Napier Inner Harbour remedies report
Other Courts and Tribunals
High Court—Waitaha challenge to Ngäi Tahu settlement
High Court—Gisborne port endowment land and s40 offer-back
High Court—Mäori Land Court powers of audit
Environment Court—Mäori values re water in regional plan
Mäori Land Court & Appellate Court
No items this month
Te Whanganui-A-Orotu. Report on Remedies 1998
11 May 1998. WM Wilson (presiding officer), MA Bennett, MB Boyd, JH Ingram
In Te Whanganui-A-Orotu Report 1995 the tribunal found a claim on behalf of 7 hapü to the area known as Te Whanganui-A-Orotu (TWAO—later called the Ahuriri Lagoon or Napier inner harbour) to be well founded. The tribunal found that the Crown had breached Treaty principles in claiming ownership of the bed of the shallow harbour, covering some 3840 hectares, as foreshore and seabed under common law rules, and alternatively as included in the Ahuriri purchase of 1851. When an earthquake in 1931 uplifted the area from the sea, the Crown continued to claim ownership and reclaim and develop the land in the face of numerous Mäori petitions.
This report on remedies was the outcome of a remedies hearing held over two days in August 1996. The delay in the tribunal report is explained firstly, because the tribunal suggested in its 1995 report that it might make an order for the return of Landcorp land in the harbour and it wished to wait until legal issues surrounding resumption orders over state enterprise lands were dealt with in the Turangi land claim (Wai 84. See Mäori LR June 1997 p4). Secondly, the tribunal was concerned with progress with the broad inquiry into claims in the Mohaka ki Ahuriri region, of which this claim is a part. However, the tribunal determined that the claimants could not be expected to “wait indefinitely” for this remedies report and it should now issue.
Whether recommendations should be made
Considering the Crown submissions at the 1996 remedies hearing:
• The tribunal rejected the argument that any recommendations as to remedies should await the hearing of other claims in the region. Concern about Crown claims to ownership of the inner harbour first arose in 1861 and there had been numerous petitions since, and there was strong circumstantial evidence that some of the land was promised by PM Fraser in 1949 to be returned. So the claimants had waited a long time for a remedy.
• The tribunal also rejected the Crown contention that it should not report on remedies because any urgency in the claim had passed and it should now be considered alongside general claims in the region (the claim was given urgency because the local authority was planning to sell some of the claimed land—a matter on which the tribunal can no longer make a recommendation since the Treaty of Waitangi Amendment Act 1993 prevents the tribunal recommending the return of any “private” land, which includes local authority land. In its 1995 report the tribunal found that claims where hearings commenced before 1993 were affected by the amendment, and that the amendment was not in itself a breach of the principles of the Treaty).
• The tribunal also rejected a contention that there might be problems with adjoining or overlapping claims being adversely affected by recommendations as to remedies solely in respect of the inner harbour.
• The tribunal also rejected the Crown submission that the tribunal should follow the Crown policy of comprehensive rather than piecemeal settlement of claims, and that the tribunal could not decide whether the inner harbour claimants in particular were left a sufficient endowment for their future needs without considering their claim in the context of regional claims. First, there was no issue here as to whether a sufficient “endowment” was left—since the tribunal found that the inner harbour land was never sold in the first place. Second, there was a danger that if specific recommendations for relief in relation to the inner harbour lands were not made now, they might never be made as the regional claims were to be investigated by a different tribunal from the one that heard the inner harbour claims.
The major recommendation
Accordingly, the tribunal found that its major recommendation as to remedies must be that negotiations between the parties should commence immediately and not be unduly or unreasonably delayed. The negotiations should proceed on the basis that, in light of the 1995 report, the Crown has a fiduciary obligation to ensure the rangatiratanga of the claimants over their taonga, TWAO, is restored. Other general recommendations would be made—with leave given for claimants to seek more specific recommendations if negotiations with the Crown were unsuccessful.
Evidence for the remedies hearing
The tribunal noted that in preparation for the remedies hearing it had in its 1995 report asked that:
• the Crown identify the pre-European settlement boundaries of TWAO;
• the Crown identify all Crown and state enterprise lands within that area;
• the Crown report on valuation and present day utilisation of the Landcorp farm covering part of TWAO (the major state enterprise asset in the claim area);
• No further state enterprise or Crown land in TWAO be sold pending settlement (this had occurred);
• the claimants to file a schedule of recommendations sought, with the Crown to provide financial assistance (for valuation expertise etc) to compile that schedule ($20,000 was provided).
Examining the evidence which was collected, the tribunal noted that the property evidence did not list for the TWAO area any former state enterprise lands now in private hands with a resumptive memorial on the title. The tribunal suggested that this and some other minor Crown and SOE properties possibly omitted from the list, if included, might bring further flexibility to any settlement negotiations, if required.
The tribunal examined valuation evidence which attempted to provide the present value of all lands within TWAO, the extent of the claimants economic loss through being deprived of the use of reclaimed areas, and give the value of properties available to claimants for possible return as compensation. No value was provided of:
• losses of intangible value;
• lands still covered by water (only the economic value of reclaimed lands was considered);
• loss of kaimoana and the cultural and spiritual importance of TWAO;
• Economic loss was based on rentals which could have been earned if the reclaimed land had been leased by Mäori on 21 year leases of the kind which were used when the land was initially developed. An annual return of 4-5% from these lands meant an economic loss of $7 million which was added to the current valuation of the land in its undeveloped state—$16.065 million. This produced a final figure of $23.065 million for “tangible losses”. A valuation of the Hawkes Bay airport was also obtained.
Recommendations concerning particular assets
Landcorp farm: the tribunal found that this should be returned because it was the single largest property within the claim area, it included 2 former islands (Roro o Kui and Tapu Te Ranga) of particular importance to claimants and restoration of some of the lands under claim would restore the claimants mana and tino rangatiratanga. The tribunal stressed however that its recommendation was not a binding recommendation in terms of s8A(2)(a) Treaty of Waitangi Act 1975 at this stage.
Ahuriri Estuary: this was the last remaining part of the TWAO still largely under water and is Crown owned and managed by the Department of Conservation. The tribunal recommended its return to the claimants, in a time and manner negotiated between the parties, and in conjunction with the development of a new regime for management. It noted claimant submissions that revesting in Mäori through special legislation was the preferred option for claimants.
Other Crown-owned land: the tribunal supported negotiations involving other properties held by the Crown for conservation, education, electricity, railways, police, justice and social welfare purposes—whether surplus or not. It would not at this stage make detailed recommendations on such lands but granted leave to claimants to seek detailed recommendations at a later stage if desired.
Hawkes Bay Airport: this 189 hectare area was run as a joint venture by the Crown with Napier City and Hastings District councils. The Crown was seeking to privatise the venture and sell its 50% shareholding. The tribunal found that the concept of the claimants entering into a joint venture with the council to own the airport was a “most satisfying one.” Such an arrangement would reflect the spirit of the Treaty in a more meaningful way than an award of monetary compensation. The tribunal recommended that the Crown interest in the airport “form part of the negotiations between the claimants and the Crown”, but options for the Crown shareholding in any settlement still needed to be explored. More detailed recommendations could be sought by claimants at a later date if required.
Monetary sum: the claimants should receive a “substantial fund of money” as compensation for the loss of TWAO and for islands within it which were important wahi tapu and urupa. The tribunal did not agree that it could make a recommendation that the Crown obtain a long term lease over the property—the 1993 amendment concerning private land precluded such a recommendation. The size of the sum should be reached by negotiation and would be affected by lands returned to the claimants. The sum should reflect tangible and intangible losses and establish a hapü economic base to which claimants and their descendants should have access. The valuation of $23.065 million for land and economic losses, excluding intangible losses, should be noted. If negotiations failed the tribunal would give favourable consideration to a request for more detailed recommendations on this issue.
Body to manage the settlement: the tribunal endorsed a claimant resolution that a “hapü authority” representing the 7 hapü who brought the claim should be set up by legislation to manage the settlement. Crown submissions that an Act of Parliament should not be seen as a panacea to settle internal wrangling, and that statutory entities have previously involved iwi rather than hapü authorities were noted but dismissed. Leave was granted to return for more detailed recommendations if required.
Management of Ahuriri Estuary: the tribunal recommended that a new joint management regime between the claimants and the Department of Conservation be developed for the estuary in conjunction with its return to claimants.
Local governance: in its original report the tribunal recommended that local authorities be required, by legislation if necessary, to expand the use of the Mäori advisory standing committee structure then in use by the councils. Following submissions from the claimants that a structure which gave more direct power and control to the 7 hapü over their lands and waters under a hapü management plan was required, the tribunal recommended that 2 bodies be created. The first to be a hapü authority with powers of policy making and planning over their taonga. The second to be a strengthened Mäori standing committee of the local councils enabling the 7 hapü to continue representation on wider regional issues.
The tribunal also recommended that:
• a hapü development plan should be drafted and implemented under the Resource Management Act (RMA) 1991.
• Section 2 RMA 1991 should be amended so that “iwi authorities” include authorities representing hapü that are tangata whenua;
• the RMA 1991 should be amended to ensure local authorities accord “appropriate weight” to hapü management plans given that such plans represent the view of the Treaty partner and not just one sector of the community.
• The RMA 1991 should be amended to provide that all persons exercising functions and powers under the Act in a manner consistent with the principles of the Treaty of Waitangi (currently the legislation requires that persons “take into account” Treaty principles—s8). This follows the recommendation of tribunal in its Ngawha Geothermal Resource Report 1993.
• Appropriate amendments should be made to the Conservation Law Reform Act 1990 to ensure that tangata whenua special status on the boards is accepted, and that there is a higher ratio of tangata whenua membership on the boards.
Public Works Act 1981
Finally, the tribunal supported comments in the Te Maunga Railways Land Report 1994, Ngäi Tahu Ancillary Claims Report 1995, Turangi Township Report 1995 that the Public Works Act be amended to ensure that such compulsory acquisition of islands as had occurred in TWAO could not occur again. Amendments should include:
• no acquisition of Mäori land unless no other suitable land is available;
• sale at an agreed price should first be sought after full consultation;
• the power of compulsory acquisition should be exercised only in “exceptional circumstances” and “as a last resort in the national interest”;
• a lease, licence or easement should be the interest acquired, unless exceptional circumstances required the acquisition of the freehold, and that issue should be determined by a body independent of the Crown or local authority seeking to acquire the land;
• the Act should provide that it be interpreted and administered so as to give effect to the principles of the Treaty of Waitangi.
Other courts & tribunals
Waitaha Taiwhenua O Waitaki Trust & Maiharoa v Te Runanga O Ngäi Tahu & Attorney-General
CP41/98. 17 June 1998. High Court Christchurch. Panckhurst J
The plaintiffs claimed to represent Waitaha interests and challenged the right of the Te Runanga O Ngäi Tahu (TRONT) to speak for them through the settlement of Ngäi Tahu claims in the South Island. In these proceedings TRONT sought an order to strike out the challenges on the grounds that they raised issues which were not justiciable or were an abuse of process.
In its 1991 report on Ngäi Tahu claims the Waitangi Tribunal described Waitaha as an older iwi which occupied the South Island prior to the arrival of Ngäi Tahu and Ngati Mamoe. In the same year the tribunal recommended the introduction of legislation establishing a Ngäi Tahu iwi authority, and the Te Runanga o Ngäi Tahu Act 1996 was passed establishing the runanga as a body corporate to represent “Ngäi Tahu Whanui” meaning individuals descending from the “primary hapü of Ngäi Tahu and Ngäi Mamoe”. In 1996 the plaintiffs filed claims Wai 618 and Wai 622 with the tribunal on the basis that they were Waitaha descendants. In November 1997 TRONT signed a deed of settlement for all Ngäi Tahu claims which included these two claims. The deed:
• Envisaged that legislation would put the settlement into effect;
• Provided that the legislation would amend the definition of Ngäi Tahu Whanui to include Waitaha;
• Provided that the legislation would come into force by Order in Council, which would not be made until TRONT had indicated it was satisfied with the legislation as passed;
• Provided that TRONT would agree, prior to the introduction of the bill, that if it was passed as introduced, then TRONT would give its consent to the Order in Council. This prior consent had been given and the bill was now before Parliament’s Mäori Affairs Select Committee.
It was agreed that, should the bill be passed into law in its present form, then this High Court challenge would effectively end.
The Waitaha plaintiffs argued that as an incorporated body created by statute, TRONT had acted outside its legal powers when it purported to include Waitaha within the settlement. There was a request for an injunction to prevent TRONT giving its consent to the Order in Council to bring the settlement legislation into effect once passed.
The power to strike out proceedings before hearing them should be exercised carefully and only in situations where the plaintiffs case is “clearly untenable”. In this case that power should not be exercised because:
• under the present law, TRONT by its own definition of who constituted “Ngäi Tahu Whanui” did not represent Waitaha.
• Previous decisions attacking deeds of settlement before they were passed into law were distinguishable because that they did not involve a claim that a statutory incorporation had exceeded its powers (Greensill v Tainui Mäori Trust Board (M117/95 HC Hamilton 17 May 1995 Hammond J): Te Ngäi Tuahuriri Runanga v Te Runanga o Ngäi Tahu (CP187/87 HC Christchurch 13 May 1998 Master Venning): Te Runanga o Wharekauri Rekohu Inc v AG  2 NZLR 301 (CA)).
• While this case would effectively end if the contemplated legislation was passed, it should not be struck out now on the assumption that legislation would be passed to end the matter. That would contravene the principle that persons should only have regard to existing law and not contemplated law (see Fitzgerald v Muldoon  2 NZLR 615). And the Waitaha plaintiffs had readily accepted that hearing of the full case must be adjourned until it was seen whether the settlement bill was passed in its present form or not.
• Even if the settlement bill was amended to exclude Waitaha, there would still be the challenge to the TRONT action in including the Waitaha claims in the deed of settlement in the first place to give impetus to the settlement process.
However, if there was a later hearing of this application, it would be doubtful that the court would grant an injunction preventing TRONT from giving its consent to the Order in Council to bring the settlement legislation into effect, since that would seem to sit in judgment on legislation already passed. And the lateness in filing these proceedings (the day before the introduction of the settlement bill) might have some bearing on the discretion to grant relief.
Accordingly, the proceedings would remain, but stand adjourned until 4 August 1998.
Smiler & Others v Port Gisborne Ltd
CP1/98. June 1998. High Court Gisborne. Laurenson J
Port Gisborne Ltd, a port company under the Port Companies Act 1988, wanted to sell 11,262 hectares of land known as Tauwhareparae near Tolaga Bay. The land was purchased from Mäori owners by the Crown in 1881 and given in 1884 as an endowment to the Gisborne Harbour Board—the forerunner of the port company. The port company wanted a sale by tender. The applicants, claiming to be descendants of the original Mäori owners of the land, argued that it should first be offered to them under s40 Public Works Act 1981. They sought judicial review of the decision to sell and an order that the port company comply with its duty under s40.
Section 40/1981 provides that:
• where land is held under any legislation for a “public work”;
• and it is no longer required for that public work and is not required for any other public work;
• the local authority shall offer to sell the land to the person from whom it was acquired or the successor of that person;
• unless the local authority considers it “impracticable, unreasonable, or unfair” to do so or there has been a “significant change in the character of the land” in connection with the public work for which it was acquired.
Whether s40 applied to the port company land
The combined effect of the Gisborne Harbour Board Empowering Act 1884 (which endowed the land on the board to borrow against for harbour works), the Public Works Act 1981 (s2 definitions of ‘”public work” and “local work”) and the Port Companies Act 1988, s26 of which provides that ss40-41 Public Works Act 1981 continues to apply regardless of any transfer of land to a port company, was that the land was held as a public work and s40 could apply.
It was accepted that the land was no longer required for the public work, was not required for any other public work, and was not required for any sort of exchange under s105/1981. Nor was the land affected by the separate scheme for disposal of lands by harbour boards under the Harbours Act 1950 ss143A & 143C.
Considerations under s40
The court declined to comment on the factors which might be relevant in the consideration by the Chief Executive of whether under s40 an offerback was not required because it was “impracticable, unreasonable, or unfair” to do so or there had been a “significant change in the character of the land” in connection with the public work for which it was acquired. It was not appropriate to fetter that discretion at this stage by any comment.
The land was acquired by the harbour board from the Crown rather than directly from Mäori, raising the issue of whether the duty to make an offer back simply required an offer back to the Crown. In ARC v AG (unreported CP583/88, Auckland Registry, 24 September 1990) it was held that land acquired by public authorities from private citizens for public works should be offered back to the private citizen when no longer needed for the public work. The plaintiffs argued that that principle, supported also in Bowler Investments Ltd v AG (1987) 7 NZAR 73, was a broad principle not relying on whether the acquisition was compulsory.
Accordingly, the key issue was the factual and legal nexus between the acquisition of the land by the Crown from the original Mäori owners and the endowment by the Crown on the harbour board. In particular, whether the period of Crown tenure from 1881 to 1884 could be effectively ignored in terms of the duty under s40.
There was no legal compulsion in the acquisition of the land by the Crown in this case—although the applicants had concerns about aspects of the original acquisition—and these might be relevant to the discretion of the Chief Executive as to unreasonableness and unfairness (see above).
The court rejected the harbour board argument (relying on Deane v AG  2 NZLR 180) that, on the basis that s40 recognises an inchoate right in landowners created by the compulsory deprivation of their land, s40 is limited to situations where compulsory or forced dispossession occurred.
The court accepted the contention that s40 should not be ‘bent’ to accomplish a social objective of land claim settlements, when that was not envisaged in s40. However, providing the terms of s40 were observed, it was entirely appropriate for the court to determine the issue in light of present day aspirations and perceptions, in this case Mäori claims to ancestral lands. There was an “increasing perception that in many cases the original acquisition of those lands was achieved at a time when the concepts of tenure, and the consequences of it, were not the subject of common understandings.” If the proper application of s40 could assist in resolving such issues then there should be no hesitation in following that course.
Negotiations for the sale of the land commenced in 1874, and an agreement reached in May 1879. The land was vested in the Crown in June 1881, and 2 months later declared “waste lands of the Crown” under s17 Wastelands Administration Act 1876 and s28 Land Act 1877. The land was endowed on the harbour board in 1884. Was it acquired by the Crown for a public work?
Section 40 requires that land be “held” for a public work—as opposed to its acquisition for that reason. Relevant factors were:
• Since the land was held as waste land of the Crown until endowment, no final decision was made about its disposal in the interim from 1881 to 1884. Its declaration as waste land was therefore a “neutral factor”.
• The land was acquired as part of a general policy to acquire as much land as possible, including land for infrastructure, including coastal communication, to promote settlement by colonists in the Gisborne area. A port facility was operating since 1873.
• The very wide definition of a public work in the 1876 Public Works Act indicated a government intention to acquire land for orderly development in the face of private competition, and this was the underlying purpose of the Crown in the purchase of this land.
• Whether this particular land would be used for a particular public work was not decided in 1881. However, just 39 days after purchase, a Gisborne Harbour Board Bill was introduced which provided for endowment of the land. It was passed in the House of Representatives but was defeated in the Legislative Chamber for lack of funds. The timing of events suggested that the supporters of the 1881 bill must have intended to use the land as an endowment prior to its being vested in the Crown in June 1881.
• These factors showed that in this period it was clearly contemplated, certainly at a local level, that the land should be endowed to a new harbour board. The Crown attitude was simply equivocal on the issue.
• This equivocal position remained after the defeat of the 1881 bill, and when the Gisborne Harbour Board Act 1882 was passed, which did not include the land, but it remained in contemplation as an endowment until it was endowed in October 1884.
• Accordingly, the land was held for a public work by the Crown from the period of vesting in the Crown until its endowment, and the delay can be ignored for the purposes of s40.
To whom the offer back should be made
The applicants claimed to be successors of the original owners and sought orders revesting the land in themselves. The reference in s40 to successors of the original owners does not simply mean first generation successors, but includes later successors—demonstrated by the fact that a person may pass on their interest by will or on intestacy under s78 Administration Act 1969. However, an assessment of the successors would be complex. Section 41/1981 permits an application to the Mäori Land Court to determine the persons. In any event, it was not possible for the High Court to order an offer to be made to the applicants, since their status as successors under s40 had not been established. A s41/1981 application would therefore seem to be the way to do this. The hearing was adjourned to allow the parties to confer on the orders to be made in light of this interim judgment.
[Ed: most harbour boards in New Zealand were established with endowments of Crown land. This judgment may therefore have application in other ports and places where Crown land recently purchased from Maori was used for endowments.]
The Proprietors of Mangakino Township v The Mäori Land Court & Hemi
CP252/97. High Court Wellington. 5 May 1998. McGechan J
This was an application for judicial review of several decisions of the Mäori Land Court relating to the Pouakani II Trust, a Mäori land trust constituted under s438 Mäori Affairs Act 1953, and now an ahu whenua trust under s354 Te Ture Whenua Mäori Act 1993. The plaintiff, a Mäori land incorporation, was the sole trustee of the ahu whenua land trust. The dispute arose when the plaintiff Mäori land incorporation applied to the land court for a review of its trust, as it was obliged to do under s351/1993, which requires former s438/1953 land trusts to be reviewed within 3 years of the commencement of the 1993 Act. The plaintiff anticipated that, following a favourable review, the ahu whenua trust would be terminated and the lands amalgamated with those of the existing land incorporation. Meanwhile, the court had received correspondence from dissatisfied shareholders of the land incorporation, and at the initial hearing of the application to review the trust, the court considered whether it should separately initiate under s280/1993 an investigation of the land incorporation. After discussion, it was decided to proceed with the review of the trust only. The land court appointed two experts to conduct an audit of the management and performance of the ahu whenua trust. The resultant report was sharply critical of the plaintiff’s personnel and practices. The plaintiff had written to the court asking to be consulted about the appointment of auditors, but the court had dismissed this on the basis that the matter should have been raised at the earlier hearing and it did not “conduct its business by mail” and without those affected being present.
The land court then received individual applications from the second defendant (Hemi) for both a review of the incorporation (s280/1993) and the land trust (s351/1993) including a request that the incorporation be replaced as trustee of the land trust by an independent board of trustees (s239/1993 replacement of trustees).
The land court commenced a combined hearing of the 2 applications for review of the land trust (ie those of the incorporation and Hemi) and the application for replacement of trustees, in the face of concerns expressed by the plaintiff incorporation about the appointment of the auditors, the status and content of their report, whether the court should have left it to the incorporation to subpoena the auditors and whether the report should be received in evidence. The court ruled that the audit report would be received, but in the absence of cross examination of the authors, allowance would be made for the weight which it would be given by the court. The hearing was adjourned only part-heard, with the court directing that a meeting of beneficiaries of the land trust be called to report back when the hearing reconvened whether beneficiaries wished the incorporation to continue as trustee. The vote would be recorded both on the basis to the beneficiaries present at the meeting and their shareholdings, to provide the court with sufficient information for its decision on suitable trustees. The incorporation noted its objection to the voting procedure, which the court had first proposed under ss172 & 173/1993 (meetings of assembled owners), but then imposed by making an amendment to the trust order itself.
The incorporation in these proceedings sought from the High Court a declaration that the order appointing certain persons to conduct an audit of the management and performance of the trust and trustee was a nullity, a declaration that the land court had no jurisdiction to conduct a hearing involving the audit, a prohibition order against conducting such a hearing and against directing a meeting of beneficial owners to ascertain their wishes as to the incorporation’s continued trusteeship, and an order that the report by the auditors was not evidence in any application still validly before the court and should not be lawfully admitted unless the authors were called and cross-examined.
Held: the court would make an order preventing the land court from directing the holding of a meeting of beneficial owners otherwise than in accordance with Part IX/1993 and applicable regulations, and a declaration that the audit reports should not be taken into account unless the authors were called as witnesses by the land court and submit to cross-examination. The remaining applications would be dismissed.
Jurisdiction to conduct and supervise a management audit
The plaintiff argued that the land court had no jurisdiction to appoint the audit of the management and performance of the ahu whenua land trust and that s351/1993 confines the land court to considering whether the terms of a trust as set out in the trust order should be confirmed or varied, or the trust terminated. The High Court was not persuaded by the submissions. The question of the existence of jurisdiction should be approached more broadly:
“It simply does not make sense for Parliament in s351 to direct the Mäori land Court to “review” a “trust”, with consequent powers to confirm or vary the terms of the order, or even to terminate the Trust, without taking into account the management and performance of the Trust up to that date, and prospectively. The past, of course, can be a powerful indicator of what may happen in the future unless steps are taken. The extent to which such an examination of past management and performance may be appropriate could well vary. An exemplary set of accounts, and a satisfactory current financial situation, might need no more. Questionable accounts, and suspect administration, could require a great deal more. Questions of degree of that sort should not disguise principle. … the legislative intention was to permit the Mäori Land Court to have regard to past management and performance, and with that prospective management and performance, in the course of mandatory s351 reviews.”
Appointment of management “auditors”
There is no implied power to appoint performance auditors under s351/1993 or otherwise. Section 351 contains no express power, nor does Part XII (Trusts). However, there is an express power contained in s69(2)/1993 which could have been invoked which empowers the land court to “cause” inquiries to be made, subject only to natural justice obligations. There is nothing to exclude own-motion appointments. The land court simply acted under the wrong provisions. Significantly, there was no objection at the time to the principle of appointment of independent auditors of the trust’s management. A slip by the land court should not be turned into grounds to overturn an order which could have been made under correct authority and which was appropriate.
Further, there is no breach of natural justice through an own-motion appointment. Section 69(2)/1993 does not impose prior consultation requirements. The intention to appoint independent management performance auditors was made known, no objection was raised and the terms of reference were clear enough from the outset in a general way. The plaintiff was not deprived of an entitlement or treated unfairly.
Status of the reports of the auditors
The auditors were lawfully appointed. Their reports had formal status accordingly and were not, as the plaintiff incorporation submitted, merely statements by potential witnesses. The section 69(2)/1993 power to “cause” inquiries to be made was sufficiently broad to authorise the appointed investigators to obtain reports from others in the process. However, when exercising powers under s69(2) to receive a report resulting from inquiries, the land court is obliged by statute (if not by natural justice) to ensure parties are kept informed and where appropriate are given an opportunity to reply. While the land court clearly understood this, in this case its opting to receive the report but making allowances as to the weight in the light of absence of cross-examination was an insufficient substitute. The auditors should have been available for cross-examination. With proceedings standing adjourned and evidence only part-heard, this remained possible.
Order re the meeting of beneficiaries
The land court was right to seek to ascertain and give effect to the wishes of owners as part of the discharge of its functions under the s351 and s239 applications (see s17(1) & (2)(a)/1993—importance of the wishes of owners). One, and arguably the best, method of doing this was by calling a meeting, which is a traditional and accepted method.
The approach of the land court in other such cases (namely Pokuru 1A1B2 & 1A2D2 (Wipaea Manu Block) 19 Waikato Maniapoto 1996 ACMB 66-70 11 Feb 1997—see Mäori LR April 1997 p5), has been to fashion an informal meeting procedure for beneficiaries under s222(2)(b)/1993 (court must be satisfied that any trustee is “broadly acceptable” to beneficiaries). The legality of that approach would not be commented on in this decision, but the facts of this case, particularly the fact that any vote would be contentious, required a clear procedure and an unchallengeable outcome, with no room for informal and debatable action under s351 or s239/1993. The correct procedure was the meetings procedure under Part IX/1993 (Powers of Assembled Owners). Although this would mean a result on the basis of shareholding rather than persons present, that is the law and the judiciary should not replace it. If voting by shares is felt to be inadequate guidance then the law should be changed. Accordingly, a meeting should be held under Part IX, preferably after all evidence in relation to the s351 and s239 applications, including cross-examination of the authors of the reports, had been brought out into the open.
Bias by predetermination
The plaintiff incorporation submitted that the land court showed bias by predetermination over a range of particulars with a cumulative effect. The High Court determined that this case did not come near to proof of bias by predetermination (using the test of “real danger or real likelihood as seen by an informed observer”—from Auckland Casino Ltd v Casino Control Authority  1 NZLR 142 CA), and the submission should not have been put forward.
Whether parts of the audit reports were outside jurisdiction
The plaintiff incorporation was particularly concerned that the audit reports on the trust activities included an investigation of the affairs of the incorporation as trustee. The court held that the general background and abilities of a trustee (eg in extraneous business operations) have only marginal relevance in a s351/1993 review of a trust, and could point to the need to build protections into an amended trust order. But such background and abilities have more obvious relevance under s239/1993 which deals with continued trusteeship. In this case, the land court was aware of the issue and would deal with any irrelevant material in its discretion.
Second defendant’s applications
There was nothing intrinsically wrong in the land court dealing with the two s351/1993 review of trust applications together, although the second defendant’s (Hemi’s) associated s239/1993 replacement of trustee application did raise separate considerations needing some segregation—and the land court had coped with that. The application under s239 for replacement of trustees was not properly particularised, and fair notice is required of the specific respects in which there has been an alleged failure to carry out the duties of a trustee (Re AMP Perpetual Trustee Co NZ Ltd: Poripori Farm Trust 53 Tauranga MB 129). However, this should be corrected by demanding further particulars be filed, not by striking out the application.
[Ed: the comments of the court on the appropriate voting and meeting procedure for determining whether proposed trustees are “broadly acceptable” to beneficiaries seems directly at odds with the Mäori Appellate Court decision in Pokuru 1A1B2, where it was stressed that an informal procedure is appropriate since the land court and not the beneficiaries makes the final appointment of trustees. The voting procedures under Part IX/1993 are quite formal and there are quorums set for each type of decision which the meetings can make. This formality seems to be some way removed from the land court satisfying itself whether trustees are “broadly acceptable” to beneficiaries.
On a technical point, the High Court noted that s74/1993 (land court orders not be called into question merely for irregularity or error in form) was of course no defence in a case such as this—and no party raised it as a defence.]
Te Awatapu O Taumarere v The Northland Regional Council
A34/98. Environment Court. 17 April 1998. Sheppard J, Catchpole and Easdale
Te Awatapu O Taumarere (Te Awatapu) is a committee of Ngapuhi formed to act on behalf of the kaitiaki of the waters of Taumarere River and parts of the Bay of Islands into which it flows. Te Awatapu lodged submissions concerning provisions in the proposed Northland regional policy statement. Being dissatisfied with the council’s decisions, Te Awatapu sought modifications of the regional council’s objective in relation to the maintenance and enhancement of water quality to include cultural purposes among the purposes for which water quality is to be maintained or enhanced (for all classifications of water). It also sought to include the gathering of shellfish for human consumption as a purpose for which the quality of water in estuaries and inner harbours which are influenced by major river inflows were to be maintained or enhanced.
Held: the appeal should be allowed to the extent that the council would be directed to provide cultural purposes as a further purpose for which all water bodies are to be maintained or enhanced. The appeal should be adjourned to provide an opportunity for the parties to present a joint proposal in respect of gathering shellfish for human consumption.
The council’s policy statement included cultural purposes as purposes for which water quality should be maintained or enhanced for lakes, rivers and streams. Te Awatapu contended that cultural purposes should be included for all water bodies. The regional council urged that management of water for cultural purposes ought not to be mixed with management for other purposes because there are no measurable standards for managing waters for cultural purposes, any disposal of wastes to waters of cultural or spiritual significance is objectionable to Mäori, boundaries around waters of cultural and spiritual significance are necessary to provide certainty for other users of water and a blanket requirement for all waters to be managed for cultural purposes would not be consistent with sustainable management of the water for other purposes and could effectively prevent discharges.
The court held Te Awatapu were entitled to rely on s6(e)/RMA 1991 which requires the relationship of Mäori with the Taumarere waters be recognised and provided for in the regional policy statement, and on s7(a)/RMA 1991 which requires that particular regard be paid to kaitiakitanga. Ngapuhi have long had a cultural and spiritual relationship with the Taumarere waters and feel kaitiakitanga (guardianship) responsibility in respect of them. They are concerned about the quality of waters for practical reasons such as shellfish gathering, but also because poor water quality denigrates the mauri of those waters.
It would assist the regional council’s function of integrated management of resources (s30(1)(a)/RMA 1991) if the purposes for which the quality of water bodies other than lakes, rivers and streams is to be maintained and enhanced included cultural purposes. The court also accepted that, pursuant to s61(2)(b)/RMA 1991, the regional council’s policy statement should be consistent with the Auckland Regional Council’s regional policy statement, which provides for cultural purposes, because part of the Kaipara Harbour is in one region and another part in the other.
Te Awatapu wished to see estuaries and inner harbours affected by river flows managed so that they are suitable for gathering shellfish for human consumption. The regional council argued that the management of these waters for shellfish gathering is not a practicable objective because faecal bacterial levels in those waters exceeded the relevant standards. Te Awatapu responded that the fact that it may not be possible to achieve the requisite standard within the short term is no reason for not making a start.
The court rejected the regional council’s point that the amendment sought would give a false expectation that the waters of estuaries and of inner harbours influenced by major river inflows are suitable for gathering shellfish for human consumption when they are not. An objective that included this amendment would respond to s6(e)/RMA 1991 (the relationship of Mäori with those waters be recognised and provided for in the regional policy statement) and s 8/RMA 1991 (the Treaty principle of active protection). It would also respond to the reality of continuing shellfish gathering in those areas by Mäori even though the water quality may not be suitable. Further, the objective could influence decisions on resource consent applications and policies for attaining that objective might include education of pastoral farmers in the value of riparian strips and their management.
However the court considered that the objective in that regard would be more effective if it was implemented by a willing regional council. Accordingly, it left Te Awatapu to their political remedies to persuade the regional council of the merits of adopting the amendment sought. In case they were successful, the court left the proceedings alive for three months to provide a vehicle for the appropriate amendment to be directed by consent.