IN THE MÄORI LAND COURT...AND NICOLA TUALA & ORS Respondents Hearing: 17 November 2006, 169...
Transcript of IN THE MÄORI LAND COURT...AND NICOLA TUALA & ORS Respondents Hearing: 17 November 2006, 169...
-
78 Ruatoria MB 55
IN THE MÄORI LAND COURT
OF NEW ZEALAND
TAIRAWHITI DISTRICT
A20050005763
A20050005764
A20050005766
A20050005767
A20050005768
UNDER Section 240, Te Ture Whenua Mäori Act
1993
IN THE MATTER OF Rongohaere Marae
BETWEEN LUKE DONNELLY
Applicant
AND NICOLA TUALA & ORS
Respondents
Hearing: 17 November 2006, 169 Gisborne MB 201-243
8 June 2006, 74 Ruatoria MB 45-105
25 May 2006, 73 Ruatoria MB 102-103
10 May 2006, 73 Ruatoria MB 127-188
13 September 2005, 70 Ruatoria MB 219-223
12 September 2005, 71 Ruatoria MB 63-78
Appearances: Mr R Barber, counsel for trustees
Mr L Donnelly, in person
Judgment: 30 November 2007
RESERVED JUDGMENT OF JUDGE L R HARVEY
Introduction
[1] Luke Donnelly has applied for the removal of four of his fellow trustees from
Rongohaere Marae Māori reservation. He claims that these particular trustees have
acted in breach of trust by committing forgery, have abused their positions and have
misled the beneficiaries over applications for funding to the New Zealand Lotteries
Commission. He contends that the trustees are therefore unfit to hold office and
should be removed by the Court.
-
78 Ruatoria MB 56
[2] In response, the affected trustees seek the removal of Mr Donnelly. They
argue that it is he who is unfit to hold the office of trustee. They claim that he is
belligerent, intimidating and aggressive in his conduct toward both his fellow trustees
and the beneficiaries. They argue that Mr Donnelly has assumed the role of chairman
of the marae improperly and without authority has closed various marae operating
accounts with local suppliers. He has, it was contended, generally acted contrary to
the wishes of the beneficiaries and the majority of the trustees.
[3] The trustees also argue that Mr Donnelly refuses to accept what they claim is
the view of the majority of the beneficiaries in aligning Rongohaere Marae to Te
Rūnanga o Ngāti Porou. Mr Donnelly, they say, supports Uepohatu instead and has
caused tension in the relationship between the marae beneficiaries, the rūnanga and Te
Ohu Kai Moana.
[4] The issue for determination is simply whether the requirements of section 240
of Te Ture Whenua Māori Act 1993 have been satisfied and consequently whom if
any of the trustees should be removed. At the outset I note the terms of regulation
3(h) of the Māori Reservation Regulations 1994 which provides, in effect, that any
person removed by order of the Court will no longer be eligible for appointment as a
trustee.
Background
[5] By gazette notice dated 30 March 1949 Ahiateatua A4, then comprising 3
acres 3 roods and 16 perches, was set aside per section 5 of the Māori Purposes Act
1937 as a Māori reservation for the common use of the owners thereof as a marae and
meeting place. It is important to note that this reservation has been set aside for the
owners and not any whänau or hapū group. This is likely to be relevant to the future
conduct of beneficiaries’ hui.
[6] The title order for the block is dated 8 March 1926, 93 Waiapu MB 258 and
the status is Māori freehold land. As at 22 August 2007 there were 98 owners
recorded holding 30 shares.
-
78 Ruatoria MB 57
[7] The trustees over the reservation are recorded as Gary Walker, Josephine
Tangaere, Luke Donnelly, Nicola Tuala, Ramari Pepere, Riria Keelan and
Whanaupani Pewahairangi and they were appointed on 7 March 2000, 57 Ruatoria
MB 75. According to the trustees Ramari Pepere is deceased and so the number of
remaining trustees is six.
Meeting of beneficiaries: 3 July 2005
[8] A properly convened and court supervised hui of the beneficiaries took place
at Rongohaere Marae on 3 July 2005. The agenda for the meeting was approved by
Her Honour Judge Wickliffe (as she then was) in her directions of 20 May and 20
June 2005. The subsequent report of the Registrar about the hui makes the following
points:
(a) the meeting was notified in the Gisborne Herald on 12 and 16 July 2005. The
trustees were notified by letter on 11 July 2005. Notice for the meeting
specified that participation in the hui would be limited to owners and direct
descendants of deceased owners (but excluding direct descendants who have a
living parent or grandparent who is a direct descendant of the deceased owner);
(b) 41 persons signed the register of attendees but it was estimated that some 80-90
people were present. All six remaining trustees attended the hui;
(c) the agenda was fixed at three items: discussion of matters relating to the
administration of the marae, whether there should be an election of trustees and
if so that an election take place;
(d) a resolution that the hui “supports the retention of the four trustees whose
removal is sought” was carried 27 in favour with 3 against and a single
abstention. With that result it was decided not to proceed with the third item on
the agenda; and
(e) the marae committee minute book was placed into the custody of the Registrar.
-
78 Ruatoria MB 58
[9] The Registrar recommended that the applications be set down for a judicial
conference and hearing as soon as possible at Ruatoria and that a day be set aside for
that purpose. The Registrar, Deputy Registrar and the case manager signed the report.
Judicial conference and directions: 12-13 September 2005
[10] A judicial conference was convened on the 12 September 2005 to consider Mr
Donnelly’s applications. At that hui Mr Donnelly sought an adjournment of the
proceedings to fully prepare his case and to lay a complaint with the Police over
claims of forgery against the trustees. Having heard from the parties, I adjourned the
conference to issue written directions.
[11] I then directed that the four removal applications be adjourned until the
outcome of the complaint filed by Mr Donnelly was known. Once that occurred the
applications would be reactivated and the filing of documents would follow within the
timeframes outlined. I noted Josephine Tangihaere was appointed treasurer by the
trustees and that all trustees would become signatories to the marae accounts. Finally,
I directed that the trustees were to continue to hold office until further order of the
Court.
Hearing: 10-11 May 2006
[12] Following advice on the outcome of the Police inquiry, a hearing was set down
for 10 May 2006. Mr Donnelly again asked for an adjournment on the grounds that
the inquiry was not fully completed. He claimed that Mr Barber had sent a letter to
the police that had misled them and that a forensic expert would be needed to
determine the claim of forgery. Having heard from two witnesses in regard to the
claim of forgery, I subsequently adjourned the hearing after a claim of bias by Mr
Donnelly against me.
[13] I reconvened the hearing on 11 May 2006 to discuss both the bias claim and
how the case should proceed. Mr Donnelly withdrew his claim of bias and apologised
for in his words “…a silly use of the word, I didn’t intend it as it was, it was a chuck
-
78 Ruatoria MB 59
away line…and I’d like to withdraw that unreservedly.” I accepted the apology and
the hearing continued.
Directions: 25 May 2006
[14] Following the adjournment I considered an application in chambers asking for
directions as to the summonsing of witnesses and seeking an order for payment of
witness fees and expenses. I directed the Deputy Registrar per section 69(2) of the
Act to summons the witness and ordered payment per section 98(9)(b) from the
Special Aid Fund of the fees and allowances for each person summonsed.
Hearings: 8 June 2006 and 17 November 2006
[15] Following the issue of the summonses, on 25 May 2006 a hearing was held on
the 8 June 2006 to hear from those witnesses. Having heard from those individuals I
adjourned the hearing and made directions as to filing and serving of closing
submissions. The final hearing of the case occurred at Gisborne on 17 November
2006.
The case for Luke Donnelly
[16] The evidence and submissions for Mr Donnelly can be summarised as follows:
(a) he is the legitimate chairperson of the Rongohaere Marae Trust per regulation
17 of the Mäori Reservation Regulations 1994 after a hui involving himself
and the other trustees confirmed him in that position;
(b) all subsequent trustee meetings, particularly those called by the four trustees
are therefore invalid because he was not duly notified or present;
(c) the four trustees must be removed because of their failure to act satisfactorily.
They purported to make decisions when they had no mandate and allowed
names and signatures to be put on documents when they knew such actions
were improper and deceitful. Further, they failed to properly notify him of
-
78 Ruatoria MB 60
meetings and acted in an unacceptable manner that compromised the proper
operation of the trust; and
(d) it would be unjust for the Court to act on the cross application for his dismissal
as Mr Donnelly was just acting as a responsible Trustee.
[17] Mr Donnelly stressed that he was not acting out of any ill will or malice
toward the four trustees. For him it was a question of basic honesty and competence.
He argued that the four trustees were both dishonest and incompetent and for those
reasons must be removed.
The case for the trustees
[18] Mr Barber submitted:
(a) Mr Donnelly was not the legitimate chairperson as the relevant meeting was
inquorate. He did not possess the support of a sufficient number of trustees to
secure the office of chairperson for himself. Therefore all actions purportedly
carried out by him in that guise were invalid and served only to confuse the
beneficiaries and wider community as to the proper mandate of the trustees of
the marae;
(b) Mr Donnelly has failed to show that the four trustees performed their duties
unsatisfactorily sufficient to justify their removal. His allegations of forgery
were wrong and remained unproven. They had caused distress and
humiliation to the trustees and had destroyed any prospect of a working
relationship with them;
(c) rather than the trustees being the subject of a removal applications, it is Mr
Donnelly who should be removed. He refuses to work as a team player, he
intimidates the other trustees and he does not have the support of the
beneficiaries; and
(d) his efforts to interfere with the mandate of Rongohaere Marae and Te Rünanga
o Ngäti Porou over fisheries matters and his support for Uepohatu
-
78 Ruatoria MB 61
demonstrated an inability to put the interests of the beneficiaries as a whole
before his own interests and this was contrary to the duties of a trustee.
[19] Counsel implored the Court to dismiss the four applications for removal as
there was simply no basis to Mr Donnelly’s claims. He refuses to accept the will of
the beneficiaries and the trustees and has demonstrated a profound misunderstanding
and ignorance of the duties of a trustee. Mr Donnelly, according to counsel, had
proven himself to be belligerent, uncooperative and a wholly negative influence on
the trust. He was thus unfit to serve in the role of trustee. Consequently, the only
sensible outcome was for the Court to order his removal.
The Law
[20] Sections 227, 236 and 237 of the Act provide:
227 Trustees may act by majority
(1) Subject to any express provision in the trust order and except as provided in
subsections (2) and (3) of this section, in any case where there are 3 or more
responsible trustees of a trust constituted under this Part of this Act, a majority of the
trustees shall have sufficient authority to exercise any powers conferred on the
trustees.
(2) Subject to subsection (3) of this section, every instrument to be registered under
the Land Transfer Act 1952 shall be executed by all the trustees.
(3) Where the Court has, under section 237 of this Act, made an order or given
directions in relation to the execution of any instrument (including an instrument to be
registered under the Land Transfer Act 1952) that instrument shall be executed in
accordance with that order or those directions, as the case may require, and the
Registrar shall send a copy of every such order and of all such directions to the
District Land Registrar or the Registrar of Deeds for registration against the title to
that land under the Land Transfer Act 1952 or (as the case may require) the Deeds
Registration Act 1908.
(4) The District Land Registrar or the Registrar of Deeds shall register the same
accordingly.
(5) Notwithstanding anything in section 99 of the Land Transfer Act 1952, the
production of the outstanding instrument of title shall not be necessary for the
purposes of any such registration under that Act.
(6) Where any trustee dissents in writing from the majority decision of the trustees before the decision is implemented, that trustee shall be absolved from any
personal liability arising out of the implementation of that decision. (Emphasis
added)
-
78 Ruatoria MB 62
236 Application of sections 237 to 245
(1) Subject to subsection (2) of this section, sections 237 to 245 of this Act shall
apply to the following trusts:
(a) Every trust constituted under this Part of this Act:
(b) Every other trust constituted in respect of any Maori land:
(c) Every other trust constituted in respect of any General land owned by Maori.
(2) Nothing in sections 237 to 245 of this Act applies to any trust created by section
250(4) of this Act. (Emphasis added)
237 Jurisdiction of Court generally
(1) Subject to the express provisions of this Part of this Act, in respect of any trust
to which this [Part] applies, the Maori Land Court shall have and may exercise all the
same powers and authorities as the High Court has (whether by statute or by any rule
of law or by virtue of its inherent jurisdiction) in respect of trusts generally.
(2) Nothing in subsection (1) of this section shall limit or affect the jurisdiction of
the High Court. (Emphasis added)
[21] Section 240 of the Act states:
“The Court may at any time, in respect of any trustee of a trust to which this Part applies, make an order for the removal of the trustee, if it satisfied –
(a) that the trustee has failed to carry out the duties of a trustee satisfactorily; or
(b) because of lack of competence or prolonged absence, the trustee is or will be incapable of carrying out those duties satisfactorily.”
[22] Regulation 17 of the Mäori Reservations Regulations 1994 states:
“17 Provisions applicable where trustees are not body corporate
Where the trustees are other than a body corporate as sole trustee, then, subject to any
order of the Court,—
(a) The trustees shall convene and hold a first meeting of trustees within 30 days of
their appointment:
(b) The trustees shall otherwise meet for the dispatch of business at such times and
places as the trustees consider appropriate:
(c) No business shall be transacted at any meeting of the trustees unless a quorum is
present:
(d) Where the number of trustees is 2 or 3, 2 shall constitute a quorum and, where the
number of trustees is more than 3, a quorum shall consist of at least one-half in
number of the trustees:
(e) The trustees shall at their first meeting appoint one of their number to act as
chairperson and that person shall remain in office until such time as the trustees
appoint a new chairperson:
-
78 Ruatoria MB 63
(f) If the trustees are unable to agree as to the appointment of a chairperson, or for
any other reason fail to appoint a chairperson, the Court may appoint a chairperson to
hold office for a specified term or until a new chairperson is appointed by the trustees
or the Court:
(g) All questions coming before the trustees at any meeting shall be decided by a
majority of the votes of the trustees present at the meeting:
(h) At every meeting the chairperson, or, in his or her absence, some other trustee
chosen by those present, shall preside; and the chairperson or presiding trustee shall
have a deliberative vote and also, in the event of an equality of votes on any matter, a
casting vote:
(i) All proceedings and resolutions of the trustees, and proceedings of a meeting
convened under regulation 14 or regulation 19 of these regulations, shall be recorded
in a minute book to be kept by the trustees for that purpose.”
[23] The leading authorities of this and the Māori Appellate Court in terms of
removal of trustees are in re: Poripori Farm A Trust – Ellis Faulkner (1996) 57
Tauranga MB 7 and in re: Matata 930 Rangitihi Marae - Pryor v Perenara (2003) 10
Waiariki Appellate MB 233 (10AP 233). The principles enunciated in those decisions
are adopted here.
Discussion
[24] The conduct of the trustees at meetings of beneficiaries and trustee meetings,
as well as during the Court sittings must give the beneficiaries cause for concern.
Allegations of fraud, forgery and incompetence are unlikely to create an atmosphere
of collegiality amongst the trustees. Similarly, the calling of alternate meetings by the
two factions can only serve to fuel mistrust and create unnecessary confusion amongst
the beneficiaries and the wider community as to which group retains the privilege of
acting as the custodians of the marae. That said, the Court supervised meeting of the
beneficiaries produced a clear result in support of the four trustees.
[25] Even during the hearings, on several occasions proceedings had to be called to
order as those present in the gallery interrupted in response to statements made by the
parties, particularly Mr Donnelly. I was relieved not to have witnessed the spectacle
of fists being brandished in open Court from the gallery toward Mr Donnelly, who I
was informed, appeared content to respond to such challenge in like kind with an
invitation to remove to the precincts of the foyer for that purpose. The short point is
-
78 Ruatoria MB 64
that friction and hostility continue to seriously affect the operation of this trust. That
is not a situation either the beneficiaries or the Court can countenance.
[26] The authorities underscore that trustees are not lightly removed unless there is
evidence of abuse, failure or malfeasance and that there are no positive defences. In
the Poripori decision when assessing the trustee’s performance the judge found that it
was sufficiently wanting to justify removal. That position was supported by the fact
that the beneficial owners at general meetings endorsed the actions of the majority of
the trustees to have the recalcitrant trustee removed. In considering section 222 of the
Act, that a trustee must be broadly acceptable to the beneficiaries, the judge found in
light of those facts, and coupled with his performance, the trustee concerned should be
removed.
Quorum and majority
[27] It is trite law that trustees are appointed and removed by the Court. When a
trustee resigns or is deceased, the records of the Court can only be amended by order
of a judge. Until that occurs then on the face of the Court’s record, those listed are for
all intents and purposes the trustees of the land with all of the rights, obligations and
powers of an owner.
[28] It is commonly understood that trustees of Mäori land – and contrary to
general trust law principles - may act by majority: in re: Tauhara Middle 15 Trust –
Wall v Karaitiana (2007) 85 Taupo MB 225. Section 227 of the Act provides a
statutory exception to the general principles that trustees are usually required to act
with unanimity. Indeed, it is rare for a trust order to provide that trustees must act
unanimously and given the nature of trusts over Mäori land and the practicalities that
would arise, that is hardly surprising.
[29] In general terms, decisions of trustees of Mäori reservations need not be
unanimous. Indeed, such a requirement would impose a standard that is quite
unrealistic. In any event reg 17(g) of the Mäori Reservations Regulations 1994
expressly enables trustees to act by majority. This is repeated in reg 18 regarding
documents, which need only be executed by a majority, where such a decision is
-
78 Ruatoria MB 65
supported by a resolution of trustees. This is consistent with the underlying statutory
basis for trustees over Mäori land acting by majority as set out in section 227.
[30] Mr Donnelly contended that section 227 does not apply to a Mäori reservation
trust as that provision only applies to trusts established under Part 12. He submitted
that the relevant provision is reg 17(d) and (g), which provide for a quorum of “at
least one half in number of the trustees” and decisions by “a majority of the votes of
the trustees present at the meeting”. This argument was intended to support his
submission that three trustees were sufficient, being half of the surviving trustees, to
elect him chairperson of the trustees. Mr Barber argues such a general provision as
section 227 must have application to all trusts over Mäori land and he referred to
sections 236 and 237 in this context. I agree with Mr Barber. When read together,
sections 236 and 237 provide this Court with all the powers of the High Court in
respect of trusts over any Mäori land. In any event, Mr Donnelly also agrees that
trustees can act by majority per reg 17(d) and (g). The real issue is the definition of
“majority”.
[31] As I have foreshadowed, there are six trustees as the seventh Ramari Pepere, is
now deceased. I accept the submission of Mr Barber that until there were orders
reducing the number of trustees by one or appointing replacement trustees, the
number of trustees stood at seven and the quorum for a meeting of trustees to transact
business in the normal way would have been four. It could not have been anything
else. On the passing of Mrs Pepere it was then incumbent upon the trustees to file an
application with the Court to reduce the number of trustees by one or to seek
directions. The trustees took neither step and instead each faction purported to act as
if they possessed the necessary quorum to transact business on behalf of the trust.
They were wrong.
[32] It is understandable that the remaining six trustees would adopt a practical
approach to ensure the business of the trust and the marae continued without
interruption. But even then, with only six trustees, the quorum will be four. Put
another way, where there are even numbers of trustees the quorum cannot be one half
of that number. In this case with six trustees the argument was put that the quorum
would be three. With respect, that would produce absurd results, notwithstanding
-
78 Ruatoria MB 66
regulation 17. Each faction of three trustees could conceivably hold their own
meetings and claim to pass resolutions effecting the trust’s business. Such resolutions
may be contrary. That is of course what has happened: two factions of equal numbers
have acted as if they had the authority. That is why with an even number of trustees-
like six in this case-the quorum will be four. The late O’Regan J’s obiter that the
rules of court are the servants of justice, not the masters, has a practical resonance in
this case. The regulations must be applied to give a practical result.
[33] In the context of Māori trusts, where the trust instrument is silent as to specific
procedures, then the orthodox rules of meeting conduct should apply. So even if a
chairperson possessed a casting vote that vote must be cast in favour of the status quo.
Mr Donnelly’s purported endorsement of himself as chairperson when there was
already someone in that role cannot be valid. Likewise, any decisions made by the
trustees led by Ms Tuala without a quorum will also be invalid. Despite the
experience of the trustees the simple step of seeking directions from the Court appears
to have escaped them all. Accordingly, I find that the two factions of trustees have
not acted in accordance with their duties by holding separate hui without an
appropriate majority. Unless four trustees were present when resolutions were passed
and decisions made then any such meeting will fail for want of a quorum.
Consequently, I cannot see how their decisions were valid.
Forgery
[34] Mr Donnelly alleges his fellow trustees and those associated with them
conspired to defraud the Lotteries Commission by supposedly forging the signature of
Mr Butler, the Chairman of the marae committee at that time. He lodged a complaint
with the Police but they decided to take no steps following receipt of correspondence
from Mr Barber. A Detective Thomas of the Gisborne Police even attended Court and
gave evidence to such effect.
[35] On oath Mr Butler confirmed he had given authority for his name to be signed
on the application forms, 73 Ruatoria MB 151-152. Mr Donnelly did not accept Mr
Butler’s evidence or the submissions of Mr Barber on the point. I did, and said so at
-
78 Ruatoria MB 67
the hearing on 10 May 2006, making it plain that the allegations of forgery could not
be sustained in light of Mr Butler’s evidence, 73 Ruatoria 153 and 166:
“Court: One moment Mr Donnelly if Mr Butler in answer to questions from Mr Barber has said he gave authority for Tawhai Nuku to sign his name on his behalf. A forgery is when
your name is signed without your knowledge. You can’t use that word…
…Now this forgery thing you know I have to tell you Mr Donnelly that has no legs, that is not going to go anywhere. We’ve heard Mr Butler say he gave his knowledge and consent to the
signing on his behalf…”
[36] At the November 2006 hearing, despite my repeated reference to the fact that I
had accepted Mr Butler’s evidence, Mr Donnelly persisted with his allegation that, in
effect, Mr Butler had made that story up after being found out, 169 Gisborne MB 209;
“Court: The gentleman in question he came forth and made it very plain that he had
given his permission for his name to be signed.
L Donnelly: Well Your Honour that there is his word. It is quite easy to say that after
the fact that you have been caught.
Court: He was on oath, he was sworn and I accepted his evidence.
L Donnelly: Your Honour I don’t accept that that is the truth, for the mere fact that
the minutes again record that he had already been under questioning at a meeting in
either October of November, when Ngaire Keelan put it to him, it is recorded in the
minutes. Ngaire Keelan asked him if it was his signature, and he told her yes. But he
knew that he wasn’t even there to make that.
Court: But the key point is he has sworn on oath before me that he gave his consent.
Now you are saying that you do no accept that what he is saying is truthful.
L Donnelly: I don’t accept that that is truthful. The other point about that is that there
seemed to be a denial right up until the last minute, and then counsel for the
respondents finally came forward at questioning to Malcolm Thomas… if this was a
genuine case why wasn’t this raised anytime through that six months, and why did it
not appear in the minutes. Throughout the minutes he said that was his signature and
he signed it. In the minutes of October, November, Ngaire Keelan does put the
question to him. So did Gary Walker. They both put the question to him, and he is
still said that yes it is. With that Your Honour I can’t possibly accept.
Court: I understand you to say Mr Donnelly is that you consider the timing of Mr
Butler’s admission convenient.
L Donnelly: Yes Sir.
Court: What I am saying to you now is that he stood in the witness box, he swore on
the bible before me that he had given his consent. What he may or may not have said
in the hui, I don’t know I wasn’t present. What I am telling you now is that before the
Court on oath with a bible in his had he swore, he gave his consent. I have accepted
that.”
-
78 Ruatoria MB 68
[37] Having reviewed the minutes of the hearing, again I accept Mr Butler’s
explanation but on reflection, make the following observation: if indeed that is what
transpired I would have expected the trustees to proffer that explanation at the earliest
opportunity. They did not do so. That position seems inexplicable.
[38] In any case, I have accepted Mr Butler’s testimony given on oath and his
explanation. I find nothing in the questioning of Mr Butler by Mr Donnelly to
displace that conclusion. In light of this, any allegation of forgery, in the context of a
trustee’s conduct (rather than in any criminal sense,) cannot be sustained. As that was
the principal ground upon which Mr Donnelly’s removal application was based and
unless the other grounds pleaded pass muster, the application should be dismissed.
Section 240 – removal of trustees
[39] Turning to alternative the grounds contended, Mr Donnelly emphasises the
“incompetence” of the trustees in the context of section 240(a) of the Act, 169
Gisborne MB 210:
“…a trustee, Whanaupani Pewhairangi, in particular, signing and witnessing on the
same document, knowing full well that the names of the others on there are not
trustees. That constitutes a failure to carry out… that Sir is grounds for removal.
Because that there impinges on honesty, it brings into question the honesty and the
fitness to be trustee. We are not talking about a few hundred dollars this is large
amounts of money.”
[40] The essence of Mr Donnelly’s case against his four fellow trustees can be
found at 169 Gisborne MB 215:
“…these trustees have failed to act satisfactorily as trustees. They delegated and gave
away their powers to the marae committee in an unacceptable manner. This has
effectively excluded the proper operation of the trust, it puts the trustees at risk as
well as making them fail in their duties to be responsible, for the asset the marae.
Any potential liabilities like this grant which they may acquire. When confronted
with these issues the trustees simply failed to turn up to the meetings requested by
myself, and advised others not to bother to attend. They continued on their merry
way. It is clear that there is some support in the Court for the organised meeting for
the trustees to continue. No doubt the Court will take that into account when making
the decision. For my part I consider that this does not absolve them from being
irresponsible as trustees, and in that respect to be held to account. Concerns over my
performance have arisen in a tit for tat manner as well as a result of these applications,
I do not accept allegations of intimidation. It is clear from the manner in which the
Court has proceeded that there are two sides to every story, and that there is much
provocation towards me… In my submission Sir it would be unjust for the Court to
act on the other trustees cross application for their removal. I have acted as a
responsible trustee and have simply been seeking proper administration. Whilst the
-
78 Ruatoria MB 69
other trustees may have some difficulty with me that’s because I have called them to
account… In the circumstances I believe the appropriate course is for the Court to
remove the four trustees.”
[41] Mr Donnelly asserted that there was ample evidence before the Court to satisfy
the provisions of section 240. He further argued that there were no defences available
to the four trustees as nothing could justify from his point of view their incompetence
and failing. He again stressed that the cross application seeking his removal was
simply a reaction to his proceedings and that the trustees had been quite content to
take no steps against him until he had brought them to account with his removal
application.
[42] Mr Barber countered that if anyone must be removed, it ought to be Mr
Donnelly. It was argued that Mr Donnelly was unfit to hold the office of trustee,
refused to act as a team player and was simply pursuing his own personal political
agendas in the face of considerable opposition from the beneficiaries. Those same
beneficiaries had endorsed the four trustees almost unanimously at the Court
convened hui.
Trustees’ performance
[43] Turning then to the performance of all the current trustees of this Mäori
reservation. It was evident to me that the trustees all failed to appreciate that they
were responsible for the financial affairs of the reservation trust, not the marae
committee. Regulations 3 and 15 of the Mäori Reservations Regulations 1994 make
the point very clear. The trustees had no right to delegate their responsibility for funds
concerning the marae to a committee.
[44] In addition, they should have held annual meetings properly notified with 21
days clear notice and presented the marae annual accounts and reports on the activities
of the trust to the beneficiaries. They are required to present a charter to the
beneficiaries at a properly convened hui for the beneficiaries’ approval. They should
have executed documents by a majority of trustees where that had been authorised by
a resolution of trustees. When problems arose, as they clearly did, they should have
applied to the Court for directions. They failed to do so.
-
78 Ruatoria MB 70
[45] All the trustees, including Mr Donnelly, must bear responsibility for these
failings, which regrettably, are not uncommon for Mäori reservation trusts. Given the
situation that had developed between the trustees – the holding of alternative
meetings, the allegations of fraud and forgery, the closing of accounts, the
involvement of the Lotteries Commission and their decision to suspend funding - the
failure to seek directions is inexplicable. It was certainly irresponsible.
[46] Regarding the Butler signing matter, I hardly think the four trustees have
covered themselves in glory in that situation either. They should have clarified the
position the moment doubts were raised. They could have done so but for reasons
known only to them, they did not do so. While Mr Butler gave his consent, he says,
the trustees should never have allowed themselves to fall into the position of having to
sign on behalf of a non-trustee if proper allowance had been made as to the deadlines
for the filing of funding applications. I accept the role of a trustee, especially for a
Mäori reservation, is voluntary. There are limits on what might reasonably be
expected from lay trustees as to their knowledge of trust law and procedure. But in
acting in this way the trustees have opened themselves up for criticism. Some of that
criticism is justified.
[47] The trustees and Mr Donnelly do not get on. That was obvious. And if it was
plain for me to see, then I am confident the beneficiaries too will be well acquainted
with the palpable hostility evident between the parties. That said, it is not a
requirement that trustees necessarily form a mutual admiration society. But they
should at least act civilly, with dignity and with a modicum of co-operation. Where
they do not agree, then there is provision for dissenting trustees to have their say and
to have their opposition recorded. The minority must respect the wishes of the
majority. As section 17(2)(d) of the Act provides, where that majority is oppressive
on the minority unreasonable, then the parties will have recourse to this Court.
[48] While trustees are free to dissent and to argue against the actions of each other
during trustee and beneficiary meetings, it is counterproductive if those arguments
spill over into the public domain. If any trustee is concerned as to the action of his or
her fellow trustees, then the Court’s directions should be sought. Trustees should not,
as has occurred in other cases I am aware of, publish conflicting notices in local
-
78 Ruatoria MB 71
newspapers airing their disputes in public. I cannot see how such behaviour is in the
interests of the beneficiaries, which must be the trustees’ paramount concern along
with protecting the trust property.
[49] I find that all trustees have failed to conduct themselves in a manner consistent
with the duties of their office. They have not followed the regulations. They have
failed to deal with the marae finances appropriately. They have allowed their
personal animosities to taint the operation of the trust. In short they have acted
contrary to the interests of the beneficiaries as a whole and have failed to seek
directions when that should have been obvious. The trustees must all take some
responsibility for the situation that has now arisen.
Mandate issues and fisheries
“With the growth of the settlement process, including fisheries, during the last decade or so, it would appear that marae have assumed a greater prominence in the affairs of iwi and hapū.
Surprisingly, these concerns were touched on, if only briefly, by counsel during the appeal
hearing and also by the Applicant himself during the lower Court proceedings. However, we
are not concerned with such matters. They are irrelevant for our purposes and we have
not given them anything other than fleeting consideration by way of early disposal. For
the avoidance of doubt, this Court will not be drawn into hapū and iwi politics and
mandate disputes that concern matters beyond those put in issue before the lower Court.
There are specific pathways available for the purposes of determining such questions
over mandate either by way of advice or adjudication. The principal issue for
determination by this Court therefore is whether or not the lower Court exercised its discretion
to remove and appoint trustees to the Reservation in accordance with correct legal principles.”
(Emphasis added)
in re: Matata 930 Rangitihi Marae - Pryor v Perenara (2003) 10 Waiariki Appellate MB 233 at
241
[50] The Appellate Court’s statements are apposite to the instant case. I will not be
drawn into mandate issues over fisheries between supporters of Te Rünanga o Ngäti
Porou and Uepohatu. There are processes available to deal with such matters and
neither this nor the Appellate Court will permit cases over the administration of Mäori
reservations to become vehicles for mandate disputes. They are a distraction and for
present purposes have no value in these proceedings other than to illustrate the
behaviour of certain trustees in the context of fulfilling, or otherwise, their duties to
the beneficiaries of this reservation. Whether the marae beneficiaries support Ngati
Porou or Uepohatu is irrelevant for present purposes, except insofar as the trustees’
-
78 Ruatoria MB 72
actions, collectively or as individual trustees, may be inconsistent with their duties to
act for the benefit of all beneficiaries.
[51] That said, I find Mr Donnelly’s explanations regarding his alleged attempts to
align Rongohaere Marae with Uepohatu disingenuous. After first claiming that he
had signed his name to a form supporting Uepohatu simply to mention what marae
were his affiliates, he later admitted that this was in fact done in an attempt to align
Rongohaere with Uepohatu and not Ngäti Porou for Te Ohu Kaimoana purposes. The
relevant excerpts from the minutes can be found at 74 Ruatoria 69-77. At page 73:
“Court: So, number five says that the following list of marae are the traditional marae that
belong to Ngati Uepohatu and attests to their existence. Isn’t that saying that these marae
belong to Ngati Uepohatu?
Donnelly: Yes it does.
Court: And the whole import of this document is to tell the Ohu Kaimoana, don’t deal with the
Runanga, they don’t have our mandate including Rongohaere. Deal with Uepohatu. That is
what it says isn’t it?
Donnelly: Yes.
[52] Mr Donnelly then confirmed his view that by being appointed a spokesperson
for fisheries on behalf of Rongohaere Marae, this gave him authority to make
decisions including aligning the marae with Uepohatu instead of the existing link with
Te Runanga o Ngäti Porou. Despite opposition from some of the trustees and
beneficiaries, Mr Donnelly considered he had the right to take such steps, 74 Ruatoria
MB 74:
“Court: Well I read this as saying that Rongohaere along with all these other marae are traditional marae belonging to Ngäti Uepohatu and the commission should deal with Uepohatu
L Donnelly: Yes.
Court: And Mr Barber asked you, who gave you the mandate? And you said, I did. You
didn’t need to go to the beneficiaries.
L Donnelly: Because of the fact that we were the fisheries spokespeople and with that coming
within the gambit of the fisheries that’s how we…
Court: So to take that further then, if that’s accurate, are you telling me that when you and Mrs
Tibble were put in place as fisheries representatives for Rongohaere, that included a mandate
to sign up to Uepohatu?
-
78 Ruatoria MB 73
L Donnelly: Because of the ongoing nature of matters, not only the Uepohatu Tribal
Authority, there are a number of other things that I was involved in and this is but one of them.
The mandate wasn’t really a considered issue from that point. The support that I got from
being the appointed spokesperson I took as allowing me to make decisions, if you like.
Court: I will put it to you Mr Donnelly, it’s simply not credible to suggest that wrapped up in
that representative role, you could alter Rongohaere’s allegiance from the rünanga to
Uepohatu.
L Donnelly: Who said that the allegiance was to the Rünanga?
Court: Well Ngäti Porou have been dealing with Te Ohu Kaimoana since 1989.”
[53] These exchanges highlight Mr Donnelly’s general approach to the role of the
trustee and his strident opposition to Ngäti Porou. While as I have said mandate
disputes cannot form part of removal applications for trustees over Mäori
reservations, the evidence underscores Mr Donnelly’s attitude to process and how he
considered regular consultation with beneficiaries of the marae on fisheries matters
was unnecessary.
[54] The short point is that it is unrealistic to suggest the beneficiaries would
support moves to realign Rongohaere Marae in the manner attempted by Mr Donnelly
without providing him with an appropriate and particular mandate for that purpose.
Put another way, these actions would doubtless give the beneficiaries cause for
concern where it appears that Mr Donnelly is using the marae to push a particular
political platform, which appears inconsistent with his duties as a trustee to represent
the interests of all the beneficiaries.
[55] If Mr Donnelly has seen fit to write to Te Ohu Kaimoana and claim
Rongohaere Marae supports Uepohatu instead of Ngäti Porou, given the change, a
series of hui with the beneficiaries to approve such a change ought to have been
obvious. It is, with respect, stretching credibility to suggest that simply being
appointed a spokesperson – whatever that means – endows that person with a right to
alter an existing alignment with Ngäti Porou in favour of Uepohatu.
[56] They key issue is that Mr Donnelly’s actions do not appear to have the support
of a majority of the beneficiaries. That cannot be consistent with his duties to act on
behalf of all the beneficiaries. In any event, if doubts remain, in due course the
-
78 Ruatoria MB 74
trustees to be appointed may wish to test those possibilities at a hui of the
beneficiaries called for that purpose.
Election of trustees
[57] It is essential, in the context of section 222 of the Act, that the mandate of the
trustees is tested given the particular circumstances that this present group find
themselves in as a consequence of their actions over the last ten years. Whatever
mandate they might have possessed, doubts must exist now as to their broad
acceptability to the beneficiaries. The periodic testing or refreshing of mandate to act
as a trustee should be regarded as a desirable process by beneficiaries - more so when
trustee relationships have broken down so clearly.
[58] The appropriate remedy in this case is for all trustees to vacate their positions
and for an election of trustees to occur at a properly constituted hui of the
beneficiaries. That hui will be supervised by court staff. If necessary, an independent
facilitator will be arranged. Trustees are invited to submit their views on an
independent chairperson for the hui within 14 days from the date of this judgment and
failing agreement the final decision will rest with the Registrar. The existing trustees
are of course free to offer themselves for election if they wish but have no obligation
to do so.
[59] In the circumstances, given the history of these matters, I consider it
appropriate that all trustees appointed after the general meeting should serve a term of
three years and then offer themselves for re-election.
“Owners” means owners
[60] For the avoidance of doubt, the gazette notice is explicit that the beneficiaries
of this Māori reservation are the owners. Not the descendants of owners but the
persons listed in the records of the Court as at the date of the election hui as beneficial
owners. It is the owners therefore who can participate and vote at the hui, and only
the owners. To put the matter beyond doubt, the owners will be those persons listed
-
78 Ruatoria MB 75
in the ownership list held by the Court on the day of the hui. As this is a meeting of
the beneficiaries voting will be by way of one owner one vote. It is not a meeting of
assembled owners, it is a hui of beneficiaries to a Mäori reservation.
[61] There are three exceptions to this determination. Firstly, any person holding a
valid order for succession to an owner, but whose name has not yet been entered into
the records of the Court by the time of the hui, will also be entitled to participate.
Secondly, any successor to a deceased owner in this land who has succeeded to that
deceased’s other interests but who is not recorded as an owner - due to previous
practices of not recording successions in Mäori reservations - will be entitled to
participate in the hui and vote.
[62] The third exception is really a variant of the first two. Where any person holds
a valid power of attorney for an owner and furnishes the Registrar with a properly
executed certificate of non-revocation they will be entitled to participate in the hui as
if they were an owner or successor to an owner.
[63] To assist in determining validity, owners or those persons claiming to be
owners who intend to participate at the hui will be required to furnish the Registrar
with details of their succession at least 48 hours prior to the hui.
[64] I stress that proxies are not permitted and are not a substitute for a validly
executed power of attorney. If any doubts remain as to the meaning of “owner” the
urgent direction of the Court should be sought.
Decision
[65] The applications by Luke Donnelly for removal of trustees and by Nicola
Tuala for the removal of Mr Donnelly are dismissed.
[66] The Registrar will, in concert with the trustees, convene a meeting of the
beneficiaries of Rongohaere Marae Mäori reservation within 2 months with 14 days
notice taking into account the imminent holiday period. All current trustees are invited
to resign their positions at the meeting. They are free to offer themselves for election
-
78 Ruatoria MB 76
if they wish. Those trustees who do not resign may be removed. Following the
election hui, the Registrar will forthwith make application to the Court for the
appointment of trustees.
[67] The only persons who are entitled to participate and vote at the hui are those
persons who are recorded in the ownership list held by the Court, any person holding
a succession order to a deceased owner or a properly executed power of attorney for
such owner or successor.
Pronounced in open Court at am/pm in on
the day of 2007
L R Harvey
JUDGE