Durie v Paul

[2016] NZHC 683

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2016-485-217 [2016] NZHC 683

UNDER

the Declaratory Judgments Act 1908

IN THE MATTER OF

the Māori Community Development Act
1962 and the Māori Community
Development Regulations 1963

BETWEEN

SIR EDWARD TAIHAKUREI DURIE Plaintiff

AND

CLETUS MAANU PAUL First Defendant

THE NEW ZEALAND MĀORI
COUNCIL

Second Defendant

Hearing:	13 April 2016
Appearances:	F Geiringer for the Plaintiff A Isac for the First Defendant D Hall and C Bulow for the Second Defendant (abides)
Judgment:	13 April 2016

ORAL JUDGMENT OF MALLON J

Introduction

[1]      The plaintiff obtained an ex parte order late on Friday afternoon from Clark J

as Duty Judge. The terms of that order were:

No member or purported member of New Zealand Māori Council shall take any step in reliance on or hold him or herself out as having any authority derived from decisions purported to have been made by the New Zealand Māori Council at a meeting on 25 February 2016.

[2]      The matter was scheduled to be heard today to enable the defendants the opportunity to be heard as to whether the order should continue.  The first defendant

DURIE v PAUL [2016] NZHC 683 [13 April 2016]

opposes the order continuing in its current form.  The second defendant abides the Court’s decision.  That is appropriate given this matter involves an internal dispute between its members as to who has legitimate control over the New Zealand Māori Council (the second defendant).

Background

[3]      The plaintiff’s submissions summarise how decisions are made by the second defendant.  The first defendant’s counsel agrees that that is a succinct and accurate summary of the legislation and takes issue only with the number of functioning districts and therefore the number of members as at 25 February 2016.  I therefore adopt that summary in full:

5.NZMC [the second defendant] is a statutory body established by s 17 of the Māori Community Development Act 1962.  Its membership is comprised of three representatives appointed by each District Māori Council.1   The Māori Council districts are created by NZMC.2   There are presently 16 districts.  There is supposed to be a District Māori Council for every Māori Council district,3 but only 14 of these were functioning  when  the  NZMC  last  held  elections.    There  were therefore 42 members of NZMC on 25 February 2016.

6.When the District Māori Councils appoint members to the NZMC they must inform the Secretary of the NZMC.4   The Secretary of the NZMC is obliged to maintain a list of the members of the NZMC.5

The Secretary has provided a list of the identities of the members as at 25 February 2016.

7.NZMC  is  a  “Māori  Association”  under  the Act.6      As  such,  all questions coming before NZMC must be decided by a majority vote of the members present at a meeting.7     “No business shall be transacted at any meeting of” the NZMC “unless a quorum of not less than half its members is present”.8   So, on 25 February 2016, no business was allowed to be transacted at a meeting of the NZMC unless there were no less than 21 members of the NZMC present.

8.If a member of the NZMC “is unable to attend a meeting of” the NZMC, the District Council by which that member was appointed may appoint another of its members as his or her proxy at that

1      Māori Community Development Act 1962, 17(3).  There are no longer any Tribal Executives and therefore no deemed members under s 17(4).

2      Section 14.

3      Section 15.

4      Section 21(4); Māori Community Development Regulations 1961, r 4(3).

5      Māori Community Development Act 1962, s 21(4).

6      Section 2.

7      Section 23(f).

8      Section 23(e).

meeting.9    The names and addresses of every such proxy must be notified to the NZMC.10

[4]      In  May 2015  a  meeting  of  the  second  defendant  was  held.    Before  the meeting was a budget.  The budget referred to meetings of the second defendant in September/October in Wellington and in April venue to be advised.   The meeting confirmed the budget.   The evidence for the plaintiff is that meetings are set in advance to ensure that the second defendant operates within its budget constraints, since each meeting costs approximately $35,000.

[5]      In accordance with the approval of the budget in May 2015 a meeting of the second defendant took place in September.   The evidence before me is that there were considerable tensions at the meeting between opposing factions within the second defendant.   There is a dispute in the evidence about what occurred at the meeting.  Relevantly for present purposes, both the plaintiff and the first defendant agree that they were to continue as co-chairs at least for the meantime.  The other matter of present relevance is a purported resolution to dismiss Woodward Law from continuing to act as instructing solicitors in respect of the water rights litigation before the Waitangi Tribunal and other litigation in which that firm was involved on behalf of the second defendant.

[6]      Correspondence and communications occurred between the plaintiff and the first defendant about the need to have an early resolution of who was to be chair going forward.   An early meeting and a postal vote were raised as possibilities. There is correspondence before the Court that the plaintiff wished to wait until after

1 February 2016  because  that  was  when  the  next  tranche  of  funding  would  be available.  The plaintiff does not accept this as an accurate statement of the position. The first defendant proposed that a meeting take place on 25 February 2016.  The plaintiff was not agreeable to that for reasons which he explains in his affidavit (at paragraph [3]).

[7]      A meeting did take place on 25 February 2016.  At that meeting a number of resolutions were passed. These included:

9      Section 23(d), Māori Community Development Regulations 1963, rr 4(4) and 4(5).

10     Māori Community Development Regulations 1963, r 4(4).

(a)       the appointment of the first defendant as sole chair; (b)          the election of the executive council;

(c)       a decision to seek an audit;

(d)      a decision to ask the government to conduct an inquiry; (e)     recognition of Hauraki District Council;

(f)       appointment of a deputy chair; (g)       assigning of portfolios; and

(h)      the dismissal of existing staff.

[8]      Acting on the plaintiff’s instructions, a meeting of the second defendant has

been arranged by the secretary of the second defendant to take place on 16 April

2016.  The plaintiff says this was authorised pursuant to the May meeting, and the usual arrangements that the secretary advises the particular date once an appropriate venue has been found.   Expenditure on caterers, venue and flights has been committed. The matters for consideration at the meeting include:

(a)       election of the chair;

(b)      election of the deputy chair;

(c)       election of the balance of the executive.

[9]      There are also some matters which relate to some of the issues that are in dispute between the two factions of the second defendant.  The agenda includes a special motion that John Tamihere, the chair of Tamaki Makaurau, be removed from the second defendant for misconduct.   It includes a motion that Des Ratima be directed to withdraw his complaint to the Law Society.  And it includes an ordinary motion that the minutes of the September meeting be confirmed.   While that is a

usual motion at a meeting, in this case the accuracy of the minutes is apparently in real dispute.

Serious question to be tried

[10]     The statement of claim alleges that the 25 February 2015 meeting was invalid and decisions of that meeting are void.   It seeks declarations to that effect.   For present purposes the plaintiff seeks only to demonstrate that by reference to the quorum necessary to pass resolutions.  As noted above, questions coming before the second defendant must be decided by a majority vote of all members present at a meeting and no business shall be transacted at any meeting unless a quorum of not less than half its members is present.

[11]     Under the Act there are 16 districts that can appoint three members.   The procedure for appointments of members is set out in s 21 of the Act.  If all districts had duly appointed members there would be 48 members.  The evidence before me is that two districts have not conducted elections, or advised the secretary of the appointments  pursuant  to  those  elections,  as  is  required  in  s 21.    This  is  not necessarily accepted by the first defendant, but it is the position at least as disclosed in the evidence on this interim application.  On that basis there are 42 members and a quorum would be 21.  The circulated minutes from the 25 February 2016 meeting show that there were 22 attendees. Therefore, if there were two people attending that meeting who were not members, the meeting would not be quorate.

[12]     The plaintiff submits it is clear on the face of the minutes that the meeting was not quorate.   In particular the minutes show that in respect of two districts, namely Tamaki ki Te Tonga and Takitimu, four members were in attendance whereas the Act specifies that each district is represented by only three members.

[13]     Two other matters are referred to by the plaintiff: there are three attendees said to be representing Hauraki District whereas the evidence from the secretary of the second defendant is that it did not hold any elections in 2015 and has no valid membership at present under the Act; and the evidence from the secretary points to four other people who are recorded at the meeting who are not included on the list of members that she is required to and does keep in accordance with the legislation.

[14]     The first defendant submits that the issue of the validity of the 25 February

2016 meeting will be hotly contested (at any substantive hearing of the plaintiff’s claim).   It has concerns about the absence of evidence said to support the list of members maintained by the secretary.  It also says there are a number of contested issues, or issues that are in the process of being contested, in relation to the membership of the second defendant.  That said, the first defendant accepts that, for the purposes of this application, there is a serious question to be tried.

[15]     I accept that there is a serious question to be tried as to the validity of the

25 February 2016 meeting.   It is a strong case for the plaintiff, on the evidence before me, that the meeting of 25 February 2016 was not valid.  The first defendant would first have to establish that the membership was less than 42 in order for the meeting to be quorate.  On the evidence there appears to be a significant number of the 22 attendees who were not members.  The most obvious example is that there are four representatives for each of the Tamaki ki Te Tonga and Takitimu districts when there can be only three for each district.

Balance of convenience

[16]     Interim relief is sought because actions of the first defendant are said to be impacting upon matters now.  The plaintiff says the first defendant is attempting to derail the 16 April 2016 meeting by making statements that it is invalid and freezing the second defendant’s bank account.  The plaintiff also says it is impacting on the important Waitangi Tribunal water litigation for which there is an upcoming judicial conference on Friday.  At that conference the second defendant will be pushing for a hearing before the Tribunal to proceed.  Its view is that the Crown has delayed that hearing for a significant period of time.  I understand that both factions within the second defendant are at one on the need to push for this.

[17]     The first defendant says I should not continue the existing interim order because it is only three days until the intended meeting and, if I grant interim relief, it will effectively resolve the underlying substantive issue as to whether the February meeting is valid.  Balanced against the prejudice from that, the first defendant says there is no prejudice to the plaintiff if the interim order is vacated.

[18]     The interim relief will resolve the underlying issue only if valid resolutions are passed at the 16 April 2016 meeting.   The first defendant has not sought to injunct the 16 April 2016 meeting and, given that it is accepted there is a serious question to be tried as to the validity of the 25 February meeting, I cannot see on what basis such an injunction could be sought.   If the meeting results in invalid resolutions  because the  first  defendant’s  position  on  the 25 February meeting is subsequently vindicated, or because the first defendant, as the co-chair, did not agree to the date of the 16 April meeting, then that can be rectified if necessary by a further meeting properly convened and constituted.  That may involve prejudice to the first defendant and his supporters in that it may involve the additional cost of a further meeting.  However the first defendant has, to some extent, caused this by conducting the 25 February meeting against the plaintiff ’s opposition.  And further, some of the costs for the 16 April meeting have already been incurred.

[19]     Moreover, the first defendant accepts that there is a need for a further meeting but seeks to postpone that meeting for a short period.  Given the divide between the two factions, delaying the meeting for a few weeks may not advance the matter any further.  There is a need to resolve matters and I see no reason why, on the material before me, the plaintiff should not be given the opportunity to seek to do that at the

16 April  meeting,  and  in  respect  of  which  he  acknowledges  the  first  defendant remains presently co-chair with him, and that one of the important items on the agenda is the election of a chair.  I am told that arrangements are being made for an independent person, Sir Harawira Gardiner, to perform the role of independent chair for the purposes of that resolution.  I am told that it was Sir Harawira who performed that role in 2012 when the existing co-chairs were appointed.  With amendments to the existing interim order, which I have discussed with the parties, any prejudice to the first defendant and his supporters is minimised.

Interim orders

[20]     Accordingly I am satisfied that it is in the overall interests of justice to continue the interim orders but in a modified form.  The interim orders are in the following terms:

Subject to further order of the Court or resolution of the proceeding the following orders are made:

(a)       No  member  or  purported  member  of  the  New  Zealand  Māori Council (the second defendant) shall take any step in reliance on or hold themselves out as having any authority derived from decisions purported to have been made by the second defendant at a meeting on 25 February 2016.

(b)       Neither the plaintiff nor the first defendant will hold themselves out as the sole chair of the second defendant.

(c)       The  chairmanship  of  the  second  defendant  is  a  matter  that  the members of the second defendant can determine in accordance with the Māori Community Development Act 1962.

(d)       No party shall take any steps to continue the audit of the second defendant’s financial affairs by PWC until Monday 18 April 2016 and subject to approval of the second defendant in accordance with the Māori Community Development Act 1962.

(e)       Any use of funds in the second defendant’s bank account must be approved by the members of the second defendant in accordance with the Māori Community Development Act 1962.

(f)       Woodward  Law  Office  shall  not  purport  to  act  for  the  second defendant on or after 18 April 2016 unless approved by the second defendant in accordance with the Māori Community Development Act 1962.

[21]     Costs are reserved.

Mallon J