Short v Stowers
[2021] NZCA 697
•17 December 2021 at 11.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA245/2020 [2021] NZCA 697 |
| BETWEEN | MALCOLM SHORT, ANARU BIDOIS, UENUKU FAIRHALL, PIRIHIRA FENWICK, WALDO HOUIA AND EMILY ROTA AS TRUSTEES OF TE TUMU KAITUNA 14 TRUST |
| AND | KAREN STOWERS ON BEHALF OF THE TUKERE AND GRACE REHU WHANAU TRUST |
| Hearing: | 22 April 2021 |
Court: | Miller, Clifford and Courtney JJ |
Counsel: | L McEntegart and G J Dennett for Appellants |
Judgment: | 17 December 2021 at 11.30 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
B The appellants must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Courtney J)
Table of Contents
| Para No. | |
| Introduction | [1] |
| Factual background | [6] |
| The statutory scheme | |
| Overview | [12] |
| Change of status of Māori freehold land | [16] |
| Alienation of Māori freehold land | [20] |
| The reorganisation of titles to Māori land | [22] |
| The Māori Land Court decision | [29] |
| The Māori Appellate Court decision | [36] |
| Issue 1: does the Māori Land Court have the jurisdiction to make a status order, conditional or otherwise, in respect of part of a title in the absence of a prior/contemporaneous application for partition? | [43] |
| First point: TTWMA does not preclude a change of status in respect of part of a block of Māori freehold land | [46] |
| Second and third points: the Māori Appellate Court failed properly to consider the conditional nature of the orders being sought | [55] |
| Issue 2: did the Māori Appellate Court wrongly find that the s 137 criteria for a status order was not met? | [68] |
| Issue 3: did the Māori Appellate Court wrongly address the level of engagement with owners on the change of status proposal? | [70] |
| Summary | [73] |
| Result | [75] |
Introduction
The issue in this appeal is whether the Māori Land Court has jurisdiction to make a conditional status order affecting only part of a block of Māori freehold land, where the change of status would only be effected following the subdivision of that part of the block.
The trustees of Te Tumu Kaituna 14 Trust hold a 240.7626-hectare block of Māori freehold land near Papamoa in the Bay of Plenty.[1] Local authorities in the wider Western Bay of Plenty area are planning substantial development of the area. The trustees wish to participate in this development. To do so they would need to construct infrastructure on part of the land. That would require external funding. But restraints on alienation mean that securing funding for the development of Māori freehold land is notoriously difficult.
[1]Te Tumu Kaituna 14 Trust is an ahu whenua trust constituted under the Māori Affairs Act 1953. The block was created by amalgamation order in 1971. There are currently 4,817 owners holding 42,200 shares.
The land is presently held in a single Māori freehold title. The trustees propose to obtain consent from the Tauranga City Council (TCC) to subdivide the block into two new titles and an order from the Māori Land Court to change the status of the smaller parcel to General land. It is intended that the smaller block then be transferred to a new “development entity” beneficially owned by the current beneficial owners, which could then borrow to fund the necessary development.
The trustees applied to the Māori Land Court under Te Ture Whenua Māori Act 1993 (TTWMA) for orders changing the status of 55.48 hectares of the original block.[2] The order was sought in a form that would have made its effect conditional on the TCC’s consent to the subdivision and new titles issuing. The Māori Land Court dismissed the application.[3] It held that it did not have jurisdiction to change the status of part of a block of land. The Māori Appellate Court dismissed the trustees’ appeal in relation to the change in status.[4] Both Courts considered that the proper course was for the trustees to apply under TTWMA for partition of the block either before or contemporaneously with seeking a status order. The Māori Land Court has the exclusive jurisdiction to make partition orders in respect of Māori freehold land.[5]
[2]Te Ture Whenua Māori Act 1993, ss 135 and 137. The trustees also applied under s 244 for an order varying the terms of the trust but that aspect of the case is not relevant to the present appeal.
[3]Short v Stowers – Tumu Kaituna 14 Block (2018) 199 Waiariki MB 188 (199 WAR 188) [Māori Land Court decision].
[4]Short v Stowers – Tumu Kaituna 14 Block [2020] Māori Appellate Court MB 141 (2020 APPEAL 141) [Māori Appellate Court decision].
[5]Te Ture Whenua Māori Act, s 287(1).
The trustees appeal from the decision of the Māori Appellate Court. Counsel identified the following issues for determination:
(a)Does the Māori Land Court have jurisdiction to make an order under ss 135 and 137 of TTWMA, conditionally or otherwise, for the change of status of part of a title of Māori freehold land to General land, or is a prior/contemporaneous application for partition under pt 14 of TTWMA required?
(b)Did the Māori Appellate Court, like the Māori Land Court, find that the change of status criteria in s 137(1) of TTWMA had not been met and, if so, did it err in making such a finding?
(c)Did the Māori Appellate Court err in addressing the level of engagement by the appellants with owners on the change of status proposals when that issue was neither before it nor argued?
Factual background
None of the factual material put before the Māori Land Court was contained in the case on appeal. We draw on the decision of the Māori Land Court for the necessary background, including the reference to affidavit evidence from one of the trustees, Mr Short, outlining the reasons for the application.
Mr Short explained that about 90 of the 240.7626 hectares of the subject land is constrained from development due to wetlands, beach front and other environmental and cultural factors. The balance, approximately 151 hectares, is regarded as capable of development. When the trust was vested in the trustees in 1990 it was expected that steps would be taken to develop the land. Throughout the 1990s and early 2000s the trustees actively looked for development opportunities and formed a development company, Te Tumu Kaituna Lands Ltd, which now holds a 120-year lease over the land. However, none of the development opportunities have produced real results and the trustees consider that the development company structure and existing lease will not be appropriate for future development plans.
The local authorities in the Western Bay of Plenty, including the TCC, are planning to advance the future growth of this area through a strategy known as Te Tumu Urban Growth Area project. The subject land lies within this area and it is proposed that parts of it be zoned for roading, infrastructure and servicing corridors. Before any development could proceed, work would be needed to prepare the land for development. The trustees consider that external funding would be more readily available if the part of the land concerned were General land, rather than Māori freehold land. This view appears generally to be accepted as valid.
The Trust Deed was not before the Court but counsel advised that it confers on the trustees the power to subdivide the land. The trustees propose that the land be subdivided into two new titles. One of the new titles would comprise 55.48 hectares. The trustees wish to change the status of that block from Māori freehold land to General land. After that, the block would be transferred to a corporate entity controlled by the same owners. If the status of the land were, by that point, General land, the restrictions on alienation of Māori land under TTWMA would not apply. The new entity could then raise the necessary funding, secured against the new title, and proceed with the planned development.
A postal ballot was held to gauge support for the status change proposal. Of the 276 owners who voted, 223 were in support, 49 were opposed and four were undecided. Approval was also sought to vary the terms of the Trust Deed. 276 responses were again received, with 232 owners in favour, 38 opposed and six undecided. After the notice of hearing was sent to the owners, however, around 103 people advised the Māori Land Court that they opposed the applications.[6]
[6]The Māori Appellate Court did express unease as to the accuracy of this figure and recommended a fresh owner engagement process: Māori Appellate Court decision, above n 4, at [66].
The respondents are a particular group of owners who say that the trustees are going about things the wrong way; they say that the land should first be partitioned under pt 14 of TTWMA and then steps should be taken to advance the development proposal. Partitioning would engage the Māori Land Court’s discretion which would have to be exercised having regard to the purpose of pt 14 and the necessity of partition to facilitate the effective operation, development and utilisation of the land.[7]
The statutory scheme
Overview
[7]Te Ture Whenua Māori Act, ss 286–288.
TTWMA was the product of many years of parliamentary toil. It was first introduced in 1987 as the Māori Affairs Bill and came into effect in its present form on 1 July 1993. During its third reading the Bill was described by the then Minister of Māori Affairs as:[8]
… a historic milestone that charts a new course in Māori land management. The Bill represents a significant departure from the agenda of dispossession, alienation, and fragmentation that has characterised the trend of Māori land law in this country.
Retention of Māori land and Māori ownership is at the heart of this Bill. Retention has, however, been reconciled where necessary with the need to operate in a modern context. The Bill empowers Māori landowners with the means to decide upon and facilitate the retention, development, use, and occupation of their lands.
[8](3 March 1993) 533 NZPD 13656.
TTWMA provides a comprehensive scheme for dealing with Māori land. It is intended to address both the dangers of uncontrolled fragmentation and the desirability of utilising Māori land. However, retention of Māori land by Māori is the overarching objective. The purpose of TTWMA is set out in the Preamble, the English portion of which states:
Whereas the Treaty of Waitangi established the special relationship between the Māori people and the Crown: And whereas it is desirable that the spirit of the exchange of kawanatanga for the protection of rangatiratanga embodied in the Treaty of Waitangi be reaffirmed: And whereas it is desirable to recognise that land is a taonga tuku iho of special significance to Māori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu: And whereas it is desirable to maintain a court and to establish mechanisms to assist the Māori people to achieve the implementation of these principles.
(Emphasis added.)
Sections 2(1) and (2) expressly record Parliament’s intention that TTWMA will be interpreted in a manner that best furthers the principles set out in the Preamble and, as far as possible, implemented in a manner that facilitates and promotes the retention, use, development and control of Māori land as taonga tuku iho by Māori owners, their whānau, hapū and descendants, and that protects wāhi tapu.
The Māori Land Court continued, charged with the general objectives stated in s 17:
(1)In exercising its jurisdiction and powers under this Act, the primary objective of the court shall be to promote and assist in—
(a)the retention of Māori land and General land owned by Māori in the hands of the owners; and
(b) the effective use, management, and development, by or on behalf of the owners, of Māori land and General land owned by Māori.
(2)In applying subsection (1), the court shall seek to achieve the following further objectives:
(a)to ascertain and give effect to the wishes of the owners of any land to which the proceedings relate:
(b)to provide a means whereby the owners may be kept informed of any proposals relating to any land, and a forum in which the owners might discuss any such proposal:
(c)to determine or facilitate the settlement of disputes and other matters among the owners of any land:
(d)to protect minority interests in any land against an oppressive majority, and to protect majority interests in the land against an unreasonable minority:
(e)to ensure fairness in dealings with the owners of any land in multiple ownership:
(f)to promote practical solutions to problems arising in the use or management of any land.
Change of status of Māori freehold land
Part 6 of TTWMA concerns the status of land. For the purposes of TTWMA all land in New Zealand must be accorded one of the statuses specified. Relevantly, these include Māori freehold land and General land.[9] The status of land cannot be changed other than in accordance with TTWMA.[10]
[9]Te Ture Whenua Māori Act, s 129.
[10]Section 130.
A change in status of Māori freehold land to General land is a significant step because it takes the land beyond the jurisdiction of the Māori Land Court. Changing the status of Māori land to General land can only be undertaken in accordance with s 135:
135 Change from Māori land to General land by status order
(1)The Māori Land Court shall have jurisdiction to make, in accordance with section 136 or section 137, a status order declaring that any land shall cease to be Māori customary land or Māori freehold land and shall become General land.
(2)The court shall not make a status order under subsection (1) unless it is satisfied that the order may be made in accordance with section 136 or section 137.
(3)A status order under subsection (1) may be made conditional upon the registration of any instrument, order, or notice effecting a conveyance of the fee simple estate in the land to any person or persons specified in the order.
Section 137 sets out the prerequisites for a status order under s 135(1):
137 Power to change status of Māori land
(1)The Māori Land Court may make a status order under section 135(1) where it is satisfied that—
(a)the legal estate in fee simple in the land is vested in a Māori incorporation or the trustees of a trust constituted under Part 12; and
(b)the title to the land is registered under the Land Transfer Act 2017 or is capable of being so registered; and
(c)the alienation of the land is clearly desirable for the purpose of a rationalisation of the land base or of any commercial operation of the Māori incorporation in which or the trustees in whom the legal estate in fee simple in the land is vested; and
(d)the rationalisation referred to in paragraph (c) will involve the acquisition of other land by the Māori incorporation in which or the trustees in whom the legal estate in fee simple in the land is vested; and
(e)the quorum and voting requirements imposed by regulations made under this Act in relation to the resolution necessary to authorise the alienation referred to in paragraph (c) are impractical.
(2)Where the Māori Land Court makes, in accordance with subsection (1), a status order under section 135(1), the status order may be made conditional on the net proceeds of the alienation of the land—
(a)being applied towards—
(i) the purchase of a specified piece of land; or
(ii) the improvement of any specified piece of land owned or to be purchased by the Māori incorporation or the trustees; or
(iii) both; or
(b)being held in trust for the purposes of the acquisition of other land pursuant to a land acquisition plan approved by the court or for the purposes of the improvement of land pursuant to a land improvement plan approved by the court; or
(c) both.
A change in status is not, in itself, an alienation of land.[11] However, the rationalisation of Māori land frequently involves the contemporaneous alienation of land and acquisition of a replacement parcel. Change of status is also not uncommonly sought to enable funding to be accessed which (as a result of a mortgage) would involve an alienation. The references to alienation in s 137(1) and 137(2) reflect the fact that a change of status may be required to effect such plans.
Alienation of Māori freehold land
[11]Te Ture Whenua Māori Act, s 4.
Consistent with the objective of retaining Māori land in the hands of Māori owners, TTWMA precludes the alienation of Māori land other than in accordance with TTWMA.[12] Part 7 imposes strict controls on alienation. Anyone who seeks to alienate Māori freehold land by sale or gift must give the right of first refusal to purchasers or donees who belong to one or more of the “preferred classes of alienees”.[13]
[12]Section 146.
[13]Section 147A. “Preferred classes of alienees” is defined in s 4. They include the children and “remoter issue” of the owner and the whanaunga of the owner who are associated in accordance with tikanga Māori with the land.
Where Māori land is owned by a trust, as in this case, the land cannot be sold or gifted without the agreement of the owners of 75 per cent of the shares in the land or three-quarters of the owners where the shares are not defined.[14] Other forms of alienation, such as leases and forestry rights, are subject to slightly less onerous requirements.
The reorganisation of titles to Māori Land
[14]Section 150A(1)(a).
Fragmentation of interests in Māori land makes the cohesive management and productive use of the land difficult. Part 14 of TTWMA, “Title reconstruction and improvement”, seeks to address this issue. Section 286 provides that:
(1)The principal purpose of this Part is to facilitate the use and occupation by the owners of land owned by Māori by rationalising particular landholdings and providing access or additional or improved access to the land.
(2)Where it is satisfied that to do so would achieve the principal purpose of this Part, the court may make partition orders, amalgamation orders, and aggregation orders, grant easements, and lay out roadways in accordance with the provisions of this Part.
Section 287(1) confers on the Māori Land Court the power and exclusive jurisdiction to make orders to facilitate the reorganisation of land titles and ownership. Partition orders allow for the separation of ownership interests by the division of land into new titles;[15] amalgamation orders allow for the amalgamation of two or more titles into a single title;[16] aggregation orders allow for two or more pieces of land to be vested in common ownership without cancelling existing titles;[17] and Māori freehold land or any interest in such land can be exchanged for other Māori freehold land or general land or any other interest in such land.[18]
[15]Sections 289–298.
[16]Section 307.
[17]Section 308.
[18]Section 311(1).
The jurisdiction to make these orders is discretionary and “without limiting that discretion, the court may refuse to exercise that discretion in any case if it is not satisfied that to do so in the manner sought would achieve the principal purpose of this Part”.[19] In Brown v Māori Appellate Court, Elias CJ observed that:[20]
… although Part XIV is concerned principally with rationalisations and arrangements which facilitate the use and occupation by the owners and the effective operation, development and utilisation of the land, the overall objective of retention of land as far as possible by Māori owners and their descendants is always to be promoted and facilitated, where it is relevant.
[19]Section 287(2).
[20]Brown v Māori Appellate Court [2001] 1 NZLR 87 (HC) at [39].
The jurisdiction to partition is set out in s 289:
289 Partition orders
(1)Where the court is satisfied that it should partition any Māori freehold land in accordance with this Part, it shall make a partition order, being—
(a)an order for the partition of any land into 2 or more defined separate parcels; or
(b)an order creating or evidencing the title to any 1 or more of such defined parcels.
(2)Every partition order shall, upon registration in accordance with section 299, constitute the title to the parcel or the several parcels of land included in it, without any transfer or other instrument of assurance being required.
The modes of partition orders are specified in s 290:
290Modes of partition
(1)The court may partition any land under this Part in any 1 or more of the following ways:
(a)into parcels held by single owners in severalty:
(b)into parcels held by 2 or more owners as joint tenants:
(c)into parcels held by any number of owners as tenants in common together with owners holding as joint tenants:
(d)into parcels held by 2 or more owners as tenants in common:
(e)into parcels for which a class of persons are the beneficial owners or beneficiaries (for land vested in trustees by an order made under section 132(6)).
(2)Nothing in this Part shall prevent any such owner from retaining any interest in the residue of the land.
The discretion to partition is to be exercised in accordance with s 291:
291 Discretionary powers of court in making partitions
(1)In partitioning any land under this Part, the court may exercise its discretionary powers in accordance with the following provisions of this section:
(a) it may partition the land among the several owners in accordance, as nearly as may be, with their several shares; or
(b) in order to give effect to any agreement or arrangement made by the owners concerned, it may allot the share or any of the shares of any owner to any other owner, subject to such conditions as to payment of compensation or otherwise as may have been agreed to.
(2)Nothing in subsection (1)(a) shall limit the powers conferred on the court by section 293,[21] or to prevent the court from varying the shares of the several owners with their consent, or otherwise from varying their shares within reasonable limits if, in its opinion, a variation is necessary to enable the court to make an equitable partition.
(3)The court shall make vesting orders for the purpose of giving effect to any arrangement made for the purpose of subsection (1)(b).
(4)When any compensation is made payable by any person under subsection (1)(b), the court may, in the partition order or by a separate charging order, constitute the compensation a charge on any land or interest in land owned by the person by whom the compensation is payable.
[21]Section 293 of Te Ture Whenua Māori Act provides for the power to award additional land as compensation for improvements.
In considering whether to make one of the orders provided for in pt 14, including partition orders, the Māori Land Court is required to have regard to the opinion of the owners as a whole, the effect on the owners and the best overall use and development of the land.[22] Relevantly, the court must not make a partition order unless it is satisfied that the order “is necessary to facilitate the effective operation, development and utilisation of the land”.[23] It is significant that the powers conferred under pt 14 do not include the power to order the sale of land. Any proposed alienation of Māori land falls to be determined under pt 7. The power to partition is commonly used in conjunction with pt 14 orders to implement a tailor-made solution for land use.
The Māori Land Court decision
[22]Section 288(1).
[23]Section 288(4)(a). “Necessary” is to be construed as “reasonably necessary”, and what may be considered reasonably necessary “is closer to that which is essential than that which is simply desirable or expedient”: Brown v Māori Appellate Court, above n 20, at [51].
The application for a change of status order was ultimately advanced on the basis that part of the land would be converted to General land upon the granting of subdivision consent under the Resource Management Act 1991 (RMA) and the issue of separate titles:
The Trustees of Te Tumu Kaituna 14 Trust APPLY for the following order:
1.A status order under section 135 declaring 55.48 hectares of Māori freehold land (“the land”) situated within the Tumu Kaituna 14 Block, and located in an area shown as prospective residential use in the framework plan, together with the area for a road to be constructed as an extension to either The Boulevard or Te Okuroa Drive (for the purpose of facilitating the provision of infrastructure to service the land), cease to be Māori freehold land and become General land upon:
(a) the obtaining of a separate title to the land; and
(b)the filing of evidence of such separate title in the Māori Land Court.
ON THE GROUNDS:
2.The trustees cannot reasonably or sensibly advance development of Tumu Kaituna 14 without access to the level of funding available through the securitisation of the land as General land.
3.Development of Tumu Kaituna 14 in accordance with the plans presented by the trustees and referred to in the evidence filed by the Tauranga City Council is clearly desirable and in the best interests of the owners of Tumu Kaituna 14 as a whole.
4.The land will be transferred to a development entity under which the beneficial ownership will be held by the owners of Tumu Kaituna 14.
5.The trustees will not permit the development entity to sell or otherwise alienate the land or any part of it to, or permit the vesting of any part of it in, any party without obtaining approvals to a plan for alienating the land for residential and associated use from:
(a)first, a majority (by shares) of owners participating in a postal vote, following consultation with owners at a general meeting;
(b)thereafter, the Māori Land Court;
6.The legal freehold estate in fee simple in the Tumu Kaituna 14 Block is vested in the trustees.
7.The title to the land is capable of being registered under the Land Transfer Act 1952.
8.Given the level of financial resource currently available to the trust it is not sensible or prudent to commit funds to the surveying of the land, and the obtaining of separate title, ahead of the Court’s approval of conversion of the land to General land.
9.The alienation of the land is clearly desirable for the purpose of the planned commercial operation of Tumu Kaituna 14.
10.The quorum and voting requirements in relation to the resolutions necessary to authorise the alienation are impractical.
11.There are no cultural or historical impediments to the land becoming General land.
Judge Coxhead recorded his understanding of the amended application:[24]
(a)The Court would make orders changing part of the 240.7626 hectares by declaring 55.48 hectares of that land to be General land;
(b)The trust would then apply to the TCC essentially for a subdivision, in order that the 55.48 hectares of the title that would be declared to be General land could be taken out of the current title and put into a separate title;
(c)The proposal goes further in that, having gained subdivision consent from the TCC to subdivide the parent block in this way, Land Information New Zealand (“LINZ”) would then be asked to issue a separate title; and
(d)That title would be brought back to the Māori Land Court where final orders would be made to change the status of the new title to General land.
[24]Māori Land Court decision, above n 3, at [23].
Judge Coxhead accepted the respondents’ argument that the Māori Land Court lacked the jurisdiction to change the status of part of a Māori freehold land title. Because land is required to have a designated status, the respondents submitted it was not open to the Court to alter the status of only part of that land.[25] Underlying that argument was the assertion that the proper course was to seek partition prior to or simultaneously with change of status so that once partition had been granted and a new title produced, the change in status could be effected for the partitioned area, with the whole process kept within the jurisdiction of the Māori Land Court.[26]
[25]At [25].
[26]At [26]–[28].
One of the trustees’ arguments, which the Judge rejected, was that because s 147(1)(d) explicitly confers the power on trustees to alienate “part of” land subject to TTWMA, it followed that the reference to land in ss 135 and 137 should be interpreted as including part of land. Further, the proposed course reflected the primary objective of the Māori Land Court under TWMA of promoting and assisting in the retention of Māori land and General land owned by Māori and the effective use, management and development by or on behalf of the owners of such land.[27]
[27]At [29].
The Judge described the proposal as unique, with obvious difficulties.[28] He said:
[31] I do not currently have a separate title for the 55.48 hectares and, not until the proposed subdivision is completed, will I have a separate title. So as the application stands, I am being asked to change part of the current title, conditional on that part being separated into its own title.
[28]At [30].
The Judge held that the trustees’ proposal amounted to a partition and that TTWMA’s policy required separate title to be obtained by that means:
[32] … The Court does not have jurisdiction to make a title that has the status of General land for part of that title and the status of Māori freehold land for another part of the title.[29] As Mr Sharp noted, s 4 of the Act defines “land” as being either Māori land, General land or Crown land. Section 129 of the Act further defines those land statuses and provides that, for the purposes of the Act, all land in New Zealand shall have one of those statuses. There is no provision for land to have two different statuses.
[29]Citing Paikea – Otara 5D1 (2016) 140 Taitokerau MB 78 (140 TTK 78); Craig v Kira – Wainui 2F4D (2006) 7 Taitokerau Appellate MB 1 (7 APWH 1); and Management Committee of Mangatawa Papamoa Blocks Inc – Lot 1 DPS 65413 (2018) 156 Waikato Maniapoto MB 77 (156 WMN 77).
Nor was the Judge persuaded that the conditional nature of the order sought could overcome the jurisdictional problem:
[33] The conditions noted in the amended application do not persuade me or provide a way around the obvious difficulty of making an order to change the status for part of the title. There is no jurisdiction allowing the Court to do what is being proposed.
…
[35] I also have concerns with what has been proposed in terms of seeking a subdivision and new title of Māori freehold land outside the jurisdiction of the Māori Land Court. The Court has exclusive jurisdiction to partition Māori freehold land. I am sure that LINZ would, given the flagging process in place in their system, alert the Māori Land Court where Māori land owners seek to obtain separate title of Māori land. There have been occasions in the past when the LINZ system did not operate as effectively as it does today with regards to identifying Māori freehold land title. Some land owners were able to obtain separate titles by way of subdivisions, with LINZ issuing and registering separate titles on the basis that LINZ was not aware the land was Māori freehold land. Those owners were able to retain those titles despite non-compliance with this Court’s requirements, through the principle of indefeasibility. I would hope that this is not the situation today. If LINZ was to have land that is Māori freehold land put before it, it would be flagged and referred to the Māori Land Court in order for a partition to be considered to derive a separate title.
(Emphasis added.)
The Māori Appellate Court decision
The trustees’ argument in the Māori Appellate Court focussed on the discretion conferred by s 137 to make a change of status order and the conditional nature of the orders being sought. They submitted that the Māori Land Court had misunderstood the effect of the conditional orders being sought, under which a change of status would not be effected until a separate title was created for the 55.48 hectares. They argued that, in these circumstances, jurisdiction was not in fact an issue.[30]
[30]Māori Appellate Court decision, above n 4, at [19].
The Court opened its discussion with the following general observations about the nature of the Māori Land Court’s jurisdiction and the objectives of TTWMA:
[34] It is trite that the Māori Land Court has the jurisdiction to change the status of Māori freehold land to General land and to grant the partition of Māori freehold land. Invariably, on an application for a partition and status change, partition either precedes or is granted simultaneously with a change from Māori freehold to General land, as the authorities confirm. Given the nature of partition and change of status when considered together, and their effect of severing permanently, in most cases, the connection of the preferred class of alienees from the whenua tipuna, the Act, contrary to its predecessors, sets out important tests that must be satisfied before either application will be granted. This is because the legislation contains at its core the dual principles of retention and utilisation and includes, in the Preamble and s 2, the positive duty on the Court to interpret the Act in a manner that best facilitates those dual objectives.
(Footnote omitted.)
The Court then turned to consider the jurisdictional point. It considered that there was no mechanism under TTWMA by which the status of only part of a block of Māori freehold land could be changed, even though it accepted that some provisions in TTWMA contemplated land as including part only of a block:
[37] … [T]he provisions are plain that land can only have “one” of the six statuses. Further, we cannot find support for an alternative view in either the Land Transfer Act 2017 or even the Property Law Act 2007. While ss 339‑341 of the Property Law Act 2007 provide jurisdiction in respect of subdivisions of General and, along with s 218 of the Resource Management Act 1991, we can find no mechanism in this legislation to permit the change of status of part of a block of Māori freehold land to General land.
[38] The central question is what is meant by ‘land’ in this context, and whether it could include part of a piece of land held under one title. The definitions in the Act, the Property Law Act 2007 and the Land Transfer Act 2017 are unhelpful, even though the definition in the Land Transfer Act 1952 (which was in force when the 1993 legislation was enacted) is more extensive. In any event, we consider that it is implicit in all cases that the definition of “land” includes equitable interests – which may apply to part of a parcel of land that may be under a registered title. Any such equitable interests relevant to part of a parcel of land may be enforced in equity. More importantly, the definition of ‘land’ may include parts of a parcel or title for the purposes of ss 135-138 of the Act. …
…
[39] Even so, we are not convinced that, despite these observations, the jurisdiction exists to change part of the status of a Māori freehold land title to General land without a severance into a separate and new title by way of a partition order.
As to whether the Judge in the Māori Land Court had misunderstood the trustees’ argument, the Court said:
[43] While counsel argued that the Judge, in effect, misapprehended the intent of the application of the change of status, on the basis that it was to incorporate the proposal to create a separate title of 55 ha, we can understand why he may have taken that view. Like Judge Coxhead, we consider that the correct approach would have been for the appellants to seek a partition and change of status simultaneously … once the appropriate consultation with the owners had occurred. This would have then circumvented the need for conditional orders since, if the Court had been satisfied as to the relevant tests, a partition order to create a separate title could have been issued along with a change of status. We underscore that the decision to do so would fall squarely within the Judge’s discretion and that the threshold for both kinds of orders as set out in Part 6 and Part 14 of the Act is appropriately high.
The Māori Appellate Court did not engage, as the Māori Land Court Judge had, with the practical aspects of the proposed order.
There was only limited engagement with the other arguments advanced by the trustees on the jurisdictional issue. In particular, the trustees had argued that s 137(1)(c) created a disjunctive scheme under which the Court needed only to consider whether alienation was “clearly desirable” for “any commercial operation of the owner”.[31] Although the Court referred to the criteria in s 137(1), it did not engage with the argument and simply expressed its agreement with the Māori Land Court Judge that the criteria had not been met.[32]
[31]At [18].
[32]At [35].
The Court also referred to the trustees’ argument that the wording of s 147(1)(d), which permits alienation of part of a block, supported their interpretation of s 137 as likewise permitting a change in status of part only of a block. However, the Court considered that the argument had not been fully developed and it did not regard s 147(1)(d) as relevant.[33]
[33]At [41]–[42].
Having concluded that there was no jurisdiction to grant the status order sought the Court nevertheless went on to make the following additional comments regarding the level of consultation with the owners about the proposal:
[44] In addition, given the nature and potential effect of the proposals on the owners’ interests, we would have expected that the consultation process might have involved several hui and additional opportunities for owner engagement for those who could not attend general meetings in person. Such engagement might include online discussions by Zoom or Skype, a postal ballot, preceded by detailed information on the proposals and notification by conventional and more contemporary means including the use of websites and social media. While it is correct to observe that there are costs attached to these forms of owner engagement, given the significance of the development proposals, such costs would not be unreasonable in the overall scheme of the development project and the circumstances of this case. We also observe that social media engagement can often be undertaken at relatively low cost. The short point is that the process of owner engagement should properly take into account twenty-first century realities of both owner demographics and historically low levels of owner participation in general meetings.
Issue 1: does the Māori Land Court have the jurisdiction to make a status order, conditional or otherwise, in respect of part of a title in the absence of a prior/contemporaneous application for partition?
The focus of the appeal was on the conditional nature of the status order being sought rather than the nature of the proposed division of the land. There seems to us a question whether the proposed subdivision of the land is properly viewed as a form of partition within the exclusive jurisdiction of the Māori Land Court. Sections 301–303 of TTWMA require partitions of land (other than partitions into parcels by members of the same hapū) to comply with the provisions of the RMA and deems partitions to be subdivisions within the meaning of the RMA. Section 11(2) of the RMA provides that s 11(1) of the RMA (which precludes subdivision otherwise than in accordance with that Act) does not apply to Māori land unless TTWMA provides otherwise.
The jurisdiction to divide Māori land and the interface between TTWMA and the RMA in relation to the subdivision of land are matters of some complexity. Proper consideration of them would require us to examine the historical jurisdiction of the Native Land Court and the development of the Māori Land Court’s jurisdiction in the context of modern planning legislation.[34] We have given careful consideration to doing so. However, we were not addressed on this issue; counsel both referred to subdivision and partition interchangeably, on the basis that, ultimately, any order dividing the land was one to be made by the Māori Land Court. We have therefore concluded that we need not go further.
[34]In particular, the Municipal Corporations Acts 1920; 1933; and 1954; the Town and Country Planning Act 1953; the Māori Affairs Act 1953 (and as amended, in particular, in 1967); pt XX of the Local Government Amendment Act 1978 and the Māori Affairs Act 1953 (as amended); the Resource Management Act 1991 and the Māori Affairs Act 1953 (as amended); and Te Ture Whenua Māori Act.
We turn to consider whether it was open to the Māori Land Court to make a status order conditional upon subdivision being achieved under the RMA. For the trustees, Mr McEntegart identified three errors in the approach taken by the Māori Appellate Court.
First point: TTWMA does not preclude a change of status in respect of part of a block of Māori freehold land
Mr McEntegart submitted that the Court’s interpretation of the relevant sections was incorrect. He argued: (a) there was nothing in TTWMA to preclude a change of status order in respect of part of a block; (b) the Court’s conclusion that there was no mechanism to allow a change of status of part of a block was inconsistent with its conclusion that “the definition of ‘land’ may include parts of a parcel or title for the purposes of ss 135-138”;[35] and (c) the Court had misunderstood and therefore failed to address the trustees’ argument regarding the significance of s 147.
[35]Māori Appellate Court decision, above n 4, at [38].
We agree that TTWMA does not expressly preclude a change of status of part of a block of land. But nor does it expressly allow it and, when the relevant provisions are read in their entirety and with the purpose of TTWMA in mind, it is apparent that changing the status of part of a block is not contemplated. We agree that there is some inconsistency in the Court’s reasoning. But we consider that the error was in the conclusion that “the definition of ‘land’ may include parts of a parcel or title for the purposes of ss 135-138”, rather than in its ultimate conclusion.
The wording of s 129(1) makes it clear that land can only have one status at any given time. The Court rightly saw the meaning of “land” as critical; the trustees’ argument could only succeed if “land” were interpreted as including part of land. But there is no basis in TTWMA for concluding that ss 135 and 137 could be interpreted in this way.
We start with what is meant by land in TTWMA. For convenience we set out the definition of “land” in s 4 of the Act:
land—
(a) means—
(i)Māori land, General land, and Crown land that is on the landward side of mean high water springs; and
(ii)Māori freehold land that is on the seaward side of the mean high water springs …
…
The definition of land in TTWMA is markedly different to the broad, non‑exhaustive definitions contained in the Property Law Act 2007 and the Land Transfer Act 2017 (LTA). The Property Law Act defines land as including “all estates and interests, whether freehold or chattel, in real property”.[36] The LTA defines land as including estates and interests in land; buildings and other permanent structures on land; land covered with water; and plants, trees, and timber on or under land.[37] In comparison, TTWMA defines land exhaustively by reference to its status and relationship to the mean high water springs.
[36]Property Law Act 2007, s 4.
[37]Land Transfer Act 2017, s 5.
In practical terms, identifying a particular block of land in terms of both the definition and its status under s 129 depends on the title to the land. Legal ownership of land to which TTWMA relates (and any other legal interest created by order of the Māori Land Court) is only effected by registration of title under the LTA.[38] Although the Māori Land Court has jurisdiction to determine claims involving land under TTWMA, orders that it makes can neither effect nor affect legal title until registration. Therefore, unless otherwise specified, a reference to “land” in TTWMA must be taken as a reference to a parcel of land identifiable by its title.
[38]Te Ture Whenua Māori Act, s 122 and 123.
Section 135 refers only to “land”. Section 137(1), which sets out the circumstances in which a change of status order can be made, refers only to “land” in a way that makes clear that it is only the parcel contained in the registered title that can be the subject of such an order. The Court must be satisfied that the “legal estate in fee simple in the land is vested in … the trustees” and that “title to the land is registered under the Land Transfer Act 2017 or is capable of being so registered”.
Section 138 has no relevance to the present situation. Although it refers to “any part of the land”, the provision has narrow application, being limited to the circumstances specified in ss 132 and 134 in which change of status is permitted by vesting order rather than by status order. Those sections are confined to cases in which Māori customary land or General land is vested in Māori and declared to be Māori freehold land. Section 138 therefore does not assist in interpreting ss 135 and 137; to the contrary, the reference to parts of land in s 138 is consistent with our view of the default position and reflects an express departure from that position.
Mr McEntegart also relied on s 147 as demonstrating that alienation of Māori freehold land can be effected in respect of part of land held under one title. Section 147 appears in pt 7, which is concerned with alienation of Māori land. Whilst it is true that TTWMA contemplates alienation of part only of a title, the fact that it uses that language in relation to alienation under pt 7 but not in relation to change of status under pt 6, suggests a different intention in respect of the two parts.
Second and third points: the Māori Appellant Court failed properly to consider the conditional nature of the orders being sought
This issue is at the heart of the trustees’ case. They say that the Māori Appellate Court did not engage with the nature of the order sought, which was described in submissions as “a conditional order that the 55.48 hectares cease to be Māori freehold land and become General land upon: (a) the obtaining of separate title to the land; and (b) the filing of such evidence of separate title in the Māori Land Court”.
Mr McEntegart advanced two, overlapping arguments. First, the Māori Appellate Court’s analysis of the jurisdictional issue wrongly assumed that the orders sought would result in the same parcel of land having two different statuses at the same time. That assumption showed a misunderstanding of the order being sought; a proper analysis of the proposed orders would show that a separate title would issue for the smaller block before any status order took effect. The conditional nature of the order being sought meant that no change of status could be effected unless and until two separate titles were available. Only then would the status of the smaller parcel of land (now on a separate title) be changed. He submitted that the Court had failed to explain why this mechanism could not operate within the provisions of TTWMA. Instead it simply concluded that jurisdiction did not exist to change the status of part of a Māori freehold title without severance into new titles by way of partition.
Secondly, and allied to the first argument, Mr McEntegart submitted that the Court failed to consider the merits of the proposed order against the purpose and policies of TTWMA set out in ss 2 and 17 and failed to have regard to other cases in which conditional orders had been made. Mr McEntegert pointed to previous decisions of the Māori Land Court in which conditional partition orders had been made, particularly Management Committee of Mangatawa Papamoa Blocks Inc.[39]
[39]Management Committee of Mangatawa Papamoa Blocks Inc, above n 29.
We agree that the Māori Appellate Court did not engage with the provisions of TTWMA that the trustees say permit orders of the kind being sought. We start with s 73, which the trustees say provides the statutory basis for the form of order sought. Although it was referred to in argument as permitting a “conditional order”, s 73 actually provides that:
(1)Any order may be made subject to the performance of any condition within such period as may be specified in the order.
(2)Notwithstanding anything in section 42 or the rules of court, no such order shall be sealed while it remains subject to a condition that has not yet been fulfilled.
…
We consider the plain wording of s 73 contemplates that the statutory requirements for an order must exist for the order to be made. In other words, any conditions imposed cannot include satisfaction of the statutory pre-requisites.
It is also relevant that s 135, which confers the jurisdiction to make status orders, permits a status order to be made “conditional upon the registration of any instrument, order, or notice effecting a conveyance of the fee simple estate in the land to any person or persons specified in the order.”[40] In the absence of any general power to make an order of the kind being sought, this provision indicates that the conditional nature of a status order is limited to the conditions specified.
[40]Te Ture Whenua Māori Act, s 135(3).
In our view the jurisdiction of the Māori Land Court only permits an order to be made where the Court is satisfied (among other things) that there is a title of the land that is or is capable of being registered under the LTA. There is no basis on which to conclude that the legislature intended a status order to be made before title to the land affected was available.
We turn lastly to Management Committee of Mangatawa Papamoa Blocks Inc. Both parties saw relevance in this decision. Mr McEntegert pointed out that the conditional status orders were made on the basis of less certain facts and plans than existed in the present case. Mr Sharp, for the first respondent, saw the case as an example of the process that the trustees ought to have followed, i.e. contemporaneous applications for partition and change of status.
In Management Committee of Mangatawa Papamoa Blocks Inc, the applicant incorporation wished to develop part of its land as a retirement village, in conjunction with a development partner. It applied for partition and status orders that would see two blocks of land divided without any change in ownership and the smaller blocks subject to status orders that would (temporarily) change the status of the land to General land. The temporary change in status circumvented the prohibition on leases of Māori freehold land for longer than 52 years.[41]
[41]Sections 150B(1)(b) and 4.
At the time of the applications a scheme plan had been prepared but was not finalised. In particular, it seemed likely that the nature and location of easements relating to water storage and drainage would change. Nevertheless, the Māori Land Court made partition orders that it described as “akin to a subdivision” under which the land was divided to create new titles.[42] The partition orders were “conditional, under section 73 of Te Ture Whenua Māori Act 1993, upon completion and receipt of a ML Plan approved as to survey by Land Information New Zealand within twelve (12) months of the date of these orders.”[43]
[42]Management Committee of Mangatawa Papamoa Blocks Inc, above n 29, at [51]. A special resolution of shareholders supporting the application had been passed (though not unanimously and with low participation) and the application appears not to have been opposed.
[43]At [115(b)] and [180(b)].
Status orders were made in respect of the subject blocks that changed their status (1) from Māori freehold to General land and (2) from General land to Māori freehold land “following the registration of a long-term lease in favour of [the development partners]”. The status orders were subject to the following condition:[44]
The above orders are to lie in Court and not to be forwarded for registration with Land Information New Zealand until such time that the long-term lease to [the development partners] has been noted by the Court in accordance with s 150B(3)(b)(ii). The orders along with the approved long-term lease are to be filed in one dealing with Land Information New Zealand.
[44]At [115(e)] and [180(e)]–[180(o)].
The propriety of the orders made in Management Committee of Mangatawa Papamoa Blocks Inc is not in issue. However, it will be evident from our discussion above that we do not consider that it is open to the Māori Land Court to make an order changing the status of land without the pre-requisites set out in ss 135 and 137 having been satisfied. This means that no status order can be made until a title exists to which the order can attach. In the present case, that means that until the Māori Land Court has before it the title for the parcel in respect of which a status order is sought, no jurisdiction exists to make such an order.
Although our reasons differ from those of the Māori Appellate Court, we nevertheless conclude that the Court was correct to hold that the status orders sought could not be made in the form proposed.
Issue 2: did the Māori Appellate Court wrongly find that the s 137 criteria for a status order was not met?
In the Māori Land Court, Judge Coxhead concluded that there was no jurisdiction to make a status order and declined to consider whether he would have made such an order had jurisdiction existed.[45] As a result, the pre-requisites for a status order in s 137(1) were not considered by the Māori Land Court. The Māori Appellate Court, however, having referred to the requirements of s 137(1) commented that “[l]ike Judge Coxhead, we do not accept that in this case the criteria have been met”.[46]
[45]Māori Land Court decision, above n 3, at [36].
[46]Māori Appellate Court decision, above n 4, at [35].
This statement was an error, as the respondents appear to accept. However, they say that it made no difference to the outcome because it did not represent a finding about the s 137 criteria that was binding on the trustees. This is clearly right and, indeed, subsequent comments by the Court make it clear that it was not embarking on a consideration of whether the s 137 criteria had been met.[47]
Issue 3: did the Māori Appellate Court wrongly address the level of engagement with owners on the change of status proposal?
[47]At [36] and [42].
This issue relates to the comments made by the Māori Appellate Court at [44] of its judgment (set out above at [42]) regarding the level of consultation that is desirable in the context of a proposal to seek a change of status order. The trustees inferred criticism as to the adequacy of the hui and related communications by them with the owners relating to the change of status proposals. They said that such criticism was made in error because the adequacy of the trustees’ engagement with the owners on the change of status application was not an issue addressed by the Māori Land Court or by either of the parties during argument at the hearing before the Māori Appellate Court.
Mr Sharp, for the first respondent, took a different view of this passage; he regarded it as an obiter comment offered as guidance on the application if it were to be reframed and brought back before the Māori Land Court. In any event, he submitted that the comments made no difference to the substantive outcome of the decision.
It does appear that the issue of adequacy of consultation in relation to the change of status application was not the subject of argument before the Māori Land Court; Judge Coxhead’s discussion about the adequacy of consultation clearly fell within his consideration of the application for variation of the Trust. We accordingly agree that the comments regarding adequacy of notice and the nature of appropriate consultation were not necessary to address the jurisdictional point that the Māori Appellate Court was concerned with. However, we do not see anything particularly critical about the comments being made. To the contrary, they seem to us to have been carefully crafted as merely advisory and do not convey specific criticism of the trustees. We therefore find it unnecessary to engage further with this ground of appeal.
Summary
We agree that the Māori Land Court does not have jurisdiction to make a status order conditional on the issue of a separate title. The trustees cannot proceed with the application for a change of status until a new title exists for the 55.48‑hectare block.
We do not consider the Māori Appellate Court made any binding conclusion on the s 137 criteria. Nor did it wrongly address the level of engagement with owners on the change of status proposal.
Result
The appeal is dismissed.
The appellants must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Graeme Dennett, Rotorua for Appellants
Te Whenua Law & Consulting, Rotorua for First Respondents
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