Tau - [2023] NZHC 2544

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-000534

[2023] NZHC 2544

UNDER the Trusts Act 2019

IN THE MATTER OF

an application to amend the Trust Deed for the Forestry Emission Unit Trust

BY

RAKIHIA TAHUMATĀ TAU PAUL FRANCIS MAJUREY BRONWYN DAWN KOROHEKE RAYMOND TAU HENARE ANNETTE TE IMAIMA SYKES LYNELL TUFFERY HURIA

as Trustees of the Forestry Emission Unit Trust

Applicants

Hearing: 8 September 2023 (by telephone)

Appearances:

R Brown and G Dawson for the Applicants

Judgment:

13 September 2023

JUDGMENT OF WALKER J

This judgment was delivered by me on 13 September 2023 at 10.30 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

RAKIHIA TAHUMATĀ TAU [2023] NZHC 2544 [13 September 2023]

[1] The Trustees of the Forestry Emission Unit Trust (FEUT) have filed two applications dated 30 August 2023. The first application is an interlocutory application without notice for an order seeking permission to bring the proceeding by way of Originating Application. The second application is a proposed Originating Application without notice for an order pursuant to s 125 of the Trusts Act 2019 (the Act).

Background

[2] The affidavit of Bronwyn Dawn Koroheke filed with the applications sets out the origins of the FEUT. Ms Koroheke is the Chairperson of the FEUT. When the forestry sector was brought within the New Zealand Emissions Trading Scheme (ETS), owners of “pre-1990 forest land” were made eligible to apply for an allocation of New Zealand Units (carbon credits) to compensate for the fact that they would need to surrender NZUs if their land was deforested.

[3] The Crown held a significant amount of such pre-1990 forest land. Given the arrangements between the Crown and Māori reflected in the Crown Forest Assets Act 1989, there was the potential for this land (or part of it) to be transferred to iwi/Māori in settlement of historical claims for breach of Te Tiriti o Waitangi by the Crown.

[4] The FEUT was established by the Minister for Climate Change Issues on 19 April 2011 for the purpose of acting in the interests of the future owners of this pre-1990 forest land. The Trust Deed provides:

The Trust is established for the purposes of:

(b)Applying for an allocation of New Zealand Units in respect of Eligible CFL Land in accordance with the Act;

(c)holding on trust for the Beneficiaries any allocation of New Zealand Units in respect of Eligible CFL Land; and

(d)distributing the New Zealand Units to the Beneficiaries in accordance with clause 6.

[5]Eligible CFL Land is defined in the Trust Deed.

[6] The Trustees of the FEUT are appointed by the Minister of Climate Change as the Settlor of the FEUT. The Minister has seen fit to appoint the current Trustees of the Crown Forestry Rental Trust (CFRT) as Trustees of the FEUT because of the similar functions of the two Trusts and administrative efficiencies.

[7] In essence then, the FEUT is a Trust that looks after NZUs…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Tau [2023] NZHC 2544
Case: [2023] NZHC 2544
Decision Date: 13 September 2023

CaseChat Overview and Summary

The Trustees of the Forestry Emission Unit Trust (FEUT) have applied for permission to bring a proceeding by way of Originating Application without notice, and for an order pursuant to s 125 of the Trusts Act 2019 (the Act) to amend the Trust Deed. The Trust was established to hold New Zealand Units (carbon credits) associated with eligible pre-1990 Crown forest licensed land until the ultimate ownership of that land is determined through Treaty settlement processes. The Trust Deed currently requires that the New Zealand Units be transferred to beneficiaries as soon as reasonably practicable after Eligible CFL Land has been transferred. However, due to administrative processes, there can often be a considerable delay between the settlement date and the transfer of the land. The Trustees seek to amend the Trust Deed to allow New Zealand Units to be transferred as soon as reasonably practicable following the earlier of the settlement date or the date on which Eligible CFL Land is actually transferred.

The primary legal issue is whether the court has jurisdiction to waive the requirement for unanimous consent of all beneficiaries to vary the terms of the trust under s 122 of the Act, and whether the court can make an order under s 125 of the Act to waive the requirement of consent. The applicants argue that it is not practical to seek or obtain the consent of every beneficiary within the definition in s 9 of the Act, which includes all iwi and other large natural groupings with historical claims that have not yet been settled. The court considers that it is appropriate to grant the orders sought to enable variations of the Trust Deed, and is satisfied that it is in the best interests of the persons beneficially interested now or in the future under the Trust for this Court to permit amendment in the manner set out in the application.

The court grants leave for the applicants to proceed by way of without notice Originating Application, waives the requirement for the unanimous consent of beneficiaries that ordinarily applies under s 122 of the Act to facilitate a variation to clause 6.1 of the Trust Deed for the FEUT under that section with immediate effect, and pursuant to s 124 of the Act, approves the variation of the Trust Deed proposed by the Trustees in the terms set out in schedule 1 of the Originating Application. The court finds that the proposed amendment does not reduce or remove any vested interest in the trust property, and that there is no detriment to any person with an interest in the Trust property should the orders be made. The court also finds that the support of the Minister of Climate Change has been obtained, as Settlor under the Trust Deed. The court considers that the jurisdiction to make the order sought is found in a combination of ss 122, 124 and 125 of the Act, and that should it be necessary, employing the Court’s inherent jurisdiction to order variation of the Trust Deed would be consistent with the policy and intent of the combined sections.

Orders