Adams v Adams
[2024] NZHC 1713
•26 June 2024
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV 2020-419-000034
[2024] NZHC 1713
UNDER Property Law Act 2004 and Trusts Act 2019 IN THE MATTER OF
an application for an order for sale of real property and distribution of the proceeds and an application for directions
BETWEEN
SONIA RANGIMARIA ADAMS
Plaintiff
AND
DESMOND ALEXANDER ADAMS
First Defendant
PAULINE PARAKU
Second Defendant
Hearing: 13 May 2024 Appearances:
S McKenna for the Plaintiff
P Depledge for the Defendants
Judgment:
26 June 2024
JUDGMENT OF TAHANA J
This judgment was delivered by me on 26 June 2024 at 3.00pm
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
McKenna King Dempster, Hamilton Riverbank Chambers, Hamilton
ADAMS v ADAMS [2024] NZHC 1713 [26 June 2024]
Hei tīmatanga kōrero | Introduction
[1] At the heart of this application is a property owned by a Māori whānau. The property was left to the tamariki (children) on the passing of their mother, Marion Te Omiraka Putere. Ms Putere had eleven tamariki and one had sadly passed away prior to her death. The whānau proceeded to deal with the property as a whānau by holding whānau hui and discussing what should be done with the property. The whānau hui refer to “Te Omiraka Trust”. The whānau agreed to appoint persons as trustees, those persons included the plaintiff and the defendants (the Parties).
[2] The plaintiff, Sonia Adams, is a mokopuna1 and whāngai2 of Ms Putere and the defendants are tamariki of Ms Putere.
[3] The solicitor who acted as executor of Ms Putere’s estate transferred the property into the names of the Parties understanding that they had been appointed as trustees. This occurred around the same time that the whānau agreed to appoint a new solicitor. All beneficiaries except two provided written authority for the new solicitor to act.
[4] In the absence of a written trust deed, the new solicitor sought to transfer the property into the names of the beneficiaries under Ms Putere’s will. Had that occurred, the property would now be in the names of the children. The property has continued to be held in the names of the Parties.
[5] The Parties all accept that they hold the property for the benefit of the beneficiaries under Ms Putere’s will. They have not sought to deal with the property as though it was their own. The plaintiff seeks an order that the property be sold. The defendants do not oppose the application.
Ngā Take | Issues
[6]The issues I must determine are:
1 Biological grandchild.
2 Foster or adopted child according to tikanga Māori.
(a)What is the relevance of tikanga in considering the circumstances in which the property became to be held in the names of the Parties?
(b)Do the Parties hold the property pursuant to a trust and if so, what is the nature of that trust?
(c)Should an order for the transfer and/or sale of the property be made?
Ko ngā kōrero e pā ana ki te tono nei | Background to application
Will of Ms Putere
[7]Ms Putere sadly passed away in 1990.
[8] Ms Putere prepared a will dated 3 December 1986 (the will). Under the will, she appointed her solicitor, Mr Todd as her executor and trustee. She devised and bequeathed:
the whole of my said estate unto my trustee to pay thereout all my just debts funeral and testamentary expenses and all estate duties payable upon the whole of my dutiable estate and to stand possessed of the residue UPON TRUST for such of them my children as shall survive me and attain the age of twenty (20) years and if more than one in equal shares.
[9] Ms Putere owned a property at 37 Te Roto Road, Te Kauwhata (the property). The certificate of title for the property records that it was vested in Charles Adams and Marion Te Omiraka Adams on 27 September 1960. It was vested in the sole name of Marion Te Omiraka Adams on 4 May 1984. Marion Te Omiraka Adams then became Marion Te Omiraka Putere.
[10] Ms Putere had eleven children: Edward Adams, Lorraine Huriata, Desmond Alexander Adams, Pauline Rangiwauwau Paraku, Tipene Kauwhata Adams, Harry Adams, Robert Adams, Christine Kataraina Puaka, Eleanor Kirimoumou Pearl Riki, Peter Maui Timothy and Wayne Adams.
[11] I refer to the children and the plaintiff (Sonia Adams) by their first names to avoid any confusion given the common Adams whānau name.
[12]Wayne had passed away before Ms Putere died.
[13]On 22 August 1990, probate was granted.
[14] On 29 April 1991, the property was transferred into the name of Mr Todd, as executor of the estate.
First whānau hui in 1994
[15] On 26 March 1994, a whānau hui (family meeting) was held at Te Kauwhata. The minutes are entitled “Hui for the Te Omiraka trust.”3 The whānau agreed to appoint a third party as their “budgeting office” for the beneficiaries for the rents from the property.
[16] Two bank accounts (bereavement and savings) were opened in the name of “Te Omiraka Whanau” and the Court was provided with bank statements from 1995. A bank statement records rental of $100 per week having been paid into the savings account. The bank statement is addressed to “E Adams” of Waiuku. Presumably this is Edward.
[17]There are no records of what may have occurred between 1995 and 2006.
Meeting with executor
[18] On 3 February 2006, three of the siblings met with Mr Todd. Desmond wrote to the whānau about that meeting indicating that they could give the tenants notice and a whānau member could move into the property. Desmond also noted that whānau had contacted Mr Todd indicating they wished to sell the property. Desmond proposed to call a whānau hui to discuss. Whānau who could not attend were invited to submit their views on sale of the property.
3 The attendees are recorded as Fred Paraku, Edward, Des, Tip, Pauline, Wayne, Robert, Mihi, Moana, Fred, Donna, Maylene and Louis[e] Johns. Apologies are recorded from Harry, Eleanor, Christine, Lorraine and Peter.
Whānau resolve to appoint board of trustees
[19] On 18 March 2006, a hui was then held for “Te Omiraka Trust 2006.”4 The whānau agreed to appoint a board of trustees comprising: Desmond (Chair); Pauline (Treasurer), Sonia (Secretary); Lance Adams and Heeni Hura. The whānau discussed renting the property to whānau members and the management of bank accounts going forward (which would require three trustees’ signatures).
First trustee meeting
[20] On 28 March 2006, there was a “Te Omiraka Trustee Hui”.5 The trustees discussed appointment of a new solicitor, Ms Starr, who had provided a letter outlining what was required for her to act. The trustees discussed opening bank accounts and it was agreed Desmond would follow up with Edward who “has been acting as Trustee over the Estate for the past 16 years”.
[21] On 29 March 2006, Desmond wrote to Mr Todd providing him with a copy of a letter to Edward requesting information and informing Edward that new trustees had been appointed.
Whānau appoint two more trustees
[22] On 14 April 2006 there was a further whānau hui.6 The letter from Ms Starr was tabled as were the bank accounts. The whānau discussed the bank accounts for the trust, who wished to live in the property and the amount of rent whānau and non- whānau tenants should pay. The whānau agreed to appoint two further trustees: Duran and Jeremy.
4 The attendees are recorded as Desmond Adams, Donna Adams, Pauline Paraku, Fred Paraku, Tipene Adams, Moana Adams, Lance Adams, Marion Adams, Christine Puaha, Percy Puaha, Huirata Adams, Eleanor Riki, Marion Adams, Jeremy Adams, Lisa Davis, Sonya and Jamie Pink, George Hura and Heeni Hura. Apologies are recorded from Harry Adams, Edward Adams, Robert Adams and Peter Timothy.
5 The attendees are recorded as Fred & Pauline Paraku, Desmond & Donna Adams, Sonia Pink, Lance Adams, and Heeni Hura. There are no apologies.
6 The attendees are recorded as Fred & Pauline Paraku, Desmond & Donna Adams, Percy & Christine Puaha, Robert & Maylene Adams, Duran & Darlene Adams, Robert Jnr & May Adams, Sonia & Jamie Pink, Jerome Adams, Jeremy & Lisa Adams, Huriata Adams, Lance Adams, and Heeni Hura. Apologies are recorded from Eleanor Riki, Harry Adams, Karl & Marion Adams, George Adams, Edward & Mihi Adams, and Tipene & Moana Adams.
Transfer of property to Parties
[23]On 11 May 2006, the property was transferred into the names of the Parties.
Ms Starr starts acting
[24] On 26 May 2006, Ms Starr wrote to Mr Todd confirming that she had been instructed to act for the beneficiaries of the estate. She requested information from Mr Todd as to the estate, including details of the bank account, whether the property was being rented and disclosure of income earned on the property.
[25] On 12 July 2006, Mr Todd responded to Ms Starr and enclosed copies of minutes that had been forwarded to him. Mr Todd informed Ms Starr that the family had appointed Desmond, Pauline and Sonia as trustees of the family trust and that in accordance with those instructions, he had transferred the property.
[26] On 17 July 2006, Ms Starr wrote to Desmond requesting a copy of the family trust document. No trust deed could be provided as none had been prepared.
[27] A 19 July 2007, Ms Starr wrote to Pauline and Desmond setting out calculations of the rental over 16 years and suggesting that a letter be sent to Edward asking for information about the rental monies. She noted that if Edward does not agree, they will need to take the matter to Court. Ms Starr also noted that:
There is also the other matter, which is the need to obtain a signature from Sonya. If we cannot obtain her signature, you will likely have to go to Court to remove her from the title.
Before we proceed, we will require further funds in advance on account of our fees…
[28] On 20 September 2007, Ms Starr wrote again to Pauline and Desmond noting that she had not received further instructions and would require further funds on account. Ms Starr then ceased acting.
[29]The property has remained in the names of the Parties.
Ko te hātepe e pā ana ki te tono nei | Procedural history
[30] It is helpful to set out the history of this proceeding for the benefit of the whānau. It is now over four years since the original claim was filed.
[31] On 20 February 2020, the plaintiff filed a claim seeking an order pursuant to s 339 of the Property Law Act 2007 (PLA) that the property be sold and the proceeds be divided amongst the beneficiaries under Ms Putere’s will.
[32] On 29 June 2020, the defendants applied to strike out the claim. That application was deferred for a mediation to take place. There was a mediation on 25 September 2020 and the Parties agreed they would do all they could to form an ahu whenua trust. It is unclear who attended that mediation and/or whether it included the wider whānau.
[33] On 13 November 2020, the defendants filed a notice of appearance indicating that they did not oppose the claim but wished to reserve all rights. They discontinued their application to strike out the claim.
[34] On 15 June 2021, Sonia filed an amended statement of claim seeking orders that the property be sold and requiring that the Public Trust administer the sale and the division of proceeds. In the alternative, the claim sought directions under s 133 of the Trusts Act 2019 that the Public Trust be appointed as an independent trustee to administer the sale.
[35]On 2 November 2021, Sonia filed a further amended claim seeking:
(a)a declaration that the Parties hold the property pursuant to a constructive trust;
(b)directions under s 133 of the Trusts Act that the property be transferred to Mr Wilson (the executor of Mr Todd’s estate) to administer the sale and distribution of proceeds in accordance with Ms Putere’s will; and
(c)alternatively, an order for sale under s 339 of the PLA. That alternate claim was not pursued at the hearing.
[36] On 9 November 2021, the plaintiff was directed to serve the proceedings on all of the beneficiaries.
[37] The court file indicates that on 16 December 2021, Ms Morgan accepted service as counsel on behalf of Eleanor, Harry and Robert. Ms Morgan informed the plaintiff’s solicitors that they are wanting to form a trust and keep the house in their possession for all of the beneficiaries to benefit from its use:
Further, they are considering reverting it to Māori land. If they are successful, then the generational process of succession can commence and the grandchildren will then be able to benefit once their parent dies. The idea of having their possession sold from under them is abhorrent.
[38] On 12 September 2022, counsel for Harry Adams filed a notice of appearance indicating that he does not oppose the plaintiff’s claim.
[39] On 26 August 2022, Chemell Paraku, a mokopuna of Ms Putere who also says she is a whāngai of Ms Putere, applied to join the proceeding. She currently resides in the property and says that she is currently paying $350 per week pursuant to an agreement that she has with Eleanor, Robert and Peter who refer to themselves as the “MTP Whanau Collective”. On 28 March 2023, Chemell Paraku’s application was declined.7
[40] Against the above background and procedural history, this Court is being asked to make orders for the sale of the property.
Te Ture | Relevant law
He tikanga Māori e pā ana ki tēnei tono? | Is tikanga relevant to this application?
[41] The first issue to determine is whether tikanga is relevant in considering the circumstances in which the property became to be held in the names of the Parties.
7 Adams v Adams [2023] NZHC 608.
[42] The Supreme Court in Ellis v R unanimously recognised that tikanga has been and will be recognised in the development of the common law.8 Tikanga will need to be considered where it is relevant to the circumstances of a case.9 Tikanga is also relevant to explaining the social and cultural framework for the actions of Māori parties.10
[43] The Supreme Court also acknowledged the challenges that may exist where there is a difference between the principles under tikanga and the current common law:11
[119] Challenging issues may arise where there may be a difference between the process or result indicated by tikanga principles and that under the current common law. Such issues may arise due to the traditionally more individualistic nature of the common law and the more relational and communitarian perspective of tikanga. That does not necessarily mean the two are irreconcilable or necessarily by default sit in opposition. The methodology of resolving any differences will need to be worked through on a case-by-case basis.
[44] The relevant context here is a whānau Māori who have met together to discuss how to deal with the property. The documentation provided to the Court refers to the property as “our papakainga” and a place where the whānau can “take [their] mokopuna home to show them where [their] birth right is”. That language suggests that the property is a place to which the whānau whakapapa or at the very least, a place which the whānau see as culturally significant.
[45] The whānau hui minutes reflect tikanga in that they start and end with karakia and include mihi. The minutes of one whānau hui refer to the need to bless the house before any of the whānau move in. The minutes also indicate that the whānau had agreed to contribute to a tangihanga (funeral) insurance policy and to contribute to the whānau bank account.
[46] There could not be a clearer context in which tikanga Māori is front and centre to how the whānau behaved. That context is relevant to understanding the intentions
8 Ellis v R (Continuance) [2022] NZSC 114, [2022] 1 NZLR 239 at [19].
9 At [117].
10 At [118].
11 At [119].
of the whānau. The whānau are Māori and the whānau engaged in a way, as reflected in the minutes of the whānau hui, that accords with tikanga Māori.
[47] Fortunately, we also have the benefit of the findings of the Māori Land Court who regularly opine on how Māori view Māori land and inheritance. I note that this land is general land owned by Māori but tikanga concepts are relevant especially if the way in which the whānau engage reflect tikanga. The Māori Land Court’s observations as to how Māori view Māori land is helpful in viewing the conduct of the whānau:12
First, Māori land is not seen as a commodity but a cultural heritage. Second, Māori land is expected to be passed from generation to generation; the current generation is merely a custodian for the next. Third, Māori land is almost always received by the current generation without payment. With limited exceptions, current owners have not invested their personal wealth in purchasing the land. They can hardly complain at not being able to realise the full monetary value of their land by selling it when they received it for free in the first place.
[48] It is therefore necessary to consider the actions of the whānau within the context of tikanga.
Trusts
[49] The second issue to determine is the basis upon which the Parties hold the property. They understand that they hold the property for the beneficiaries under Ms Putere’s will and none of the Parties have sought to act contrary to that understanding.
[50] The Trusts Act applies to express trusts however, a court may where necessary or appropriate, apply the provisions of the Trusts Act to a resulting trust, a constructive trust or a trust that does not satisfy the definition of express trust but that is recognised at common law or in equity as being a trust.13
[51] Section 13 of the Trusts Act sets out the characteristics of an express trust, as follows:
12 Re Te Whata – Waiwhatawhata 1A2B6 (2008) 125 Whangarei MB 294 at [39].
13 Trusts Act 2019, s 5(2)(b).
Characteristics of express trust
The characteristics of an express trust are as follows:
(a)it is a fiduciary relationship in which a trustee holds or deals with trust property for the benefit of the beneficiaries or for a permitted purpose; and
(b)the trustee is accountable for the way the trustee carries out the duties imposed on the trustee by law.
An express trust may be created by:14
15 Creation of express trust
(1)An express trust may be created—
(a)by or under an enactment; or
(b)by a person (the settlor) who, clearly and with reasonable certainty (and subject to any formalities prescribed by any enactment),—
(i)indicates an intention to create a trust; and
(ii)identifies the beneficiaries (or classes of beneficiaries) or the permitted purpose of the trust; and
(iii)identifies the trust property.
(2)A trust created under subsection (1) commences when a trustee holds property of the trust.
[53] Section 25(2) of the PLA requires that a trust must be created in writing and signed by the settlor if it relates to land; and it is to take effect in the lifetime of the settlor. Section 25 however, does not affect the creation or operation of a resulting, implied or constructive trust or the disposition of any interest in land by operation of law.15
[54] Garrow and Kelly Law of Trusts and Trustees provides guidance on the nature of a resulting trust as follows:16
14 Section 15.
15 Property Law Act 2007, s 25(4).
16 Chris Kelly and Greg Kelly Garrow and Kelly Law of Trusts and Trustees (8th ed, LexisNexis, Wellington, 2022) at [14.5] and [14.6].
A resulting trust returns beneficial ownership of the trust property to a person who owned the property before it reached the trustee’s hands; in equity the beneficial interest “jumps back” to its previous owner. However, if that party seeks to claim a greater share for subsequent direct or indirect contributions, the claim would be on the basis of a constructive rather than a resulting trust. Certainly in England the distinction can be important in the event of bankruptcy. Lord Millett expressed the view that a constructive trust arises when it is unconscionable for the owner of the legal title to assert a beneficial interest and deny the beneficial interest of another. A resulting trust arises when the legal title has been transferred to another and the person who provided it did not intend to pass the whole beneficial interest to the recipient. It does not depend on unconscionable conduct. The authors of Lewin on Trusts state that resulting trusts are founded on the presumed but rebuttable intention of the transferor or purchasers of property; constructive trusts are imposed on a person who holds the title to property against his intention.
A further difference between resulting and constructive trusts is that traditionally a resulting trust arose from the presumed intention of the parties, whereas a constructive trust did not. This issue has been the subject of some controversy — Megarry J in Re Vandervell’s Trusts; White v Vandervell Trustees Ltd suggested that one form of resulting trust does not depend on intention but operates automatically. However, in Westdeutsche Landesbank Girozentrale v Islington LBC Lord Browne-Wilkinson questioned this. In his view, “[a] resulting trust is not imposed by law against the intention of the trustee (as is a constructive trust) but gives effect to his presumed intention”.
(footnotes omitted)
[55] As to the nature of a constructive trust, in Commonwealth Reserves I v Chodar Glazebrook J explained the features of a constructive trust, as follows:17
Constructive trusts are distinct from any other form of trust in that they are not directly dependant on the intention of the parties. Express and implied trusts arise from the actual or inferred intention of the parties, while resulting trusts are based on the presumed intention of a transferor of property. In contrast to this, a constructive trust is imposed by the operation of a rule of law, and possibly through the exercise of the Court’s remedial discretion.
[37] It is also important to realise that a constructive trust is a means to an end. While it bears the name “trust”, it is in some cases simply a mechanism to enforce personal accountability with proprietary consequences. The object of a constructive trust is generally not to create an ongoing trust relationship, but to force the disgorging of money or property by the constructive trustee.
[56] Garrow and Kelly provide guidance on the difference between a resulting trust and a constructive trust:18
17 Commonwealth Reserves I v Chodar [2001] 2 NZLR 374 (HC) at [36] and [37].
18 Kelly and Kelly, above n 9, at [15.4] and [15.5].
As above, a constructive trust differs from a resulting trust in a number of ways. While resulting trusts rely on the presumed intentions of the parties, constructive trusts may be found irrespective of the parties’ actual or presumed intentions. In the case of a resulting trust, the property in question will have originally belonged to the person who is held to be the beneficiary of the resulting trust. In the case of a constructive trust, the property in question was not necessarily originally the property of the person for whom it is ultimately found to be held on constructive trust.
Constructive trusts generally respond to unconscionability – they will arise in a variety of circumstances where equity recognises that it would be unconscionable for the person with title to property to retain a beneficial interest in that property.
(footnotes omitted)
[57] It is therefore necessary to assess the circumstances in which the property was transferred to the Parties and the basis upon which it is now held.
Kōrerorero | Discussion
On what legal basis do the Parties hold the property?
[58] The requirement in s 25(2) of the PLA that a trust must be in writing and signed by the settlor if it relates to land has not been satisfied. The relevant settlors are the beneficiaries under Ms Putere’s will. The whānau were not aware of this requirement and conducted themselves on the assumption that a trust was in place. The absence of this requirement however, does not affect the creation or operation of a resulting, implied or constructive trust.
[59] I am satisfied that the minutes of the whānau hui indicate a clear intention to form a trust. They certainly do not indicate an intention that the property is to be held in the name of the executor for the purpose of selling the property. The trust property is clearly identified and the minutes refer to the “beneficiaries”, which in the context can only refer to the beneficiaries under Ms Putere’s will. I set out my reasons for this finding.
[60] The minutes of the whānau hui in 1994 refer to “Te Omiraka trust”. The attendees and apologies indicate the siblings were invited and some attended with their spouses.
[61] The issues discussed at the hui indicate that the whānau considered the property was a whānau asset, with decisions about the property to be made by the whānau at whānau hui. At the hui, the whānau discussed payment to the solicitor (Mr Todd), insurance and sale or renting out of the property. These minutes indicate that the whānau intended that the property be rented out and the rents paid into a whānau account.
[62] This intention is further supported by the bank statements for accounts held in the name of “Te Omiraka Whānau” in 1995. Those bank statements were addressed care of “E Adams” (Edward) supporting Desmond’s contention that Edward had been acting as “trustee”. There was a bereavement account and a savings account indicating that rent had been paid for the property.
[63] The minutes of the whānau hui on 18 March 2006 also record the whānau’s intentions for the property:
… any family differences to be sorted there and then we start the meeting about the house.
[Huriata] stated that we all need to work together this time for the house and land and to go forward and forget the past and start anew.
…
Christine then stipulated that we need to get the house back so that family members can take [their] mokopunas home to show them where [their] birth right is.
…
Tipene also gives his love and full support to the whanau.
..
Percy then stood up and then said that this is a beautiful meeting with lots of aroha…
[64] The whānau then proceeded to nominate a board of trustees indicating their intention to administer the property through a trust.
[65] The appointed trustees then sought to act in accordance with the wishes of the whānau and held a meeting. They opened new bank accounts, they looked for a new
solicitor and they sought to act consistent with the responsibilities of trustees. The trustees also contributed out of their own funds to locate documentation so that Ms Starr could act.
[66] Desmond acted to advance the interests of the whānau by writing to Mr Todd and seeking to engage with Edward. Desmond’s letter to Edward dated 29 March 2006 indicates his desire to act in the best interest of the whānau:
… hopefully we can reach [an] amicable agreement for our whanau and mokopunas. What we need from you is cooperation you need to pass on information to Sonya so that we can carry on with thing. [It’s] not about money [it’s] about our sibling and our mokopunas …
[67] The subsequent whānau hui on 14 April 2006 further indicates that the whānau understood that they had a trust and wished to act collectively.19 They agreed to instruct Ms Starr, they discussed the bank accounts, they agreed the amount of rental to charge and they tried to discuss who should rent the property.
[68] The minutes of the 14 April 2006 hui also indicate that there had been a discussion with Mr Todd who had told the trustees about duty tax and a government evaluation on the house that needs to be undertaken. This discussion appears to relate to the requirements for establishing a trust.
[69] The minutes of the various whānau hui disclose a clear intention to deal with the property collectively, as a whānau. The issue of sale is noted but the minutes do not record any agreement to sell the property. To the contrary, they indicate a desire to keep the property as a whānau asset for them and their mokopuna.
[70] By the end of April 2006, it is clear that the whānau understood that they had a trust known as “Te Omiraka Trust” and that they had appointed seven of the whānau to act as trustees. They had agreed the property should be rented to a whānau member and they agreed on the rental amount to be paid.
19 The attendees at that hui were Fred and Pauline Paraku, Desmond and Donna Adams, Percy and Cristine Puaha, Robert and Maylene Adams, Duran and Darlene Adams, Robert Jr and May Adams, Sonia and Jamie Pink, Jerome Adams, Jeremy and Lisa Adams, Huriata Adams, Lance Adams and Heeni Hura. Apologies were received from Eleanor Riki, Harry Adams, Karl and Marion Adams, George Adams, Edward and Mihi Adams, and Tipene and Moana Adams.
[71] Desmond and Pauline then responsibly sought to work with Ms Starr, who the whānau had agreed should be appointed to represent “our Trust”.
[72] It is at this point that the intentions of the whānau who had acted as though the property was owned collectively by “Te Omiraka Trust” and the PLA requirements are not aligned. It is also at this point that the solicitors acting for the whānau do not appear to have understood tikanga and/or to have considered the options available to constitute a trust other than under the PLA.
[73] This may or may not reflect a lack of understanding of tikanga Māori and the way in which whānau Māori deal with collectively owned land. The whānau could have applied to the Māori Land Court who has jurisdiction to constitute an ahu whenua trust in respect of general land owned by Māori.20 An application to constitute an ahu whenua trust could have been made on behalf of any of the owners of the land.21 The Māori Land Court could have granted the application if it was satisfied that the owners of the land had sufficient notice of the application and sufficient opportunity to discuss and consider it and that there is no meritorious objection to the application among the owners, having regard to the nature and importance of the matter.22 The Māori Land Court may also make orders for the payment from the Māori Land Court Special Aid Fund of the reasonable legal costs of persons represented before the court.23 That would have assisted in the absence of any funds to support the payment of legal fees, which appears to have been one of the reasons the whānau were left without legal advice when funds were not advanced to Ms Starr.
[74] These options do not appear to have been discussed with the whānau in 2006 or 2007. Mr Todd assumed a trust had been constituted without inquiring into whether and how this had occurred. In the absence of a trust deed, Ms Starr understood that she was acting for the estate and proceeded to work towards transferring the property to the beneficiaries. When this could not occur because no funds were advanced, nothing happened.
20 Te Ture Whenua Maori Act 1993, s 215(1).
21 Section 215(3).
22 Section 215(4).
23 Section 98(3).
[75] Mr McKenna for the plaintiff notes that there is a shared desire to keep the property in the whānau and for it to be used for the collective benefit of the descendants of Ms Putere. Mr McKenna notes that the whānau have not been able to come to any consensus about how that could be achieved, communication has broken down between the Parties and the levels of animosity between various whānau members is only increasing.
[76] The documents on the file suggest that Sonia, Desmond, Pauline and Harry do not oppose the sale while Eleanor, Robert and Peter do. The position of the other beneficiaries (estate of Edward, estate of Christine, the other children of Lorraine and Tipene) are unknown. Edward and Christine were both served with the proceedings when they were alive but have since passed away.
[77] Challenges with reaching consensus amongst large families is not uncommon. Many Māori are beneficiaries of collectively-owned land and the Māori Land Court has considerable experience working with whānau Māori to navigate these issues. The issues this whānau are confronting are not unique. What is apparent is that the property is not being administered as the whānau intended and the persons who were appointed to act as trustees have not been able to do so because of internal disputes within the whānau. Any rentals must be held for the benefit of all of the beneficiaries and not for some.
[78] Mr McKenna submitted that Mr Todd’s transfer of the property was ultra vires his powers as executor of Marion’s estate. He submitted that it was unclear who exactly gave Mr Todd the instruction to transfer the property in 2006 as his only comment was that it was “the family” who instructed him. The evidence is clear, the whānau understood they had a trust, they appointed trustees, Desmond notified Mr Todd accordingly and provided him with minutes. Mr Todd then transferred the property on the understanding that a trust was in place. He had the minutes indicating that the whānau had appointed trustees. Sonia should have known this given she was present at the meeting at which she was appointed as a trustee on 18 March 2006. She was also present at the trustee hui on 28 March 2006. I do not accept that she did not understand why Mr Todd transferred the property into the names of the Parties.
[79] The transfer was only in error in so far as Mr Todd had not satisfied himself that the trust had been duly constituted.
[80] I am satisfied that there is evidence of a clear intention to create a trust, that the trust property is clearly identified and that the beneficiaries of the trust are clearly identified, being the beneficiaries under Ms Putere’s will. The issue however, is that the trust does not comply with the requirements in s 25 of the PLA so does not meet the requirements in s 15 of the Trusts Act for an express trust.
[81] I consider that the circumstances in which the property was transferred to the Parties indicate an intention that the beneficiaries under the will should retain their beneficial interests in the property. This is not a situation where any of the Parties have acting unconscionably and/or contrary to the intentions of the whānau. I consider that the circumstances indicate a resulting trust in favour of the beneficiaries. The legal title has been transferred without an intention to pass the whole of the beneficial interest to the Parties. It is therefore appropriate that the beneficial interest return to the beneficial owners.
[82] I do not consider that it would be just to ignore the obvious intention of the whānau that the property no longer remain in the name of the executor but be held by the whānau. The title of the property should therefore reflect the beneficial interests held by the beneficiaries under the will.
[83] I do not consider that there is a resulting trust in favour of the executor of the estate as that would be contrary to the intentions of the whānau and the minutes of the whānau hui. The beneficial owners of the property are clear, the intentions of the whānau are clear and in circumstances where the trust has not been validly constituted, the property should be returned to the beneficial owners.
Should directions be made for the sale of the property?
[84] In circumstances where I have determined that the property is held subject to a resulting trust in favour of the beneficiaries under Ms Putere’s will, I need to be satisfied that the trustees would have the power to sell the property or that this is an order that the Court should make in the circumstances.
[85]Under s 133 of the Trusts Act:
(1)A trustee may apply to the court for directions about—
(a)the trust property; or
(b)the exercise of any power or performance of any function by the trustee.
(2)The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.
(3)On an application under this section, the court may give any direction it thinks fit.
(4)This section does not restrict the availability of alternative proceedings within the court’s jurisdiction, including a declaration interpreting the terms of the trust.
[86] This Court in Re Darlow (as trustees of Hugh Green Trust) explained that previous authorities relating to the predecessor provision (s 66 of the Trustee Act 1956) identified four situations where directions will be given:24
(a)Category 1 — where the issue is whether some proposed course of action is within the trustee’s power.
(b)Category 2 — where the issue is whether the proposed cause of action is a proper exercise of the trustees’ powers and there is no real doubt about the trustees’ powers, but the decision is “momentous in nature.”
(c)Category 3 — where the trustees have to surrender their discretion due to being deadlocked or having a conflict of interest.
(d)Category 4 — where the trustees have acted, and those acts are claimed to be outside their power or in proper exercise of their power.
[87] Counsel for the plaintiff argued that this case falls within category 3, but the Parties are not deadlocked. The defendants do not oppose the sale. The issue here is
24 Re Darlow (as trustees of Hugh Green Trust) [2021] NZHC 2184 at [31] citing Re Honoris Trust
[2017] NZHC 2957; [2018] 3 NZLR 160.
whether a sale is a proper exercise of the trustees’ powers. I am not satisfied that a sale is a proper exercise of the trustees’ powers given the circumstances in which the property was transferred to the Parties. The conduct of the whānau in determining that it be held in trust indicates that any decision to sell the property should be the subject of a whānau hui. That is consistent with tikanga.
[88] I am not satisfied that directions for the sale of the property should be made in circumstances where the intention of the whānau when the property was transferred into the names of the Parties did not support a sale. The documents held on the Court file indicate that members of the whānau feel strongly against the sale of the property. They refer to a sale as “abhorrent”.
[89] Unfortunately, the current wishes of the wider whānau are not clear. If the property had been transferred into the names of the beneficiaries under the will in 2006, then any application for sale would have to be determined in accordance with s 339 of the PLA. It is not appropriate to use the Trusts Act to get around the fact that the Parties hold the property as trustees so would likely have difficulty in seeking an order for sale under the PLA.
[90] I appreciate that this has been a longstanding issue and there appears to be disagreement amongst the whānau. The property does not appear to have been used for the benefit of all of the whānau.
[91] It is ultimately for this whānau to determine how they wish this property to be administered. There are options available to the whānau including applying to constitute a trust under Te Ture Whenua Māori Act or, once the property is held in the names of the beneficiaries, applying to the Court for sale of the property and distribution of the proceeds of sale. While the plaintiff has sought an order for sale, I do not consider that it is available to the Court on the evidence before it. To order a sale would be contrary to the intention of the whānau at the time that the property was transferred to the Parties.
[92] If any of the whānau wish to sell the property then once the property is held in the names of all beneficiaries under the will, an application can be made under s 339
of the PLA. At that time, it will be necessary for the Court to consider the requirements under s 342 of the PLA in determining whether a sale is appropriate.
[93] The whānau intention was to create a trust in favour of the beneficiaries under the will. This Court should not disregard tikanga and the whānau intent by reinstating an executor and allowing the property to be sold.
Whakataunga | Result
[94] I order that the property be vested in the beneficiaries under the will of Ms Putere in equal shares being the estate of Edward Adams; the estate of Lorraine Huriata Adams; Desmond Alexander Adams, Pauline Rangiwauwau Paraku; Harry Adams; Peter Maui Timothy, the estate of Christine Kataraina Puaka, Robert Adams, Tipene Kauwhata Adams and Eleanor Kirimoumou Pearl Riki.
Costs
[95] In circumstances where the Parties have been acting as trustees and have brought and/or participated in this proceeding for the purpose of obtaining directions as to the operation of the trust, they should be indemnified out of the assets of the trust if they are ordered by Legal Aid to make any repayment.
Tahana J
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