Kahotea v Hikairo - [2025] NZHC 1271

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2025-470-77

[2025] NZHC 1271

IN THE MATTER OF Breach of Trust

BETWEEN

DESMOND TATANA KAHOTEA

Plaintiff

AND

PHILLIP HIKAIRO, NGARONGO ORMSBY, NORMAN RAHIRI, SYLVIA WILLISON, HENARE DOUGLAS as

Trustees of the WAIROA HAPŪ SETTLEMENT TRUST

Defendants

Hearing: On the papers

Appearances:

D Naden for the Plaintiff

Judgment:

21 May 2025

JUDGMENT OF GARDINER J

This judgment was delivered by me on 21 May 2025 at 4.45 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Tamaki Legal, Auckland

KAHOTEA v HIKAIRO [2025] NZHC 1271 [21 May 2025]

[1] The plaintiff, Desmond Kahotea, has filed a without notice application for an interim injunction restraining the defendants from paying a negotiator’s fee or any portion thereof to a negotiator.

Facts

[2] Dr Kahotea is a member of the Wairoa Hapū and a beneficiary of the Wairoa Hapū Settlement Trust. The defendants are the trustees of the Wairoa Hapū Settlement Trust formed under a Deed of Trust dated 28 May 2012. The trustees manage settlement property on behalf of the beneficiaries of the Trust.

[3] On 23 July 2020, the trustees entered into a compensation agreement with Tauriko Property Group LP and Tauriko West Limited (the Developers). The Developers agreed to pay the Trust $3,000,000 plus GST in compensation for the effect of their intended development on the cultural value of the land in Tauriko West, Tauranga. The compensation was to be paid in three instalments. In return, the trustees agreed to support the Developers’ application for resource consent.

[4] For negotiating the compensation agreement with the Developers on behalf of the Trust, the trustees agreed to pay a fee (Negotiator’s Fee) to a third-party negotiator (Negotiator). The negotiated fee is 40 per cent of the compensation, or $1,200,000 plus GST.

[5] The first compensation instalment of $300,000 plus GST was paid to the Trust in 2021. The Negotiator was paid $120,000 plus GST as part of the Negotiator’s Fee.

[6] The second compensation instalment of $600,000 plus GST was paid by the Developer to the Trust on 16 May 2025. It is expected that by close of business on 21 May 2025 the Negotiator will be paid $240,000 plus GST by the Trust.

[7] The plaintiff has filed an ordinary proceeding in this Court, seeking an order that the trustees acted in breach of trust when they agreed to the Negotiator’s Fee.

[8]The plaintiff anticipates that the trustees are likely to defend the claim.

Assessment

[9] The Court follows a three-step approach when assessing whether to grant by way of interim injunction:1

(a)whether there is a serious question to be tried;

(b)the balance of convenience;

(c)where the overall justice lies.

[10] I am satisfied, based on the application and the affidavit of Dr Kahotea filed in support, that there are serious questions to be tried. These include whether the trustees breached the trust deed by agreeing to a Negotiator’s Fee…

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.

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Details

Case: [2025] NZHC 1271
Decision Date: 21 May 2025

CaseChat Overview and Summary

Desmond Kahotea, a beneficiary of the Wairoa Hapū Settlement Trust, has applied for an interim injunction against the trustees of the Trust, Phillip Hikairo and others, to prevent them from paying a negotiator's fee to a third party. The trustees had entered into a compensation agreement with developers for the effect of their intended development on the cultural value of the land, and agreed to pay a fee of 40 per cent of the compensation to a negotiator. Kahotea claims that the trustees acted in breach of trust by agreeing to such a fee. The court was required to determine whether there was a serious question to be tried, whether the balance of convenience and the overall interests of justice favoured the grant of interim injunctive relief, and whether damages would be an adequate remedy. The court found that there were serious questions to be tried, and that the balance of convenience and the overall interests of justice favoured the grant of interim injunctive relief. The court also found that damages would not be an adequate remedy, as the trustees may not have the means to meet a damages award, and Kahotea and other Wairoa Hapū members would be irreversibly prejudiced. The court granted the injunction, restraining the defendants from paying, assigning, or transferring the negotiator's fee or any portion thereof to the negotiator, their agents, successors or assigns. The plaintiff was to serve this order and supporting documents on the defendants as soon as practicable. Leave was reserved to the parties to apply on 24 hours’ notice, and the application was to be called on 4 June at 9:00am (in Hamilton by VMR). The court reserved costs.

Orders