Aronui Ko Huarau Trust Board v Harris

[2015] NZHC 2911

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV 2015-404-001958

[2015] NZHC 2911

BETWEEN

ARONUI KO HUARAU TRUST BOARD

Plaintiff

AND

GEORGINIA HORIANA HARRIS

Defendant

Hearing:

19 November 2015

Appearances:

S McAnally for the Plaintiff

G H Harris, the Defendant in person

Judgment:

20 November 2015

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

20.11.15 at 4:30pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

ARONUI KO HUARAU TRUST BOARD v G H HARRIS [2015] NZHC 2911 [20 November 2015]

Background

[1]    The plaintiff applies for summary judgment upon its application requiring the defendant to vacate property owned by the plaintiff at Harrison Road, Ramarama, Auckland (the Property).

[2]    The plaintiff has been the registered proprietor of the Property since 1989 and remains so to this date.

[3]    The plaintiff says on 5 March 2015 it gave the defendant notice to vacate the Property. She has not done so. She believes she is entitled to remain in occupation either:

(a)Pursuant to a licence provided by herself and Mr Thomas Williams a fellow trustee; and/or

(b)As a trustee undertaking a fiduciary duty to protect trust assets for beneficiaries.

[4]    On 5 August 2015 the plaintiff says it entered into an agreement to purchase the land and business of an Inn at Great South Road, Ramarama (the Inn). On 22 September the plaintiff entered into an agreement to sell the Property. Both agreements, the plaintiff says, are unconditional and are due for settlement on 1 December 2015. Evidence was provided to the Court confirming the agreement was unconditional.

Opposition to the application

[5]    By her notice of opposition Ms Harris says she will vacate the Property within 10 days “if the Court was to hold that there was a legally binding resolution of the plaintiff to bring these proceedings and to enter into an agreement for sale and purchase of the property”.

[6]    It is not in dispute that the plaintiff owns the Property which Ms Harris occupies. The plaintiff asks the Court to order Ms Harris to vacate the Property as they say it has lawfully terminated her right of occupation of that Property.

[7]    Ms Harris claims the current plaintiff Board “is not lawful”; that there is “no lawful resolution of the plaintiff Board to bring these proceedings”, nor any “lawful resolution of the plaintiff Board to enter into negotiations for the sale of the property”.

[8]    By her notice of opposition Ms Harris says the Attorney-General as the protector of charitable trusts has appointed the Auditor-General to undertake an enquiry on his behalf, which includes, the lawful composition of the plaintiff Board; that the Auditor-General has completed the report and that is being considered by Crown Law who was to provide advice to the Attorney-General as to what proceedings or actions he should take as a result of the findings in that report.

[9]    Ms Harris’ case is that when a Court or the Attorney-General declares who the proper trustees of the Board are and when there is a proper legal resolution of the Board for the sale of the Property, then she will vacate it but meanwhile will remain to protect the trust asset.

[10]Ms Harris deposes, inter alia:

(a)There are four lawful trustees of the plaintiff which include herself and Thomas Williams, both of whom have consented to her remaining on the Property “to protect the trust asset”.

(b)She has occupied the Property since October 2014 when she entered the Property to protect her mother Ngawini Puru who had resided there since 1989 and to also protect the assets of the trust.

(c)That she has been a trustee of the Aronui Ko Huiarau Trust Board from its inception.

(d)That she and Thomas Williams have been removed unlawfully from their positions as trustees of the plaintiff by Dean Grace (Mr Grace) her

nephew, and by Steven Powell (Mr Powell) her cousin the other two trustees of the plaintiff.

[11]   Ms Harris says she was a trustee of the Aronui Technical Training Council (ATTC) from 2004 until she resigned on 21 November 2013. It is the trading entity of the plaintiff which receives funding from the Government for the purpose of assisting Maori youth.

[12]   A copy of the Trust Deed for the plaintiff contains provisions regarding how and by what authority the functions of the plaintiff can be performed.

[13]Appendix B Part IV(b) of the Trust Deed states:

Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes the chairperson shall have a second or casting vote. The chairperson or any two Board members may at any time summon a meeting of the Board members…

[14]   It is Ms Harris’ claim that Mr Grace and Mr Powell, at the relevant time in March 2014, summonsed a Board meeting and because Ms Harris and Mr Williams did not attend, they were dismissed. Ms Harris says Mr Grace and Mr Powell purportedly rely upon Appendix B Part II(d)(v) of the Trust Deed which states:

The office of Board member shall become vacant if:

…

(v)he or she fails to attend (and give reasonable explanation for not attending) three (3) consecutive Board meetings.

…

[15]   Ms Harris challenges the process by which that meeting in March 2014 purported to dismiss herself and Mr Williams as trustees. She says Mr Grace and Mr Powell had made it clear they wanted her and Mr Williams removed as trustees, she believed because they wanted to assume control of the plaintiff’s assets.

[16]   Ms Harris acknowledges that had she and Mr Williams attended that meeting there would have been a vote for their removal by the use of Mr Grace’s casting vote as the meeting chairman. Indeed they did not attend in order to avoid that outcome.

In a letter since to the plaintiff’s lawyers Ms Harris explained her purpose in not attending the meeting was to protect the beneficiaries of the plaintiff and the plaintiff’s charitable interests.

[17]   Ms Harris’ position is that there was no meeting which has provided Mr Grace and Mr Powell with the mandate they now claim because there was no quorum of three (the minimum required) in attendance.

[18]   Ms Harris is concerned about the purchase of the Inn for $4,150,000 plus GST which is to be funded by the sale of the Property for a similar sum.

[19]   Ms Puru has sworn an affidavit in support of her daughter’s opposition to the summary judgment application. Ms Puru deposes she has concerns regarding the actions of her grandson (Mr Grace) and her nephew (Mr Powell); and that it was this which instigated a complaint being made to the Attorney-General in 2013.

[20]   Ms Puru says she was an occupier of the property for over 25 years until steps were taken to remove her from it.

[21]   In the late 1970s she was concerned about the numbers of Maori teenagers dropping out of school “and becoming street kids”. She was a secondary school teacher at the time. She resigned from her position then with the goal to create “a second chance education system”. She said the Aronui Trust Deed was signed in 10 September 1982 and that the first subjects delivered by the trust were Maori carving, Maori weaving and Te Reo Maori with funding being provided by the then Labour Department. The programs became a great success she said. The outcome sought was for students to become “work ready”. A new trust was created when funding was provided by the Education Department. Then the ATTC Trust Deed was signed on 10 March 1994.

[22]   Ms Puru says that over 32 years the trust has accumulated significant land and buildings. She has been advised the value is about $5M. She says funding is now provided by the Tertiary Education Commission which requires attendees to obtain

formal qualifications; that courses offered are in hospitality, carpentry, motor trade, computing, and horticulture among others.

[23]   Ms Puru says both trust boards (the plaintiff and ATTC) are dominated by her family members, which in hindsight she considers to have been a mistake. She believes independent professional trustees are required now and in the future. The plaintiff employs all management staff who are then subcontracted to ATTC to administer the ATTC programs.

[24]   Ms Puru said that Mr Powell is a trustee of both trusts and is the financial manager. Mr Grace is her eldest grandson. She describes in detail her concerns about the manner in which Mr Grace had, she considers, improperly obtained funding from the trusts. She considers payments made to Mr Grace and Mr Powell could have been in breach of trust obligations. In January 2013 and as CEO she recalled all petrol cards and placed all staff on weekly reports and required regular compulsory meetings.

[25]   Ms Puru said it was after she went to see a lawyer who advised her that a forensic accountant should be instructed that Mr Powell and Mr Grace called a meeting of the ATTC and a resolution was passed to remove her as CEO. Then she said they called a meeting of the plaintiff and a resolution was passed to terminate her position as a trustee of the plaintiff.

[26]   She engaged lawyers as did Mr Grace and Mr Powell. An exchange of correspondence between lawyers did not resolve matters. She said that without notice to her, a further trust meeting was called at which Mr Grace had appointed himself as CEO of ATTC.

[27]   Then on 24 June 2013 she wrote to the Attorney-General requesting that he should consider undertaking an investigation into the plaintiff and ATTC. She says on or about 10 February 2014 the Attorney-General determined it was appropriate for him to undertake an enquiry under Section 58 of the Charitable trusts Act 1957. The warrant issued on behalf of the Attorney-General to investigators required an investigation of a number of matters which included whether the appointment and

dismissal of trustees (including Ms Puru) had been done in accordance with the terms of the Trust Deed.

Application for summary judgment

[28]   The plaintiff says Ms Harris has taken up occupation of the Property without licence or other rights derived from the plaintiff and therefore it is appropriate for the Court to make orders requiring Ms Harris to vacate the Property.

[29]   The Court has reviewed the development background of the plaintiff and the ATTC trust. That has included the accounts of Ms Harris and her mother Ms Puru regarding the actions of family members, Mr Grace and Mr Powell who have assumed control of the trusts.

[30]   It is the plaintiff’s case that that background of issues assumes no significance for present purposes; that the issues for the Court are about whether Ms Harris has a right to occupy the Property and if she has, whether that right was lawfully terminated by the plaintiff.

Legal principles

[31]   It is the plaintiff’s case Ms Harris has no arguable defence to its claim for possession of the Property.

[32]   The relevant summary judgment principles are well settled. It is appropriate to refer to the Court of Appeal’s summary in Krukziener v Hanover Finance Limited1:

The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng

1 (2008) 19 PRNZ 162 at [26].

Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

[33]   It is the case of Ms Harris that the current board of the plaintiff was unlawfully appointed and therefore any decisions of theirs are also unlawful; that Ms Harris has a right to occupy in her capacity as a trustee of the plaintiff and/or pursuant to a licence granted by her and Mr Williams.

[34]   Regarding Ms Harris’ claim of a right of occupation because of the licence granted to her by herself and Mr Williams, Mr McAnally submits such a claim is misconceived; that Ms Harris misconstrues her stated position as a “trustee”. Such rights may only be claimed regarding assets of a non-incorporated trust. In this case however the plaintiff is an incorporated trust and as such rights and property are vested in the Board and not with the individual members. It follows, submits Mr McAnally, that no trustees or board members acting individually could lawfully grant any form of interest in the property of the board or bestow themselves a licence of any kind enforceable against the owner of the property.

[35]   It is the plaintiff’s claim that any right of occupation has been lawfully terminated; that it is not contentious that Ms Harris was served with the trespass notice on 5 March 2015. By whatever authority Ms Puru or Ms Harris occupied the Property theirs, submits Mr McAnally, was of a licence which was always revocable at will by the plaintiff, subject to reasonable notice being given to vacate.

[36]   The plaintiff’s position is that any investigation by the Attorney-General does not give rise to a defence but rather appears to be a plea to the Court’s residual discretion to withhold summary judgment.

[37]   In any event Mr McAnally submits the Attorney-General’s investigation has been ongoing since August 2013 and that the last batch of information required by the Crown Law Office from the plaintiff was sent on 1 April 2015. Still there is no outcome. Further and in the meantime there has been no interference by or on behalf of the Attorney-General with the management of the plaintiff’s affairs.

[38]   A recent affidavit by Mr Grace states that the agreement to purchase the Inn is unconditional, as is the plaintiff’s agreement for the sale of the Property.

Considerations

[39]   This is about an application to require Ms Harris to vacate the property. Her opposition is based on many factors. Her purpose is to refuse to relinquish control of the plaintiff or ATTC to other family members. She seeks to enforce hers and her mother’s objectives on behalf of youth who wish to be trained or educated.

[40]   Ms Harris’ complaints regarding the lawfulness of the actions of Mr Grace and Mr Powell are, in the background they have described, understandable – at least as they perceive those actions.

[41]   In their view Ms Puru was subject to intimidation. Finally it was Mr Grace and Mr Powell who initiated the process by which they purported to serve a trespass notice on Ms Harris.

[42]   That process was faulty. The plaintiff’s solicitor’s letter suggests three meetings were called of which Ms Harris and Mr Williams did not attend and therefore they were empowered to deliver the trespass notice.

[43]   The problem with that position is that the trespass notice issued on 5 March 2015 i.e. before 7 March, apparently the date of the third meeting which Ms Harris did not attend and for which reason it is claimed provided Messrs Grace and Powell with authority to assume control of the plaintiff’s affairs – which included the decision to end Ms Harris’ occupation of the Property.

[44]   Clearly that claim cannot succeed because even on Mr Grace’s account, the notice of trespass was served without proper authority. The plaintiff had no authority vested in it to issue such notice.

[45]   However this case is not about Ms Harris being entitled to occupy because the process to evict her was flawed.

[46]   Ms Harris went into occupation to support her mother who was then, in her position as a plaintiff trustee and CEO of ATTC, being subject to criticism in her performance of leadership obligations. Indeed Ms Harris endorsed that criticism by her support of an application to remove her mother as CEO of ATTC.

[47]   In February 2015 Ms Puru vacated the property. Ms Harris has remained. She supported her mother’s issues raised upon the complaint filed with the Attorney- General. She remained also to protect, as she perceived it, her family’s long term interests in the concept of ownership of that property and its Maori youth training objectives.

[48]   Ms Harris also remained because she believed her cousin and her nephew had unlawfully assumed control of the Board.

[49]   Those concerns are subject to enquiry by the Attorney-General with the assistance of the Crown Law Office. That enquiry has been ongoing for more than two years. It is not clear when there will be an outcome of that enquiry.

[50]   In this Court’s view it appears clear, for better or worse, the Board by its present authority has assumed authority to enter into those contracts for sale and purchase that it has. Further, and notwithstanding the procedural issues associated with the issue of the trespass notice the Court considers that following her mother’s (Ms Puru) vacation of the Property, Ms Harris retained no authority to remain in occupation of it. Her claim to act as a beneficiary for others is without legal foundation. Therefore she remains without any authority at all.

[51]   The summary judgment procedure is not often engaged to rule upon the authority of an occupant to remain in occupation of a property.

[52]   But that process enables an occupant to offer evidence in opposition to claims requiring departure from those premises, in the knowledge that if there is doubt about that opposition then any claim for occupation should be deferred.

[53]   There may be real purpose attributed to the complaints of Ms Harris and her mother about the actions of Mr Grace and Mr Powell and others over the period when they assumed control of the plaintiff. Or, there may not be. That is a matter for consideration by the Attorney-General in due course.

[54]   For present purposes it appears Ms Harris has no lawful basis to remain in occupation of the Property, because she has no authority as her mother’s guardian (assuming her mother had authority to occupy the Property) for her mother had left the Property in February 2015. Thereafter it is clear that Ms Harris retained no authority on behalf of another to remain in occupation.

[55]   It follows therefore that the application requiring her departure must, upon this application, be granted.

Judgment

[56]   There shall be an order requiring Ms Harris to vacate the Property and she is to do so by 4:00pm, 27 November 2015 and she may not thereafter return without the authority of this Court or of the plaintiff.

[57]The costs of this proceeding are directed to lie where they fall.

Associate Judge Christiansen