Re Tuhoe Charitable Trust Board

[2012] NZHC 1952

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV 2012-463-000212 [2012] NZHC 1952

IN THE MATTER OF     The Charitable Trusts Act 1957

AND

IN THE MATTER OF     an application by the TUHOE CHARITABLE TRUST BOARD, the TUHOE FISHERIES CHARITABLE TRUST BOARD and the TUHOE- WAIKAREMOANA MAORI TRUST BOARD for orders approving amalgamation of three charitable trusts administered by the applicants

Hearing:         4 July 2012

Counsel:         D McLay for First and Second Applicants

D McLay and C Bidois for Third Applicant
P Gunn for Solicitor-General
B Lyall for V Winitana

Judgment:      14 August 2012

INTERIM JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Tuesday, 14 August 2012 at 11:00 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:

D McLay, Barrister, Wellington

C Bidois, East Brewster Limited, Rotorua
P Gunn, Crown Law, Wellington

B Lyall, Kathy Ertel, Wellington

RE TUHOE CHARITABLE TRUST BOARD, TUHOE FISHERIES CHARITABLE TRUST BOARD AND TUHOE-WAIKAREMOANA MAORI TRUST BOARD HC ROT CIV 2012-463-000212 [14 August 2012]

Introduction

[1]      The  trustees  of  three  trusts  associated  with   Ngai  Tuhoe,  which  are administered by the Tuhoe Charitable Trust Board, the Tuhoe Fisheries Charitable Trust Board and the Tuhoe-Waikaremoana Maori Trust Board, apply to vary the purposes and the mode of administration of those trusts.  Basically, the applicants are seeking Court approval to amalgamate the three separate trusts into one trust.  All three trusts have broadly similar objects and operate for the benefit of Ngai Tuhoe.

[2]      Extensive affidavits have been sworn and filed in support of the application by the Chair of the Tuhoe Charitable Trust, Mr Tamati Kruger; the Chair of the Tuhoe Fisheries Charitable Trust, Mr Matthew Te Pou, and the Chair of the Tuhoe- Waikaremoana Trust Board, Mr Aubrey Temara.

[3]      Ngai Tuhoe wishes to combine its asset management structures into a single post-settlement governance entity (or as near to a single entity as possible).  As part of this process Tuhoe wishes to amalgamate those entities that carry out charitable activities for the benefit of Tuhoe into one charitable trust.   The trustees are also concerned about the administrative difficulties involved in operating three separate trusts, particularly in relation to compliance costs under the Charities Act 2005, as well as making investment and distribution decisions that benefit the whole iwi.

[4]      The application was first called on 4 July 2012.  The applicants at this stage seek only interim orders because they recognise that there are a number of steps that need to be taken before final approval can be sought from the Court.  In effect, they now seek approval to start the process.  If the Court’s approval to start the process is obtained, the applicants intend to call a special general meeting at Tataiahape Marae, Waimana on 10 November 2012 to  ask for the approval of Ngai Tuhoe to the proposed amalgamation. A vote will be held on a special resolution which requires a

75% majority.   There will therefore be the opportunity for further consultation, discussion and debate with iwi members.  Following the meeting, an affidavit will then be provided to the Court which will summarise the outcome of the meeting.

[5]      I heard from Mr McLay, counsel for the applicants, as well as Mr Gunn, counsel for the Solicitor-General and Mr Lyall, counsel for Mr Vernon Winitana, who opposes the application.  In addition, I heard from a number of iwi members in person, including Mr Timoti Nikora, the former Secretary of the Tuhoe- Waikaremoana  Maori  Trust  Board,  Mr  Tamaroa  Nikora,  Mrs  Kath  Peebles  and Ms Cindy  Wills,  on  behalf  of  the  Ruapani  ki  Waikaremoana  Collective  Trust, Ms Victoria Albert, on behalf of the Wiki Cairns Whanau Trust, and Ms Kirituia Tumarae, on behalf of Te Umutaoroa.  I have also received affidavits and/or written submissions from Ms Jaylene Wehipeihana on behalf of the Waiohau C4 Papakainga Maori Reservation Trust, Mr Robert Pouwhare on behalf of the Ngati Haka Patuheuheu Trust and as acting convener of Te Umutoaroa, and Ms Hinerangi McCorkindale on behalf of the Waiohau Marae Committee.

[6]      I have also received a report from the Acting Solicitor-General, Ms Cheryl Gwyn, under s 56(1)(a) of the Charitable Trusts Act 1957.  The Act imposes certain responsibilities on the Attorney-General, who is commonly referred to as the protector of charities.  These responsibilities are delegated to the Solicitor-General. The Solicitor-General, on behalf of the Attorney-General, reports on, or approves, schemes to vary charitable trusts; may appear as a party to charity proceedings and act for the beneficial interest to enforce charitable purposes; and in the public interest investigates the management and administration of charitable trusts.   I am most grateful to Ms Gwyn for her report, which, with two reservations, endorses the application.  Much of the factual background and many of the legal principles set out in my judgment are adopted from her report.

Tuhoe-Waikaremoana Maori Trust Board

[7]      The Tuhoe-Waikaremoana Maori Trust Board is a body corporate constituted under s 9A of the Maori Trust Boards Act 1955, and holds its assets subject to the provisions of that Act.  Section 9A provides:

9A       Tuhoe-Waikaremoana Maori Trust Board

Whereas the  Urewera Lands Act 1921-22 authorised the appointment of Commissioners for the purpose of carrying into effect a scheme of consolidation of the lands described in Schedule 1 thereto: And whereas the

Commissioners  were  authorised  by  the  said Act  to  inquire  into  certain purchases theretofore made by the Crown and to allot lands to the Crown in accordance therewith under the said scheme and to fix the boundaries thereof and, after providing for the portion of land to be allotted to the Crown, to allot the balance in suitable areas to persons to be named in the Commissioners' orders as entitled thereto: And whereas the area so allotted to the Crown included land having a value of $40,000 or thereabouts which represented the proportionate contribution which the Commissioners considered should be made to the Crown in respect of the cost of certain new roads which the Crown then proposed to construct: And whereas for various reasons the roads were not constructed and are not now likely to be constructed: And whereas claims have been made against the Crown for compensation in respect of the land allotted to the Crown in respect of the cost of the roading as aforesaid: And whereas negotiations for the settlement of  the  said  claims  have  been  concluded  between  representatives  of  the Crown and the Maori claimants and it is desirable to give effect to the terms of the settlement: Be it therefore enacted as follows:

(1)       There is hereby constituted a body corporate to be known as the Tuhoe-Waikaremoana Maori Trust Board (in this section referred to as  the  Board)  which  shall  be  a  Maori  Trust  Board  within  the meaning and for the purposes of this Act.

(2)       The beneficiaries of the Board are hereby declared to be the persons to whom land was allotted under section 7 of the Urewera Lands Act

1921-22   and   their   successors   in   title   (being   Maoris   or   the

descendants of Maoris) and those persons comprised in the Tuhoe portion of the list of owners of Lake Waikaremoana, as certified by the Registrar of the Maori Land Court pursuant to subsection (3) of section 9 of the Lake Waikaremoana Act 1971 and the descendants of any persons hereinbefore declared to be beneficiaries.

(3)       There shall, without further appropriation than this section, be paid to the Board out of the Crown Bank Account the sum of $200,000 together with interest thereon at the rate of 5 percent per annum from the 6th day of November 1957 to the 31st day of March 1958, and at the rate of 4½ percent per annum from the 1st day of April 1958 until the date of payment; and the said payments shall be deemed to be  in  full  satisfaction  and  discharge  of  all  claims  and  demands against the Crown in respect of the land allotted to the Crown in the manner and for the purposes hereinbefore referred to.

(4)       As soon as practicable after the commencement of this section there shall  be  appointed  by  the  Governor-General  not  more  than  12 persons to be the initial members of the Board for a term of 3 years.

(5)       All members, other than the initial members, shall be appointed in the manner prescribed by this Act.

[8]      The charitable trust administered by the Tuhoe-Waikaremoana Maori Trust

Board was established by a Declaration of Trust executed on 12 March 1982 (the

1982 Declaration) pursuant to s 24B of the Maori Trust Boards Act (the s 24B trust). Section 24B provides:

24B      Trusts for charitable purposes

(1)       Any Board may from time to time, in its discretion, execute under its seal a declaration of trust declaring that it shall stand possessed of any of its property, whether real or personal, upon trust for charitable purposes.

(2)       Any income derived by the Board from any property to which the declaration relates shall be applied for such purposes referred to in section 24 or section 24A of this Act as may be specified in the declaration of trust; and, for the purposes of the Income Tax Act

2007, any such income shall be deemed to be income derived by trustees in trust for charitable purposes.

(3)       No declaration of trust under this section shall have any force or effect unless it has been approved by the Commissioner of Inland Revenue.

[9]      Clause  1  of  the  1982  Declaration  provides  that  the  assets  listed  in  the schedule to the Declaration are held:

UPON  TRUST  for  its  [the  Board’s]  beneficiaries  the  members  of  the TUHOE TRIBE and their descendants FOR CHARITABLE PURPOSES IN NEW ZEALAND.

[10]     The Tuhoe-Waikaremoana Maori Trust Board’s beneficiaries are defined in s

9A(2) of the Maori Trust Boards Act as being:

the persons to whom land was allotted under section 7 of the Urewera Lands Act 1921-22 and their successors in title (being Maoris or the descendants of Maoris) and those persons comprised in the Tuhoe portion of the list of owners of Lake Waikaremoana, as certified by the Registrar of the Maori Land   Court   pursuant   to   subsection   (3)   of   section   9   of   the   Lake Waikaremoana Act 1971 and the descendants of any persons hereinbefore declared to be beneficiaries.

[11]     The charitable purposes of the s 24B trust are set out in clause 2 of the 1982

Declaration and are drawn from s 24 of the Maori Trust Boards Act.  Broadly, they include:   the promotion of public health, the promotion of social and economic welfare, and the promotion of education and vocational training.

[12]     The assets to which the 1982 Declaration relates are listed in the schedule to the Declaration and include the Tuhoe portion of the bed of Lake Waikaremoana.  It appears that 404 hectares of land called the Tuararangaia 1B block was mistakenly included in the schedule to the 1982 Declaration as it never formed part of the Tuhoe-Waikaremoana  Maori  Trust  Board’s  own  property.    The  Board  held  the

Tuararangaia 1B land solely as responsible trustee under s 438 of the Maori Affairs

Act 1953 (now s 215 of the Te Ture Whenua Maori Act 1993).

[13]     The Tuhoe-Waikaremoana Maori Trust Board also acts as the trustee for a number of ahu whenua trusts and reservation trusts constituted under ss 215 and 338 of the Te Ture Whenua Maori Act 1993, which are subject to the supervision of the Maori Land Court.  The Board is taking steps to transfer the trusteeships of these trusts to individuals elected by the relevant beneficiaries of these trusts.

[14]     The financial statements of the Tuhoe-Waikaremoana Maori Trust Board for the period ended 31 March 2010 show the assets of the 1982 Declaration which comprise the Trust Board’s interest in Lake Waikaremoana, a half-share in three commercial properties in south Auckland, and four sections situated at Ruatahuna. The financial statements do not include any of the assets of the Tuararangaia 1B block or of the other ahu whenua and reservation trusts.

[15]     The  s  24B  trust  is  registered  with  the  Charities  Commission  under  the

Charities Act 2005.

Tuhoe Fisheries Charitable Trust Board

[16]     The Tuhoe Fisheries Charitable Trust was established by deed executed on

16 August  2006.    It  was  established  in  order  to  act  as  Tuhoe’s  mandated  iwi organisation in terms of the Maori Fisheries Act 2004 in relation to Tuhoe’s fisheries settlement.  The trust deed was based on a template document provided by Te Ohu Kai Moana.  Te Ohu Kai Moana is the entity established under the Maori Fisheries Act 2004 to distribute and administer fisheries settlement assets.

[17]     The Tuhoe Fisheries Charitable Trust’s purposes are set out in clause 3 of the trust deed. They are:

3.1...to receive, hold, manage and administer the Trust Fund for every charitable purpose directly or indirectly benefiting Tuhoe whether it relates to the relief of poverty, the advancement of education or religion or any other matter beneficial to the community of Tuhoe and all the Members of Tuhoe irrespective of where those members reside.

[18]     The  purpose  of  acting  as  a  mandated  iwi  organisation  under  the  Maori

Fisheries Act is set out in clause 3.2 under the heading “Incidental purposes”.

[19]     Under the deed, “member of Tuhoe” is defined as :

a person who affiliates to a Tuhoe Marae and a Tuhoe Hapu and who claims an antecedent (tipuna) who was an original owner of Tuhoe land  or the sibling of such an owner and who is a descendant of Tuhoe or Potiki (being the  primary ancestors of the Tuhoe tribe)  and includes a  person  legally adopted by a member of Tuhoe but does not include Whāngai.

“Tuhoe” is defined as “the Iwi comprising every person who is a Member of Tuhoe”.

[20]     The Trust’s main assets are its shares in Tuhoe Fish Quota Limited (the asset- holding company for the purposes of the Maori Fisheries Act) and income derived from those shares.

[21]     The Tuhoe Fisheries Charitable Trust is incorporated as a board under the Charitable Trusts Act 1957.   It is also registered with the Charities Commission under the Charities Act 2005.

Tuhoe Charitable Trust

[22]     The Tuhoe Charitable Trust was established by deed executed on 31 July

2010.  The settlers of this trust were the trustees of the Tuhoe Establishment Trust (since renamed the Tuhoe Trust), which was itself established with the intention of becoming Tuhoe’s post-settlement governance entity for the purposes of the settlement of Treaty claims.  The Tuhoe Charitable Trust was established in order to carry out charitable activities which could not be undertaken by the Tuhoe Trust itself (which is a private trust).

[23]     The purposes of the Tuhoe Charitable Trust are set out in clause 3 of the trust

deed.  Clause 3 describes the trust’s purposes as being:

(a)       the promotion of health and well-being of members of Ngai Tuhoe and relief of the aged members of Ngai Tuhoe;

(b)      the maintenance, upkeep and improvement of marae of Ngai Tuhoe;

and

(c)      any other matter beneficial to the community of Ngai Tuhoe.

[24]     “Tuhoe Iwi Members” are defined in the Tuhoe Establishment Trust Deed (now the Tuhoe Trust Deed) and adopted by the Tuhoe Charitable Trust Deed under clause 1.2, as meaning:

...the  individuals  for  the  time  being,  who  (a)  by  whakapapa  can  claim descent from the eponymous ancestors Tuhoe or Potiki or who are Whangai and (b) who are affiliated to any of the Hapu.

“Hapu” is defined by reference to a list of specific hapu.  It includes Ngati Ruapani

Ki Waikaremoana.

[25]     The Tuhoe Trust holds and manages assets received from the Crown as a result of the CNI Forests Deed of Settlement dated 25 June 2008 and the Central North Island Forests Land Collective Settlement Act 2008.  At the meeting of the trustees of the Tuhoe Trust held on 17 September 2010, it was resolved that $3.6 million would be donated to the Tuhoe Charitable Trust with a view to it being distributed to maraes.  The unaudited financial statements of the Tuhoe Charitable Trust for the period ended 31 March 2011 refer to distributions of $1 million made to marae and a further $20,000 for the Christchurch earthquake.   The balance of its assets comprise deposits totalling $2,817,000.00.

[26]     The Tuhoe Charitable Trust is incorporated as a board under the Charitable Trusts Act 1957.   It is also registered with the Charities Commission under the Charities Act 2005.

Orders sought by the applicants

[27]     Broadly, the applicants will seek to have the Court make the following orders at a later date:

(a)      An order amalgamating the s 24B trust (administered by the Tuhoe- Waikaremoana Maori Trust Board) and the Tuhoe Fisheries Charitable Trust with the Tuhoe Charitable Trust, such amalgamated trust to be held by the Tuhoe Charitable Trust Board on the terms and for the purposes set out in an amended Tuhoe Charitable Trust Deed;

(b)Orders that the Tuhoe Charitable Trust Board is to succeed to all the property, rights, interests, powers, privileges, trusts, contracts, engagements and authorities of the Tuhoe-Waikaremoana Maori Trust Board (in relation to the s 24B trust only) and the Tuhoe Fisheries Charitable Trust Board, and also to the debts and liabilities of those two trusts;

(c)      Orders removing the s 24B trust and the Tuhoe Fisheries Charitable Trust from the Register of Charities under the Charities Act 2005;  and removing the Tuhoe Fisheries Charitable Trust from the register held by the Registrar of Incorporated Societies under the Charitable Trusts Act;

(d)An order rectifying the schedule to the 1982 Declaration by deleting the reference to the Tuararangaia 1B Block.

[28]     The applicants have also sought alternative orders amalgamating the Tuhoe Fisheries Charitable Trust and the Tuhoe Charitable Trust only, in the event that the Court finds that there is no jurisdiction to vary the s 24B trust.  The jurisdiction issue is discussed below at [63] to [70].

[29]     The above orders are expressed as coming into effect when Te Ohu Kai Moana approves the transfer of mandated iwi organisation status from the Tuhoe Fisheries Charitable Trust to the Tuhoe Charitable Trust (see below at [31] – [33]). The  applicants  also  seek  an  order  directing  the  trustees  of  the Tuhoe  Fisheries Charitable Trust to execute a share transfer transferring all of the shares in Tuhoe Fish Quota Limited to the Tuhoe Charitable Trust.

[30]     However,  as  noted  above  in  [4],  at  this  stage  the  applicants  only  seek approval to start the process.  Ngai Tuhoe’s approval of the proposed amalgamation will be sought in a special general meeting on 10 November 2012.

Transfer of Mandated Iwi Organisation status

[31]     An important aspect of the amalgamation sought by the applicants is the transfer of mandated iwi organisation status from the Tuhoe Fisheries Charitable Trust to the Tuhoe Charitable Trust.  Such a transfer is governed in the first instance by the Maori Fisheries Act 2004.  Sections 18A to 18F of the Maori Fisheries Act

2004 enable iwi to transfer mandated iwi organisation status to a replacement entity in   certain   circumstances   and   following   a   set   procedure,   and   exempt   the accompanying transfer of fisheries assets from the protective provisions of the Maori Fisheries Act 2004 which would otherwise require an offer for sale to other iwi and to Te Ohu Kai Moana.

[32]     However, the Maori Fisheries Act 2004 is silent as to whether a transfer of the mandated iwi organisation status and fisheries assets to another entity authorises a change in the charitable purposes for which those assets may be applied, where the transfer is from one charitable trust to another.   Accordingly, the applicants are seeking the Court’s approval of the modification of charitable purposes that will result from the transfer of mandated iwi organisation status and the amalgamation of the three charitable trusts.

[33]     In order to ensure compliance with the provisions of the Maori Fisheries Act

2004 in respect of the transfer of mandated iwi organisation status, the applicants have specified that the orders sought will not come into effect until Te Ohu Kai Moana has approved the transfer of mandated iwi organisation status.

Variation of Charitable Trusts

[34]     Section  32  of  the  Charitable  Trusts  Act  1957  provides  that  where  any property or income is given or held upon trust, or is to be applied, for any charitable purpose  and  it  is  “impossible  or  impracticable  or  inexpedient  to  carry  out  that

purpose” the property and income shall be disposed of for some other charitable

purpose in the manner and subject to the provisions of Part III of the Act.

[35]     In varying trusts under s 32 of the Act the Court is exercising a statutory jurisdiction.  Nonetheless, previous decisions of the High Court have held that those promoting a scheme under Part III of the Act should seek to substitute beneficiaries or purposes resembling as closely as possible in the changed circumstances those specified by the original settlor.

[36]     In  Re  Tennant[1]   Hammond  J  summarised  the  principles  that  govern  an application for variation of charitable trusts as follows:

[1] Re Tennant [1996] 2 NZLR 633 (HC) at 636.

(a)      The application must come within the statutory jurisdiction (which includes a necessity for the purposes to have been charitable at the date of settlement).

(b)The substituted arrangements must be charitable as that term is understood in law.

(c)      In deciding whether to approve the substituted arrangements, the new scheme should accord as closely as is reasonably possible in the changed circumstances to the terms of the original trust.

(d)The Court will dispose of the property in such a way as will best serve the interests of those intended to be beneficiaries and the public.

[37]     Furthermore, s 33 of the Charitable Trusts Act provides that the powers of trustees may be extended or varied and the mode of administering the trust may be prescribed or varied in the manner and subject to the provisions contained in Part III of the Act if the administration of the property or income or the carrying out of the trust could be facilitated by extending or varying such powers or prescribing or

varying the mode of administering the trust.

[38]     I am of the view that  the Court’s  powers in  relation to the approval  of schemes under Part III of the Act include the power to approve a scheme designed to amalgamate separate existing trusts.   This was the effect of the orders made in Hawkes Bay Children’s Home v Birthright (Napier) Inc & Ors,[2]  in Re Sisters of Mercy Trust,[3] and in Re New Zealand Federation of Graduate Women.[4]

[2] Hawkes Bay Children’s Home v Birthright (Napier) Inc & Ors HC, Wellington CIV-2004-441-458,

30 August 2004.

[3] Re Sisters of Mercy Trust HC, Wellington CIV-2005-485-2290, 12 December 2005.

[4] Re New Zealand Federation of Graduate Women HC, Wellington CIV-2006-485-2037, 7 November

2006.

[39]     These cases show that the Court has jurisdiction under s 32 to make an order amalgamating multiple charitable trusts into a single trust, provided that the statutory conditions for variation of trust are met, that is, the applicants must still show that it has become inexpedient, impracticable, or impossible to carry out the original purposes of the individual trusts.

Grounds of opposition to application

[40]     Mr  Winitana   opposes   the   application   on   the   grounds   of   inadequate consultation.  He also notes that the bed of Lake Waikaremoana is vested in named individuals and submits it should be held on trust for those people and their descendents.  He also notes that Ngati Ruapani, of which he is a member, is not a hapu of Tuhoe and will receive its own treaty settlement.

[41]     Mr Timoti Nikora has concerns about the narrow definition of “Tuhoe Iwi Members” in the Tuhoe Trust deed, which has been adopted by the Tuhoe Charitable Trust Deed.   He makes a plea to the Court to request either a Judge of the Maori Land  Court  or  an  independent  practicing solicitor  to  investigate and  certify the number of members who are 18 years or older who have made a valid application (particularly as to whakapapa and the validity of the signatures of the appellant and their witnesses) and whether those persons have been validly approved and entered

on to the Tuhoe Iwi Register as at 30 June 2011.

[42]   Mr Timoti Nikora estimates that 95% of Tuhoe beneficiaries would be disenfranchised because of their inability to trace lineage to Tuhoe or Potiki as specified in the Tuhoe Trust Deed.  He submits that a solution to this problem would be to add the words “an original owner in Tuhoe Land” to the definition of a member in the Tuhoe Trust Deed.

[43]     Mr Tamaroa Nikora opposes the application on the grounds that the proposal is not in the interests of the beneficiaries affected and they have not been properly consulted.  He submits that the proposal assumes that all beneficiaries of the trusts are the same and are all Tuhoe.  He submits this is not correct.  He notes that the trusts are separately governed, and have different policies of distribution.   In particular, he submits that the Tuhoe-Waikaremoana Maori Trust Board has been unable to administer policies of distribution which are equitable as between the beneficiaries.   He also notes Tuhoe comprises 35 marae and 24 hapu and submits that each should be entitled to set up a charitable trust and take over a share of the trust assets on the winding up of the Tuhoe-Waikaremoana Maori Trust Board and Tuhoe Fisheries Charitable Trust.   Mr Tamaroa Nikora also submits that the ahu whenua Trusts should continue.  He sees Waikare as a special case and also submits that provision needs to be made for Kahungunu.   Finally, he submits that there is need to wait for the third part of the Urewera Inquiry by the Waitangi Tribunal (Wai

894) and to discuss and consider what needs to be done subsequently.

[44]     Mrs Peebles and Ms Wills oppose the inclusion of the s 24B trust in the amalgamation scheme unless the rent paid to the Tuhoe-Waikaremoana Maori Trust Board under the Lake Waikaremoana Act 1971 is excluded.   Ms Peebles and Ms Wills note that the Tuhoe-Waikaremoana Maori Trust Board holds title to both Lake Waikaremoana and other Maori land but no application has been made to the Maori Land Court for approval of the amalgamation scheme under the Charitable Trusts Act 1957, which they submit amounts to an alienation of Maori land.   There is however no objection on their part to the amalgamation of the Tuhoe Charitable Trust and The Tuhoe Fisheries Charitable Trust as sought by the applicants.

[45]     Ms Peebles and Ms Wills also note that the 1982 Declaration has never been approved as an alienation by the Maori Land Court under the Maori Affairs Act

1953, which, they believe, is a statutory requirement for validity.  They submit this Court therefore has no jurisdiction until the Maori Land Court has ruled on the contemplated alienation or confirmed that alienation has already taken place to the Tuhoe-Waikaremoana Maori Trust  Board.   They ask that  the Court direct these applications   be   referred   to   Maori   Land   Court   for   enquiry,   hearing   and   a determination as to the issue of the Lake Waikaremoana title and rental.   They believe an application to the Chief Judge for an urgent hearing could be arranged in conjunction with any other interlocutory orders to initiate an approval procedure for the amalgamations sought by the applicants.

[46]     Finally,  they  submit  that  Ngati  Ruapani  cannot  be  Tuhoe  if  the  Crown recognises them as a separate large natural group for treaty negotiations and has already concluded a partial settlement, notwithstanding their inclusion in the list of specific hapu in the Tuhoe Trust Deed.

[47]     Ms Albert also opposes the application submitting that her people have not relinquished  ownership  or  given  any authority  to  the  trusts.    She  complains  of malpractice within the Tuhoe leadership and remains anxious that their whakapapa and taonga tuku iho be honoured and respected.   She also supports her kaumatua, Mr Tamaroa Nikora.

[48]     Ms Tumarae fully supports the submissions made by Mr Timoti Nikora, Mr Tamaroa  Nikora  and  Ms  Albert.    Through  whakapapa,  Te  Umutaoroa  also supports their kin Mrs Peebles and Mr Winitana from Ngati Ruapani Waikaremoana in   their   endeavours   for   justice   regarding   their   claims.      She   submits   that Te Umutaoroa want their hapu/iwi claims to be addressed and not put into a bucket to become one claim. The uniqueness of the claims for each area would then be lost.

[49]     Ms Wehipeihana submits that there has been no appropriate engagement by the trustees of the Trust Boards with the people of Ngai Tuhoe to obtain an informed view about the proposal to consolidate.  She submits that the enduring separation of the various entities is required to ensure that there is better accountability of the trustees of the three trusts with regard to the assets that they have been provided with the obligation to administer.  She also submits that consolidation is not required for

the better and more effective distribution of benefits.  Finally, she submits that Ngai Tuhoe  does  not  desire  the  dissolution  of  the Tuhoe-Waikaremoana  Maori  Trust Board.

[50]     Mr   Pouwhare   opposes   the   application   on   the   same   grounds   as Ms Wehipeihana,  as  does  Ms  McCorkindale  on  behalf  of  the  Waiohau  Marae Committee.

Inexpedience

[51]     The applicants have not argued that it is impossible to continue carrying out the purposes of the existing charitable trusts, but are instead relying on the ground of inexpedience.  The affidavits of Mr Kruger, Mr Te Pou and Mr Temara set out the matters that are said to make a continuation of the three separate trusts inexpedient:

(a)      Each of the three trusts is required to keep separate financial records and   to   prepare   separate   financial   statements,   which   creates unnecessary  administration  costs.     In  addition,  each  trust  has  a separate database of iwi members.

(b)At present each of the trusts makes investment decisions in isolation, which results in unnecessary investment risks to the iwi as a whole.

(c)      Trust law requires the trustees of each trust to consider distributions independently  of  the  other  trusts,  which  may  result  in  inefficient and/or unfair distributions.

(d)The separate registration requirements for each of the trusts creates confusion and frustration for iwi members, who must register with each trust.

(e)      Consolidation   of   iwi   assets   will   enable   the   iwi   to   maximise investment opportunities by leveraging its total asset base.

[52]     The leading case on the meaning of inexpedient is Re McElroy Trust.[5]   In that case the Court of Appeal noted that Parliament’s clear wish to expand the concepts of impossibility and impracticability (by adding “inexpedient” to the statutory formula) should not be inhibited by giving too narrow an interpretation to the word “inexpedient”.    The  Court  of Appeal  thought  that  the  concept  of  inexpediency introduced a value judgment rather than simply an assessment of feasibility, and that the general connotation of the word was of the original charitable purposes having become unsuitable, inadvisable, or inapt.

[5] Re McElroy Trust [2003] 2 NZLR 289 (CA).

[53]     However, the Court also stressed that the test was not whether the scheme would carry out the purposes of the trust better than the existing arrangements.  It was not a question of comparing the utility or expediency of the existing trusts as against the proposed scheme.  The test was whether it was inexpedient to carry out the original purposes of the trust.

[54] The three amalgamation cases referred to at [37] above also relied on the grounds of inexpedience or impracticability. I am of the view that, in the present case, the duplication of administration and compliance costs, and the current inability to align investment strategies, pool resources and make joint distribution decisions, make it inexpedient for the three charities to continue separately.

Objects of Trusts

[55]     In approving a variation the Court owes a duty to the settlor of the trust property to dispose of it as nearly as possible in accordance with the intentions of the settlor in establishing the trust.  The applicants submit that the proposed variation conforms to the “as nearly as possible” principle because:

(a)       The  objects  of  the  three  individual  trusts  are  identical,  or  nearly identical, meaning that no substantial change to those objects would

be effected under the scheme; and

(b)Each individual trust is essentially for the benefit of Ngai Tuhoe, which will not change under the scheme.

[56]     I acknowledge that the purposes of each of the three trusts are not worded identically.  The proposed variation will involve some amendment to those purposes, if the amalgamated trust is to have one set of charitable purposes.

[57]     I am, however, of the view that the objects of the Tuhoe Charitable Trust and of the Tuhoe Fisheries Charitable Trust are very similar.  The purposes set out in the s 24B trust, while more detailed, are also in a similar vein.  All three sets of objects are broadly concerned with benefiting Ngai Tuhoe in a charitable manner, whether through the promotion of health, education, social welfare, or other means.

[58]     I also note that one of the existing purposes of the Tuhoe Fisheries Charitable Trust is to act as the mandated iwi organisation for Tuhoe, and that the amalgamated trust is also intended to function as Tuhoe’s mandated iwi organisation. As the s 24B trust and the Tuhoe Charitable Trust do not currently have any similar purposes, the amalgamation will involve a variation of their purposes to include the mandated iwi organisation purpose.  In the circumstances, and given the legislative provision for the transfer of mandated iwi organisation status to another entity, I consider this amendment to be appropriate.

Beneficiaries

[59]     The purpose of each of the trusts is also linked to the definition of the trusts’ beneficiaries.   The Tuhoe-Waikaremoana Maori Trust Board holds its assets (including those covered by the 1982 declaration) for its beneficiaries, which are defined  in  s  9A(2)  of  the  Maori  Trust  Boards Act,  while  the  Tuhoe  Fisheries Charitable Trust holds its assets for the benefit of the “members of Tuhoe”, and the Tuhoe Charitable Trust holds its assets for the benefit of “Ngai Tuhoe” and “Tuhoe Iwi  Members”.     The  differences  between  the  definitions  of  beneficiaries  are addressed in the affidavit of Mr Kruger at 34 to 38.  He takes the view that all three definitions are compatible.  Mr Kruger states:

34.I acknowledge that there are distinct definitions in the TFCT Deed, the 1982 Declaration (by the Trust Board) and the Fisheries Trust. However the beneficial members are in substance the one people, Ngai Tūhoe.   At a practical level, we are all united by the same kinship ties to each other.

35.The Tuhoe-Waikaremoana Maori Trust Board charitable declaration of 1982 defines a Tuhoe member as

THAT the Board stands possessed of those of its assets enumerated in the schedule hereto and the whole of the net income from time to time derived by it from those assets (hereinafter called “the trust property”)  UPON TRUST for its beneficiaries the members of the TUHOE TRIBE and their descendants FOR CHARITABLE PURPOSES IN NEW ZEALAND.

36.      The Tuhoe Fisheries Charitable Trust defines a Tuhoe member as:

Member of Tuhoe means a person who affiliates to a Tuhoe Marae and a Tuhoe Hapu and who claims an antecedent (tipuna) who was an original owner of Tuhoe land or the sibling of such an owner and who is a descendant of Tuhoe or Potiki (being the primary ancestors of  the Tuhoe  tribe)  and  includes  a  person  legally  adopted  by  a member of Tuhoe but does not include Whangai.

37.A Tūhoe beneficiary under the Charitable Trust is wide and encompassing of all Tuhoe descendants.  Both the Charitable Trust and   the  Trust   Board   charitable   declaration   are   in   my   view compatible.

38.The Fisheries Trust definition is prima facie more prescriptive than the other entities.   However, this is not necessarily the case.   All Tūhoe people claim descent from the eponymous ancestors Tūhoe or Potiki and all are connected to Tūhoe marae and hapu, therefore no Tūhoe person is outside of the definitions.   Furthermore, the Charitable Trust does not permit any inequity of eligibility because it combines the Tūhoe class of members.

[60]     There   are   clearly   drafting   differences   between   the   three   beneficiary definitions, with the definition of the Tuhoe-Waikaremoana Maori Trust Board’s beneficiaries  being  the  most  markedly  different.    However,  I  accept  that  the beneficial members are, in substance, the one people Ngai Tuhoe at a practical level. Tuhoe are all united by the same kinship ties to each other.  All Tuhoe people claim descent from the eponymous ancestors Tuhoe or Potiki and all are connected to Tuhoe marae and hapu.   I accept Mr Kruger’s evidence that no Tuhoe person is outside of the definitions.

[61]     I  note  that  the  Chair  of  the  Tuhoe-Waikaremoana  Maori  Trust  Board, Mr Temara, also makes reference to the similarities of the beneficiary definitions in [41] - [44] of his affidavit.  He submits that despite the seemingly more restrictive definition of beneficiaries under s 9A(2) of the Maori Trust Boards Act, that definition in fact now covers all members of Tuhoe.  Mr Temara states:

41.The beneficiaries of the Charitable Trust and the Trust Board are synonymous in that the beneficiary definitions for both entities take in all members of Tuhoe.

42.The beneficiary definition for the Tuhoe Fisheries Charitable Trust also takes in all members of Tuhoe.  The beneficiary definition for the Tuhoe Fisheries Charitable Trust was opposed initially by some who mischievously alleged that certain members of Tuhoe had been excluded from the original ownership lists for Tuhoe land.

43.The persons allegedly excluded were never named and no excluded member  has  ever  been  identified  subsequently  despite  the  Trust Board and the Tuhoe Fisheries Charitable Trust having processed many thousands of applications for membership.  The Trust Board has never accepted that any members of Tuhoe were excluded from the lists of original owners, and it is notable that since the Tuhoe Fisheries Charitable Trust has been up and running, those allegations have not re-surfaced.

44.In reality, the criteria that a member must descend from an original owner in Tuhoe land or a sibling of such an owner was included as an administrative tool only. Its inclusion enables staff who may have no personal knowledge of Tuhoe whakapapa to validate applications for membership simply by reference to a closed list of original owners.  In most families, the whakapapa from those original owners to the present generation spans four generations or less which simplifies the application process immensely, for the individual applicants as well as the Trust’s staff.

[62]     The first reservation expressed in the report of the Acting Solicitor-General was whether there was enough evidence before the Court to establish that the three beneficiary definitions are, in practical terms, the same.  Although Mr Timoti Nikora has expressed concerns about the narrow definition of “Tuhoe Iwi Members” in the Tuhoe Trust Deed, Mr Temara states that no excluded member has ever been identified.  On the other hand, Mr Winitana complains that the rental from the lease of the bed of Lake Waikaremoana is treated as being generally available to all Tuhoe. He would prefer a more restrictive interpretation than that adopted by the Tuhoe- Waikaremoana Maori Trust Board.   Notwithstanding the reservation of the Acting

Solicitor-General, the evidence of Mr Kruger and Mr Temara persuades me that the beneficiaries of the three trusts are, in practical terms, the same.

Jurisdiction to vary the s 24B Trust

[63]     The  second  reservation  expressed  in  the  report  of  the  Acting  Solicitor- General was whether there was jurisdiction to vary the s 24B trust administered by the Tuhoe-Waikaremoana Maori Trust Board. The applicants have sought alternative orders in the event that the Court considers that it lacks jurisdiction to vary the s 24B trust in the manner sought.

[64]   As explained in the Acting Solicitor-General’s report, the s 24B trust administered by the Tuhoe-Waikaremoana Maori Trust Board is constituted in part under statute.  The Court’s power to approve a variation under the Charitable Trusts Act is constrained by the fact that the Court has no jurisdiction to amend an Act of Parliament.  This does not necessarily mean that the Court has no jurisdiction to vary charitable trusts constituted under statute; however, an application for variation will only be successful if it relates to matters not affected by the statute.

[65]     In this case the charitable trust administered by the Tuhoe-Waikaremoana Maori Trust Board was established by a declaration of trust made pursuant to s 24B of the Maori Trust Boards Act 1955. Although the terms of the trust are set out in the

1982 Declaration Trust, the identity of the trustee (the Maori Trust Board) and the range of purposes for which income derived from the assets to which the declaration relates may be applied are set out in legislation.

[66]     The  proposed  variation  would  transfer  the  assets  subject  to  the  1982

Declaration to another trustee and would mean that the assets would no longer be administered within the framework of the Maori Trust Boards Act.   The potential difficulty identified by the Acting Solicitor-General with the proposal is that s 24B predicates that the Board’s property, the subject of the Board’s declaration, remains the Board’s property (and accordingly subject to the general provisions of the Act) but is from then on held by the Board on charitable trust.   Section 24B does not

authorise the Board to divest itself of any of its property or of its trustee function in relation to it.

[67]     The application to vary the s 24B trust can be seen as conflicting with the scheme of the Maori Trust Boards Act, particularly where the scheme seeks to transfer ownership of trust assets to another trustee.   The statutory functions of a Maori  Trust  Board  would  be  frustrated  if  a  Board  was  able  to  make  s  24B declarations in relations to all of its assets, and then seek to change the trustee and the purposes to which income could be applied by way of a scheme for variation. The report from the Acting Solicitor-General suggests that it seems unlikely that s

24B was intended to have that effect.

[68]     I accept that it is possible for a charitable trust to be established under which only the  income  arising  from  the  relevant  assets  is  to  be  held  and  applied  for charitable purposes.   Under such a trust the assets clearly remain with the settlor. However, it seems to me that the s 24B trust is not such a trust.   Firstly, the trust property is to be held for “the members of the Tuhoe Tribe and their descendants for charitable purposes in New Zealand”.  This is a more extensive definition than the definition of beneficiaries of the Board, which is set out in s 9A(2) of the Maori Trust Boards Act 1955.  Secondly, the 1982 Declaration refers to assets listed in the schedule as well as the whole of the net income from time to time derived from those assets.  Thirdly, although the charitable purposes specified in the 1982 Declaration are quite similar to those set out in s 24(2) of the Act, there are some notable omissions.

[69]     I also note that Clause 4(b) of the 1982 Declaration empowers the trustees to sell  assets  and  to  borrow  against  the  security  of  trust  property.    Clause  8  also provides that the trust may be wound-up by the beneficiaries of the trust by passing a resolution to that effect at a general meeting attended at least 50 beneficiaries.   It seems to me, therefore, that the 1982 Declaration has taken the s 24B trust outside the operation of the Maori Trust Boards Act.   It is my opinion therefore that I am able to deal with the s 24B trust, notwithstanding that it was set up by a statutory board.

[70]     Mrs Peebles and Ms Wills submit that either the 1982 Declaration or the proposed amalgamation scheme involved/s an alienation of Maori land which required/s the approval of the Maori Land Court.  I have not heard full argument on this issue which was raised for the first time in the notice of opposition filed on 22

June 2012.  I am not therefore in a position to make any ruling on it.  In any event, I do not believe that a decision is required at this stage since the applicants are only seeking approval to start the process.   Final orders are not sought at this time.   I therefore invite the applicants to discuss the issue further with the opponents of the scheme.  If necessary, the issue can be resolved later by the Court.

Tuararangaia 1 B Block

[71]     The applicants are also seeking an order rectifying the schedule to the 1982

Declaration by deleting cl 8, which refers to the Tuararangaia 1 B Block.   The second affidavit of Mr Temara notes that the Tuararangaia 1 B Block was vested in the Tuhoe-Waikaremoana Maori Trust Board pursuant to s 438 of the Maori Affairs Act 1953.  I accept that the effect of the vesting order made by the Maori Land Court was to create a trust in favour of the beneficial owners of Tuararangaia 1 B rather than in favour of the Board’s beneficiaries generally.  Section 24C of the Maori Trust Boards Act allows a Board to accept and hold property on trust for a sub-section of the Board’s beneficiaries which does not then become an asset of the Board for the general purposes of the Maori Trust Boards Act.  In such cases, the Board would not have the power to make a declaration of trust pursuant to s 24B of the Maori Trust Boards Act in respect of such property.  There is no opposition to an order deleting cl 8 of the schedule to the 1982 Declaration.

Conclusion

[72]     In terms of the principles set out above, I agree with the Acting Solicitor- General that:

(a)      The purposes of the three existing trusts are charitable.  Although in the past there has been doubt over whether trusts for the benefit of iwi groups could be charitable, New Zealand law does now recognise

trusts of that nature as capable of being charitable.  Although strictly speaking, charitable trusts do not have individual beneficiaries, charitable trusts for the benefit of iwi groups are often expressed as being for the benefit of beneficiaries.

(b)The substituted arrangements under the proposed amalgamation are also charitable.

(c)      The proposed changes appear to accord as closely as is reasonably possible in the circumstances to the terms of the original trusts.

(d)The proposed amalgamation is appropriate and will serve the interests of the intended beneficiaries and the public.

[73]   I also agree with the Acting Solicitor-General that the changes to the administrative provisions of all three trusts as a result of the amalgamation will facilitate the carrying out of the charitable objects of the trusts.

[74]     Finally, looking to the words of s 56 of the Charitable Trusts Act, I agree with the Acting Solicitor-General that the Scheme is a proper one and should carry out the desired purpose or proposal, and is not contrary to law or public policy or good morals.  I am of the view that the Scheme can be approved by this Court under Part III of the Act; that every proposed purpose is charitable within the meaning of Part III and can be carried out; and that the requirements of Part III have been complied with in respect of the said Scheme.

Orders

[75]     I make the following orders:

(a)      The commencement of the process for the approval of the charitable scheme is approved and the Court orders the holding of a meeting in accordance with these orders to consider passing a resolution, approving the scheme in the following terms, as a special resolution:

This   Special   General   Meeting   of   the   Tuhoe   Fisheries Charitable Trust held in accordance with orders of the High Court approves the Charitable Scheme dated 27 March 2012.

(b)The  approval  of  Ngai  Tuhoe  for  the  purposes  of  (a)  the  deed constituting Tuhoe Fisheries Charitable Trust and (b) charitable trust established by the Declaration of Trust made by the Tuhoe- Waikaremoana Maori Trust  Board dated 12  March  1982,  shall  be sought by the holding of a Special General Meeting of the Tuhoe Fisheries Charitable Trust to be held on 10 November 2012 at Tataiahape Marae, Waimana.

(c)      The Special General Meeting of the Tuhoe Fisheries Charitable Trust shall be advertised by advertisements in the New Zealand Herald, The Whakatane Beacon and The Daily Post on at least three occasions in the following terms:

Tuhoe Charitable Scheme – Notice of Meeting

Notice is hereby given of the holding of a single meeting of

Ngai  Tuhoe  pursuant  to  orders  of  the  High  Court  dated

14 August 2012 by way of a Special General Meeting at the Tuhoe  Fisheries  Charitable Trust  to  consider the following resolution and to vote on the resolution as a special resolution requiring a 75 percent majority:

This Special General Meeting of the Tuhoe Fisheries Charitable Trust held in accordance with orders of the High  Court  approves  the  Charitable  Scheme  dated

27 March 2012.

The process for approving the Charitable Scheme has been approved by the High Court and the next step is the passing of the  resolution  as  a  special  resolution.     If  the  Charitable

Scheme is approved by further orders of the High Court, the Tuhoe Fisheries Charitable Trust and the charitable trust constituted by the Declaration of Trust dated 12 March 1982 by the Tuhoe-Waikaremoana Maori Trust Board will be amalgamated into the Tuhoe Charitable Trust (which is part of the Tuhoe Trust group).

Copies of the Charitable Scheme may be obtained from the offices  of Tuhoe  Fisheries  Charitable Trust  and  the Tuhoe Trust located at 68 Tuhoe St, Taneatua, or by telephoning the offices on [phone] or by emailing [email protected].

(d)The Chair of the Special General Meeting of the Tuhoe Fisheries Charitable Trust shall provide an affidavit to the Court summarising the outcome of that meeting.

(e)       The schedule to the Declaration of Trust dated 12 March 1982 and

made under section 24B of the Maori Trust Boards Act 1955 (“the

1982 Declaration”) by the Tuhoe-Waikaremoana Maori Trust Board is rectified by deleting clause 8 in its entirety.

(f)      Leave is granted to the applicants to apply to the Court seeking the further and  final  orders  as  described  in  the Notice of Originating Application.

……………………………….

Woolford J