Hearing:	18 November 2014
Court:	McGrath, William Young, Glazebrook, O'Regan and Blanchard JJ
Counsel:	D G Hurd and J F Anderson for Appellants F E Geiringer and M I de Villiers for First Respondents No appearance for Second Respondent
Judgment:	20 May 2015

JUDGMENT OF THE COURT

AThe appeal is allowed in part and the matter remitted to the Maori Land Court to decide on the conflicts and on the consequences of a breach of s 227A of the Te Ture Whenua Maori Act 1993 in light of this judgment.
BThe reasonable costs and disbursements of the first respondents are to be paid by the Whakapoungakau 24 Ahu Whenua Trust (the Tikitere Trust).
CThe question of costs in the Maori Land Court, the Maori Appellate Court and the Court of Appeal should (if an application is made) be considered by those Courts in light of this judgment.

____________________________________________________________________

REASONS

McGrath, Glazebrook, O’Regan and Blanchard JJ	[1]
William Young J	[145]

McGRATH, GLAZEBROOK, O’REGAN AND BLANCHARD JJ
(Given by Glazebrook J)

Table of Contents

Para No
Introduction	[1]
Relevant statutory and trust provisions	[4]
More detailed background	[7]
Tikitere Trust	[7]
The trustees of the Tikitere Trust	[11]
Tikitere Geothermal	[13]
The other trust parties	[14]
The land and the geothermal resource	[15]
Joint venture agreement	[18]
Other agreements	[21]
Meetings	[25]
Procedural history	[26]
Maori Land Court	[26]
Maori Appellate Court	[31]
Court of Appeal	[32]
Leave application to this Court	[40]
The parties’ submissions	[43]
The Trustees’ submissions	[43]
The Beneficiaries’ submissions	[47]
Issues	[50]
What is the scope of ss 227 and 227A of the Act?	[52]
Alleged conflicts in this case	[56]
Pirihira Fenwick	[57]
Tai Eru	[58]
Winnie Emery	[59]
Application	[60]
Does the self-dealing rule apply?	[66]
Trustees’ duties	[69]
Is the self-dealing rule restricted to purchases?	[75]
Limited beneficial interest exception	[82]
Placed in position of conflict	[95]
Conclusion	[101]
Consequences of breach of s 227A	[102]
Submissions	[102]
Preliminary comments	[103]
Structure of the Act	[105]
Should rescission be automatic?	[113]
Further comments	[128]
Summary	[137]
Result	[139]
Costs	[140]

Introduction

[1] This appeal concerns alleged conflicts of interest in relation to a joint venture. The joint venture agreement (and related royalty and option agreements)[1] were entered into by the Whakapoungakau 24 Ahu Whenua Trust, commonly referred to as the Tikitere Trust, with two other Maori trusts (the Paehinahina Mourea Trust[2] and the Manupirua Ahu Whenua Trust) and with a company owned by the Tikitere Trust, Tikitere Geothermal Power Co Ltd (Tikitere Geothermal).

[1]In this judgment we refer to the joint venture agreement and the related royalty and share option agreements as the joint venture arrangements.

[2]This is the shortened name of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Fenwick v Naera

Details

AGLC: Fenwick v Naera [2015] NZSC 68
Case: [2015] NZSC 68
Decision Date: 20 May 2015

CaseChat Overview and Summary

This appeal concerns alleged conflicts of interest in relation to a joint venture. The joint venture arrangements were entered into by the Whakapoungakau 24 Ahu Whenua Trust (the Tikitere Trust), two other Maori trusts and a company owned by the Tikitere Trust. The Court of Appeal held that two of the five trustees of the Tikitere Trust should not have participated in discussions and voting on the above joint venture arrangements because of interests in, and links with, the other trust parties to the joint venture. The Court held that the remedy for such a breach is rescission (the setting aside of the transaction). However, as that remedy is not available where the interests of innocent third parties are affected, the Court remitted the matter to the Maori Land Court for further evidence and consideration on that issue. On 19 May 2014, this Court granted leave to appeal to the Trustees against the Court of Appeal’s findings on the conflict of interest issue. The Court refused leave to appeal by the Beneficiaries on other issues. The appeal was heard on 18 November 2014. The appeal is allowed in part and the matter remitted to the Maori Land Court to decide on the conflicts and on the consequences of a breach of s 227A of the Te Ture Whenua Maori Act 1993 in light of this judgment. The reasonable costs and disbursements of the first respondents are to be paid by the Whakapoungakau 24 Ahu Whenua Trust (the Tikitere Trust). The question of costs in the Maori Land Court, the Maori Appellate Court and the Court of Appeal should (if an application is made) be considered by those Courts in light of this judgment.

Orders