A number of targeted amendments have been made to Te Ture Whenua Māori Act 1993.

The Te Ture Whenua Māori (Succession, Dispute Resolution, and Related Matters) Amendment Bill (Amendment Bill) passed its third reading on 22 July 2020. The Amendment Bill will come into force in January 2021.

Toni Love has prepared a series of articles describing the different areas covered by this law reform exercise. In this article, Toni looks at the Amendment Bill's changes to the operation of Māori land trusts and incorporations.

Overview

Background

Replacement for 2016 Bill

The Amendment Bill replaced the Te Ture Whenua Māori Bill 2016, which was introduced by the former government to replace the current Act. The 2016 Bill progressed some way through the legislative process but was paused during the Committee of the Whole House stage due to controversy surrounding the proposals. The current government chose to withdraw the 2016 Bill and proceed with "targeted amendments that would better support the governance, management and development of Māori land". (See Cabinet Paper seeking approval for introduction dated 14 October 2019 at [5].)

Whenua Māori Programme

The reform is a key part of the Whenua Māori Programme, which aims to support the sustainable development of whenua Māori (Māori land), increase the knowledge and skills of Māori landowners, generate wealth, and strengthen the connection between Māori and their whenua. The Programme booklet notes the amendments to the Act are made on the basis that navigating and complying with the Act can be difficult and frustrating for Māori land owners, with the process being time consuming, costly and complex.

The Cabinet Paper seeking approval for introduction noted the Amendment Bill is the first stage of the targeted legislative proposals, with the second stage addressing matters that create impediments for Māori land owners, namely valuation, rating, and public works. As part of the second stage, the Local Government (Rating of Whenua Māori) Amendment Bill was introduced to Parliament on 27 February 2020 to address longstanding issues with rating. At the time of writing, the Rating Bill is with the Māori Affairs Select Committee, whose members are considering submissions.

Explanatory note - policy objectives

The Explanatory note to the Amendment Bill provides that the Amendment Bill seeks to ensure that the laws governing Māori land work better for whānau by making practical and technical changes to reduce the complexity and compliance requirements that Māori encounter when they engage with the courts regarding their Māori land. In particular, the Bill proposes:

• a new dispute resolution process based on tikanga Māori;
• a simplified and streamlined succession process which allows a Registrar of the Māori Land Court (Court) to deal with simple and uncontested succession applications in certain situations;
• a simplified and streamlined trust process, which allows a Registrar of the Court to deal with simple and uncontested trust applications in certain situations; and
• to extend the jurisdiction of the Court to deal with certain matters regarding Māori freehold land concerning (among other things) injunctions, mortgages, and easements and covenants.

Overall the legislative proposals are intended to facilitate Māori land owners’ participation in the governance, management and development of their Māori land. (See Cabinet Paper seeking approval for introduction dated 14 October 2019 at [5].)

The Amendment Bill also proposes a number of minor and technical amendments to improve clarity and promote the Act's overall workability.

Discussion - Māori land trusts and incorporations

The Amendment Bill makes a number of changes affecting Māori land trusts and Māori incorporations.

Māori land trusts

Regarding trusts, the Amendment Bill replaces the current grounds for the Court to remove a trustee (s 240) with those contained in ss 104 and 105 of the Trustee Act 2019, which are:

• the Court may form a Māori incorporation from the owners of Māori freehold land if it is in the owners’ interests, which requires a resolution of assembled owners and sufficient support from the owners (s 247);
• updating the grounds for the Court to remove a member of an incorporation's committee of management to include grounds for persons who are subject to an order appointing a manager under section 31 of the Protection of Personal and Property Rights Act 1988, has a trustee corporation managing the trustee’s property under section 32 or 33 of that Act, or is an undischarged bankrupt (ss 240, 269 and 272);
• updating the grounds that disqualify a person from being a member of the committee of management of a Māori incorporation to include grounds where someone is prohibited from being a director, promoter or otherwise takes part in the management of a company under the Companies Act 1993 or an incorporated or unincorporated body under the Financial Markets Conduct Act 2013 or the Takeovers Act 1993;
• requiring a Māori incorporation to record the details of dividends paid to shareholders and keep an interests register. The register would need to contain details of the members of the committee of management's beneficial interests in, and dealings in, the Māori freehold land held by the incorporation.

The Select Committee recommended amending clause 48 (new section 274B(3)) to provide that the register be held in either physical or electronic form and updating section 274B(4), which relates to the inspection of the interests register, to refer to both a physical and electronic register as a result of this change.

The Select Committee further recommended inserting a new subsection (274B(5)) providing that electronic interests registers can be made available for inspection on a publicly accessible web page, as well as amending ss 274B(4) and (5) to specify that any viewing of the registers would be free of charge. The Committee considered these amendments would improve the accessibility of the information contained in the register of interests and enhance the accountability of committees of management.

The Departmental Report prepared by Te Puni Kōkiri noted that while there are many benefits associated with establishing a Māori incorporation, very few incorporations have been established (only 160 compared to 5,691 ahu whenua trusts). The Departmental Report noted that this is partly due to the need for owners holding 15% in aggregate of the shares in the land to consent to the establishment of an incorporation. This threshold can be difficult to achieve, especially for land blocks with a high number of owners (even when most owners agree with the proposal). The Amendment Bill therefore replaces this threshold test with the requirement for the Court to be satisfied there is a sufficient degree of support for the proposal.

The Departmental Report made the following comments in response to submissions:

• the phrase “sufficient degree of support” does not need to be defined as this phrase is used throughout the Act and has established meaning, which the Court has held requires the applicant to demonstrate support for the application must be from "among the owners" and outweighs the opposition;
• the 10% threshold for investigating the affairs of a Māori incorporation should not be removed. This threshold provides certainty that decisions consistent with the incorporation's constitution will only be challenged when the shareholders have a substantial degree of concern. Removing this requirement runs counter to the policy intent of the amendment (being to remove barriers to establishing incorporations) and would make incorporations less attractive. However, the Court may require an officer of an incorporation to appear before the Court to explain any act or omission that falls within the types stipulated in the Act. For instance, failure to disclose an interest or entering into discussions where personal contracts or similar matters are being discussed (see s 281(1));
• the further prescribed grounds that disqualify a person from the committee of management do not need to be removed.  The differences between the removal of a trustee compared to a member of the committee of management reflect the differences between a trust and an incorporation. The grounds for removing a trustee are based on those contained in the Trusts Act 2019, while the grounds for removing a member of the committee of management are based on those found in companies legislation;
• no change is required to require a trustee to be removed if they cease to qualify as an officer of a charitable entity as this is not a feature of the Trusts Act;
• no change is required to make the obligation relating to the disclosure of members' interests identical to that found in the Companies Act because of the special nature of Māori incorporations.

Overall, the Departmental Report noted that the changes seek to better align the governance practices of Māori land trusts and incorporations with best practice standards, provide greater transparency for land owners, and make it easier for whānau to establish Māori incorporations.

Author: Toni Love

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