June 2016 Māori Law Review

Review of Te Ture Whenua Māori Act 1993 – Te Ture Whenua Māori Bill – disposing of interests in Māori land

A Bill was introduced into the House of Representatives in April 2016 to further reform Māori land law. This latest reform project has been in train since June 2012 when an independent expert panel was appointed to review the law.

Toni Love has followed the law reform process and has prepared a series of articles examining the most significant components of the new Bill as introduced to the House of Representatives. In this article she examines the provisions relating to alienation/disposition of Māori land.

Overview

A review of the Te Ture Whenua Māori Act 1993 (“the Act”) was announced by the Associate Minister of Māori Affairs on 3 June 2012.[1]

A Review Panel was formed to advise on unlocking the economic potential of Māori land for its beneficiaries, while preserving its cultural significance for future generations.[2] The review aimed to provide a recommendation for a form of legislative intervention that would empower Māori land owners to achieve their aspirations while enabling better utilisation of land.

A complete re-write of the current Act was chosen over piecemeal amendment. This culminated in an exposure draft Bill that is markedly different from the Act both in structure and function. The proposed changes are intended to provide a solution to the issues raised by the Review Panel in their report as well as to empower Māori land owners.[3] After consultation, and a Waitangi Tribunal inquiry and report, the draft Bill was revised. A Bill has now been introduced into the House of Representatives.

This article is the fifth in a series that considers the substantive changes in the Bill as introduced, Te Ture Whenua Māori Bill (“the Bill”). The Bill was introduced into the House of Representatives on 15 April 2016.

Each article compares the main changes between the Bill and Act, and discusses the most significant issues addressed by the Waitangi Tribunal when it looked at the earlier exposure draft Bill (the Wai 2478 inquiry). The articles also include analysis from the resulting Waitangi Tribunal Report He Kura Whenua Ka Rokohanga (Wai 2478, 2016). The articles do not include a detailed clause by clause analysis.

Te Ture Whenua Māori Bill - articles
1Policy statement and explanatory note
2Preliminary provisions
3Status of land and whenua tāpui
4Ownership interests in Māori freehold land
5Disposing of interests in Māori land (this article)
6Succession
7Management entities
8Registers and the Māori Land Court
9Dispute resolution

Further information relating to specific clauses is available in the materials referenced in this article.

The content contained within this article presents information relating to the Bill as introduced to the House of Representatives. The reform is an ongoing process, with the Bill as introduced going through a number of iterations since its release as an exposure draft in May 2015.

Background

Concerns relating to disposing of interests in land under Part 4 of the Bill were raised both by claimants before the Waitangi Tribunal and by submitters during consultation on the exposure draft of the Bill.

Disposing of certain interests in land is called an alienation under Te Ture Whenua Māori Act 1993. These actions are termed dispositions under the Bill.

Part 4 of the Bill includes extensive changes to the existing law both in structure and process. The provisions in the Bill that govern dispositions are comprehensive and highly prescriptive. Each type of disposition and its requirements is detailed separately. This could be a difficult area for Māori land owners to navigate in the early stages of working under the new legislation. Although some of the threshold requirements for more serious dispositions such as sale that are set out in the Act have been maintained, many threshold requirements have been reduced via the new “participating owners” model that is a distinctive feature of the Bill.

The most striking change concerns the significant reduction of the role of the Court. The Court no longer has the final say on decisions concerning a disposition of land, except to check compliance with the Bill for certain types of dispositions. The reduction in the protective mechanisms coupled with the reversal of many of the presumptions found in the Act could promote easier alienation.

These concerns may be ameliorated through further details becoming available about the Māori Land Service and the services that service will be mandated to provide. Irrespective of its proposed functions, the Māori Land Service will require adequate resourcing as well as sufficient support and oversight, particularly during the transitional stages. Such support and advice will need to extend to oversight of governance bodies to ensure owners are properly informed about governance agreements, land management plans, and stipulations that restrict sale, options to purchase in regard to leases, and threshold requirements.

The Bill also requires owners to be vigilant about what occurs to their land to ensure that unwanted disposition decisions do not occur.

Discussion

Requirements for disposition/alienation of Māori land

Under the Act all alienations must be to a member of a preferred class of alienee. Alienations of Māori Freehold Land can be made by the sole owner, joint tenants, owners in common, trustees, and a Māori incorporation (s 147).

In the Bill, dispositions must be made to a preferred recipient or preferred entity, which replaces the preferred class of alienee. The introduction of the concept of preferred entity clearly envisages dispositions to governance entities (cl 96). Dispositions of Māori freehold land can only be made by a governance body under a governance agreement, or by the owners where there is no governance body in place (cl 97). There are limited circumstances in which others may dispose of land. For example, a kaiwhakahaere, an administrator or executor of an estate, or a mortgagee (cl 97).

Alienations of undivided interests under the Act, may be made by the owner of that interest and only by a vesting order by the court (ss 148 and 164). The Act requires alienations to be confirmed by the Court, which the court will grant, if satisfied of certain matters, which includes a consideration of the objectives in s 17 (s 152).

The equivalent part in the Bill is a lot more detailed than the Act, with each disposition and its particular requirements, being detailed separately. Some dispositions under the Bill require the preparation of a survey plan to ensure that no new parcel becomes landlocked; an allocation scheme; and where there is a governance agreement, a land management plan (cl 104).

Generally there are two types of dispositions under the Bill, those that require Court confirmation and those that do not. Sales, gifts (not by will), exchanges, boundary adjustments, partitions, amalgamations, aggregations, long-term leases where land is not managed by a governance body, and easements require Court confirmation that the disposition complies with the Bill (cls 100, 102, 105, 110, 113, 118, 122, 128, 135). Leases over land managed by a governance agreement, gifts by will, short-term leases, licences, or mortgages do not require the Court’s confirmation (cls 105, and 128 - 133).

Where Court confirmation is required, it extends to confirmation that the requisite instruments also comply. For partitions, amalgamations and aggregations the court must be satisfied that the allocation scheme is fair and equitable to the owners (cls 113, 118 and 122). Partitions are also conditional on the Court being satisfied that the partition will assist the owners to retain, occupy or develop their land (cl 113). Sales, exchanges, partitions and amalgamations made under a governance agreement require a land management plan (cls 100, 102, 104, 113, and 118).

Boundary adjustments, partitions, and amalgamations (including survey plan and allocation scheme) must be agreed to by the grantor or grantee of an interest that benefits or burdens the parcel (cls 110, 113, 118).

There are three categories of general lease under the Bill. These are leases of 52 years or less (short-term leases), a lease between 52 and 99 years (long-term lease), and a self-lease (cl 128). A self-lease is a lease of land managed under a governance agreement that is granted to the governance body or an entity controlled by a governance body and agreed to by the governance body (cl 128). Short-term leases require agreement by owners who together hold 75 percent or more of the participating owners’ total share, while long-term leases require agreement by owners who together hold more than a 50 percent share (cl 128). However, agreement is not required for a lease granted under a right of renewal (cl 128). Although these thresholds may appear back to front, 75 percent of the participating owners is likely in application to be a lower threshold than 50 percent of owners, thus a long-term lease has a higher threshold as might be expected.

Licences or profits à prendre may be granted over all or part of Māori freehold land (cl 132). They can be granted for a term of 52 years or less (including rights of renewal); or in the case of a forestry right, for a term of 99 years or less (cl 132). In the absence of a governance body, agreement by owners who together hold more than a 50 percent share in the land, is required (cl 132).

Role of the Māori Land Court in relation to dispositions

One of the most significant changes from the Act, in relation to the disposition of Māori land, is the reduction in the role of the Court. Under the Act the Court is required to assess certain criteria for alienations of whole parcels of land, individual freehold interests, or various title improvements, and then use the preamble, ss 2 and 17 to assess the overall disposition (ss 152, 164, and 286 – 288). This includes an assessment of whether a disposition will improve utilisation of the land and advance the interests of the owners (s 17). In the case of more extensive dispositions, hearings are required to provide an opportunity for owners to express their views. In contrast, for most dispositions under the Bill, the Court acts only as a final check by ensuring dispositions comply with the Bill and any required instruments. These confirmation orders are required for the disposition to take effect, but the process does not include a consideration of the overall merits of the disposition. This removal of the Court’s consideration of the overall merits reflects the Court’s reduced role under the Bill.

Clause 103 allows a governance body to sell or exchange Māori freehold land without securing owner support that would otherwise be required. To do this the governance body has to have attempted and failed to obtain the requisite owner agreement and to be satisfied there is no reasonable prospect of obtaining the required level of support. In this situation the governance body may apply to the Court for an order declaring that the land will cease to be Māori freehold land on the change of ownership (cl 103). Submissions on the exposure draft raised concerns about this provision, with some submitters contending that governance entities should never be able to alienate land without owner agreement.[4]

The Waitangi Tribunal also considered that this provision was inconsistent with the Treaty of Waitangi. The Tribunal noted that the provision did not contain an open-ended discretion for the Court, but that it would require the Court to consider only the matter specified, that is, whether it is ‘satisfied that the governance body has complied with section 103 in relation to the sale or exchange’ (p 304). Further, the Tribunal pointed out that if the clause was intended to confer a genuine open discretion on the merits, then an express wording as to that general discretion would be expected, such as that which exists for approving partitions by the court, which expressly requires the court to be satisfied that the partition would ‘assist the owners to retain, occupy, and develop their land for the benefit of the owners and their whānau.’ No such wording appears in cl 103. Finally, the Tribunal found it surprising that this asserted general Court discretion did not appear in the appendix detailing the protections against alienation in the Bill compared with the Act (p 304).[5] If clause 103(3) genuinely provided an unencumbered general discretion for the court to review and refuse consent to proposed sales by a governance body, one would have expected that to be one of the first protective mechanisms to be listed; however, it does not appear there at all. Thus the Tribunal did not accept that cl 103(3) is a fully discretionary control or effective protection by the Court against alienation (p 304). Overall, the Tribunal considered that this provision had the effect of nullifying and weakening the protections under the Bill. The Tribunal concluded that, in this respect, the proposed reforms breached the principle of active protection, and of the rangatiratanga guarantee in the Treaty (p 357).

The Crown submitted that this clause and its related provisions were included in response to feedback from trusts and incorporations that desired the current s 137 regime be continued in the Bill.[6] The s 137 regime provides an avenue for a governance body to obtain a court order for land rationalisation purposes.[7] However, this purpose is not explicit on the wording used in the Bill. Submitters noted that if this clause is to apply to land rationalisation only, then an express reference should be made to eliminate the confusion and subsequent concern that this provision has raised. It was also suggested that a high threshold of evidence and due care to locate owners was required before this clause could be triggered.[8]

The introduced Bill now includes what appears to be an open ended discretion for the Court (s 103). It states that the court must not make an order unless it is satisfied that ‘the governance body has complied with section 104 in relation to the sale or exchange; and the purpose of Parts 1 to 9 can be achieved more effectively if the order is made’. Although the wording is not express, as the Tribunal pointed out in relation to partitions, it does trigger the purposes of Parts 1 to 9. One of the purposes of the Act is to ‘protect the right of owners of Māori land to retain, control, occupy, and develop their land as a taonga tuku iho for the benefit of present and future generations of owners, their whānau, and their hapū’ (cl 3).

The addition of the Court’s discretion coupled with the safeguard in the form of a land management plan that expressly permits a sale of land suggests the clause continues to provide an important safeguard against alienation (cl 204).

Another significant change from the Act is the new process for the sale of Māori freehold land. Sales under the Bill will be required to follow a preferential tender process as detailed in the Bill (cl 100). Sales must be first offered to a preferred recipient under a negotiated agreement; or to a preferred recipient or preferred entity under an agreement formed on acceptance of a qualifying tender; and secondly to any other person, under an agreement made by tender or auction after a preferential tender process ends without a qualifying tender (cl 100). Notice must be sent to every preferred recipient and published electronically and (if necessary) in any other way so that preferred recipients are reasonably likely to learn of the request for tenders (cl 101). Preferred recipients and preferred entities have 20 working days in which to respond to a preferential tender process to lodge a qualifying tender.

Overall, the proposed reforms aim to increase utilisation. The reform assumes that utilisation of land is inhibited in large part by disengaged owners, hence the introduction of the participating owners model. The Tribunal emphasised the lack of empirical research with which to establish whether or not the present Act is in fact a barrier to land use, recommending that such research should be undertaken by the Crown. Another important factor is that despite its importance to the scheme of the Bill, the Crown has made very few decisions to date about the Māori Land Service and has been unable to date to offer Māori sufficient detail about this service.

Existing government research suggests that improving utilisation of Māori land will require a suite of integrated policy reforms. The Ministry of Agriculture and Forestry (MAF) undertook a series of interviews and meetings around New Zealand with various individuals and organisations, and conducted a substantial literature review in order to inform MAF of the current state and future potential of Māori freehold land in order to determine the barriers to utilisation.[9] The review found that the barriers included a lack of effective governance; the need for greater investment in Māori upskilling; the administration and the compliance costs associated with the Act and the Māori Land Court.[10]

Overall the report found that delivering the productive potential of Māori freehold land requires a multifaceted approach that involves a range of agencies and entities both within government and within Māoridom. This includes support of social structures and the development of collective approaches to land management and development; all level training; specialist support to assist all levels of development; and the streamlining of the Act’s processes and procedures.[11] These reports show that the policy approach of privileging participating owners and removing the requirements for the Court’s approval for dispositions will be insufficient to address utilisation issues. Therefore, the role of the Maori Land Service will be integral in achieving the policy goals of the proposed reforms.

Waitangi Tribunal consideration of disposition provisions

The Tribunal considered the removal of the need to seek discretionary approval from the Māori Land Court when considering the thresholds under the Bill. The Tribunal noted that the Bill will replace the discretionary oversight of the Court by combination of owner decisions with an administrative support mechanism and procedural checks (p 274). The removal of discretionary approval has been cast as the fundamental advantage conferred on Māori by the Bill because it allows Māori landowners to exercise tino rangatiratanga in respect of decisions affecting the utilisation of their own lands. The Tribunal considered that although tino rangatiratanga envisages the utmost or untrammelled authority in decision-making, the correlative obligation of Crown protection of Māori rights in land could not be ignored (p 275). Any statutory proposal that aimed to give effect to increased tino rangatiratanga had to remain protective in order for the Crown to discharge its broader Treaty obligations (p 275). The challenge in changing the system lay in identifying what Treaty principles had to be addressed and what mechanism in practical terms could do that (p 275).

The Tribunal stated that the Crown’s obligations under the Treaty in respect of Māori land could not be limited solely to giving effect to the guarantee of tino rangatiratanga. Māori wanted retention of land to be an overriding value. Consequently, no system could provide for untrammelled owner decision-making. The level of fragmentation of title and of owner disconnection required the Crown to take into account and give effect more generally to its Treaty obligations and duties (p 274). All of those Treaty obligations, and the practical complexities bearing upon their performance, remain important today, particularly as the processes of fragmentation and disconnection for many Māori whānau has increased since 1993 (p 274).

The Tribunal found that the statutory participation threshold levels in cl 51 could not always be relied on as a fixed protective mechanism because that clause allows a parcel managed under a governance agreement to provide for other participation thresholds or exceptions, subject only to the minimum thresholds levels in the Bill (p 294). Apart from those set minimum thresholds, if the governance agreement is approved by 50 per cent of participating owners and lowers the thresholds, then the statutory thresholds are no safeguard at all once the governance agreement is adopted (p 295). This situation is made even more problematic by the possibility of decisions being made at second-chance meetings with lower threshold requirements (p 296). The Tribunal noted that although the Crown has stated that decisions which are more likely to result in alienation will be tightly restricted, the irony is that relying on prescriptive procedural safeguards as a method of protection is that participating owners seeking to utilise their lands may well find that the percentages required of all owners for these types of decisions will be greater barriers to utilisation than endeavouring to persuade an impartial court (p 298).

The Tribunal accepted that the ‘all owner’ threshold percentages generally assist in meeting the Treaty duty of retention; however, that is not due to the ‘participating owners’ regime, rather it has resulted from strengthening the ‘all owner’ thresholds to a level that ensures greater protection against alienation and, with the exception of possible sales by the governance entity, it reflects the same or similar owner percentages as are required under the Act (p 306). However, the Waitangi Tribunal remained concerned at the ease with which a lease of up to 52 years (short term leases) may be granted; these leases will have to meet a much lower threshold of owner agreement than at present (p 306). This is problematic because leases at the upper end of that category will effectively alienate the land for two generations (p 306).

The Act makes the Māori Land Court the primary mechanism for enabling decisions to be made after ensuring that proposals have ‘sufficient’ support or no ‘meritorious’ objections (p 343). The Court is also the primary mechanism for ensuring that the rights and interests of all owners are considered and protected. Its supervisory powers prevent decisions that might result in harm to the Māori owners.

One of the most important changes in the Bill is that it removes the majority of these roles from the Court. The Tribunal feared that the proposed thresholds are complex and somewhat arbitrary, and may turn out to reduce the flexibility available under the present system, where the Court assists owners. The thresholds may also enable capture of decision-making by small minorities.

For the most part, however, permanent alienation (by sale, gift, or long-term lease) will still require a high threshold of owners’ support. In the Tribunal’s view, that continued protection for retention is Treaty-consistent.

Further, the changes designed to empower owners to make decisions (without the Court) are not inconsistent with Treaty principles, so long as there is properly-informed, broad-based support from Māori for the changes.

Importantly, the Tribunal took the view that the empirical research necessary for properly-informed agreement has not yet been carried out. The Tribunal also noted that Treaty principles do not require any one particular form of protective mechanism, so long as the Crown’s duty of active protection is provided for in a form that is effective and is acceptable to Māori. If Māori generally wish to substitute quorum and voting thresholds for court protections, that is their choice. However, the Tribunal stressed that before the current protective powers of the court can be removed, properly-informed, broad-based support from Māori is essential (p 343).

Notes

[1] Te Ture Whenua Māori Act 1993 Review Panel Discussion Document, March 2014.

[2] Te Puni Kōkiri Discussion Document: Te Ture Whenua Maori Act 1993 Review Panel (March 2013) at 5; Christopher Finlayson “Te Ture Whenua Maori Act review announced” (3 June 2012) New Zealand Government official website <www.behive.govt.nz>.

[3] Te Ture Whenua Māori Act 1993 Review Panel Report, Poutū-te-rangi 2014.

[4] ‘Appendix 1: Protections against alienation in the revised draft Bill compared to the 1993 Act.’

[5] ‘Appendix 1: Protections against alienation in the revised draft Bill compared to the 1993 Act.’

[6] Closing submissions of counsel for the Crown, WAI 2478, #3.3.6, 14 December 2015, at [166].

[7] TPK, ‘Te Ture Whenua Maori Reform: Summary of Submissions’, September 2015, at [277].

[8] TPK, ‘Te Ture Whenua Maori Reform: Summary of Submissions’, September 2015, at [287] – [299].

[9] Māori Agribusiness in New Zealand: A Study of the Māori Freehold Land Resource, Ministry of Agriculture and Forestry (2011) at iii.

[10] Māori Agribusiness in New Zealand: A Study of the Māori Freehold Land Resource, Ministry of Agriculture and Forestry (2011) at vi.

[11] Māori Agribusiness in New Zealand: A Study of the Māori Freehold Land Resource, Ministry of Agriculture and Forestry (2011) at iv.

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