Baker v Waimakuku Whanau Trust Board Incorporated
[2013] NZHC 2530
•27 September 2013
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
CIV-2010-441-000581 [2013] NZHC 2530
BETWEEN EDWARD HENRY BAKER and WHAKAWE CHARLES RAMEKA as
trustees of THE THOMAS BAKER WHANAU TRUST
Applicants
AND
WAIMAKUKU WHANAU TRUST BOARD INCORPORATED
Respondent
| Hearing: | 19 June 2012; 11-12 September 2013 |
Counsel: | E M Bate for applicants P A Nee Harland for respondent D N Soper, amicus curiae |
Judgment: | 27 September 2013 |
RESERVED JUDGMENT OF DOBSON J
Contents
Background........................................................................................................................................ [3]
The present application .................................................................................................................. [23]Meeting of beneficiaries .................................................................................................................. [25]
Demonstrated need for a trust deed............................................................................................... [32]
Proposed terms of a trust deed....................................................................................................... [37]
Parties .......................................................................................................................................... [37]
The introduction to the trust deed................................................................................................. [38]
Definitions .................................................................................................................................... [40]
Terms of trust ................................................................................................................................ [45]
Trustees......................................................................................................................................... [58]
Charitable status? ........................................................................................................................ [70]Audit of financial statements ........................................................................................................ [73]
Annual meeting............................................................................................................................. [74]Power to vary the terms of the trust? ........................................................................................... [75]
Does the Court have jurisdiction to authorise a deed on these terms? ....................................... [77] Ascertaining capital of the trust................................................................................................... [100]
The conduct of the hearing, and subsequent memoranda ......................................................... [104] Settling final form of the deed .......................................................................................................[117]
Costs ............................................................................................................................................... [120]
Summary........................................................................................................................................ [125]
BAKER v WAIMAKUKU WHANAU TRUST BOARD INCORPORATED [2013] NZHC 2530 [27 September 2013]
[1] These proceedings constitute an originating application brought pursuant to provisions of the Trustee Act 1956 (the Act), in which the trustees of the Thomas Baker Whanau Trust (TBWT) seek the Court’s approval for proposed terms of a trust deed to regulate the governance of the TBWT.
[2] Having urged the protagonists at various stages of the proceedings to focus on the future of the TBWT in the interest of all its beneficiaries, it is nonetheless necessary to begin with some history.
Background
[3] In 1929, the Crown cancelled the freehold title of the then owners of a 726 acre block of general land in the Tarawera area, known as Tarawera Block 5A (Tarawera 5A). Until her death in 1923, Rihi Nene was the registered proprietor of Tarawera 5A. She was the second wife of Thomas Henry Baker. Although she had no children of her own, Thomas Henry Baker had at least nine children by his first
wife who had died in 1903. By her will, Rihi Nene left the property to two of the children of Thomas Henry Baker, Robert, William, and a granddaughter, Mary.1
[4] Ownership of Tarawera 5A was re-vested in Rihi Nene’s successors, initially by a partition order made by the Māori Land Court in 1966. Then, following re- survey and registration, legal title was restored in 1970.
[5] The present living survivor of the previous ownership interests in Tarawera 5A is Mr Nigel Baker. In 1990, he and his father pursued a claim before the Waitangi Tribunal (Wai 147) for compensation for the wrongful cancellation of the title to Tarawera 5A and for the loss of improvements that had been made on the land. The claim was pursued in the name of the respondent, Waimakuku Whanau Trust Board Incorporated (Waimakuku).
[6] In 1995, the Crown negotiated a settlement with Waimakuku, as the claimant in Wai 147. The settlement involved an ex gratia payment of $350,000, which was
1 Some of the documents in the proceedings treat Mary/Mere as a daughter, rather than a granddaughter. Attributing the correct generation to her is not critical.
recorded as compensation for breach of the principles of the Treaty of Waitangi.2 Prior to the settlement, Cabinet had approved a payment of $25,000 to the claimants to assist in funding the pursuit of their claim. The deed of settlement dated 20 December 1995 included that prior payment in what was described as a total payment of $375,000.
[7] Nigel Baker and members of his family took control of the sum received in settlement from the Crown. Although at some point Nigel Baker resigned as a trustee of Waimakuku, members of his immediate family remained the trustees and it appears to be common ground that he has continued to exercise effective control over decisions made in its name.
[8] Waimakuku made substantial distributions of funds out of the settlement received from the Crown. However, in 2000, approximately 38 members of the extended Thomas Baker family commenced High Court proceedings against Waimakuku claiming that its conduct in managing the settlement funds breached the terms of the trust on which those funds were to be held, as reflected in the settlement deed completed with the Crown in 1995. Members of Nigel Baker’s family, who were then the trustees of Waimakuku, were sued as second defendants. Nigel Baker was sued as a third defendant on the basis that he was a constructive trustee. Those proceedings also sought reimbursement to the fund by the defendants of amounts allegedly disbursed in breach of the terms of the trust.
[9] A critical issue in the 2000 proceedings was what the terms of the trust created to receive the settlement sum were, and in particular how the beneficiaries of that trust were to be defined. In a judgment delivered in August 2005,3 Durie J analysed the terms of the settlement deed with the Crown as the document creating the trust. He resisted the admission of any extrinsic evidence as an aid to interpreting the deed, on the basis that its terms did not show any relevant ambiguity, so that the document fell to be interpreted simply on its terms.
2 Waimakuku was also interested as a claimant in Wai 491. The deed of settlement made reference to that, and the settlement also settled Waimakuku’s component of that claim. No present relevance was attributed to it.
3 Chisholm v Waimakuku Whanau Trust Board Inc HC Napier CP27/00, 29 August 2005.
[10] The relevant findings are reflected in the following passage:
I am satisfied then that the Deed is clear. The fund was to be held for the general benefit of the descendants of Thomas Baker (without provision for capital distributions to individual beneficiaries). I accept Mr Bates’ [sic] submission that in law, there is then no room to admit of extrinsic evidence to interpret the Deed.
[11] The plaintiffs in the 2000 proceedings made an application for further orders in terms of that judgment, and additional relief was granted by Durie J in May 2006.4 The relevant aspects are reflected in the following:
[13] Accordingly there is an order pursuant to s 51 of the Trustee Act 1956 appointing Edward Henry Baker and Whakawe Charles Rameka as responsible trustees in substitution for the first defendant, the Waimakuku Whanau Trust Board Incorporated, as trustees of the trust established by a Deed of Agreement between Her Majesty the Queen and the first defendant of 20 December 1995, the trust now to be known as the Thomas Baker Whanau Trust. Pursuant to s 49 of the Act there is a further order appointing as advisory trustees Ivan Northcroft, Thomas Mill, Wayne John Hesketh, Bill Grace and Peter Karaitiana.
[14] There is an order that the first defendant, each of the second defendants and the third defendant are jointly and severally liable to pay the sum of $306,522.90 to the trustees of the Thomas Baker Whanau Trust for the purposes of the Trust together with interest thereon at 11% per annum from 20 December 1995 to 31 July 2002 and thereafter to 29 August 2005 at
7.5% per annum.
[12] Although there was no attempt to appeal Durie J’s judgments in the 2000 proceedings, at the heart of on-going challenges by Nigel Baker’s interests to the initiatives proposed by the current trustees is their concern that those judgments were wrong in treating beneficiaries of the fund as extending to all descendants of Thomas Baker. Rather, Nigel Baker continues to assert that those who were deprived of legal ownership of Tarawera 5A comprised the only relevant claimants for any compensation flowing from wrongful cancellation of the certificate of title to the land.
[13] Recently Mr Nee Harland has signalled intentions on behalf of Nigel Baker to move to set aside, or to apply for recall of, Durie J’s judgments. No formal steps have been taken and formidable hurdles would be likely to present themselves in the pursuit of any such initiative seven and eight years after the judgments were
4 Chisholm v Waimakuku Whanau Trust Board Inc HC Napier CP27/00, 1 May 2006.
delivered. Novel steps contemplated by Mr Nee Harland in various documents filed with the Court included contacting the now retired Durie J to ascertain whether he had been misled as to the circumstances of the settlement of Wai 147, in the course of argument during the 2000 proceedings.
[14] Waimakuku’s view that the judgments in the 2000 proceedings were fundamentally wrong distracted it from the issues relevant to the present application under the Act. In contrast, the solicitors for the incumbent trustees have sought orders that would regularise the governance of the TBWT on the basis of the existing 2005 and 2006 judgments. Their position is that those judgments represent the current state of the law in relation to vesting of the settlement proceeds in the TBWT, and there is presently no credible prospect of the determinations in those judgments being reversed.
[15] Part way through the resumed hearing, I agreed to record Mr Nee Harland’s protest that the Court should not be considering terms for the on-going governance of the TBWT in its present form, when the respondent contended that the premise on which the 1995 settlement had occurred was either or both historically and factually wrong in that the cancellation of the certificate of title did not involve a breach of the principles of the Treaty of Waitangi. Further, the respondent was participating in these proceedings subject to its protest that the interpretation of the terms of settlement by Durie J in the 2000 proceedings was in error, and the beneficiaries of the settlement should have been confined to those with a legal interest in Tarawera 5A.
[16] Earlier in the resumed hearing, Mr Nee Harland had also sought an acknowledgement that Waimakuku’s submissions on the preferable (or perhaps the least undesirable) terms for the TBWT would not preclude it subsequently bringing claims for maladministration of the TBWT between it being seized of the fund in 2006, and the Court’s approval of fuller terms of a deed of trust.
[17] Governance of the TBWT has been beset by uncertainty as to the scope of the trustees’ powers, and the purposes for which they should be administering the fund. All those involved in considering the conduct of the TBWT ought to be concerned in
the interest of all the beneficiaries. Those beneficiaries should be benefitting from distributions from the fund, and their interest ought to be in minimising the number and scope of disputes about it. That is particularly so, given the modest size of the fund and the legitimate expectations of beneficiaries, that they might obtain some benefit from it. Despite that concern, it is appropriate to acknowledge that Waimakuku’s participation in the present application by the trustees cannot constitute any form of waiver of Waimakuku’s rights to challenge the manner in which the TBWT has been administered since 2006. Further, the present rationale for the TBWT rests on the judgments in the 2000 proceedings. If they are ever overturned, or the effect of them reversed, then the rationale for the trust deed that is being considered in this application would no longer exist.
[18] Mr Nee Harland acknowledged that Waimakuku’s reasons for opposing the present application included its firm preference that terms for the TBWT remain unsettled while it pursued a challenge to Durie J’s decisions. Given the passage of time, the number of beneficiaries and the relatively modest fund at issue, that is not a realistic stance.
[19] At a subsequent point in the hearing, Mr Bate acknowledged that Waimakuku’s participation in the consideration of preferable terms for on-going governance of the TBWT under the present arrangements would not be invoked by the current trustees as creating any form of estoppel that prevented Waimakuku from challenging the terms of Durie J’s judgments. This leaves open a possibility that Waimakuku could later argue that those judgments directed the TBWT to operate in favour of an incorrect definition of beneficiaries and/or on an incorrect premise as to the rationale for the 1995 settlement.
[20] Superficially, there is some logic in arguing that compensation for cancellation of title to land ought only to be pursued by, and received on behalf of, those with legal interests in the property. Durie J was mindful of that basic point. However, reviewing the circumstances in which Wai 147 had been pursued, and settlement of it negotiated, his Honour observed:5
… the drafts and associated correspondence between the Crown and Mr Porteous, as counsel for the [Waimakuku] Trust Board, demonstrate clearly that the Board itself sought to settle on the basis of the wider class of beneficiaries. The reasons for doing so are not clear but that is plainly what was intended at the time. Whether the true successors to Tarawera 5A fully appreciated this and agreed is not the point. That could be the subject of some other proceedings against those who settled the claim. The point for the present is that the Crown agreed to the settlement on the basis of representations on behalf of the Trust Board, which I am satisfied were made, that the settlement would be for the benefit of the wider class of beneficiaries and that all who could be affected had agreed on that course. It cannot then be said that there was some mistake. The intention was plain on both sides.
Moreover, Mr Porteous for the Trust Board advised the Crown at a settlement negotiation meeting that the proposed beneficiaries, the descendants of Thomas Baker, numbered some 380 people. Plainly, the wider class of beneficiaries was in mind. …
[21] The Crown had settled in 1995 with Waimakuku in apparent reliance on Waimakuku’s representation (as recorded in the deed of settlement) that:
… it is the legitimate representative of the descendants of Thomas Baker (whose three children, Robert, Mary and William Baker inherited interests in the land from their stepmother, Rihi Nene) and that it has the mandate from those people it represents to agree to this settlement on their behalf and enters into this deed with their full authority, knowledge and blessing.
[22] An important source of tension arises because Tarawera 5A includes urupa, comprising a cemetery for the extended family. That contains the graves of numerous descendants of Thomas Henry Baker, not just the descendants of Robert, William and Mary. There is also a wahi tapu site. The present trustees have been involved in disputes with Nigel Baker’s interests as to the extent of constraints on access imposed by Nigel Baker to the urupa on Tarawera 5A.
The present application
[23] The present originating application was filed in 2010. Although other relief was sought, the focus has been on the trustees’ application for orders under s 64 of the Act, to approve the terms of a trust deed for the TBWT. Solicitors for the trustees have provided numerous iterations of draft terms for such a trust deed, including a latest draft circulated days before the resumed hearing.
[24] At the outset of the proceedings, the applicants proposed that an amicus be appointed, in part because of the potentially disparate interests of the various branches of the wider Baker family. Mr Soper has been involved in the proceedings in that role from an early stage. Mr Soper’s initiatives included placing advertisements in the Taupō Times, Bay of Plenty Times, Hawke’s Bay Today and the Dominion Post in May 2011, canvassing for responses from beneficiaries of the TBWT in relation to the trust’s application to the High Court. Mr Soper obtained a modest number of direct responses to those advertisements. Very limited responses were made, other than through counsel for the parties. He has also monitored the discussion of issues in relation to the trust deed, including attending the meeting that was convened in Taupō, which is discussed below.
Meeting of beneficiaries
[25] Nigel Baker has contended from early in these proceedings that the present trustees should not seek Court approval for any terms of a trust deed, without submitting its proposed terms for consideration by all beneficiaries at a meeting convened for that purpose. Initially, the trustees resisted that course. Mr Bate indicated that the trustees’ reluctance was because of the risks of misinformation given the animosity towards the trustees exhibited by Nigel Baker, the cost in convening such a meeting, and the perceived adequacy of communicating with all beneficiaries who might be interested, by other means. Accordingly, the trustees proceeded to set down their application for hearing.
[26] The hearing commenced on 19 June 2012. Mr Nee Harland commenced a cross-examination of Edward Baker, focusing on the desirability of a meeting of beneficiaries, and criticisms of the trustees’ refusal to hold one. The parties agreed part-way through that cross-examination that the hearing ought to be adjourned to enable such a meeting to occur.6
[27] A meeting was duly convened in Taupō on 17 November 2012. The protagonists take very different views as to the efficacy, scope and outcome of that meeting. From the applicants’ perspective, it afforded an adequate opportunity for
all beneficiaries who might be interested to attend, and to express views about the proposed terms of the trust deed, as well as a more general exchange of views as to how the TBWT ought to be administered. The meeting concluded with resolutions supporting the present application, and confirming the appointment that had been made originally by the Court of the incumbent trustees in that role. The meeting also identified additional trustees who would represent different branches of the extended family comprising descendants of Thomas Baker.
[28] From the perspective of Nigel Baker’s interests, the meeting gave inadequate notice of the matters that ought to have been addressed, was inappropriately chaired, and was dominated by representatives of one branch of the extended family who were predictably sympathetic to the propositions being advanced by Edward Baker. Mr Nee Harland also criticised the trustees for having sought resumption of the Court hearing when they had made numerous changes to the draft that had been made available to beneficiaries at the meeting. He suggested that the proper course was for a further meeting to be convened to enable beneficiaries to consider the updated draft. Mr Bate’s rejoinder on the last point was that any material changes to the proposed deed since the meeting were to reflect changes that were proposed and supported by those at the meeting.
[29] On a literal approach, Mr Nee Harland took the terms of my minute of 19 June 2012 as the terms on which the meeting had to be conducted. Paragraph [10] of that minute specified:
At 1.40pm [on the day of the first hearing], counsel confirmed that the parties sought an adjournment of the proceedings, notionally for a period of three months. The adjournment is to enable a meeting of beneficiaries to be held. The chair of that meeting is to be selected from names that will be provided by Mr Bate as counsel for the applicants. The cost of the meeting is to be met out of the Trust fund and the venue is to be at a location that the parties are to agree upon in Taupo. The nominated reason for convening the meeting is to discuss the proposed Trust Deed for which the present application seeks approval, and to discuss trustee representation which I take to extend to processes for appointment of trustees to reflect the interests of all branches of the descendants of Thomas Baker.
[30] Mr Nee Harland interpreted this record of the understanding I obtained from counsel as to the context in which they had agreed to adjourn the hearing, as prescribing mandatory topics that had to be resolved at the meeting. That was
certainly not my intention and, with respect to Mr Nee Harland, I cannot accept that the relevant paragraph in my minute could reasonably be interpreted as providing a binding order or direction as to the terms on which the meeting had to occur, or the scope of any matters that had to be addressed at it.
[31] Following the meeting, the independent chair, Mr Te Kani Williams, who is a director of an Auckland law firm, completed a report dated 29 November 2012. That report was appended to an affidavit sworn by a member of Mr Bate’s staff and filed in the proceedings on 30 November 2012. Mr Williams’ report confirms that he had no prior connection with the dispute between factions of the extended family, and that his nomination was confirmed initially by Mr Nee Harland, and then by Mr Bate. His report acknowledges that Messrs Nigel Baker and Nee Harland were critical of his chairmanship during the meeting, and that during a lunch break Mr Nee Harland indicated he wanted to withdraw his client’s consent to Mr Williams continuing as chair. That did not happen. The report described Messrs Nigel Baker and Nee Harland, and those supporting them, withdrawing from the meeting during the course of discussions about the then proposed terms for the trust deed, sometime after the lunch break. Mr Williams characterised Mr Nee Harland’s conduct by saying that when they “…were not getting their way, their actions were to be obstructive and unhelpful”.
Demonstrated need for a trust deed
[32] Waimakuku was established as an incorporated trust board. It is therefore understandable that the terms of settlement pursuant to which it received an ex gratia payment would not address in any detail the terms on which settlement monies would be held on trust for beneficiaries.
[33] When the judgments of Durie J in 2005 and 2006 resulted in control of the trust fund being transferred from Waimakuku to the TBWT, it was predictable that the trust would require more specific terms than those which could be implied from the terms of the settlement deed with the Crown. Section 64 of the Act was at least a logical starting point for the trustees to resort to, in seeking the Court’s assistance to regularise appropriate terms for on-going governance of the trust.
[34] As Mr Soper suggested, it is important to retain proportionality in the scope of the response to the uncertainties confronting the incumbent trustees. At stake is the on-going governance of a relatively modest whanau settlement, being a far cry from a major settlement with one or more iwi. Settling appropriate terms has already involved a greater commitment of resources by advisers to the protagonists than a proportionate response would warrant. The processes for the trustees to deal with on-going governance of the trust ought to be as informal and efficient as protection of the interests of all beneficiaries allows.
[35] I am satisfied that there is a compelling need for a trust deed with relatively detailed terms which the TBWT presently does not have. In those circumstances, I will assess the most appropriate terms for a trust deed, and then analyse whether approval of a trust deed on such terms is within the Court’s powers, either under s 64 of the Act or from other sources. Consideration of appropriate terms does not involve any detailed assessment of the law on trustees’ powers. Rather, it involves projecting terms that will enable even-handed governance of the trust fund, where it is realistic to assume that the parties will continue to hold diametrically opposed views about its use.
[36] With the concurrence of other counsel, at the end of the hearing I invited Mr Bate to provide, in an electronic form on which changed could be marked up, the proposed terms for the TBWT trust deed. That form is annexed as Appendix 1 to this judgment. The terms I am prepared to approve are reflected in the draft as provided by Mr Bate, subject to the changes I have marked up on it. Given the extent of alterations, I am also annexing as Appendix 2 a clean copy of the trust deed that adopts the changes I propose.
Proposed terms of a trust deed
Parties
[37] As to the parties to the deed, those recognised by Durie J as having a responsibility for governance of the TBWT should be included as parties committing to its fuller terms. No reason was given for omitting Mr Peter Karaitiana, who was
appointed as an advisory trustee by Durie J, and consistency suggests that he should be added to those listed.
The introduction to the trust deed
[38] As to introductory matters by way of recital, it is desirable for the context to be set out a little more fully. I propose expanding what was in cl A to identify the breakdown of the $350,000 and $25,000 components of the total ex gratia payments.
[39] As to cl B in the draft introduction, the origin of the obligations as to how the fund is to be held can be related more precisely to the judgments in the 2000 High Court proceedings. I propose re-casting cl B in new clauses C and D to reflect that. That includes a statement as to the relevant effect of the second judgment, placing in context the status of the existing responsible and advisory trustees.
Definitions
[40] By the end of the hearing there was a measure of consensus that “beneficiaries” should, as a matter of law, include not only descendants by blood of Thomas Baker, but also persons deemed to have that status by virtue of formal adoption under the Adoption Act 1955. It is preferable for the definition to be expanded to acknowledge that.
[41] A further issue traversed was the number of branches of the wider family descended from Thomas Henry Baker that should be recognised. The draft contemplated there being four, on the basis of the trustees’ understanding that only four of the issue of Thomas Henry Baker and his first wife then had issue of their own. That approach was endorsed by the majority at the November 2012 meeting.
[42] Mr Nee Harland’s cross-examination of Edward Baker raised the prospect that a fifth of Thomas Henry Baker’s children, William, did in fact have issue by virtue of formally adopting two sons, William and David. Mr Bate was not in a position to refute that proposition. Rather, his submission about the definition of family branches was to the effect that there was no practical requirement to recognise an additional branch as the descendants of William were confined to two
survivors, both of whom resided in Australia, and whose interests could be catered for, to the extent relevant, by trustees appointed for the other substantially larger branches of the family.
[43] I am not persuaded that a definition of the number of branches of the family should be on terms excluding William’s issue on that pragmatic basis. I propose an inclusive definition that would enable recognition of descendants of William to qualify as a discrete family branch, if the status of his sons as being formally adopted is subsequently established.
[44] Mr Nee Harland also raised the prospect of recognising a further “branch” of the family by virtue of legal succession to the rights of ownership of Tarawera 5A. That criterion is quite different, and would involve an overlay of recognition by virtue of a different characteristic. I am not persuaded that the definition should be amended to accommodate that.
Terms of trust
[45] Clause 3.1 of the proposed draft arguably afforded equal status to the original deed of settlement, and the terms of Durie J’s judgments. That could lead to confusion and disputes. It is preferable that the trust deed represent the source of binding commitments on trustees, so that its provisions prevail over anything in the earlier documents. I have made amendments to reflect this.
[46] Clause 3.1 of the proposed terms contained specific trustee powers. That is a re-draft of an earlier proposed set of exclusive purposes for the trust. However, Mr Soper raised concerns about the propriety of the deed providing anything in the nature of exclusive purposes for the trust and those were transformed into non- exclusive powers. If no other general purpose or specific purposes are substituted, TBWT is left with the general and non-operative statement in cl C of the introduction that the payments are held, and are to be applied, for the benefit of all the descendants of Thomas Baker. I consider that to be adequate.
[47] The most contentious of the proposed specific powers in cl 3.4 was that authorising the trustees to pay for initiatives to obtain access to family urupa and
wahi tapu sites at Tarawera, and for the upgrading of gravestones at Tarawera. Those sites are located on Tarawera 5A. At least since pursuit of the 2000 proceedings, Nigel Baker has asserted the legal entitlement, as registered proprietor of the land, to control access by other members of the extended family to urupa and wahi tapu sites. In particular, there have been confrontations between members of Nigel Baker’s immediate family and others, notably alleged assaults by Edward Baker and his son, Jason, on members of Nigel Baker’s family. Notwithstanding Nigel Baker’s insistence that all descendants of Thomas Henry Baker have to respect his rights as owner of the sites as part of private land, Mr Nee Harland’s submissions were to the effect that meaningful constraints on access to those sites have only been asserted against Edward and Jason Baker.
[48] Since the present trustees assumed control of the trust fund, they have committed TBWT resources to unsuccessful applications in the Māori Land Court, seeking orders for access to the sites. Nigel Baker argues that that expenditure was not authorised by the terms of the trust, and that the deed should not authorise the commitment of trust funds for any further legal proceedings against him because he is a beneficiary.
[49] It is a matter that is likely to provoke strong feelings on both sides, and an enduring workable solution is complicated by the different approaches reflected in the common law and the expectations of tikanga. It possibly over-simplifies the tensions, but on the one hand Nigel Baker relies on common law notions upholding the sanctity of individual property rights. On the other, members of the wider whanau have an expectation that, irrespective of the formal position in terms of legal rights, their enduring interests in the urupa and wahi tapu as spiritually significant will be respected consistently with tikanga.
[50] During the hearing, Mr Nee Harland referred to terms for access that had been issued in relation to the urupa by Nigel Baker some years ago. After the hearing, Mr Nee Harland provided what purports to be a copy of such terms, attached to his memorandum filed on 16 September 2013. I did not hear argument about those terms. They purport to restrict access to the urupa to weekends, with any visitors required to make a request at least seven days prior to the proposed visit and
with all access at the discretion of the landowner, and able to be revoked by the landowner at any time without notice. Where there are on-going tensions between Nigel Baker’s immediate family and other members of the wider family, it is predictable that insistence on constraints of this type could exacerbate those tensions.
[51] I did not hear argument about the appropriate constraints that might be imposed, or the appropriate legal basis for the wider family’s expectation to have less constrained access to the urupa site. It is tenable to contemplate some form of trust obligation arising in personam, requiring the legal owner of the property including urupa to afford access that respects the strength of the spiritual links all descendants have, to the site at which ancestors are buried. Alternatively, some form of right in rem running with the land might be recognised, exercisable by the class of persons who are descendants of those buried there. Any such formulation would likely be qualified by the landowner’s reservation to exclude family members who persisted in inappropriate behaviour at the site over a sustained period.
[52] In the absence of the tensions caused by the disputes over control of the present trust fund, it seems unthinkable that the shared respect for ancestors buried in an urupa would not be strong enough to forge workable arrangements for all members of the extended family to have appropriate access.
[53] Notwithstanding such concerns, a power to commit trust resources to pursuit of disputes in relation to access to urupa and wahi tapu should not be the first among a number of specific trustee powers. Nor am I persuaded that the power should be provided on simple terms that leave such commitments entirely to the trustees’ discretion. I acknowledge that Mr Soper and the chairman of the November 2012 meeting discerned that those attending it supported the use of trust monies being applied for this purpose. Mr Soper also suggested that a power could be treated as in the interests of beneficiaries overall, even although against the wishes of some beneficiaries.
[54] In catering for the interests of all beneficiaries, the trust deed should guide the trustees as and when they need to consider application of trust funds for this negative purpose. I accordingly propose to relegate the recognition of a power for
the trustees to consider such expenditure to cl 3.6 of the proposed deed, and to confine the circumstances in which that might occur. In doing so, it cannot be inferred that commitment by the trustees of trust resources for this purpose up until now constituted unauthorised expenditure. That is a discrete question which it is hoped can be left in the past. If it were ever to arise, the issue would need to be addressed in the context of the position confronting the trustees at the time those actions were undertaken.
[55] In terms of these constraints, Mr Nee Harland argued that if there was to be any power at all (his client’s primary position being that there should be no such power), then at the least it should only be exercisable after the trustees satisfied themselves that there was an on-going and material issue of access to urupa and wahi tapu for a material number of beneficiaries. Further, that the commitment of resources should only be made after more than a bare majority of trustees voted in support of it.
[56] Mr Soper accepted that it may be appropriate to provide some constraint on the circumstances in which trust resources could be committed for this purpose. Mr Bate submitted that it was unnecessary and ought to be left as a part of the trustees’ general discretion. I am satisfied that constraints on when the trustees may resort to this power are appropriate. They are reflected in the terms of what now appears as cls 3.6.1 and 3.6.2.
[57] Previous drafts proposed on behalf of the trustees had extended the power of capital distributions to payments for dentures and glasses of beneficiaries, and payments to students. Appropriately, the references to payments out of capital have been removed. The provisions of what were cls 3.5 and 3.7 in the draft addressing a definition of “costs of education”, and empowering the trustees to resolve when a particular student has completed that student’s education, both expand on what the trustees may do in considering payments for students. As a matter of drafting, they are preferably seen as sub-paragraphs of the paragraph creating the power to make such payments. I have accordingly re-ordered those paragraphs to reflect that scheme. (See cls 3.4.2.1 and 3.4.2.2.)
Trustees
[58] Considerable attention was focused on the appropriate provisions in the deed for election and replacement of trustees. Mr Nee Harland raised a range of concerns about the legitimacy of the processes by which the present trustees, and those they propose should join them as trustees, were nominated, confirmed or elected. Mr Nee Harland was also concerned about perceived inadequacies in the process for electing a trustee to represent each branch of the extended family and their control over that forum.
[59] In essence, the present trustees saw the occasion of a single annual meeting for all registered beneficiaries of the TBWT as sufficient to constitute a forum for each family branch to elect a trustee or trustees when that is required. That business would be in addition to the general business for such a meeting that was equally relevant to beneficiaries from all branches of the family. Practical considerations of the time and expense involved in convening beneficiary meetings weigh in favour of allowing a single forum for these various purposes. Those branches of the family that are content with that single forum should not be required to add to the formality in holding a separate meeting where the trustees to represent their branches of the family are elected.
[60] On the other hand, those branches that wish to have the opportunity to address the election of trustees to represent them (and conceptually other issues of specific interest to that branch of the family) should not be deprived of the opportunity to address those matters in a discrete forum.
[61] The present trustees take the view that proceedings at the beneficiary meeting convened in November 2012 were sufficient to produce the election of two further trustees, one each for the third and fourth branches of the family that were recognised at that time. Those are Todd Karaitiana and the Reverend Jonathan Hirini Arapeta Te Rire, representing respectively the “Ani” and the Te Kawa branches of the wider family.
[62] Although I did not understand Mr Nee Harland’s instructions to be from either of those branches of the family, Nigel Baker disputed that there had been any
adequate process to elect trustees for those branches of the family. Mr Nee Harland argued that if the terms of the draft were adopted, then that inadequacy would be perpetuated for the extent of the first five year term.
[63] At the risk of unduly complicating the processes for appointment of trustees, I consider that the preferable course is to:
treat the proposed appointments as operative for an interim period;
afford all branches of the family an opportunity to address the forum they consider appropriate for appointment of trustees; and
provide for an election of trustees towards the end of 2014 so that beneficiaries may reflect on the appropriateness of present trustees in light of the operation of the trust under its new trust deed for a year or so.
[64] I have accordingly added to the provisions in respect of trustees clauses providing for:
the retirement of the advisory trustees in that present capacity (cl 4.2);
the appointment of the trustees representing other branches of the family as proposed by the incumbent trustees (cl 4.3); and
an “initial term” for all trustees so that beneficiaries have an opportunity, in light of the settled terms of the trust deed and an initial period of experience, to address elections which will thereafter be for longer terms (cls 4.3, 4.6).
[65] Mr Nee Harland also resisted the proposed length of trustees’ terms of appointment at five years. Mr Soper accepted that that was at the outer boundaries of what would be reasonable. Given that I am proposing an interim term to the end of 2014, I consider on balance that the terms thereafter ought preferably to be for four years (cl 4.6.1).
[66] As to other proposed terms, the draft proposed forgiving trustees for non- attendance at meetings for a period of 24 months or longer. Mr Nee Harland considered that that was too permissive of what would be a dereliction of duty and I agree that a shorter period of non-attendance should be sufficient to afford the other trustees an opportunity to remove a trustee. I have reduced it to 15 months (cl 4.4).
[67] The proposed terms of indemnification of trustees for liabilities they incur on behalf of the trust, or in their capacity as trustees, did not have an exclusion for acts or omissions in bad faith. I raised the point during the hearing with counsel and it was agreed that an appropriate limitation on the indemnity should be included. That is reflected in the further sentence inserted in cl 6.
[68] Mr Nee Harland raised a number of times his client’s concern that the trust deed should reflect some constraint on trustees to act in accordance with the wishes of the family branch of the beneficiaries whom they represent. However, ultimately Mr Nee Harland accepted that any such constraint could not override the obligation on all trustees to act bona fide in what they perceive to be the best interests of all beneficiaries. I have considered the scope for a potential addition to the provisions of cl 12 that regulates meetings of trustees, to address this concern.
[69] It would be feasible to include recognition of beneficiaries’ expectation that trustees elected to represent their family branch would have regard to the views of that group in considering any proposals before the trustees. However, unless such a provision acknowledged that it did not, in any way, derogate from the obligation on all trustees to act in the best interests of all beneficiaries, it would risk misleading trustees into acting contrary to the law. Once an acknowledgement of a narrower duty to a trustee’s family branch was qualified by that overriding obligation, it would risk being both confusing and internally inconsistent. In the end, I am not persuaded that any stipulation such as that sought by Mr Nee Harland is justified, and I have accordingly not included one. To the extent that trustees depend on support of the beneficiaries within their own family branch, the democratic pressure of losing that support should operate to focus trustees’ minds on the wishes of their “electorate”.
Charitable status?
[70] The proposed terms included in cl 5.4 a power for the trustees to seek incorporation of the TBWT as a charitable entity. Mr Nee Harland opposed the inclusion of such a provision, principally because of a concern that the formal steps following the recognition of charitable status would further entrench the proposed mode of administration of the trust. Arguably, that would be difficult to reverse in the event that Nigel Baker’s interests are able to overturn the judgments of Durie J, pursuant to which the trust is presently intended to be administered.
[71] I am not persuaded that the transformation of the TBWT into a charitable entity would afford the incumbent trustees any greater protection against the contingency contemplated by Mr Nee Harland. If indeed the direction charted for the trust by the judgments of Durie J was overturned, then it would be competent for the Court, as an aspect of any relief to that effect, to bring to an end a charitable entity, the origins of which depended on those judgments.
[72] There is, however, a practical concern as to whether the scope and objects of the TBWT would qualify it for charitable status.7 I do not express any firm view on the point. There may be other initiatives that could be pursued to have the trust qualify for less onerous income tax obligations. It is appropriate to set a threshold that has to be reached before the trustees could commit the trust to the substantial expense of pursuing charitable status. I have added a suggested form of constraint. I have also updated the reference to the regulatory body which is no longer the Charities Commission, but the Charities Registration Board.8 I have also added a power confining the trustees to charitable purposes contingent upon the trust achieving that status (cl 5.4.1).
Audit of financial statements
[73] Clause 9.2 makes provision for an annual audit. Throughout the present proceedings, Mr Nee Harland has supplemented criticisms of the conduct of the trustees with repeated calls for them to have the financial statements for the trust
7 See the requirements of s 13(1)(a) of the Charities Act 2005 and the meaning of “charitable purpose” in s 5.
8 Charities Act 2005, s 8.
audited for the years since the incumbent trustees took control of the fund. The trustees have resisted incurring that expense, until the terms for on-going governance of the trust were resolved. Whether or not any saving will be achieved by having the financial statements for a number of years audited together, it is understandable that in the position that has pertained, completion of an audit would be deferred until the terms for governance were regulated by provisions that included such an obligation. No exception was taken to the proposed term requiring the trustees to procure an audit of the financial statements.
Annual meeting
[74] Clause 10 addresses the obligation to convene an annual meeting of beneficiaries. The terms appear largely uncontroversial, and appropriate. I note that in cl 10.7, I have substituted the inappropriate reference to a “member” with a reference to “registered beneficiary”.
Power to vary the terms of the trust?
[75] Mr Bate also proposed that the trustees be authorised to vary the provisions of the deed from time to time. This was opposed by Mr Nee Harland as further extending what he characterised as the inappropriate extent of power enjoyed by the trustees. Mr Soper was inclined to suggest that some power of amendment in relation to the more machinery provisions of the deed would be appropriate, but that provisions reflecting the more important issues of principle, or protecting the interests of beneficiaries, ought to be entrenched in some way.
[76] I agree that, given the history of the TBWT, and the effort involved in settling provisions that will hopefully be adequate to regulate the governance of the trust without controversy, at least the important provisions should not be capable of simple amendment by a majority of existing trustees. Once that concern is recognised, it is difficult to draw a line between the provisions of sufficient importance which warrant being “entrenched”, and those that can be treated as mere machinery. Accordingly, I have come to the view that the trustees ought not to be given a power to vary the trust deed.
Does the Court have jurisdiction to authorise a deed on these terms?
[77] Having settled on the preferable terms for a deed for TBWT, it is necessary to assess whether the Court has power to approve a document in those terms.
[78] Section 64 of the Act provides as follows:
64Power of Court to authorise dealings with trust property and variations of trust
(1)Subject to any contrary intention expressed in the instrument (if any) creating the trust, where in the opinion of the Court any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, retention, expenditure, or other transaction is expedient in the management or administration of any property vested in a trustee, or would be in the best interests of the persons beneficially interested under the trust, but it is inexpedient or difficult or impracticable to effect the same without the assistance of the Court, or the same cannot be effected by reason of the absence of any power for that purpose vested in the trustee by the trust instrument (if any) or by law, the Court may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions (if any) as the Court may think fit, and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne, and as to the incidence thereof between capital and income:
Provided that, notwithstanding anything to the contrary in the instrument (if any) creating the trust, the Court, in proceedings in which all trustees and persons who are or may be interested are parties or are represented or consent to the order, may make such an order and may give such directions as it thinks fit to the trustee in respect of the exercise of any power conferred by the order.]
(2)Repealed.
(3)The Court may from time to time rescind or vary any order made under this section, or may make any new or further order:
Provided that no such rescission or variation of any order shall affect any act or thing done in reliance on the order before the person doing the act or thing became aware of the application to the Court to rescind or vary the order.
(4)An application to the Court under this section may be made by the trustees, or by any of them, or by any person beneficially interested under the trust.
[79] Section 64 is designed to authorise dealings in trust assets in a way that was not contemplated by the trust’s deed. Applications have generally been made under
this section where there is an existing trust deed, but it does not authorise the specific transaction that the trustees proposed. This application is different in that there is no deed setting out even the most basic provisions. Nonetheless, it is appropriate to begin with a consideration of what is contemplated by the ordinary meaning of the words used in s 64(1).
[80] Treating the deed of settlement with the Crown as the instrument that created the trust, there is certainly no intention expressed in it that would be contrary to the provision of a trust deed as is now sought. Nor is there anything in the judgments in the 2000 proceedings that might represent a contrary intention. Indeed, it might be implied that those judgments anticipated that an application for approval of fuller terms to regulate the TBWT might well be made.
[81] The application has not been brought to authorise any specific transaction of the types listed near the outset of s 64(1). The trustees do seek terms to regulate the scope of investments they might make, and potentially to authorise dispositions and expenditure. On a purposive approach, I incline to the view that the proposal to complete a trust deed to provide for these matters is of itself a “transaction” in the sense that concept is used in the terms of s 64.
[82] I note that in its recent review of the law of trusts, the Law Commission recommends broadening the Court’s powers under s 64, allowing it to amend the administrative provisions of the trust deed to enable trustees to exercise the necessary power on a more on-going basis. This is seen as preferable to the Court granting those specific powers to undertake certain transactions on an ad hoc basis.
Again, this presumes a trust deed is in existence and capable of amendment in the manner contemplated by the Law Commission.9
[83] Without anticipating any change in the law, it is consistent with the analyses of the preferable role for the Court to treat an application in the present circumstances as relating to “a transaction” to fill the vacuum left by the absence of a trust deed.
9 Law Commission Review of the Law of Trusts: A Trusts Act for New Zealand (NZLC R130, 2013) at [10.19]–[10.22].
[84] Certainly, it is expedient for the management of the trust fund, and in the best interests of beneficiaries (those being alternative requirements listed in s 64), to seek approval for appropriate terms to regulate the governance of TBWT and all aspects of its administration.
[85] Given the trenchant differences between groups of beneficiaries, I am readily persuaded that it would be inexpedient or impracticable to effect the settling of binding terms for a trust deed, without the assistance of the Court (that being a further requirement in s 64). If I had any doubt about the need for Court assistance prior to the hearing, I was certainly persuaded of the point by the end of the hearing. Further, the original settlement deed certainly did not vest in trustees the power to settle the terms of a comprehensive trust deed such as is now proposed, and the need for which is readily demonstrated.
[86] The Court’s power under s 64 is to confer upon trustees the power necessary for one of the purposes stated at the outset of that section. Here, that is to complete the trust deed. The Court is empowered to do so on such conditions as the Court thinks fit, and relevantly that is reflected in the Court’s preparedness to make an order only subject to the trustees accepting variations to the terms that they had themselves proposed. This decision grants the trustees an ad hoc power to execute a trust deed, being a form of “transaction”.
[87] I therefore consider that on the wording of s 64(1), the Act empowers the Court to order that the trustees complete the trust deed on appropriate terms.
[88] Although there had previously been reference to the proviso to s 64(1), it was not invoked in Mr Bate’s submissions. I consider that is correct, because the proviso is to be applied where all those interested consent to the order, which is not the case here.
[89] Mr Soper provided helpful submissions that referred to consideration in a number of cases of the scope of the powers under s 64. These included the following observations:
The object of (now) s 64(1) of the Trustee Act 1956 is to secure that Trust property should be managed as advantageously as possible in the interests of the beneficiaries, and with that object in view, to authorise specific dealings with the property which the Court might have felt itself unable to sanction under the inherent jurisdiction … 10
… Pursuant to s 64 the Court has a supervisory function whereby it can enlarge on inadequate powers of administration and management as contrasted with s 64A where the Court is empowered to act as a statutory agent to vary beneficial interests.11
Section 64 of the Trustee Act is essentially administrative in nature, empowering the Court to sanction specific transactions where they would be in the best interests of beneficiaries and there would otherwise be difficulties in effecting those transactions.12
[90] The observations are consistent with the comment on s 64 that the courts will interpret it liberally, and have used it to make orders approving a wide variety of transactions.13
[91] The courts have been conscious that s 64 does not empower the Court to order variations to beneficial interests.14 A specific power to vary the terms of a trust in defined circumstances is provided in s 64A. That section was originally invoked in the present application, but Mr Bate ultimately did not rely on it. I am satisfied that none of the terms proposed would constitute a variation in the sense contemplated by s 64A.
[92] Mr Bate’s application also invoked s 66 of the Act. That provides for trustees to apply to the Court for directions concerning any property subject to a trust, or respecting the management or administration of any property. That section tends to be invoked when trustees face an uncertainty as to the interpretation or application of existing terms of a trust, and take the precaution of seeking directions from the Court as to the manner in which they should proceed.
10 In re Gray (deceased) [1956] NZLR 764 (SC) at 768.
11 Re Lyell (deceased) [1977] 1 NZLR 713 (SC) at 716.
12 Winter v Attorney-General HC Auckland M333-IMO1, 21 December 2001 at [26].
13 See Chris Kelly and Greg Kelly Law of Trusts and Trustees (7th ed, LexisNexis, Wellington, 2013) at [20.25] and the cases there cited.
14 See Banicevich v Gunson [2006] 2 NZLR 11 (CA) at [46]; Re Lyell (deceased), above n 11, at 716.
[93] In his submissions, Mr Soper suggested that s 66 was not appropriate for the present application. He characterised s 66 as being intended to provide for private advice by the Court to trustees where they are in doubt as to whether a proposed action is authorised by the terms of the trust. He characterised s 66 as intended to provide an inexpensive procedure to obtain the Court’s assistance on what are relatively minor points arising in the management of a trust.
[94] I accept Mr Soper’s caution. The present application does not seek interpretation of the terms for a trust deed that are expressed in what is otherwise adequate detail. Rather, the application is to put in place such a document.
[95] Mr Nee Harland’s submissions did not include any argument that the Court could not approve the proposed terms of a deed under s 64 of the Act. Rather, his client’s concern was that the Court should not approve any terms, at least not until Nigel Baker’s interests had exhausted their attempts to challenge the decisions in the 2000 proceedings that provide the basis for the current administration of the TBWT.
[96] For the most part, the provisions of the proposed trust deed do address administration of the fund, creating a measure of certainty for trustees, and confirming the obligations owed to all beneficiaries. The non-exclusive specific powers are likely to focus the attention of trustees on those as forms of benefit to relevant beneficiaries, but they do not preclude pursuit of other matters to confer benefits on the beneficiaries. They appear to have gained support at the meeting, and also appear to be proportionate to the size of the fund. The terms of the deed are relatively conservative in that they do not permit the trustees to make payments to beneficiaries out of capital. That is likely to prolong the life of the TBWT, which appears to be what Durie J contemplated.
[97] The non-exclusive specific powers (now in cls 3.4 to 3.6) were previously proposed as the exclusive purposes of the TBWT. A deed in those terms would have required the trustees to consider distributions to beneficiaries, or payments on their behalf, for just those specific purposes. Mr Soper had reservations that that would amount to a variation of the trust, and would therefore have been outside s 64. I am inclined to agree. In any event, once transformed from purposes into powers, and
expressed in non-exclusive terms, they do not preclude the trustees making payments to beneficiaries or on their behalf for other purposes.
[98] A significant focus during the hearing was on the process by which trustees are to be elected and appointed. Given the history of the matter, it is important to have provisions that optimise the prospects of all branches of the wider Baker family participating on even terms, so far as they are interested to do so. On one view, such provisions might not address the management or administration of the trust at all, as a Court approved transaction under s 64 is required to do. However, in the context of this trust, its history and the aim of charting a less contested course in the future, I am satisfied that the provisions for election and appointment of trustees are appropriately within the umbrella of provisions reflecting the administration of the trust. They can accordingly be a component of a deed that the Court approves under s 64.
[99] I am accordingly satisfied that the Court’s power under s 64 extends, in the context of this trust, to an order approving a transaction for completion of a trust deed with relatively comprehensive provisions, to fill the void that its history has created.
Ascertaining capital of the trust
[100] The incumbent trustees took control of a fund of $306,552.90. That amount was reimbursed to the trust by Nigel Baker pursuant to orders made by Durie J in 2006. The sum, with accumulated interest, reached a fund of some $608,974 as the opening balance in the 2008 financial statements. Financial statements to date have not been prepared in a manner that distinguishes capital from income, which could be applied to dictate the extent of the fund available to the trustees as income. Mr Nee Harland submitted that this larger amount should be recognised as the trust capital because it represented the accumulated asset that was available to the trustees at the point he suggested a “new start” was made. The larger the portion of the accumulated fund that was given capital status, the smaller the remaining component would be, for recognition as income and therefore available to the trustees for distribution.
[101] Mr Bate submitted that conventional concepts ought to be applied, so that the capital of the fund was the amount of which the trustees were originally seized, comprising the relevant portion of the original settlement received from the Crown in 1995. Mr Soper suggested that there was no rationale for adopting other than the conventional approach.
[102] In pragmatic terms, Mr Bate submitted that the beneficiaries have not received any distributions of any kind, notwithstanding the fund being in existence since 1995. In those circumstances, equity suggested that an accumulation of income ought to retain that character, and therefore be available for distributions that might represent some form of “catch up”.
[103] Both in terms of principle and the pragmatic concerns raised, I am satisfied that the capital ought to be recognised at the sum of $306,552.90. I was not referred to any accounting principle that would require undistributed income to be treated as an accretion to capital, in circumstances where that characterisation would take interest previously earned out of the sums available to the trustees for distribution. Such an outcome would be particularly inappropriate where, as Mr Bate submitted, there have been no distributions at all throughout the period in which the accrued interest was earned.
The conduct of the hearing, and subsequent memoranda
[104] The resumed hearing was set down for the day of 11 September 2013. Mr Nee Harland spent nearly all of that day cross-examining Edward Baker. Messrs Bate and Soper were relatively restrained in the number of objections they raised to questioning on matters that were irrelevant to the applicants’ application. I made more frequent interjections, in largely futile attempts to confine the cross- examination to matters which might be of assistance in determining the present application. Some of Mr Nee Harland’s questions raised matters that had been dealt with in the 2000 proceedings. Also, they sought to make out criticisms of Edward Baker as a trustee, and otherwise, in respects where it was inappropriate or irrelevant to press the Court to make definitive factual findings adverse to the trustees as applicants in the present proceedings.
[105] Mr Nee Harland protested that my interruptions to his questioning prevented him eliciting evidence that was, on his instructions, relevant to a consideration of the preferable terms for a proposed trust deed. Having reviewed all the cross- examination that did occur, and assessed it in light of the wide-ranging submissions that Mr Nee Harland made both in writing and orally, I am satisfied the objections of other counsel and my own concerns had appropriate regard for matters that could be relevant to the present application. I am satisfied that any relevant matters in opposition that Nigel Baker might have wanted to raise could not be advanced by any additional questioning of Edward Baker.
[106] Subsequent to the hearing, Mr Nee Harland filed two forms of a further memorandum dated 16 September 2013, which ran to eight pages, together with 14 pages of appendices. He also filed another memorandum dated 20 September 2013, which sought a telephone conference to address matters tangential to the terms of the proposed trust deed.
[107] During the resumed hearing, Mr Nee Harland cross-examined Mr Rameka as to whether he was a descendant by blood of Thomas Henry Baker. Mr Nee Harland contended that Mr Rameka’s grandmother or great-grandmother, Roihape, was not the natural daughter of her father, Henry Baker. Mr Rameka’s response was to the effect that he was aware of a birth certificate for Roihape confirming that she was the natural child of Henry Baker. No further challenge was made during cross- examination on that point.
[108] Subsequent to the hearing, Mr Nee Harland filed a further affidavit from Nigel Baker sworn on 18 September 2013. That annexes death certificates of Roihape’s mother, Hineata Baker, who died at the age of 80 in 1975, and a death certificate for Henry Baker who has been treated as her father who died in 1953. Those death certificates show a discrepancy in the number of female children. Henry Baker’s death certificate specifies that he had five female children, and Hineata’s death certificate specifies that she had six female children. Nigel Baker’s affidavit deposes to “talk within the family to the effect that no one within the generation of my father’s brothers and sisters knew of Roihape as being their sister”.
[109] No explanation is offered as to why the documents now annexed to Nigel Baker’s affidavit filed after the hearing were not provided earlier, and in particular why those documents and the matters Nigel Baker seeks to draw from them were not put to Mr Rameka. The number of children specified in a death certificate is unlikely to be determinative of the issue.
[110] In the various memoranda filed by Mr Nee Harland subsequent to the hearing, and Nigel Baker’s further affidavit, further points were also raised in relation to allegations that Edward Baker had made payments from the trust fund to his own interests or otherwise, that were not for proper purposes of the TBWT. Among the items that had been identified at the hearing was a payment recorded as being made to the High Court for $7,000 in 2004. Subsequent to the hearing, Mr Bate has filed a memorandum addressing that point, and two affidavits from a legal executive in his firm who has conducted further research in relation to them. They acknowledge that a payment of $7,000 was made in error, subsequently addressed by a payment of $6,500.
[111] The justification for an order settling appropriate terms for the TBWT is not removed if those challenging the incumbents make out instances of apparently inappropriate payments made by them, prior to the terms being settled. If any inappropriate payment is not corrected once it is identified, then that would provide a basis for an order that the trustee be required to account, and may more generally go to challenging the fitness of the trustee to continue. During Mr Nee Harland’s oral submissions he indicated that he was not in a position at that time to advance Nigel Baker’s claim for removal of Edward Baker as a trustee. Sadly, given the compelling interest in resolving all aspects of the dispute, that cannot be dealt with on the present application. The prospect of it cannot hold up the resolution of the present application.
[112] Equally, the belated focus that Nigel Baker has given to his challenge to the legitimacy of Mr Rameka’s standing as a trustee cannot influence the analysis of the appropriate terms for the TBWT. Thus far, Mr Rameka’s status as a trustee depends on the terms of orders made in the 2000 proceedings. Should it subsequently be established that Mr Rameka’s position is based on an erroneous assumption that he is
a descendant by blood, or by formal adoption, of Thomas Henry Baker, then it would necessitate his retirement as a trustee and result in all those whose claims as beneficiaries depend on their descending from Roihape being excluded. That proposition cannot be dealt with in the present context.
[113] Mr Nee Harland’s post-hearing memoranda press Nigel Baker’s claim for a refund of $25,000. This sum was included by Durie J in the calculation of the components of the settlement originally received from the Crown by Waimakuku, for which Nigel Baker was required to account.
[114] The claim for a refund was apparently pursued on the basis that Durie J was wrong. Mr Nee Harland’s 20 September 2013 memorandum asked whether an application was necessary to pursue the refund.
[115] The matter was dealt with in Durie J’s 2006 judgment in the following terms:15
Mr Porteous sought reductions in the total claimed. His first contention was that the sum of $25,000 was paid direct to the third defendant for his research and activities prior to the signing of the settlement deed. He argued that it should not therefore form part of the trust fund of $375,000 and that the third defendant was under no duty to account for that sum. Mr Bates [sic] responded that on the third defendant’s own evidence the sum was donated back to the trust (transcript p 68 line 15).
In my view the Court cannot go beyond the terms of the settlement deed. The third defendant and his solicitor were involved in that Deed which states at cl 25 that the $375,000 paid over was inclusive of the sum of $25,000 “already advanced to the Trust” (emphasis added). The position then is that it forms part of the trust fund for which the defendants must account. If any sum is due to the third defendant for costs and expenses then the third defendant had properly to submit full particulars of the amount claimed for the Trust Board’s approval. It may be that the new trustees will still accept a claim for reasonable expenses, notwithstanding the evidence in Court of a donation which suggested that no such claim was to be made. However, the
$25,000 forms part of the trust fund for which the defendants are obliged to account.
[116] The extent of Nigel Baker’s obligation to account for the sums originally received is res judicata. I cannot form a different view about it. Durie J
15 Chisholm v Waimakuku Whanau Trust Board Inc, above n 4, at [7]–[8].
contemplated that it might be a matter Nigel Baker take up with the current trustees. I am not in a position to influence that.
Settling final form of the deed
[117] The extent of concerns as to the proposed terms of the trust deed have led to a significant number of alterations and additions, to bring the deed into a form which I consider would be appropriate for the Court to approve. The wording of some of the changes was not discussed in detail during the hearing. It is accordingly appropriate to allow a short period for counsel to reflect on the efficacy of the presently proposed terms, to enable the trust to operate in the manner that my reasoning contemplates.
[118] This is not to afford any opportunity to re-argue the scope, or indeed the terms on which the trustees should henceforth be empowered to administer the trust. Rather, it is an opportunity to identify any unintended consequences of the drafting as I have set it out. I invite memoranda from counsel to be filed and served by 5 pm on 4 October 201. Contemplating that memoranda may not anticipate what other counsel raise, I flag the prospect of affording a confined right of response to comments made by other counsel, and will indicate whether I am prepared to receive any such replies, after considering the content of any initial memoranda received.
[119] Once I am in a position to make a final order approving the terms for the trust deed, I will be directing that it be completed by the trustees, and that it is thereafter to regulate the governance of the TBWT. I will also be directing that the trustees are to provide advice to all registered beneficiaries of the TBWT as to the outcome of the application. That advice should indicate the availability of the terms of the trust deed to any who want it. The report is also to explain the interim nature of the appointment of new trustees until November 2014, and identify the opportunity for each branch of the family to address the forum in which that branch wishes to address the issue of trustee elections.
Costs
[120] The trustees are entitled to charge the trust fund with the reasonable costs and disbursements incurred in pursuit of the application.
[121] Mr Nee Harland sought costs in favour of the respondent. Material changes that I have made to the terms of the trust deed have been influenced by concerns raised on behalf of the respondent by Mr Nee Harland. In a limited sense therefore the respondent might be treated as having had a measure of success in the proceedings.
[122] However, that consideration is outweighed by the extent to which Mr Nee Harland’s initiatives needlessly prolonged the proceedings. Mr Nee Harland used the proceedings for an extensive number of collateral attacks, and raised more points without merit than those that did have any relevant merit.
[123] In all these circumstances, I do not consider that the trust fund ought to make a contribution to the costs incurred on behalf of the respondent.
[124] No issue as to costs arises for the amicus. I am grateful to Mr Soper for the care and attention he has given to a brief that must have been less than straightforward.
Summary
[125] The applicants are entitled to an order under s 64 of the Trustee Act 1956 authorising their completion of a deed of trust for the Thomas Baker Whanau Trust. That deed is to be in the form of Appendix 2 to this judgment, subject to the Court authorising any further amendments to address any unintended consequences of the drafting of those terms.
[126] Once it is finalised, the trustees are to report to registered beneficiaries on the matters address in [119] above. The applicants are entitled to costs on their application out of the fund.
[127] The parties should pursue constructive resolution of remaining issues, including challenges to allegedly unauthorised or inappropriate expenditure directed by one or more of the present trustees of the TBWT, and the legitimacy of the line of Roihape as blood descendants of Thomas Henry Baker. If necessary, the resolution
of those issues are to be the subject of further applications which may be brought in the present proceedings.
Dobson J
Solicitors:
Hansen Bate, Hastings for applicantsTe Nahu Lovell & Co, Rotorua for respondent Crown Law, Wellington for amicus curiae
Counsel:
P A Nee Harland, Havelock North
Annexure 1
Annexure 2
THOMAS BAKER WHANAU TRUST DEED
HANSEN|BATE
Lawyers Hastings New Zealand
DEED dated this day of 2013
PARTIESEdward Henry Baker of 509A Frederick Street, Hastings 4122; Whakawe Charles Rameka of 54 Marshall Avenue, Taupo 3330;
("trustees")
Ivan Northcroft of State Highway 1, RD2 Waitahanui, Taupo 3378; Wayne John Hesketh of 43 Yarmouth Road, Flaxmere, Hastings 4120; Tom Mill of 2 Hurst Avenue, Maraenui, Napier 4122;
Bill Grace of Turangi Peter Karaitiana
(“advisory trustees”)
INTRODUCTION
ABy deed of agreement dated 20 December 1995 the Crown settled Waitangi Tribunal Claim Wai147 for a total ex-gratia payment of $375,000.00 (the payments), which comprised an advance of $25,000 and a payment of
$350,000 on execution of the settlement deed.
BThe payments were made in acknowledgment of the breach of the principles of the Treaty of Waitangi.
CBy a judgment of the High Court in CP27/2000, Napier Registry, dated 29 August 2005, it was determined that the payments were required to be held and applied for the benefit of all the descendants of Thomas Baker being up to 380 persons as referred to in those proceedings, and further that there was no provision for capital distributions to individual beneficiaries.
DBy a further judgment in CP27/2000 dated 28 April 2006, the High Court ordered that the trust established by the settlement deed dated 20 December 1995 was henceforth to be known as the Thomas Baker Whanau Trust. That judgment directed that those who had been responsible for administering the payments up until that time pay the sum of $306,552.90 in reimbursement of sums that had been applied out of the payments, to the trustees of the Thomas Baker Whanau Trust, together with interest on that sum for relevant periods. The April 2006 judgment appointed Edward Henry Baker and Whakawe Charles Rameka as trustees, and Ivan Northcroft, Thomas Mill, Wayne John Hesketh, Bill Grace and Peter Karaitiana as advisory trustees of the Thomas Baker Whanau Trust.
EThe trustees considered it expedient to specify further terms for the trust, and have pursued an application to the High Court under s 64 of the Trustee Act 1956 for court approval to settle appropriate terms for the trust. The terms of this Deed have been approved by order of the High Court in CIV-2010-441- 581 in the Napier Registry, pursuant to a judgment in that proceeding dated 27 September 2013.
COVENANTS
1DEFINITIONS AND INTERPRETATION
1.1Definitions
In this deed unless inconsistent in the context the following phrases shall have the respective meanings set out alongside:
"Date of Distribution" to be 19 December 2075, provided that if the Registrar of Incorporated Societies under section 11 Incorporated Societies Act 1908 incorporates the trustees of the trust fund as a Board pursuant to section 11, then there shall not be any date of distribution as the Trust shall have perpetual succession and shall administer the trust fund indefinitely pursuant to this Trust Deed.
"Beneficiaries" all the descendants by blood of Thomas Baker. By virtue of section 16(2) of the Adoption Act 1955, the descendants include children who were adopted pursuant to that Act prior to the execution of this Deed.
“Family Branch” comprises the persons descended from any of the issue of Thomas Henry Baker whose issue are identified in the chart of Whakapapa attached as Schedule 1.
“NZQA” New Zealand Qualifications Authority or its successor organisation.
"Student" means every eligible descendent by blood of Thomas Baker undertaking or proposing to undertake a course of study that is NZQA approved and is provided by a NZQA registered and accredited provider.
"Trust fund" the monies referred to in the Introduction and all further assets of any nature which may be received or acquired by the trustees by any means, and from whatever source, for the purposes of the trust confirmed by this deed, including any income received in respect of any assets held. Unless expressly provided otherwise, references to the trust fund shall include references to any and all parts of the trust fund.
1.2Interpretation
In the interpretation of this deed, unless the context otherwise requires:
(a)reference to a person by relationship shall include a person having that relationship by adoption under the Adoption Act 1955;
(b)references to persons include individuals, partnerships, firms, associations, corporations and unincorporated bodies of persons, government or semi- government or local body or municipal bodies, and agencies or political subdivisions of them in any case whether having separate legal personality or not;
(c)words in the singular shall include the plural and vice versa;
(d)words importing one gender shall include the other genders;
(e)any obligation not to do anything includes an obligation not to suffer, permit or cause that thing to be done;
(f)headings have been inserted for convenience only and shall not affect the construction of this deed;
(g)reference to a statute includes all statutes amending, consolidating or
replacing the statute referred to;
(h)references to clauses and schedules shall be construed as references to the same in this deed; and
(i)the covenants expressed or implied in this deed on the part of a party shall bind all persons executing this deed who form that party and any two or greater number of them jointly and each of them severally.
2NAME
This trust is known as the Thomas Baker Whanau Trust.
3TERMS OF TRUST
3.1Creation of trust
The trustees shall, from the date of execution of this deed, hold the trust fund upon trust on the terms specified in this deed. The origins of the trust are reflected in the deed of agreement dated 20 December 1995 between Her Majesty the Queen and Waimakuku Whanau Trust Board Incorporated, as affected by the judgments dated 29 August 2005, 1 May 2006 and 22 May 2007 in Napier High Court proceeding CP27/2000. To the extent that any potential conflict arises between the terms of this deed and the provisions of any of those other documents, the provisions of this deed shall prevail.
3.2Payments out of trust
The trustees may as they think fit pay out of the income or the capital of the trust fund any of the following:
(a)The expenses of administering the trust fund;
(b)Any debts or liabilities of the trust fund;
and may also out of such income or capital set aside reserves for the same purposes.
3.3Investment of income
The trustees shall invest the income of the trust fund not paid or applied in any accounting period from time to time fixed by the trustees so as to accumulate to the intent that such accumulations shall be added to and form part of the capital of the trust fund provided that the trustees may in any accounting period resort to the accumulations of any preceding accounting period or periods and apply the same as if it were income of the trust fund arising in the current accounting period.
3.4SPECIFIC TRUSTEE POWERS
The trustees shall have the following non-exclusive powers:
3.4.1Payments for dentures and glasses of beneficiaries
The trustees may pay or apply so much of the income from time to time arising from the trust fund, to pay or reimburse the payment of the cost of dentures, glasses or hearing aids for beneficiaries to a maximum payment in total of $500.00 per beneficiary for each set of dentures, glasses or hearing aids.
3.4.2Payments to students
The trustees may pay or apply so much of the income from time to time arising from the trust fund, to meet the costs of education of students.
3.4.2.1Costs of education
The term "costs of education" includes the costs and incidental expenses of any course of study or training at any school, polytechnic, university, college or other educational institution including post-graduate study that is NZQA approved and is provided by a NZQA registered and accredited provider.
3.4.2.2Completion of education
The trustees may in their absolute discretion decide whether each student has completed the student's education and their decision shall be absolutely final and binding. For the avoidance of doubt the student should be encouraged to further the student's education as far as is possible and that a waiting period which may elapse between one course of study and a decision to proceed with a higher or different course of study should not lead the trustees to conclude that the student has completed the student's education.
3.5Contributions to tangihunga costs
The trustees may pay or apply such of the income from time to time arising from the trust fund as they in their absolute discretion think fit, towards the costs of tangihunga for any descendant of Thomas Baker.
3.6Access to Urupa and upgrading of gravestones
The trustees may pay or apply so much of the income from time to time arising from the trust fund,to obtain access to family Urupa and Wahi Tapu sites at Tarawera and for the upgrading of gravestones at Tarawera, including the unveiling of the upgraded gravestones. Provided, however, that the trustees may only pay or apply income to obtain access to those sites in the event that:
3.6.1A majority of trustees are satisfied that a sufficiently serious, non-transitory obstruction to access to family urupa and wahi tapu sites at Tarawera is occurring to justify the commitment of trust resources; and
3.6.2A majority of trustees resolve that the commitment of resources to pay for initiatives seeking to improve that access is an appropriate use of trust resources.
Solely for the purposes of this clause, a majority of trustees means the vote of all trustees representing all but one of the family branches of which trustee representatives are present at any meeting at which such resolutions are put. If a proposal to approve expenditure of this type is dealt with by circulation of resolutions in lieu of a meeting pursuant to clause 12.5 of this deed, then all the trustees from all but one branch of the family must approve of the resolutions circulated in lieu of a meeting to address the proposal.
4TRUSTEES
4.1Number of trustees
The number of trustees shall at all times (subject to the provisions of s 23 of the Trustee Act 1956) be no less than three. Further trustees shall be appointed by the existing trustees from time to time pursuant to clauses 4.4 and 4.5 so that when practicable up to two trustees have been appointed from each branch of the descendants of Thomas Baker. Trustees may also be appointed and replaced as a
consequence of elections at an Annual Meeting of beneficiaries convened pursuant to clause 10, or in another forum as provided for in clause 4.6.
4.2Retirement of advisory trustees.
The advisory trustees who are parties to this deed are to retire from their positions as such 14 days after execution of this deed, and the office of advisory trustees to the trust is to cease at that time.
4.3Appointment of trustees representing separate branches of the family Consistently with steps taken prior to completion of this deed which are treated by the existing trustees as sufficient to appoint Todd Karaitiana and Jonathan Te Rire as representatives of their respective branches of the Baker family, those two will become trustees and, as with the existing trustees, shall hold office for the period up to November 2014. At that time, the office of trustees shall be subject to further elections as provided in clause 4.6 below.
4.4Removal of trustee and power to appoint substitute trustees
Where a trustee fails to attend trustee meetings for a period of 15 months or greater, having been notified in writing at least 14 days in advance of each such meeting then that trustee shall be taken to have refused to act pursuant to section 43(1) Trustee Act 1956, and the surviving or continuing trustees for the time being, may by deed appoint a person or persons to be a trustee or trustees in the place of the trustee refusing to act. A copy of such deed shall be provided to the trustee refusing to act. Prior to using the power under this clause the remaining trustees shall consult with the family branch of the trustee failing to attend trustee meetings, and must appoint a replacement trustee from that family branch who is acceptable to that family branch.
4.5Retirement of trustee and power of appointing replacement trustee
4.5.1At any time any Trustee may retire as a Trustee by the execution by that Trustee (the "Retiring Trustee") of a deed recording such retirement.
4.5.2Such retirement shall:
(a)take effect forthwith upon the execution of the deed and advice of its execution being given to the remaining Trustees; and
(b)shall not require any consent from or approval by any other person; and
(c)take effect notwithstanding its effect on the administration of the Trust by any other Trustees, either under the provisions of this deed or of the Trustee Act 1956; and
(d)operate to vest the Trust Fund in any other Trustees on the terms set out in this deed pending appointment of a new Trustee; and
(e)completely discharge the Retiring Trustee from the Trust;
4.5.3Such deed shall be executed and forwarded by the Retiring Trustee to the other Trustees as soon as practicable after its execution, accompanied by all documentation duly executed by the Retiring Trustee required to give full effect to the retirement of the Retiring Trustee.
4.5.4The reasonable costs and expenses incurred by the Retiring Trustee in connection with the preparation and execution of the deed evidencing the Retiring Trustee's retirement and incidental matters to complete the retirement shall be payable from the Trust Fund.
4.5.5The surviving or continuing trustees for the time being, may by deed appoint a person or persons to be a trustee or trustees in the place of the retiring trustee. Prior to making such appointment, the surviving or continuing trustee shall consult with the family branch of the retiring trustee, and must appoint a replacement trustee from that family branch who is acceptable to that family branch.
4.6Trustee elections
4.6.1Except for the shorter tenure of the trustees up to November 2014, trustees retire from office at the annual meeting which first follows completion of a four year term. The first such term shall commence at November 2014. Existing trustees are to remain in office after a trustee election only for the purpose of appointing new trustees, which they are required to do in accordance with the outcome of that election.
4.6.2A trustee is eligible for re-election after retirement for up to three terms of four years. At the conclusion of a third term, the trustee will permanently retire. The initial period up to November 2014 is excluded from the period of trusteeship for the purposes of this clause.
4.6.3All trustees must be descendants of Thomas Baker.
4.6.4A beneficiary is only eligible for election as a trustee if a written notice of intention to nominate the person for election as a trustee has been completed by a descendant of Thomas Baker and provided to the Chair of trustees not less than 7 clear days before the date of the annual meeting convened pursuant to clause 10 at which that election is to occur. Provided, however, that if any branch of the family proceeds to elect trustees at a separate forum as provided for in clause 4.6.5, then notice of nominations are to be provided to the chair of trustees not less than seven clear days before the date of that alternative meeting.
4.6.5Members of each family branch shall elect up to two trustees and may determine their own procedure for doing so. Each family branch shall decide, by consensus and from time to time, the forum considered most appropriate for election of trustees to represent that branch. Such elections may occur as a component of annual meetings of beneficiaries, or in another forum. Such elections may be by postal vote or electronic facilities, but not proxy voting.
4.7Trustee decisions
Except as otherwise provided in clause 3.6, all questions before the trustees shall be decided by consensus. However, where a consensus decision cannot be reached on a question, it shall, unless otherwise specified in this deed, be put as a motion to be decided by a majority of votes. If the voting is tied, the motion shall be lost.
5GENERAL TRUSTEE POWERS
5.1Trustees' powers
The trustees may, in their discretion, subject to the express provisions of this deed make investments for the time being authorised by the law of New Zealand (whether in New Zealand or elsewhere), in the name of the trustees or their nominee.
5.2Investments as authorised by law
The trustees may invest any part of the trust fund then available for investment in such investments as are authorised by law.
5.3In addition to the powers implied by the general law of New Zealand or contained in the Trustee Act 1956, the powers which the trustees may exercise in order to carry out its purposes are as follows:
(a)to use the fund of the trust as the trustees think necessary or proper in payment of the costs and expenses of the trust, including the employment of professional advisers, agents, officers and staff as appears necessary or expedient; and
(b)to purchase, take on lease or in exchange or hire or otherwise acquire any land or personal property and any rights or privileges which the trustees think necessary or expedient for the purpose of attaining the objects of the trust and to sell, exchange, bail or lease, with or without option of purchase, or in any manner dispose of any such property, rights or privileges as aforesaid; and
(c)to invest surplus funds in any way permitted by law for the investment of trust funds and upon such terms as the trustees think fit; and
(d)to borrow or raise money from time to time, with or without security, and upon such terms as to priority and otherwise as the trustees think fit; and
(e)to do all things as may from time to time be necessary or desirable to enable the trustees to give effect to and to attain the charitable purposes of the trust.
(f)subject to the provisions of this deed, the trustees shall regulate its own proceedings.
(g)to retain any investments or property coming into their hands as part of the trust fund, even if they are of a wasting or reversionary nature including any interest in real property to be used in part as for the purposes of the trust.
5.4Incorporation and registration
The trustees are empowered but not obliged to seek incorporation in accordance with the provisions of the Charitable Trusts Act 1957 and registration with the Charities Registration Board in accordance with the provisions of the Charities Act 2005. Provided, however, that the trustees are not to pursue registration under the Charitable Trusts Act in the absence of competent advice from solicitors confirming that the grant of such registration is more likely to be granted, than not.
5.4.1In the event that registration as a charitable trust is achieved, then the following additional power will thereafter apply:
No power or reservation express or implied, in this deed, shall authorise the trustees
to do or suffer any act which does not further the charitable purposes as specified in this deed and the declaration of charitable purposes so specified shall at all times be paramount so as to exclude any act or omission which is or may be deemed to be not in accordance with such purposes. All of the income of the trust and any other benefit or advantage belonging to the trust shall be applied to the trust purposes.
6TRUSTEES' LIABILITY
The trustees shall not be liable for, and shall be indemnified out of the trust fund for, any loss or liability which they may incur by reason of the exercise, manner of exercise or non-exercise of any of the powers, authorities or discretions conferred on them by this deed or by law. This indemnity does not extend to any acts or omissions undertaken in bad faith. The trustees will not be liable for any loss resulting from any investment made by the trustees in good faith.
7TRUSTEE REMUNERATION
Trustees shall be reimbursed for direct expenses incurred only such as stationary and the cost of telephone calls in respect of trust business including mileage for travelling to meetings of trustees under the Fees and Travelling Allowances Act 1951. Trustees shall not be remunerated for their time or trouble expended upon trust business except that each trustee shall be paid $100.00 for each trustee meeting attended by that trustee.
8ALLOWANCE FOR INFLATION
The monetary figures provided for as Trustee Remuneration shall be subject to increase for every year or part thereof from the first day of January in the year following the date of execution of the trust deed by an amount equal to the Consumer Price Index Figure (for the previous year) as a percentage of the relevant figure with the intent that the relevant figures shall not be diminished by the rate of inflation.
9ACCOUNTS
9.1True and fair accounts
The trustees shall keep true and fair accounts of all money received and expended as well as of the assets and liabilities of the Trust.
9.2Audit
The trustees shall, as soon as practicable after the end of every financial year of the Board, cause the accounts of the trustees for that financial year to be audited by an independent Chartered Accountant appointed for that purpose and the audited accounts shall be made available on request to beneficiaries of the trust.
10ANNUAL MEETINGS
10.1An Annual Meeting of the Trustees and beneficiaries shall be held no later than November in each year at a time and place fixed by the Trustees.
10.2At least 20 clear days before the Annual Meeting the Trustees shall post to all registered beneficiaries written notice of Annual Meeting (including copies of the Trust’s annual financial statements).
10.3Annual meetings may be attended by all beneficiaries.
10.4Annual Meetings shall be chaired by any one of the Trustees.
10.5Minutes shall be kept of each Annual Meeting. Draft copies of the Minutes shall be made available upon request to beneficiaries.
10.6The business of the Annual Meeting shall be:
(a)Minutes of the previous Annual Meeting(s),
(b)Annual Report of the Trustees,
(c)Statement of Accounts,
(d)General business.
10.7Any registered beneficiary wishing to give notice of any general business for consideration at any Annual Meetings shall provide written notice of the same to the Chair of trustees not less than 7 clear days before the date of the meeting.
10.8Descendants must be at least 18 years of age in order to vote. Each such descendant of Thomas Baker has one vote at an election or annual meeting. Voting is to be on the voices, but the Chairperson or any member may require a decision to be taken either by a show of hands or by ballot. Postal voting or proxy voting is not permitted.
11MEETING OF TRUSTEES
11.1At the first meeting of trustees after each annual meeting, the trustees must elect one of their number to be Chair until the conclusion of the next annual meeting. The Chair is to preside at trustee meetings and annual meetings.
11.2Trustee meetings are to be held when and where the trustees determine.
11.3It is not necessary for notice of a meeting to be given to a trustee who is absent from New Zealand and has not supplied an electronic address.
11.4To the extent that the procedure of meetings of trustees is not provided for this trust deed, the trustees may determine their own procedure.
11.5A resolution in writing signed by each trustee is as valid and effectual as if it had been passed at a meeting of trustees. The signatures of trustees need not be on the same copy of the resolution.
11.6The trustees may arrange electronic communication facilities by which trustees may be deemed to be present at trustee meetings, so long as the electronic facilities are such that trustees may effectively participate and vote. Such electronic communication facilities include telephone or audiovisual facilities.
11.7Any two trustees may call a special meeting of trustees for a specified purpose. Such meeting shall be held without delay, provided that written notice of such special meeting is to be given to all trustees at least 14 days before the meeting.
11.8The trustees are to keep Minutes of their meeting and of all their resolutions and decisions. The Minutes shall be kept in a Minute Book, maintained by the Chair of trustees.
11.9The trustees may from time to time appoint committees of trustees and other persons as thought appropriate but may not delegate any decision making powers to such a committee. Each such committee may determine its own procedure but must ensure that a record of proceedings of every meeting of the committee is prepared and made available to all trustees.
11.10A quorum for trustee meetings is three trustees.
11.11The Chair will preside over and control every general meeting or meeting of trustees.
11.12A conflict of interest arises in any situation where a trustee will derive a financial benefit from a matter including if the trustee is the parent, child or spouse of another person who will or may derive a financial benefit from a matter.
11.13When a conflict of interest exists for a trustee, that trustee:
(a)must declare the conflict of interest at a meeting of trustees and their disclosure shall be recorded in the Minutes of the meeting; and
(b)must not take part in deliberations or voting on the matter, or be counted in the quorum.
If a trustee contravenes either paragraph (a) or (b) above, his vote or decision will not be counted and the trustee will not be counted in the quorum for the meeting.
IN WITNESS this deed is duly executed.
SIGNED by )
EDWARD HENRY BAKER )
as Trustee in the presence of: )
Witness:
Occupation:
Address:
WHAKAWE CHARLES RAMEKA )
as Trustee in the presence of: )
Witness:
Occupation:
Address:
SIGNED by )
IVAN NORTHCROFT )
as Advisory Trustee in the presence of: )
Witness:
Occupation:
Address:
SIGNED by )
WAYNE JOHN HESKETH )
as Advisory Trustee in the presence of: )
Witness:
Occupation:
Address:
SIGNED by )
TOM MILL )
as Advisory Trustee in the presence of: )
Witness:
Occupation:
Address:
BILL GRACE )
as Advisory Trustee in the presence of: )
Witness:
Occupation:
Address:
Schedule 1 – whakapapa
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