Naera v Fenwick - [2014] NZSC 58

IN THE SUPREME COURT OF NEW ZEALAND

SC 95/2013
[2014] NZSC 58

BETWEEN

JILLIAN NAERA, KEREAMA PENE, ANAHA MOREHU, WARWICK MOREHU and ERIC HODGE
Applicants

AND

PIRIHIRA FENWICK, WIREMU KINGI and HIWINUI HEKE
First Respondents

TAI ERU
Second Respondent

Court:	Elias CJ and William Young J
Counsel:	F E Geiringer for Appellants D G Hurd and J C Jeffries for Respondents
Judgment:	19 May 2014

JUDGMENT OF THE COURT

____________________________________________________________________

AThe application by Jillian Naera, Kereama Pene, Anaha Morehu, Warwick Morehu and Eric Hodge for leave to appeal against the decision of the Court of Appeal of 8 August 2013 is declined.
BThe application by Pirihira Fenwick, Wiremu Kingi and Hiwinui Heke for leave to appeal against the decision of the Court of Appeal of 8 August 2013 is granted. The questions for determination on the appeal are:
1.Was the Court of Appeal correct to hold that the Tikitere Project Agreement was voidable because three of the trustees were beneficially interested in other trusts which were parties to the Agreement?

2.If so, was the Court of Appeal correct to hold that the remedy of rescission could be withheld only if third party interests were affected or should it have required general inquiry into whether rescission was in all the circumstances appropriate?

CNo order for costs on the applications is made.

REASONS

The Court has before it applications for leave to appeal by both parties to a decision of the Court of Appeal in CA542/2011 delivered on 8 August 2013.[1] The applicants are some of the beneficiaries of the Whakapoungakau 24 Ahu Whenua Trust. The respondents, who cross-apply for leave to appeal, are the trustees of the Trust. In these reasons we refer only to the application which we are dismissing.
[1]Naera v Fenwick [2013] NZCA 353 [Naera v Fenwick (CA)].
The case concerns a block of Maori freehold land, Whakapoungakau 24, administered by the Whakapoungakau 24 Ahu Whenua Trust (also known as the Tikitere Trust). The Trust was established by trust order in 1999 under Te Ture Whenua Maori Act 1993 and as of 2009 had some 1,222 beneficial owners. The trust order was varied by order of the Maori Land Court in 2004 and 2006 to allow the trustees to enter into joint ventures and to develop the area as a geothermal tourism park.
In November 2008 the Trust, through Tikitere Geothermal Park Ltd, entered into the Tikitere Project Agreement, a joint venture agreement for the purpose of establishing a geothermal power station. The other parties to the agreement were two other trusts, the Manupirua Ahu Whenua Trust and the Paehinahina Mourea Trust, to which three of the trustees of the Whakapoungakau 24 Ahu Whenua Trust were connected, with two of them being beneficially interested in those trusts.
The applicants objected to the actions of the trustees and took the position that the trustees had no power to enter into the Tikitere Project Agreement. They were unsuccessful in the Maori Land Court[2] and Maori Appellate Court[3] in…

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 Naera v Fenwick

Details

AGLC: Naera v Fenwick [2014] NZSC 58
Case: [2014] NZSC 58
Decision Date: 19 May 2014

CaseChat Overview and Summary

The Supreme Court of New Zealand was presented with an application for leave to appeal by both the applicants and the respondents in a case concerning the validity of a joint venture agreement entered into by the trustees of a Maori freehold land trust. The applicants, who are beneficiaries of the Whakapoungakau 24 Ahu Whenua Trust, sought to challenge the decision of the Court of Appeal that had upheld the validity of the Tikitere Project Agreement, a joint venture agreement for the establishment of a geothermal power station. The respondents, who are the trustees of the Trust, cross-applied for leave to appeal against the same decision.

The central legal issues revolved around the interpretation of clause 3(a) of the Trust order, which grants trustees broad powers in furtherance of the trust's objects, and whether the Court of Appeal was correct in holding that the Tikitere Project Agreement was within the trustees' powers. Additionally, the applicants raised concerns about the potential conflict of interest involving trustees who had beneficial interests in other trusts that were parties to the agreement. The applicants also questioned whether the Court of Appeal correctly applied the remedy of rescission in light of third-party interests.

The Supreme Court found no grounds to grant the applicants leave to appeal, as the interpretation of clause 3(a) had been thoroughly considered by the lower courts, and the Court of Appeal's decision on the matter was sound. The Court noted that the trustees' powers, as outlined in clause 3(a), were broad and included the ability to enter into joint ventures such as the Tikitere Project Agreement. The Court further held that the applicants' argument regarding the conflict of interest was not a valid basis for appeal, as it had not been raised in the lower courts. The Court also concluded that the remedy of rescission did not need to be withheld solely due to third-party interests, and the Court of Appeal had correctly exercised its discretion in this regard.

In summary, the Supreme Court declined the applicants' application for leave to appeal and granted the respondents' cross-application for leave to appeal. The Court's decision upheld the validity of the Tikitere Project Agreement and the interpretation of clause 3(a) of the Trust order.

Orders