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 that represented 40 per cent of the compensation payable to the Trust, for the benefit of the Hapū.

[11]             I am also satisfied that the balance of convenience and the overall interests of justice favour the grant of interim injunctive relief. There are grounds to believe that damages would not be an adequate remedy because the trustees will not have the means to meet a damages award. In that case, Dr Kahotea and other Wairoa Hapū members would be irreversibly prejudiced. Conversely, Dr Kahotea has provided an undertaking as to damages supported by substantial assets.

[12]I grant the following orders:

(a)Until further order of the Court, the defendants, their agents, successors and assigns are restrained from paying, assigning, or transferring the Negotiator’s Fee or any portion thereof to the Negotiator, or their agents, successors or assigns.

(b)The plaintiff is to serve this order and supporting documents on the defendants as soon as practicable.

1      Kwok v HND Holding Ltd [2024] NZHC 1153 at [7], referencing NZ Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90; (2013) 13 TCLR 531 at [12] and affirmed in Intellihub Ltd v Genesis Energy Ltd [2020] NZCA 344; [2020] NZCCLR 29 at [23]. See also Price (as trustees of the Price Karaka Trust) v Killarney Capital Ltd [2023] NZHC 2753, (2023) 24 NZCPR 574 at [38].

(c)Leave is reserved to the parties to apply on 24 hours’ notice.

(d)Otherwise, the application will be called on 4 June at 9:00am (in Hamilton by VMR).

[13]I reserve costs.

Gardiner J