The Proprietors of Potikirua Block Incorporation v Te Kani

[2019] NZHC 3200

IN THE HIGH COURT OF NEW ZEALAND GISBORNE REGISTRY

I TE KŌTI MATUA O AOTEAROA TŪRANGANUI-A-KIWA ROHE

CIV 2013-416-153

[2019] NZHC 3200

BETWEEN	THE PROPRIETORS OF POTIKIRUA BLOCK INCORPORATION Plaintiff
AND	RENATA TE KANI as administrator of the Estate of WAMOANA TE KANI Defendant

Hearing:

10–12 June 2019

Further information provided on 29 July 2019 and 4 December 2019

Counsel:

J P Koning and D W Ballinger for Plaintiff N Weatherhead for Defendant

Judgment:

5 December 2019

JUDGMENT OF MALLON J

Table of Contents

Introduction[1]

The background facts[4]

The Incorporation[4]

Wharekahika A15[7]

What the documents show[10]

The amalgamation[11]

Wamoana’s requests in the 1980s[15]

The 1990 AGM[41]

The 1991 Committee meetings[47]

The creation and transfer of Lot 1 of DP 8212[49]

Subsequent events[62]

What the witness say[79]

The evidence of Mr Matchitt[79]

The evidence of Ms Pook[84]

Unusual features of the documents[89]

No payment of $26,000[99]

Value of Te Kani Land[100]

THE PROPRIETORS OF POTIKIRUA BLOCK INCORPORATION v TE KANI [2019] NZHC 3200

[5 December 2019]

My assessment of the facts[102]

Māori Land Court decision[112]

The legislation[116]

Governing legislation[116]

Māori land[119]

Māori Land Court jurisdiction[120]

Partition applications[126]

Māori incorporations[134]

Resource Management Act 1991[144]

Did the transfer of the land comply with legal requirements?[146]

What are the consequences of non-compliance?[156]

Limitation Act[166]

What about the shares?[170]

Result[173]

Costs[176]

Introduction

[1]                 The plaintiff is the Proprietors of Potikirua Block Incorporation (the Incorporation). It seeks the return of a 29.7 hectare block of land (the Te Kani Land) from the registered proprietor Renata Te Kani (the defendant), the administrator of the estate of Wamoana Te Kani.

[2]                 The plaintiff contends the Te Kani Land was transferred to Wamoana without consideration, pursuant to mistakes about the statutory requirements for such a transfer, and was unlawful. It contends that Wamoana was unjustly enriched by the transfer in these circumstances and this qualifies as an exemption to Wamoana’s indefeasible title to the Te Kani Land.

[3]                 The defendant accepts the transfer did not comply with the statutory requirements. He says, however, that the transfer was effected transparently and through the appropriate agents and therefore no unconscionability arose. Further, he says the Incorporation’s claim has been brought out of time and it is now too late to grant the Incorporation any remedy.

The background facts

The Incorporation

[4]                 The Incorporation is a Māori incorporation formed under the Māori Affairs Act 1953. It owns a large area of Māori freehold land (almost 2,500 ha) (the Potikirua Block) located at Cape Runaway in the Bay of Plenty. The Potikirua Block is comprised of several blocks of land that are administered together.

[5]                 The Incorporation owns and administers the Potikirua Block for the benefit of its shareholders. There are approximately 360 shareholders. They whakapapa to one or both of Ngāti Porou and Te Whānau a Apanui iwi. Most of them belong to the Waenga whānau and are descendants of Whaka Parakau and Mere Rewiti.

[6]                 On the western part of the Potikirua Block is a sheep and cattle farm. On the eastern and southern parts is a forestry operation. There are also beehives on the land and honey production is a major source of income.

Wharekahika A15

[7]                 Wharekahika A15 is a 264 ha block of Māori freehold land which was amalgamated with the Potikirua Block and is located on the far eastern side. Prior to its amalgamation into the Potikirua Block, the majority owner of Wharekahika A15 was Tahanga (Taha) Wanoa. Taha was connected to the Waenga whānau as a whangai (adopted child) who was raised by Whaaka and Kararaina Parakau.

[8]                 Taha’s wife, Raukura Wanoa, and his daughter, Wamoana Te Kani (nee Wanoa) also had ownership interests in Wharekahika A15.1 Wamoana married Parekura (Lob) Te Kani in 1952. They had one child, Renata Te Kani.

[9]                 What later became the Te Kani Land was part of Wharekahika A15. It is flat grazing land which has been used for the production of supplement and to graze sheep

1      As at 1960, two other members of the Wanoa whānau also had interests. At the time of the amalgamation into the Potikirua Block the shareholders of  Wharekahika  A15  were  Taha (2,099 shares); Wamoana (688 shares), Raukura (30 shares); Ruahuihui Karapaina (128 shares) and Tamatami Waiariki (8 shares).

and beef. It is separated from the rest of the Potikirua Block farming operation by approximately five kms and a forestry block. It includes a homestead that has been occupied by the Wanoa whānau for generations.

What the documents show

[10]              The plaintiff called evidence at the trial from Tuihana Pook and Eddie Matchitt, who have been members of the Incorporation’s Committee of Management (the Committee) since 1984 and 1977 respectively. The events which they were seeking to recount took place more than 27 years ago.2 Understandably, they had difficulty in doing so. I start with reviewing what the documentary evidence discloses of the events and then consider Ms Pook and Mr Matchitt’s evidence in light of this.

The amalgamation

[11]              Wharekahika A15 was operated as a farm. By the mid-1960s, the owners of Wharekahika A15, led by Taha, decided that it was not economic on its own and should be amalgamated with the Potikirua land (at that time comprising Whangaparaoa 2D and 2E2B1 and Wharekahika A3 and A6). This was agreed to by the owners of the Potikirua land.

[12]              This was put before the Māori Land Court which ordered, in December 1967, that Wharekahika A15 be amalgamated with Whangaparaoa 2D and 2E2B1 and Wharekahika A3 and A6. The Court was satisfied that the land could be more conveniently or economically worked if it were held under one title. At the same time, the Incorporation was created and took title to the amalgamated land (the Potikirua Block).

[13]              As a consequence of amalgamating Wharekahika A15 into a single title vested in the Incorporation, Taha, Raukura, Wamoana and the two others with small interests in Wharekahika A15 became shareholders in the Incorporation (with shareholder

2      The memorandum of transfer by which the Te Kani land was transferred to Wamoana was signed on 6 July 1992.

voting and dividend rights).3 Taha Wanoa surrendered his lease over Wharekahika A15 and sold his stock to the Incorporation.

[14]              When Taha and Raukura died, Wamoana succeeded to their shares in the Incorporation. This made her one of the largest individual shareholders in the Incorporation.4

Wamoana’s requests in the 1980s

[15]              From about 1981, and possibly earlier, Wamoana had been asking the Committee to support the return of an area of Wharekahika A15, including the family homestead, to her immediate family. She was supported in these requests by her husband, Parekura, who was not a member of the Waenga whānau. Wamoana and Parekura lived in Gisborne but visited Wharekahika A15 from time to time.

[16]              The first recorded instance of Wamoana asking for the return of Wharekahika A15 was at the Incorporation’s annual general meeting (AGM) of 20 January 1981. The minutes record that Wamoana asked whether the whole of Wharekahika A15 could be returned to her family. The Incorporation Chairman, Mr Stainton, indicated that this type of request was new and would probably have to be considered by the Māori Land Court because there had been a legal amalgamation. The minutes record “the Committee was sympathetic to an arrangement on the homestead”. It was agreed that “a firm proposal was required to the Committee to start proper procedures”.

[17]              The Committee convened again on 29 March 1981 because it had received a follow up letter from Wamoana requesting that Wharekahika A15 be partitioned. A member of the Committee considered that granting the request would encourage more requests for partition. The Committee discussed that the land had been amalgamated at Taha’s request but Wamoana might have a “small lever” if she had objected to this. The Committee decided to obtain the Māori Land Court minutes before formulating a reply. It also discussed “questions of partition, County Subdivisional approval” and whether it could grant occupancy. It passed the following resolution:

3      Above, n 1.

4      At the time of the amalgamation there were 97 shareholders, holding a total of 118,709 shares. Taha held 5,563.17 shares, Raukura held 81.15 shares and Wamoana held 4,732.5 shares.

That the committee agree to the continued and undisturbed occupation of the Wanoa homestead and section by Wamoana Te Kani but that the committee accept no responsibility for repairs and maintenance but will fence off the agreed area.

[18]              Following this meeting, the Committee told Wamoana by letter that her request for partition was a difficult matter but would be investigated. Once the facts were clarified, the Committee would meet again “to prepare their recommendation for discussion with you, if you wish, or to present to the Land Court if you intend to lodge an application for partition”. The letter advised Wamoana that the Committee was “favourable” to the homestead site and, if there were problems with subdivision approval, it would agree to Wamoana having undisturbed occupation of the homestead and section as stated in the above resolution.

[19]              Wamoana raised the return of Wharekahika A15 at the following year’s AGM on 19 January 1982. She wanted a “yes or no answer”. The Chairman explained that the Committee did not see how it could agree to partition when Taha Wanoa himself had asked for the land to be amalgamated. Committee members’ Hikitia Tukaki and Waranga Maangi said that, in light of all the plans under way for the Incorporation, the request for “a yes or no” would be answered “no” but it was Wamoana’s right to apply to the Court for a partition. Parekura said that he and Wamoana recognised the complexities but did not want a compromise solution such as just having the use of an area around the homestead.

[20]              On 3 May 1982 Wamoana wrote to the Māori Affairs Department seeking advice about whether she could apply to have Wharekahika A15 released from the Potikirua Block. She said she wanted the whole of Wharekahika A15 returned so that her family could have an economical farming unit to manage.

[21]              She then wrote to the Incorporation Chairman on 26 July 1982. She said she thought the only avenue left was to file an application to wind up the Incorporation so that the land would revest in the owners and she could then apply for a partition of Wharekahika A15. Her grounds for an application would be that the land had reverted, was not being properly farmed or providing any income or support to shareholders, and the land could be better utilised if “the owners” (Wamoana and her family) were to farm it themselves. Wamoana said she was willing to meet with the Committee to

discuss alternatives such as the Incorporation bringing an application cancelling its Incorporation in respect of only Wharekahika A15.

[22]              The Committee held a meeting the following month, on 24 August 1982, to discuss Wamoana’s concerns regarding Wharekahika A15. The Committee discussed how a partition of Wharekahika A15 would affect Potikirua’s farming, forestry and horticulture programme. The Farm Supervisor, Mr Hall, said there was no forestry agreement on the “A15 area easy land which was planned for pasture and hay making with a haybarn erected”. The Committee agreed it would oppose any move to wind up the Incorporation in the interests of the majority of owners. The Committee recorded that it was approaching the matter on the basis of “family spirit and not on how the letter was expressed which could be answered [by] the Land Court if necessary”.

[23]The Committee resolved:

That the Incorporation did not object to Wamoana lodging an application for partition of her shares in the area previously known as Wharekahika A15 and that the Incorporation will present its records to assist the Court to come to a decision which is fair to both parties.

[24]              Wamoana and Parekura joined the meeting in the afternoon. They accepted the Committee’s resolution was favourable to their proposal. Waranga Maangi noted that it was not a final decision because it would have to be finalised through the Māori Land Court. Parekura responded that he did not wish to be in argument at the Court and asked for the Committee to lay down a proposal or assist them in lodging an application for partition. In response to this, the minutes record:

N. Perry asked if an agreed basis could be prepared between the Committee and Wamoana to present to the Court. H. TeMoana supported this and proposed that N. Perry be asked to assist.

There were no objections to this proposal.

In concluding the meeting the chairman stated that he wished it to be recognised that the Committee decision was concluded on ‘te aroha’ and he hoped an agreement fair to both parties and also other owners could be worked out to take to the Land Court.

[25]              On 27 September 1982 Wamoana followed up with a letter to the Incorporation. She recorded her understanding that the Committee had unanimously resolved that “the Incorporation consent to the partition of our family block formerly known as Wharekahika A15 from the Incorporation”. She asked for a copy of the resolution to support the application and to bring the Incorporation’s resolution into effect. She said the resolution would be brought to reality at the Te Kani family’s expense as discussed at the meeting, and they were in the process of instructing a solicitor to act for them.

[26]              Wamoana duly instructed Wattie Mackey, a Gisborne solicitor. On 29 October 1982 he wrote to the Incorporation Chairman advising of his instruction. He said he understood the Incorporation was agreeable to a partition, and that therefore a partition order could be made by consent. He sought confirmation of this. He sent a further letter on 24 November 1982. By this time he had discussed the matter with Committee member Sir Norman Perry who had proposed a meeting. He also had the minutes of the 24 August 1982 meeting. He referred to them and said:

If this means that the Incorporation is agreeable to the land formerly known as Wharekahika A15 being returned to its previous owners subject to agreement being reached on any matters that the Incorporation considers appropriate, please advise me as soon as possible.

[27]              The Incorporation’s Chairman, Mr Stainton, responded in December 1982.5 He said his response was a “confidential note of explanation and not for use in the Land Court unless we agree otherwise”. He said the Committee had agreed with the Te Kanis to work out a plan that was fair to both the Incorporation and Wamoana, and that Parekura had accepted it could be a complex matter to get all the details worked out. He said:

We need this to help and to be able to satisfy shareholders that we would be doing the right thing in all their interests to consent to a partition of shares, that the purpose is to settle one of the family etc, etc.

[28]              Mr Stainton proposed a meeting and that he would arrange a paper from the Farm Supervisor as a basis for the meeting. The plan was:

5      The record of this response is signed  “Chairman”.  Other records from this period show that   Mr Stainton remained the Chairman at this time.

… to make a realistic agreement together in light of the original circumstances, the changes in shares and valuations and how to deal with any binding agreements or contracts, in the forestry for example, which may be on part of the area previously known as Wharekahika A15.

[29]              On 17 January 1983 the Incorporation Committee met to discuss various matters, including the proposed partition, prior to the AGM set for the next day. The Committee noted that any partition or lease may require Town and County planning approval and result in the loss of coastal reserve. Wamoana and Parekura attended part of the meeting. Parekura made it clear that the Te Kanis wanted a partition of all of the former Wharekahika A15 block. Mr Stainton said the earlier resolution had been “not to object to a partition in that block but now the request was for all the block, which was a difficult matter and had many problems from such partition or subdivision, valuations and forestry plans” (emphasis in original). Committee members supported the Chairman’s remarks and “asked that the case go ahead on the goodwill basis of the resolution agreed at the Opotiki meeting”.6 Parekura said this was not acceptable as it did not cover all of the A15 land. He said that the Te Kanis would have to apply to the Court for the Incorporation to be wound up.

[30]              At the Incorporation’s AGM the following day, Mr Stainton read out and confirmed the Committee’s resolution made at the 24 August 1982 meeting that the Incorporation did not object to Wamoana lodging a partition application and that it would present its records to assist the Court to come to a decision which was fair to all parties. He said the Committee had not been able to reach an agreement and “there were problems about a partition of all of A15 as demanded” but the Committee’s resolution “could be a basis to find a solution”. Parekura was concerned their partition request had been declined by the Incorporation and raised the fact that 77 acres of flat land of Wharekahika A15 was not part of the forestry lease. The Chairman said it was not the case that the request had been declined and the Committee’s resolution still stood.

[31]              There was then a series of correspondence between the Incorporation, its solicitors (Potts & Hodgson), Wamoana’s solicitor (Mr Mackey) and the forestry

6 The resolution on 24 August 1982 (at [23] above).

consultant (P F Olsen & Co Ltd). In correspondence in February and March 1983, the focus was on whether there would be issues with a forestry lease:

(a)Mr Mackey wrote to the Incorporation Chairman saying his understanding was that the AGM had agreed “to release my client’s land back to her or a part thereof” and considered that consent from a lessee (Caxton Paper Mills Ltd (“Caxton”)) would also be necessary.

(b)In response, the Chairman explained to Mr Mackey that a partition of all of the Wharekahika A15 land would be difficult when “precedents, valuations and forestry agreements would be involved”. He considered that if Wamoana agreed to accept a release of part of the Wharekahika A15 land, and the Court made such an order, then he could not see that Caxton would be able to withhold consent.

(c)The forestry consultant advised that the entire Potikirua Block was leased and thought that partition would require consent from the forestry lessee and the Incorporation.

(d)In forwarding the forestry consultant’s response  to  the  chairman,  Mr Mackey stated that “Potikirua is now classified as European Land and the Māori Land Court cannot order Caxtons to do anything”.7

[32]              The correspondence continued over the following months with the focus on whether a part of Wharekahika A15 might be released:

(a)In May 1983 the Chairman confirmed that all of Potikirua was under lease but suggested that, as the part of Wharekahika A15 between the main road (State Highway 35) and the Oweka River was at the time excluded from the planting programme, it might be easier to obtain Caxton’s agreement to a release of this part. He said this would still require the support of the Committee and that of the Incorporation in a general meeting.

7      As discussed later, this is wrong.

(b)Mr Mackey’s reply in June 1983 expressed concern that the Caxton lease had been entered into after Wamoana had been seeking the return of the Wharekahika A15 block and had been led to believe the Committee would cooperate with this. Mr Mackey also expressed this view to the forestry consultant, and said Wamoana still wished to partition out Wharekahika A15 or, if that was not possible, “at the very least that part from the roadway up to the skyline, which apparently is good farming land”.

(c)The forestry consultant response to Mr Mackey advised that its programme did not include Wharekahika A15 for 1983/84; the area referred to in Mr Mackey’s letter was included in the forestry management area but was not an attractive area for pastoral farming and it would not be viewed favourably by Waiapu County as an adequate subdivision unit; but “the area of A15 east of the road to the Oweka Stream (29.7443 hectares)” was excluded from forest plans and was to be retained for farming by Potikirua. The forestry consultant also wrote to the Chairman the same day suggesting that Wamoana might sublease the area from the Incorporation.

[33]              By late June 1983 the Incorporation had instructed solicitors (Mr Peterson of Potts & Hodgson) on Wamoana’s claim.  In July 1983 Potts  & Hodgson wrote to  Mr Mackey reiterating the Incorporation’s willingness to find a satisfactory arrangement and that, because of the lease, the whole of Wharekahika A15 could not be partitioned. They proposed an occupation arrangement on some of the land not being used for forestry. In September 1983 Mr Mackey responded that Wamoana would like to have partitioned or subdivided into her sole name that part of Wharekahika A15 which was not included in the Caxton forestry plan. By late October 1983 the Incorporation understood that Caxton had agreed that this area would be released from the lease. Potts & Hodgson advised Mr Mackey of this and said it would cooperate with obtaining a partition of this area.

[34]              Mr Mackey then wrote to the forestry consultant in November 1983 with his view that:

… it is not necessary however to proceed with a Partition Application to the Māori Land Court. The piece of land which my clients wish to subdivide from the Potikirua Block can simply be subdivided in the normal manner if your clients agree and the Incorporation agrees.

[35]              The forestry consultant responded that they had not agreed to allow a partition and surrender from the lease. Rather, they had agreed to Wamoana using that part of the land not required for forestry if the Incorporation consented.

[36]              The correspondence between Mr Mackey, Potts & Hodgson and the forestry consultant continued into 1984. Wamoana still wished to have a partition of the land “east of State Highway 35 not set aside for forestry and obtain freehold title to that land”. There was a difference in view between Potts & Hodgson and Mr Mackey about whether a partition, which resulted in a subdivision of the Potikirua block, would entail the automatic forfeiture of foreshore reserve. Potts & Hodgson considered that it would and considered the economic effect of this on the Incorporation’s projects would need to be taken into account in valuations. The forestry consultant was concerned that changes to the foreshore reserve, as a result of a subdivision, would encroach on farm land that was subject to its lease.

[37]              At the Incorporation’s AGM on 20 December 1984 there was discussion about taking the farming area of Wharekahika A15 out of the forestry lease. The meeting thought that the validity of the forestry lease was questionable and resolved to have its validity investigated by the Incorporation’s solicitors.

[38]              At a Committee meeting held at around the same time the Committee approved in principle Wamoana’s proposal relating to a 29.7 ha area, subject to the Incorporation being comfortable that it would retain the foreshore reserve and receiving all relevant data, including the proposed share adjustment and a plan of the area to be surveyed, to enable consultation and negotiation before it was confirmed by the Court.

[39]              On 28 January 1985 the Committee resolved to put the matter of Wamoana’s partition on hold pending the outcome of the investigation into the forestry lease. On 31 May 1985 the Committee resolved that Parekura and Wamoana would have a lease of the “Kahika area commonly known as Potaka” for 14 years pending the outcome of the partition that Wamoana was seeking. It is unclear whether this lease was ever

formalised. It is also unclear what the outcome of the investigation into the validity of the forestry lease was.

[40]No partition application was ever made in the 1980s.

The 1990 AGM

[41]              According to the documentation, the next development was a Committee meeting on or about 7 November 1990. By now, Eddie Matchitt was the Chairman and Harry Satchell was the Secretary. The Committee resolved to seek agreement from the owners at the next AGM for partition of Wharekahika A15 from the main Highway to Oweka River, including the house, to Wamoana. Failing that, this area could be leased to Wamoana at a reasonable rental and, failing that, the house and section was to remain with Wamoana. Potts & Hodgson then proposed some wording for these resolutions.

[42]              Public notice was given of the AGM to take place on 29 December 1990. The notice advised that the special resolution for consideration at the AGM was:

Portion of Wharekahika A15 part of now known as Potikirua Inc from State Highway 35 Potaka to Oweka River. MAF Act 1953 Sect.278(5) and 289.

[43]              The minutes of the AGM on 29 December 1990 record that the motion for discussion was “partition of Wharekahika A15 Potikirua to Wamoana Te Kani from state highway 35 Potaka to Oweka river approx. area of 70 acres”.8

[44]              Mr Matchitt, as the Chairman, commented that the matter had been with the Incorporation for some time, and the Committee had resolved at its last meeting that the matter be put to the shareholders. He said the area did not include the house, an area around the house, and the accessway from the main highway as they already belonged to Wamoana and her family.

8      This appears to be the same 29.7 ha under discussion in the 1980s.

[45]              The discussion on the resolution covered “forestry approval”, “county approval”, “owners approval”, “Māori Land Court approval” and “would other shareholders want to partition”.9

[46]              The motion was put to a secret ballot. Scrutineers were appointed. The motion was defeated 19 votes against and 10 votes in favour.

The 1991 Committee meetings

[47]              The Committee again discussed the option of a lease at its 12 April 1991 meeting. The Committee resolved to offer to lease the area between State Highway 35 and the Oweka River to Wamoana rent free for five years and then for $2,000-$3,000 per annum thereafter. The lease would not include the house and the area around the house because that belonged to Wamoana and her family. Again, it seems that lease was never formalised.

[48]              A record of a meeting between the Committee and Wamoana and Parekura on 12 September 1991 stated:10

After discussion the committee agreed to Wamoana applying for a partition for part of Wharekahika A15 between State Highway 35 to Oweka River, an area of approximately 25 hectares. This partition to be carried out as soon as possible.

Moved by                  Harry Satchell

Seconded by              Eddie Matchitt All committee in favour of the motion

The creation and transfer of Lot 1 of DP 8212

[49]              As matters transpired, no partition application was ever filed in the Māori Land Court. Instead, a number of steps were taken in 1991 to 1993 that led to the subdivision of the Potikirua Block into three titles and the transfer of one of those titles to Wamoana. That title comprises 29.744 ha and is between State Highway 35 and the Oweka stream and is to the east of the rest of the former Wharekahika A15 block.

9      The minutes record these as topics and do not state the content of the discussion on these topics.

10     The minutes do not record the contents of the “discussion” that might have shed light on what the Committee meant.

[50]              Wamoana and Parekura engaged Campbell Taylor, of Grant & Cooke registered surveyors. Mr Taylor  wrote to the Principal Assistant  Land Registrar  on 3 October 1991:

(a)advising that the Incorporation have “agreed to subdivide an area of 31.1987 hectares” out of the Potikirua Block and sell it to one of the shareholders in the Incorporation, Wamoana, who would purchase the land by reducing her shareholding in the Incorporation;11

(b)querying whether he was correct in his interpretation of s 11 of the Resource Management Act 1991 that Māori land was exempt and so did not need a resource consent;

(c)stating that “even though Incorporation Land is Maori Freehold Land the Maori Land Court have no jurisdiction”; and

(d)seeking confirmation that he could lodge a plan for deposit without a Council consent on the plan.

[51]The Principal Assistant Land Registrar replied on 29 October 1991:

(a)He agreed a resource consent was not required. His view was that s 11 of the Resource Management Act did not apply to Māori land unless the Māori Affairs Act 1953 provided otherwise. He said the Māori Affairs Act 1953 made provision for partition orders, but not for “subdivisions of land” as defined by the Resource Management Act. Subdivisions of Māori land were therefore exempt from s 11.

(b)He said that, because the land was held by a Māori incorporation under Part   IV   Māori  Affairs  Amendment  Act   1967,   dealings   by   the

11 The plaintiff submits this was a misinterpretation of the Committee’s September 1991 resolution. The Committee had agreed to “Wamoana applying for a partition”. It had not agreed to subdivision without Māori Land Court approval.

Incorporation of the land “would only requiring noting in the Māori Land Court”.12

(c)He would require the registration of an order from the Māori Land Court, under s 30 of the Māori Affairs Act 1953, determining that the land is Māori freehold land.

[52]              The order from the Māori Land Court determining that the Potikirua Block was Māori freehold land was given on 21 November 1991. The Judge noted in the minute book that the order was sought at the insistence of the Principal Assistant Land Registrar at Gisborne who required it as a prerequisite to accepting a subdivision plan for deposit.

[53]              Mr Taylor lodged the plan on 18 December 1991. The plan showed an area of 29.744 ha between State Highway 35 and the Oweka stream (Lot 1) and a smaller triangular shaped area of 1.454 ha in the north corner separated from Lot 1 by a legal road (Lot 2), comprising a total 31.198 ha of land. The plan was endorsed as approved by the  Incorporation  with  its  seal  affixed  and  the  signatures  of  Mr Matchitt,  Mr Satchell and Tuihana Pook (by now a member of the Committee). The plan recorded that it was “exempt pursuant to Section 11(2) of the Resource Management Act 1991”.

[54]              The plan was lodged by Mr Taylor along with the 21 November 1991 Māori Land Court determination and a copy of the 12 September 1991 Committee resolution, which by this stage  had  the  Incorporation’s  seal  affixed  and  Mr Satchell  and  Mr Matchitt’s signatures.

[55]              The Chief Surveyor approved the plan as to survey on 13 February 1992. The Assistant Land Registrar advised Burnard Bull (the solicitors who were acting for

12 The plaintiff submits this was incorrect, because a dealing by way of subdivision and transfer of land needed to be processed by way of a partition application, which was a considerably more involved process than a mere “noting” in the Court’s records. The “noting” the Principal Assistant Land Registrar appears to be referring to is that required under s 233(1) of the Māori Affairs Act 1953. As discussed later, he is correct that this is a noting requirement.

Wamoana at this time) of this, and that the plan could be deposited when orders for new titles were registered.13

[56]              Burnard Bull (Mr Isaac) then wrote to Potts & Hodgson on 3 April 1992 advising that they were acting for Wamoana on the transfer of 29.744 ha of Wharekahika A15 and requesting that it produce the Potikirua title (CT 4C/224). The letter enclosed a copy of the Committee’s resolution dated 12 September 1991 as signed by Mr Matchitt and Mr Satchell.

[57]              In accordance with that request, by letter dated 29 April 1992 to the Registrar of the Land Transfer Office, Potts & Hodgson (Mr Peterson) produced CT 4C/224. In its letter to Burnard Bull on 8 May 1992, Potts & Hodgson (Ms Riddell, a law clerk, supervised by Mr Peterson) acknowledged it had done so to “enable you to register a transfer from the Proprietors of Potikirua to Wamoana Te Kani”.

[58]              The production of the Potikirua title (CT 4C/224), enabled the District Land Registrar to cancel this title and three new titles were issued, including CT 5C/1337 (Lot 1 of DP 8212) which is the 29.744 ha block that is the focus of this proceeding.

[59]              Steps were then taken to have the new 29.744 ha block, CT 5C/1337, transferred from the Incorporation to Wamoana. These steps included the preparation of a memorandum of transfer between the Incorporation as the transferor and Wamoana as transferee. The land was described as having an area of 29.744 ha and being Lot 1 on Deposited Plan 8212 but the CT number was not included. The transfer was stated as being pursuant to “an oral agreement in consideration of $26,000 … paid to the Transferor by Wamoana Te Kani … the receipt of which sum the Transferor hereby acknowledges …”. The Incorporation’s seal was affixed in the presence of Mr Matchitt and Mr Satchell who had initially signed the memorandum on 19 May 1992 and again on 6 July 1992.

13     Counsel recall that Mr Mackey left Gisborne at some point and this accounts for the change in Wamoana’s legal advisors.

[60]              At some stage, it is unclear when, some details were added to the memorandum of transfer: namely, the CT number and that the transfer was subject to Compensation Certificate No: 174701.1.

[61]The following steps also occurred:

(a)13 July 1992: Wamoana signed a statutory declaration under the Land Settlement Promotion and Land Acquisition Act 1952 for the transfer of the 29.744 ha from the Incorporation which, amongst other things, declared she was the purchaser and that she had entered the transaction solely on her own behalf.

(b)4 September 1992: the Assistant Land Registrar advised Burnard Bull that registration of the memorandum of transfer could not be effected until the provisions of the Māori Affairs Act 1953 relating to Māori land were complied with and the transfer was made subject to a lease.

(c)3 February 1993: in response to the Assistant Land Registrar’s requisition, the Māori Land Court entered the memorandum of transfer in the Potikirua Block memorial schedule, recording a transfer of 29.774 ha for consideration of $26,000 to Wamoana. At the same time, the Court Registrar endorsed the memorandum of transfer pursuant to s 233 of the 1953 Act.

(d)16 February 1993: Burnard Bull (Mr Isaac) wrote to Potts & Hodgson (Ms Riddell) requesting a copy of CT 5C/1337 to enable registration of the transfer. The letter stated it was for “a transfer of the land from Potikirua Incorporation” and it enclosed a copy of the memorandum of transfer. Potts & Hodgson (Ms Riddell) provided the copy of the certificate of title on 22 February 1993.

(e)5 March 1993: the memorandum of transfer was presented to the District Land Registrar in Gisborne and registered against CT 5C/1337.

Wamoana then became the registered proprietor of Lot 1 of DP 8212.14 The status of the land changed from Māori freehold land to general land because the title was transferred otherwise than by order of the Court and the instrument of transfer did not record that the land remained Māori freehold land.

Subsequent events

[62]              There was no discussion of the transfer of the land to Wamoana (or any application for partition of the land) at the Incorporation AGMs in 1993, 1994, 1995, or 1997. The minutes of the 1996 and 1998 AGMs are not before me.15

[63]              Wamoana died on 4 March 1999 at the age of 78. She had made a will, through Burnard Bull, nine months earlier (on 18 June 1998) in which, amongst other bequests, she bequeathed:

(a)“My shares in Potikirua Maori Land Incorporation” to Renata Te Kani.

(b)“My Māori Land interests in Wharekahika A15 Block” to her husband for life and then to her son and grandsons as tenants in common in equal shares with the wish “that my Māori Land interests not be sold but be used for a Papakainga”.

[64]              Probate on the will was granted on 11 May 1999. On 21 June 1999 Burnard Bull wrote to Mr Satchell, as the Incorporation Secretary, enclosing the certified probate and the will and requesting that the Incorporation arrange succession to Renata Te Kani. Mr Satchell made a handwritten note on the letter as follows:

Received 24 June 99. For Next Committee meeting July 99.

From Committee. Matters to be addressed. (Re Land Tenure. Re Vesting Back To Wamoana Lob. Certificate of Shares at Costs for adjustment $25000. Based on Land Shares. Visit to [Parekura] Lob June 1999.  Ed and myself. To be sorted. No succession until approving.

14 By this time the memorandum of transfer now included the CT number and recorded that it was “Subject to Compensation Certificate No: 174701.1. It is likely these details were added sometime between 3 February 1993 and 5 March 1993. See the discussion at [96].

15 Counsel advise that diligent searches were made for these records as well as records of the Committee meetings in these years. They could not be located and appear to have been lost.

[65]              Similarly, the minutes of an Incorporation Committee meeting on 21 July 1999 (attended by Mr Matchitt, Mr Satchell and Ms Pook, amongst others) recorded:

Lob Te Kani was to attend meeting with the committee over Wamoana shares and land transfer.

Estate of Wamoana Te Kani shares, these shares are not to be adjusted until all issues are dealt with concernin[g] value for land this matter is out standing.  E Matchitt Moved that no share adjustment until all issues are dealt with. Second T Pook Carried.

[66]              There was no mention of the land transfer or the shares at the Incorporation AGM on 27 November 1999. It was discussed at the Committee meeting on 2 April 2000 in similar terms as at the July meeting, the minutes recording:

Wamoana Shares re return of Potaka block Lob was to attend this meeting to disscus the Valuation as at that time was $25000.00 and shares to be a[d]justed to accommodate the return of the block, Ed and Harry visisted Lob to sort this matter out from that time, share certificate was issued to Lob which he has with the lawyers, Harry contacted Potts an Hodgson Lawyers Opotiki and was notified that lawyer has gone out of business and will try to return the documents.

[67]              The minutes of the Committee meeting on 13 June 2000 simply recorded that “Wamoana shares re value for land to shares” was a matter arising from the previous meeting minutes. There is no record of any further discussion about this matter at that meeting.

[68]              Meanwhile Parekura, as Wamoana’s executor, applied to the Māori Land Court for succession orders. On 30 June 2000 the Court ordered that Wamoana’s interest in the Potikirua Incorporation consisting of 9,313.74 shares was vested in Renata Te Kani.16 The Māori Land Court provided a copy of this order to the Incorporation secretary by letter dated 12 October 2000. In handwriting on the letter Mr Satchell made the following note:

Management Committee Approval. Executive of Will. 18/12/02. 7th November 2009

Re Lob in Breach of Succession Voted to Management Committee 7th

November 2009

16     Succession orders were also made for other land in which Wamoana had interests in accordance with the bequests in her will.

? Could Now Be in dispute. ??

[69]              The reference to 7 November 2009 indicates that Mr Satchell wrote the note at least nine years after receiving the letter from the Māori Land Court.

[70]              I do not have before me any record of a Committee meeting on 7 November 2009.   It  appears, however, that Parekura had been voted on to the Committee on    7 November 2009, and Mr Satchell was noting on the 12 October 2000 letter that this appointment was now in dispute because Parekura no longer held shares in Potikirua following the succession order. Consistent with this, a letter on behalf of the Committee members dated 12 January 2010 advised Parekura that his nomination to the Committee had been overturned on this basis.

[71]The Committee’s letter of 12 January 2010 to Parekura went on to say:17

Matekino [a member of the Committee] went to the lawyers who have submitted a letter confirming that succession from Wamoana to Renata should have been completed which at that time was not due to that Potikirua Inc was to return the lands to Wamoana as was discussed at the 1996 AGM and that title was to be produced and shares to the value of $25000 was to be amended at that time.

[72]              The letter went on to say that the land had been under Parekura’s management for the past 12 years and the Committee would now “exercise its powers” to have the land back under the management of the Incorporation. This would include the house site, but the Incorporation would submit an occupation order, in favour of Renata for her family’s use, to the Māori Land Court. The letter also advised that all Wamoana’s shares (9313.74 shares) had been transferred to Renata in accordance with the Māori Land Court succession order.

[73]              At this time Mr Isaac, who had been the partner acting for Wamoana when the transfer of the land to Wamoana  took place, was long gone from  Burnard Bull.18   Mr Hall, of Burnard Bull, responded to this letter on 19 February 2010. He sought a copy of the Incorporation’s Rules regarding whether members of the Committee were required to be current shareholders. He also said the Incorporation had no power to

17     As noted earlier, the minutes of the 1996 AGM are not before me.

18     Mr Isaac was appointed to the Māori Land Court in 1994 and is now the Chief Judge of that Court having been appointed to that position in 2009.

reacquire the land as it had been transferred to Wamoana. He provided a copy of the 6 July 1992 Memorandum of Transfer and a copy of the 5C/1337 title.

[74]Mr Peterson of Potts & Hodgson replied on 26 February 2010 saying:

I have been instructed by Potikirua Incorporation in relation to the transfer of land from Potikirua to Wamoana without the consideration of surrender for shares. I have been requested to investigate how this eventuated as none of the committee members at the time remember the matter being put to a resolution of the incorporation. Can you advise what process was taken and how the land was transferred without settlement being completed. Is there correspondence which is available for disclosure. We request a copy of the settlement details for the time that Parekura Te Kani or Wamoana Te Kani took the land by transfer.

[75]              This letter suggests Mr Peterson’s concern, on behalf of his client, was that the transfer had occurred without the consideration having been paid. It will be recalled that Mr Peterson was the supervising partner of Ms Riddell when the transfer took place. Burnard Bull (Mr Hall) replied on 1 March 2010 saying they no longer held their 1992 file to check if the funds were paid but they could “only assume that funds were paid because of your client Incorporation having acknowledged receipt of those funds by signing the transfer”.

[76]              After this the Incorporation asked Walter Rika to assist in sorting the matter out. He wrote to Burnard Bull on 7 May 2010 saying:

The Committee’s understanding of the transaction was that Parekura’s wife Wamoana was to transfer to Potikirua Inc her shareholding in the Inc in exchange for the land that she sought from Potikirua. And that the transaction did not involve a payment of $26,000.00 for the land which payment has never been received by Potikirua. There are also other aspects of the transaction that are unclear to the Incorporation Committee as there appears to be no reference or notation in the Incorporation minute book about the transaction and the Committee were not aware of the Transfer document that has been produced until now – some eighteen years later.

[77]              On 26 July 2010 Mr Rika advised Mr Matchitt that he had met with Parekura who did not have any details of what his wife paid to the Incorporation at the time that the transaction was done, and that all of his wife’s records have long since been destroyed and their solicitors did not have records either.

[78]              At a Committee meeting on 1 August 2010 the Committee resolved to place a caveat on the land  and  to hold Renata’s shares in the  Incorporation as security.   Mr Matchitt informed Parekura that the shares were being held as security in a letter dated 16 August 2010. He also referred to the 1990 AGM resolution having gone against Wamoana getting the land, although Mr Matchitt was personally in favour of it. He said it was left to Parekura and Wamoana to progress whether the block could be taken out of the Caxton lease and without foreshore reserve being taken from Potikirua. He said “[t]here was no money amount or exchange confirmed. No owners or shareholders resolution allowed for this”. He advised that the Incorporation would “refer this matter to the Māori Land Court for hearing as we allege that this whole transaction is fraudulent”.

What the witness say

The evidence of Mr Matchitt

[79]              Mr Matchitt has been on the Committee since 1977 and is its longest serving member. He is 78 years old.

[80]              He gave evidence about the 1990 AGM. He said the Committee decided to put Wamoana’s request to that meeting for a discussion and a vote because the issue had been going on for some time. He said Wamoana and Parekura were to apply for a partition but had not done so and kept coming to the Committee meetings about this. He said the shareholders who opposed the resolution at the AGM did so because they wanted the land kept together for the shared benefit of the mokopuna of the hapū that had contributed their lands. The concern was that if one hapū withdrew their land there would be no reason to resist requests of other hapū to do the same.

[81]              It was his view that the AGM firmly resolved that Wamoana would not get the shareholders’ nor the Incorporation’s agreement for a partition of Wharekahika A15 and the Committee could not act contrary to their wishes. However, Wamoana still wanted Wharekahika A15 returned. The lease proposal discussed at the April 1991 Committee meeting was viewed by the Committee as consistent with the spirit of the 1990 AGM that the Potikirua Block not be split up. The 12 September 1991 resolution

was a fair compromise. It allowed Wamoana to apply for a partition. The Committee would stay neutral and shareholders would be able oppose the partition if they wished.

[82]              Mr Matchitt said the conveyancing and registration documents that led to the subdivision and transfer of the land to Wamoana were arranged without the Incorporation’s or the Committee’s knowledge or agreement. He did not recall any discussion in the early 1990s about a price for the land and no money was paid by Wamoana and Parekura. He acknowledged his signature appeared on the survey plan and the earlier versions of the memorandum of transfer (those prior to the addition of the CT number and that the transfer was subject to the Compensation Certificate). He did not recall signing these documents but believed he must have thought these documents were part of a partition application. He believed he would not have understood the legal consequences of the documents were a subdivision and the Māori freehold land becoming general land, and thereby being lost to the Incorporation’s shareholders and Māori generally. He did not meet with Mr Isaac of Burnard Bull, nor with Potts & Hodgson (the Incorporation’s solicitors), nor the surveyor about this. He was positive the Incorporation’s solicitors did not provide advice about the subdivision. He did not know why Lot 2 was created as part of the subdivision and why that was retained by the Incorporation.

[83]              Mr Matchitt said that after 1991 they did not hear from Wamoana and Parekura again and the transfer only came to light in 2009. Mr Matchitt said he was shocked to learn that the land had been transferred.

The evidence of Ms Pook

[84]              Ms Pook has been a member of the Committee since 1984. She agreed with Mr Matchitt that the concern with Wamoana’s request in the 1980s was that if a partition was permitted for one shareholder, it would be much harder as a matter of principle to oppose anyone else who wanted to partition off another piece. In the early 1990s the Committee considered whether it would support a partition of just a small section of Wharekahika A15 but the resolution put at the AGM was defeated. Ms Pook also  agreed  with  Mr  Matchitt  as  to  what  the  Committee  envisaged  with  its   12 September 1991 resolution.

[85]              Ms Pook said that after the 12 September 1991 the issue seemed to mostly die away. The Te Kanis continued to use the house from time to time and Parekura grazed sheep and cows on the surrounding land. They did not pay rent but that was the way things had been since 1986 or 1987. Ms Pook was unaware the 29 ha piece had been subdivided and become general land. She said neither Wamoana or Parekura mentioned it at any time.

[86]              Ms Pook did not recall signing the survey plan, nor seeing the memorandum of transfer. Nor did she meet with surveyors or lawyers about it, nor receive any legal advice about the survey plan she signed. She believed it must have been presented to her by Wamoana and Parekura as part of the necessary steps for a partition application. She said Mr Satchell held the Incorporation’s seal. She said the fact that there were three signatures rather than the signatures of all seven Committee members indicated they had signed the plan outside of a Committee meeting.

[87]              She noted that the minutes of the July 1999 and April 2000 meetings referred to a discussion about Wamoana’s family providing value for the land or having or shareholding adjusted. She believed the Committee were adamant these options were subject to Wamoana being granted a partition order from the Māori Land Court. She was very surprised to learn of the transfer. Ms Pook’s efforts to resolve the matter through Mr Rika and directly with Renata were unsuccessful. The Incorporation transferred Renata’s shares into its name and has accumulated dividends on those shares since 2015 as security pending the resolution of this matter.

[88]              Ms Pook accepted that Potts & Hodgson were called upon quite frequently by the Incorporation for legal advice and that Mr Peterson from that firm was in attendance at the Committee meeting on 24 January 1984. She did not remember having any meeting with Mr Peterson where he gave the Incorporation advice about Wamoana’s application. Ms Pook did not recall why the small triangular piece of land (Lot 2) was created and retained by the Incorporation. She did not remember how she came to sign the survey plan. Nor did she recall any discussion with anyone about this.

Unusual features of the documents

[89]              Terry Nowland, a barrister and solicitor since 1968 with particular experience in property law, was called by the Incorporation to give expert opinion evidence about the conveyancing and registration documents by which the transfer of the land to Wamoana occurred.

[90]              He explained that memoranda of transfer were a feature of paper-based conveyancing practice before the Land Online system. A memorandum of transfer was the instrument transferring title to the land and recorded the consideration and date of the agreement. The District Land Registry office held the original certificate of title and the registered proprietor of the land or its mortgagee held the duplicate certificate of title. Dealings in land required the duplicate certificate of title to be produced to the Registrar for the dealing to be recorded on the original and duplicate certificate of title simultaneously. When presented with the original and duplicate certificate of title and a memorandum of transfer, the Register would memorialise the transfer of the title documents. Once the transfer was registered the land belonged to the transferee. The usual practice was for the purchaser to prepare a notice of change of ownership that would be provided to the vendor’s solicitor to lodge with the local authority. Solicitors would be expected to report to their respective clients.

[91]              Mr Nowland considered there were some unusual features of the conveyancing and registration documents in this case. First, the survey plan was lodged by the transferee (Wamoana) or her solicitor (Bulls Burnard) rather than the transferor (the Incorporation). This was unusual, but not unheard of and could occur when the purchaser of the land had undertaken to pay the costs of subdivision.

[92]              Secondly, the transferee’s solicitor (Mr Isaac of Burnard Bull) signed, as solicitor for the  Incorporation,  the  order  for  the  new  certificate  of  title  dated  19 February 1992. This document requested the District Land Registrar to issue a new certificate of title in the name of the Incorporation for the 29.74 ha parcel of land with the deposit of the survey plan. Mr Nowland said it was unusual for the order to be made by the transferee’s solicitor but was consistent with the subdivision being carried out on Wamoana’s instructions.

[93]              Thirdly, the memorandum of transfer referred to an oral agreement for the sale of land. Mr Nowland said agreements for the transfer of land would almost always be recorded in a written agreement, so that they were enforceable and there would be less room for uncertainty about its terms.

[94]              Fourthly, the memorandum of transfer described the consideration as having already been paid when it apparently had not. Mr Nowland said that, in the ordinary course, the consideration would be paid by the purchaser at the time the vendor’s solicitor provided a memorandum of transfer and the certificate of title. This was a formal process in which a bank cheque would be exchanged for the title and the memorandum of transfer.

[95]              Fifthly, the date of signatures on the memorandum of transfer was amended from 19 May 1992 to 6 July 1992. The amendment of dates was initialled by the original signatories but there was no reason on the face of the document as to why it needed to be redated.

[96]              Sixthly, the CT number and reference to a compensation certificate were added to the memorandum of transfer, without those additions being initialled by the signatories. The additions would have been required because those details would not have been known at the time of the earlier signatures. Based on the stamps on the second page of the memorandum, it was likely these additions were made between the Māori Land Court Deputy Registrar’s endorsement on 3 February 1993 (which is present on both versions of the memorandum) and the entry of the transfer on the Land Registry Gisborne on 5 March 1993 (which is only present on the second version of the memorandum). The additions should have been initialled by the original signatories.

[97]              Lastly, the transferee had surveying and legal representation throughout the subdivision and subsequent transfer process, whereas Mr Nowland’s understanding was that the transferor did not.

[98]              Mr Nowland considered it was possible that these unusual features meant that the Incorporation’s officers had not received advice about the purpose of the survey

plan or that the memorandum of transfer was able to be registered to effect the transfer of the land. He accepted, however, that it would be expected that a solicitor asked to produce a certificate would contact their client to confirm whether the solicitor had instructions to do so. He also accepted it would be expected that a solicitor, who received new certificate of titles following a subdivision, would report to their client about this.

No payment of $26,000

[99]              Lisa Dodds, the Incorporation’s chartered accountant since 2009, provided evidence that she had reviewed the Incorporation’s accounts and there was no indication in those accounts of the Incorporation having received $26,000 for the sale of land to Wamoana.

Value of Te Kani Land

[100]          Martyn Craven, a registered valuer, gave expert opinion evidence as to the market value of the land at issue (Lot 1 DP 8212). He assessed its 1993 market value, as a separate parcel of General Land, at $41,000 plus GST (if any), comprising $10,000 for the dwelling and garage and $31,000 for the land. He assessed its 15 March 2019 market value at $220,000 plus GST (if any).

[101]          Mr Craven would have assessed its 15 March 2019 market value at $255,000 plus GST (if any) had the property been maintained properly, comprising $193,000 for the land (of which $15,000 was for the house site) and $62,000 for improvements (made up of $56,000 for the house, $2,000 for the garage and $4,000 for fencing).

My assessment of the facts

[102]          The documents show that in the 1980s Wamoana and Parekura wanted the return of the whole Wharekahika A15. They did not want to apply for a partition to achieve this unless it was to be a consent application. The Committee was prepared to consent to a partition application but only if it was for a part of Wharekahika A15. It is unclear how much of Wharekahika A15 it would consent to. Certainly there would be no issue if it was the homestead and an area around that, but the Committee

appears to have been open to proposals provided if it was not for the whole of Wharekahika A15. The Committee was sympathetic to reaching a fair agreement with Wamoana that would involve an adjustment of her shares in return. The idea seems to have been that once a fair agreement was reached, it would be put before the shareholders for their approval.

[103]          Wamoana and Parekura, however, were still wanting the return of the whole of Wharekahika A15. A possible complication was the loss of foreshore reserve, but the primary complicating factor was the forestry lease. This led to the suggestion in January 1983, from Parekura, that the area not used for forestry be returned to Wamoana. Parekura said this area was about 77 acres (or about 31 ha) and appears to have been the area that later became Lots 1 and 2. From this point, Wamoana and Parekura appear to have begun focussing on this land and Mr Mackey, the forestry consultant and the Incorporation’s solicitors were corresponding about this. In the course of this correspondence Mr Mackey expressed the view a partition application was not necessary.

[104]          By December 1984 the Committee agreed that a 29.74 ha area could be returned to Wamoana, subject to the details being finalised (share adjustment, survey plan, consultation and negotiation). By this stage the Committee’s idea was to reach an agreement that would be approved by the Court. However, all of this was put on hold while the validity of the forestry lease was investigated. It would seem that the lease was valid (or at least no grounds were found for saying it was not). By 1990 the Committee was still in favour of returning the 29.74 ha area to Wamoana. However, a majority of shareholders voted  against  this.  This  left  the  Committee  with  its 12 September 1991 resolution to agree to Wamoana applying for a partition of this area.

[105]          Mr Mackey appeared still to have been of the view that a partition application was not necessary. Rather, the land could be returned to Wamoana via a subdivision and sale process. The surveyor and the Deputy Land Registrar seemed to have been of a similar view They proceeded to take the steps to achieve this. Those steps required the involvement of the Incorporation’s solicitors. It is not likely that they produced the Certificate of Title for the Potikirua Block without instructions from one

or more Committee representative(s), nor that they received the return of three new titles in the Incorporation’s name in August 1992, without reporting to one or more representatives of the Committee. It was made clear to the Incorporation’s solicitors that the Certificate of Title was being requested to enable the transfer of the land to be registered. It is likely this was conveyed to the same representative(s).

[106]          I find that the Committee representative(s) must have been aware by this stage that the transfer could occur without the need for a partition application. That was the view of those involved on Wamoana’s side and the District Land Registrar agreed. This is consistent with Committee representatives signing the survey plan and the transfer. They no longer remember signing those documents, which makes it difficult to accept their evidence that they would have understood the documents related to a partition application. It is also consistent with the views expressed by Committee representatives in 1999 when the issue of succession to Wamoana’s shares first arose. Those views indicate that at this point the Committee members recalled that the share adjustment (being the intended consideration for the transfer of the land) had never occurred and this still needed to be sorted out.

[107]          I find that sometime after 12 September 1991 and before the memorandum of transfer was re-signed on 6 July 1992 the consideration was agreed between Wamoana and Mr Matchitt and/or Mr Satchell. The agreement was an oral one, as recorded in the memorandum of transfer. The consideration recorded on the transfer was intended to represent the market value of the land which would then be used as the basis for adjusting Wamoana’s shares in the Incorporation. This fits with the $26,000 referred to in the transfer being close to the amount ($25,000) Mr Satchell later remembered the figure to be in June 1999. It also fits with the records in 1999 that there was to be a share adjustment based on the value of the land transferred. Lastly, it is within range of the 1993 market value of the land, less the dwelling and garage (it being recognised that the homestead was Wamoana’s).

[108]          Eleven years later, in January 2010, the Committee either no longer recalled the background or had a change of heart and wanted the return of the land as the share adjustment had never happened.  That  is  consistent  with  Mr Peterson’s  letter  of 26 February 2010 querying on behalf of the Committee how the transfer had occurred

without the consideration having been given. It is also consistent with the Committee’s understanding as conveyed by Mr Rika to Burnard Bull on 7 May 2010. When Parekura did not propose that a share adjustment should now take place, the Committee’s view hardened. With that hardening of attitude, and inevitable dimming of memory, Mr Matchitt and Ms Pook (and probably others) have looked at the last written record of what was to happen – namely its resolution of 12 September 1991 – and now recall (erroneously, in my view) that they only ever agreed to an application for a partition to the Māori Land Court. Added to this, as I will shortly discuss, the advisers at the time of the transfer were wrong – a subdivision of Māori freehold land was required to be by partition – and the Incorporation has now likely received advice to this effect.

[109]          It is understandable in these circumstances why Mr Matchitt and Ms Pook now recall matters as they do, but their recollection is not reliable. The documents at the time of the transfer and when the issue of succession to Wamoana’s shares arose provide a more reliable basis to determine what occurred.

[110]          I add that there is no evidence that Wamoana or Parekura misled the Committee or any of its representatives in obtaining the transfer of the 29.74 ha land. The witnesses do not say they did (nor could they as, quite understandably, they do not now ever recall signing the documents). Wamoana instructed a surveyor and solicitors who in turn communicated with the Incorporation’s solicitors. It was all transparent. It required the involvement of the Incorporation’s solicitors who cooperated to achieve the transfer.

[111]          The issue now is whether any of what occurred should be unwound because the transfer of the land did not comply with statutory requirements and no consideration was ever paid. To answer these issues it is necessary to review the relevant legislation. But before I do that, I refer first to the Incorporation’s first attempt to obtain the return of the Te Kani Land.

Māori Land Court decision

[112]          On 2 December 2011 the Incorporation applied to the Māori Land Court seeking an order cancelling the endorsement on the memorandum of transfer made by

the Deputy Registrar on 3 February 1993.19 The order was sought under s 44 of the Te Ture Whenua Māori Act 1993. That section permits the Chief Judge of the Māori Land Court to cancel or amend an “order” made by the Court, a Registrar or “certificate of confirmation” issued by a Registrar under s 160 of the Act if it is necessary in the interests of justice to remedy a mistake or omission.

[113]          The Deputy Registrar’s endorsement, by a memorial on the memorandum of transfer, was made under s 233 of the Māori Affairs Act 1953 and ss 42 and 48 of the Māori Affairs Amendment Act 1967. That section does not specify what the Deputy Registrar must be satisfied of when he or she makes the endorsement. The Incorporation contended the Deputy Registrar was required to be satisfied of the terms of the oral agreement, whether the consideration of $26,000 had been paid, that the memorandum had been executed in accordance with s 42 of the Māori Affairs Amendment Act 1967 and that a resolution at a general meeting had been passed pursuant to s 48 of that Act. The Incorporation contended that, by so doing, the Deputy Registrar was performing a quasi-judicial function rather than an administrative act and the decision to endorse the memorandum was in effect an “order” of the Court.20

[114]          The Deputy Chief Judge rejected this argument.21 She considered the endorsement was not within the definitions of “order” in either the Te Ture Whenua Māori Act 1993 or the Māori Affairs Amendment Act 1967. The Judge agreed with Pihema v Pehikano that s 233 was a purely administrative function.22 The section could be contrasted with a certificate of confirmation for which s 160 of Te Ture Whenua Māori Act 1993 sets out a list of matters of which the Registrar was required to be satisfied.23 The Judge considered s 233 required only that the Deputy Registrar be satisfied that the memorandum of transfer was an “alienation” of Māori freehold land. The Deputy Registrar’s functions did not turn the memorial of endorsement into an “order” of the Court.

19   The Proprietors of Potikirua Block Incorporation v Te  Kani [2013] Chief Judge’s MB 82 (2013  CJ 82). Refer [61(c)] above. It also sought an injunction preventing the registered proprietor of the land from dealing with it until the application for cancellation was dismissed.

20 At [31].

21 At [36].

22 Pihema v Pehikano [1984] 1 NZLR 625 (HC).

23 The Proprietors of Potikirua Block Incorporation v Te Kani, above n 19, at [37].

[115]          This meant that s 44 did not provide jurisdiction to cancel the endorsement. The Judge therefore declined to do so. This decision was given on 30 January 2013. The High Court proceeding was filed on 9 October 2013.

The legislation

Governing legislation

[116]          Māori land legislation provides a system for administering and dealing with Māori land. At the time relevant to this proceeding, the relevant legislation was the Māori Affairs Act 1953 and subsequent legislation (the Māori Affairs Amendment Act 1967 and the Māori Purposes Act 1975) which made amendments to the Māori Affairs Act 1953.24 Further amendments were made to the Māori Affairs Act 1953 by the various iterations of local government legislation and, subsequently, the Resource Management Act 1991.

[117]          Ultimately, the Māori Affairs Act 1953 and its amending legislation was replaced by Te Ture Whenua Māori Act 1993. The explanatory note to the Bill which became this Act explained the need for replacement legislation as follows:25

The Māori Affairs Act 1953 was well constructed and well drafted. But over the years it suffered from the ebb and flow of legislative attention and policy changes. It underwent massive surgery in 1967, and a further serious operation in 1974. In each case, the effects were so widespread that a tidier textual amendment method proved inadequate to the task, so that many substantial changes remained locked forever in the amending legislation, where they irritate to this day. Successive reprints have served to hide some of the wounds, without effecting a cure.

[118]          It has not been easy to work through the Māori Affairs Act 1953 and its amending legislation. If mistakes were made by those involved in effecting the transfer of the Te Kani land, the difficulty of navigating the legislation was likely the cause.

24 The Māori Affairs Act 1953 and this subsequent amending legislation were repealed when the Te Ture Whenua Act 1993 came into force on 1 July 1993 (s 362(2) and sch 2).

25 Māori Affairs Bill 1991 (124-1) (explanatory note) at  1.  (Upon being reported back from the  Māori Affairs Committee, the Bill’s name changed to (Māori Affairs) Te Ture Whenua Māori Māori Land Bill 1992 (124-2).)

Māori land

[119]          Under the Māori Affairs Act 1953, Māori land meant customary land or Māori freehold land.26 Māori freehold land was defined as “any land other than European land which, or any undivided share in which, is owned by a Māori for a beneficial estate in fee simple, whether legal or equitable”.27 European land meant “any land other than Māori land which has been alienated from the Crown for a subsisting estate in fee simple”.28

Māori Land Court jurisdiction

[120]          The Māori Affairs Act 1953 provided for the continuation of the Māori Land Court and the Māori Appellate Court (both established earlier).29 The Māori Land Court’s jurisdiction included:30

(a)To hear and determine as between Māoris any claim, whether at law or in equity, to the ownership or possession of Māori freehold land, or to any right, title, estate, or interest in any such land or in the proceeds of the alienation thereof:

(b)To determine the relative interests of the owners in common, whether at law or in equity, of any Māori freehold land:

[121]          Its jurisdiction on these matters did not limit the jurisdiction of any other Court, but once a matter was heard and determined by the Māori Land Court or the Appellate Court it could not thereafter be heard in any other Court.31

[122]          Māori land could be alienated or disposed of in the same manner as European land.32 This was subject to the provisions of the Māori Affairs Act 1953 (as amended) or another Act.33 One such provision restricted how land that was owned in fee simple

26     Māori Affairs Act 1953, s 2. Customary land was “land which, being vested in the Crown, is held by Maoris or the descendants of Maoris under the customs and usages of the Maori people”.

27     Above.

28     Above.

29     Sections 15 and 37.

30     Section 30(1).

31     Section 30(2).

32     Section 2: alienation was defined as meaning: “the making or grant of any transfer, sale, gift, lease, licence, easement, profit, mortgage, charge, encumbrance, trust, or other disposition …”.

33     Māori Affairs Act 1953, s 211. The Māori Affairs Amendment Act 1967 amended some of the provisions relating to alienation.

by more than 10 owners as tenants in common could be alienated.34 One of the ways such land could be alienated was in accordance with Part XXIII of the Māori Affairs Act 1953 (relating to the powers of assembled owners). However, this Part did not apply to Māori incorporations as these had their own requirements for disposing of land (discussed below).35

[123]          An alienation by transfer was to be executed by the parties to be bound.36 Generally, no alienation of Māori Land by way of transfer had force or effect until it had been confirmed by the Court.37 Confirmation was granted “by a certificate of confirmation endorsed or otherwise written on the instrument of alienation, under the seal of the Court and the hand of” a Judge.38 Once granted, the instrument of alienation took effect according to its tenors subject to the requirements (if any) of registration under the Land Transfer Act 1952.39 Confirmation could not be given unless the Court was satisfied as to the adequacy of the consideration, having regard to the relationship of the parties and any other special circumstances of the case, and that the alienation would not result in the undue aggregation of farm lands if completed.40

[124]          However, where the alienation did not require Court confirmation, a memorial was required by s 233(1) as follows:41

No alienation of Māori freehold land which is not by this Part of this Act required to be confirmed by the Court shall have any force or effect unless and until the instrument by which the alienation is effected has endorsed thereon a memorial that it has been produced to the Registrar and has been noted in the records of the Court.

[125]          The Māori Affairs Act 1953 provided for the registration of a Māori Land Court order, affecting or relating to the title to land, against the title to the land under the Land Transfer Act 1952.42 The Court’s order was to be transmitted by the Registrar of the Court to the District Land Registrar for this purpose.43 A minute of the Court’s

34     Māori Affairs Amendment Act 1967, s 92.

35     Section 114 (amending s 304 of the Māori Affairs Act 1953).

36     Section 222 (as amended by s 97 of the Māori Affairs Amendment Act 1967).

37     Section 224 (as amended by s 98 of the Māori Affairs Amendment Act 1967).

38     Section 226(1).

39     Section 226(2).

40     Section 227 (as amended by s 100 of the Māori Affairs Amendment Act 1967).

41     Section 233 (as amended by s 106 of the Māori Affairs Amendment Act 1967).

42     Section 36(1).

43     Section 36(2).

order was recorded in the Court’s records and drawn up under seal of the Court.44 No “freehold order or partition order and no final vesting order” could be sealed “unless and until a plan of the land ha[d] been prepared in form and manner sufficient for purposes of registration under the Land Transfer Act 1952”.45 It was not necessary to produce the certificate of title for the purposes of this registration.46

Partition applications

[126]          Part XVI of the Māori Affairs Act 1953 (as amended by the Māori Affairs Amendment Act 1967) concerned partition orders. It conferred exclusive jurisdiction on the Māori Land Court as follows:47

173     Jurisdiction to partition Māori freehold land

(1) The court shall have exclusive jurisdiction to partition Māori freehold land.

…

(3) The provisions of this Part of this Act shall be read subject to the provisions of sections 432 and 432A of this Act…

[127]          As at 1 October 1991 (the time relevant to this proceeding), s 432 required partitions that involved parcels to be held by owners who were not members of the same hapū to comply with the Resource Management Act provisions for subdivisions. Specifically, it provided:48

432 When partition of land to comply with Resource Management Act 1991 as to subdivisions

(1)This section applies to every partition of land by the Court except for a partition into parcels to be held by owners who are members of the same hapu.

(2)Subject to the provisions of this section, the Court shall not partition any land to which this section applies, otherwise than in accordance with the Resource Management Act 1991.

44     Section 34(2).

45     Section 34(9).

46     Section 36(2).

47 The provisions to which this section was subject, as referred to in s 173(3), were amended a  number of times as amendments were made to town planning and local government law at various times, ultimately leading to the amendments made via the Resource Management Act 1991.

48 This version of s 432, as well as s 432A next referred to, were introduced via the sch 8 to the Resource Management Act.

(3)Without limiting subsection (2) of this section,—

(a)A partition of land shall be deemed to be a subdivision of land within the meaning of section 218 of the Resource Management Act 1991; and

(b)Sections 120 and 121 of the Resource Management Act 1991 (relating to appeals to the Planning Tribunal) shall apply to any decision of a territorial authority in relation to any application for a subdivision consent which is required by this section.

(4)Notwithstanding anything in this section or in the Resource Management Act 1991, any condition imposed by the Court requiring a contribution of land for reserve purposes or land in lieu of reserves shall only require any such land to be set aside from that part of the land which is to be alienated.

(5)Notwithstanding subsection (2) of this section or anything to the contrary in the Resource Management Act 1991—

(a)The territorial authority shall not require, as a condition of a subdivision consent, that a contribution in land (being a contribution for reserve purposes or land in lieu of reserves) be made in respect of any part of the land in respect of which the Court has certified to the territorial authority as being of special historical significance or spiritual or emotional association with the Maori people or any group or section of the Maori people; and

(b)No survey plan relating to the partition shall be required to be deposited by the District Land Registrar or Registrar of Deeds in accordance with Part X of the  Resource  Management Act 1991.

(6)Subject to subsection (7) of this section, the Court may make a partition order to which this section applies in respect of any land if a subdivision consent under the Resource Management Act 1991 has been obtained for the partition and the consent has not lapsed.

(7)At the time of making any partition order to which this section applies, the Court shall—

(a)Make such orders as it considers necessary, having regard to Part X of the Resource Management Act 1991, to ensure that in respect of any conditions of the subdivision consent that have not been complied with, adequate provision is made for such compliance; and

(b)Make such orders as may be necessary to—

(i)Vest in the territorial authority any esplanade reserve required to be set aside under section 230 of the Resource Management Act 1991; and

(ii)Vest in the Crown any land to which section 235 of that Act applies,—

and sections 229 to  237  of  the  Resource  Management  Act 1991 shall apply with all necessary modifications.

(8)Without limiting subsection (7) of this section, the Court shall make an order—

(a)Vesting in the territorial authority the land that, in accordance with the subdivision consent, is required for the construction of roads or the making of reserves; and

(b)Declaring that the land is dedicated for the construction of roads or (as the case may require) is set apart as reserves for the purposes specified in the subdivision consent subject to the Reserves Act 1977.

(9)Notwithstanding anything in subsections (7) and (8) of this section, the Court may, instead of setting apart any land as a reserve under the Reserves Act 1977 (including any esplanade reserve), recommend that it be set apart as a reservation under section 439 of this Act.

(10)Except as otherwise provided in subsections (7), (8), and (9) of this section, sections 220 to 244 (inclusive) of the Resource Management Act 1991 shall not apply to any partition to which this section applies.

(11)No vesting order shall be made under this section in respect of any land which is subject to any lease, licence, mortgage, charge, or other encumbrance.

(12)Where any land proposed to be dedicated or set apart under this section is subject to any lease, licence, mortgage, charge, or other encumbrance, the Court, with the consent of the person entitled to the benefit of the encumbrance and the vesting order, shall vest the land free from that encumbrance accordingly.

(13)A vesting order in favour of the territorial authority made for the purposes of this section shall have no force or effect until the territorial authority has, under its seal, accepted the dedication and has certified in its acceptance that the relevant conditions of the subdivision consent have been complied with to the satisfaction of the territorial authority.

(14)On the completion of any vesting order made by the Court for the purposes of this section, the Registrar of the Court shall forward the order to the District Land Registrar, together with a certified copy of the acceptance by the territorial authority of the dedication to which the vesting order relates, and the District Land Registrar shall register the order.

(15)In this section, “subdivision consent” has the same meaning as in section 2(1) of the Resource Management Act 1991 and includes a certificate of compliance as defined in that Act.

[128]          In contrast, s 432A was concerned with partitions into parcels to be held by owners who were all members of the same hapū. Such partitions did not require compliance with the Resource Management Act, but the Māori Land Court could invite submissions from the territorial authority. Specifically, it provided:

432A   Restrictions may be imposed in respect of other partitions—

(1)This section applies to every partition of land by the Court where the partition is into parcels to be held by owners who are members of the same hapu.

(2)The Court shall, in respect of every partition to which this section applies, impose a restriction that the land shall not be alienated under this Act otherwise than in accordance with this section.

(3)Where an application to which this section applies is made to the Court to confirm the alienation of Maori land, the Court—

(a)May, if it considers it appropriate, publicly notify the application and invite submissions from the territorial authority and any other person who is likely to be affected by the application; and

(b)May, subject to subsection (4) of this section,—

(i)Refuse to confirm the alienation; or

(ii)Vary the terms of the alienation; or

(iii)Confirm the alienation subject to such conditions as the Court considers fair and reasonable,—

having regard to the provisions of section 106 (subdivisions not to be granted), section 108 (conditions of resource consents), section 220 (conditions as to subdivision), and sections 229 to 237 (which relate to esplanade reserves) of the Resource Management Act 1991 and the fact that the land has previously been partitioned without a subdivision consent being obtained under that Act.

(4)The Court shall not, in confirming an alienation under subsection (3) of this section, require as a condition of such confirmation, a contribution of land for reserve purposes or land in lieu of reserves to be set aside—

(a)From any part of the land other than from that part of the land which is to be alienated; or

(b)Which the Court is satisfied is of special historical significance or spiritual or emotional association with the Maori people or any group or section of Maori people.

(5)The Court may exercise a power under subsection (3)(b) of this section notwithstanding that the alienation is not a subdivision.

(6)Subsection (3)(b) of this section does not limit the powers of the Court under section 224 of this Act.

[129]          Section 174 enabled the Māori Land Court to decline a partition application as follows:

174     Discretion of the court

The jurisdiction conferred by this Part of this Act shall be discretionary, and the Court may refuse to exercise that jurisdiction in any case in which it is of opinion that partition would be inexpedient in the public interest or in the interest of the owners or other persons interested in the land.

[130]          Section 175 enabled the Māori Land Court to direct a sale of the land instead of making an order for partition if the Court considered partition on an equitable basis was impracticable. The land was to be sold to Māori and could only be sold to non- Māori with the leave of the Court.

[131]          Section 176 provided for a partition order to constitute the title to the land as follows:

176     Partition orders to constitute title

(1)Māori freehold land may be at any time partitioned by the Court by the making of partition orders.

(2)The term “partition order” as used in this Part of this Act means, as the case may require, either—

(a)An order for the partition of any land into two or more defined separate parcels; or

(b)An order creating or evidencing the title to any one or more of such defined parcels.

(3)Every partition order shall constitute, without any transfer or other instrument of assurance, the title to the parcel or the several parcels of land therein included.

[132]          Section 178 provided for partition orders to be registered against the title under the Land Transfer Act. Section 180 permitted the Court to order partition into parcels held severally by single owners, or parcels held by any number of owners as tenants in common, or partly both of these. Section 181 enabled the Court to partition the land amongst the owners in accordance with their several shares, or to give effect to an

arrangement made by the owners including any agreement as to payment of compensation.

[133]          The Māori Land Court Rules 1958 set out the particulars required for a partition application.49 A plan showing “the proposed partition with measurements of boundaries, and areas where possible” was to be filed with the application.50

Māori incorporations

[134]          Māori incorporations are one of the vehicles by which Māori land may be administered.51 The Māori Affairs Amendment Act 1967 provided that an order could be obtained constituting the owners of Māori freehold land as a Māori incorporation.52 A Māori incorporation was a body corporate.53 At the time relevant to this proceeding, the objects, powers and procedures that applied to a Māori incorporation were as set out in the 1967 Amendment Act and, later, the Māori Purposes Act 1975.

[135]          The objects of a Māori incorporation included occupying, managing and farming land or growing timber on it.54 It also included arranging “for the alienation by sale, or lease, or otherwise of the land or of any portion thereof”.55

[136]          The order constituting the Māori incorporation vested the land in the incorporation.56 Pursuant to the 1967 Amendment Act, all Māori freehold land so vested in the Māori incorporation ceased to be Māori land on such vesting.57 This meant it became European land (as it was then termed). This was altered by the Māori Purposes Act 1975. On the commencement of that Act, it ceased to European land and was again Māori freehold land (as defined in the Māori Affairs Act 1953).58

49     Promulgated under s 25 of the Māori Affairs Act 1953.

50     Māori Land Court Rules 1958, r 82(1) and (3).

51     Trusts are the other main vehicle. Counsel for the Incorporation advises that Māori incorporations were the common vehicle in the East Coast for a period.

52     Māori Affairs Amendment Act 1967, s 26.

53     Section 31.

54     Māori Affairs Amendment Act 1967, s 27.

55     Above.

56     Section 31(2).

57     Section 31(3).

58     Māori Purposes Act 1975, s 17. Perhaps accounting for Mr Mackey’s error in 1983, referred to earlier, in considering the Potikirua land to be European land.

[137]          When the order for incorporation was made, the total number of shares was fixed and that number was related to the total value of the land and assets held by the incorporation.59 A list of shareholders in the incorporation was annexed to the order of incorporation.60 These initial shareholders were those who were the owners of the freehold interest in the land immediately before the order.61 The number of shares allocated to a shareholder was the proportion of the total shares which that person’s former share in the value of the incorporation’s assets bore to the total value of those assets.62

[138]          The incorporation was required to establish a register of shareholders.63 Shares could be transferred only in accordance with the requirements of the 1967 Amendment Act.64 A shareholder could transfer his or her shares to the incorporation.65 Where this occurred, the incorporation was deemed to have acquired the shares on behalf of the remaining shareholders rateably and in proportion to their respective shareholding until the end of the financial year in which they were acquired. At that point, the total number of shares in the incorporation was reduced by the number of shares that had been acquired in that financial year.66

[139]          Requirements were imposed on the use of the seal of the incorporation as follows:

42       Form, custody, and use of seal

(1)The seal of every Māori incorporation under this Part of this Act shall be in the prescribed form, and the custody thereof shall be determined by regulations under this Act.

(2)Subject to the provisions of subsection (3) of this section, the seal may be affixed to any instrument in the presence of a majority of the members of the committee of management and all the members of the committee present when the seal is affixed shall sign the instrument.

(3)Pursuant to a resolution passed by the committee of management in that behalf, given either in specific or general terms, the seal may be

59     Māori Affairs Amendment Act 1967, s 32(2).

60     Section 30(2).

61     Section 32(1).

62     Section 32(3).

63     Section 32(4).

64     Section 38(1).

65     Section 41(3)(a).

66     Section 41(7).

affixed to any instrument in the presence of any two members of the committee. In any such case, the two members of the committee shall sign the instrument and there shall be an endorsement on the instrument stipulating the date and substance of the resolution passed by the committee of management as aforesaid.

(4)Except as provided by this section, the seal shall not be affixed to any instrument.

[140]A Māori incorporation’s powers to deal with its assets were as follows:67

48       Incorporation's powers to deal with assets

(1)Whether or not any such power is specifically included in its objects of incorporation, a Maori incorporation shall, acting by and through its committee of management, have power to alienate, mortgage, charge, or otherwise dispose of or deal with the assets from time to time vested in it in the same manner as if it were a private person of full capacity:

Provided that the incorporation shall not sell any land except pursuant to a resolution of a general meeting of shareholders.

(2)On the presentation to him of any memorandum of transfer executed by the incorporation, the District Land Registrar shall not be concerned to inquire whether a resolution under subsection (1) of this section has been passed in respect of the sale.

(3)The provisions of section 42 of the Companies Act 1955 as to the form of contracts shall apply to a Maori incorporation in as full and ample a manner as if the incorporation were a limited liability company duly incorporated under the provisions of that Act.

[141]          In short, a sale of land could only occur pursuant to a resolution of a general meeting of shareholders but the District Land Registrar was not required to inquire into whether such a resolution had been passed. Unlike transfers of land by other holders of Māori land, a transfer of land by a Māori incorporation did not require confirmation by the Court.68 Instead, they required an endorsement by the Registrar.69

67 Companies Act 1955, s 42 provided that the law relating to when contracts between private parties were required to be by deed or in writing and when writing was not required was to apply to contracts made by a company.

68 Māori Affairs Amendment Act 1967, s 31(3A). This subsection was inserted by s 17 of the Māori Purposes Act 1975 and stated “[n]othing in subsection (3) … shall affect in any way the provisions of this Part of this Act relating to powers of an incorporation to deal with its assets and no dealing by an incorporation with any land shall require confirmation by the Court”. The effect subsection

(3) is discussed above at [136].

69 Māori Affairs Act 1953, s 233 (as amended by s 106 of the Māori Affairs Amendment Act 1967).

[142]          The management committee exercised the powers and function of the incorporation but subject to compliance with any resolution as to their powers and functions as passed at a general meeting of shareholders.70 However, “the incorporation shall be bound by every act of the committee” and no person dealing with the committee need inquire into whether there is any restriction on the committee by any such resolution.71

[143]          The Registrar of the Māori Land Court was to keep a register of Māori incorporations recording details including as to the land vested in the incorporation and particulars of all orders made by the Court.72

Resource Management Act 1991

[144]          Section 11(1) of the Resource Management Act provided restrictions on subdivisions “within the meaning of section 218”. Most relevantly, s 11(1)(a) provided that no person could subdivide land unless it was expressly allowed by a rule in a district plan or a resource consent and a survey plan in accordance with Part X of the Act had been deposited with the District Land Registrar or Registrar of Deeds. Section 11(2) provided that s 11(1) did not apply to Māori land as defined in the Māori Affairs Act 1953 “unless that Act provides otherwise”.

[145]          Section 218 of the Resource Management Act defined “subdivision of land” as meaning (amongst other things) “[t]he division of an allotment …[b]y an application to a District Land Registrar for the issue of a separate certificate of title for any part of the allotment”. As referred to above, the Māori Affairs Act 1953, as amended by the Resource Management Act, deemed partitions to be a subdivision under this section if the partition orders did not relate solely to owners who were members of the same hapū. Amongst other things, Part X of the Resource Management Act set out requirements for subdivision applications.73 It also set out conditions on which a subdivision consent might be granted.74 Some of these requirements were modified by ss 432 and 432A of the Māori Affairs Act 1953.

70     Māori Affairs Amendment Act 1967, s 57(1).

71     Section 57(2).

72     Section 64.

73     Resource Management Act 1991, s 219.

74     Section 220.

Did the transfer of the land comply with legal requirements?

[146]          The Incorporation submits the process by which Lot 1 was created and transferred to Wamoana did not comply with the provisions of the Māori land legislation in five ways:

(a)First, the Incorporation submits that Wamoana was required to make a partition application to obtain the land. The process adopted created title to  a separate parcel  of land (and was therefore a partition under  s 176(2) of the Māori Affairs Act 1953) without complying with the partition process over which the Māori Land Court had exclusive jurisdiction.

(b)Secondly, the Incorporation submits the process did not comply with  s 432 of the Māori Affairs Act 1953.

(c)Thirdly, there was no shareholders’ resolution to sell the land as required by s 48(1) of the 1967 Amendment Act.

(d)Fourthly, the common seal was not affixed to the memorandum of transfer in a manner that complied with s 42(2) or (3) as required by the 1967 Amendment Act. This was because a majority of the Committee were not present when the seal was affixed or, if they were present, they did not sign the instrument. Nor was there a resolution that the seal be affixed in the presence of two Committee members, nor an endorsement of such a resolution.

(e)Finally, the Incorporation submits the Māori Land Court Registrar wrongly endorsed the memorandum of transfer. The Incorporation submits the Registrar was required to, but did not, properly scrutinise the instrument and observe that there was no evidence of a shareholder’s resolution and that the seal had not been properly affixed.

[147]          The defendant does not contest these matters but with one qualification. That qualification is to the last matter. As to that, the defendant submits the Registrar could

have rejected the memorandum of transfer because of the absence of a shareholders’ resolution and the seal that had not been affixed as required, but he was not required to do this.

[148]          First, I accept the submission that a partition application was the first necessary step before a transfer of a portion of the Potikirua Block could take place. This is because the subdivision was a partition. It divided the land (the Potikirua Block) into three separate parcels (s 176(2)(a)). The Māori Land Court had exclusive jurisdiction over this (s 173). While the Incorporation had the power to sell the land, a sale of the Potikirua Block could not occur until that land was divided into one or more separate parcels. A partition order was therefore a prerequisite to a sale.

[149]          Secondly, I agree the subdivision failed to comply with s 432 of the Māori Affairs Act 1953 (as amended by the Resource Management Act). Mr Taylor (the surveyor) and the District Land Registrar appear to have overlooked the new s 432 enacted via the Resource Management Act, which deemed a partition to be a subdivision (without taking away the Māori Land Court’s exclusive jurisdiction over them) and imposed requirements under that Act.

[150]          Thirdly, I agree a shareholders’ resolution was required before the land could be sold to Wamoana and no such resolution was obtained.

[151]          Fourthly, I agree the common seal was not affixed to the memorandum of transfer as required by s 42 of the 1967 Amendment Act. There were seven members of the Committee. This meant that at least four members needed to be present when the seal was affixed to the memorandum and all those present needed to sign the memorandum. Here the memorandum was signed by just two members, Mr Matchitt and Mr Satchell and there is no evidence of any resolution that permitted this.

[152]          Lastly, whether the Registrar was required to check a resolution had been passed and that the affixing of the seal complied with the statutory requirements, depends on whether the Registrar’s task was to update its records or to ensure compliance with the statutory requirements for disposal of the land.

[153]          The Incorporation submits it is the latter. This is because the Registrar is in a position to ensure compliance. The Incorporation submits the Registrar would have been aware from its own records that the Incorporation’s Committee had seven members and therefore that a seal affixed in the presence of two members of the Committee was insufficient. It submits the Registrar should have requested a copy of the shareholders’ resolution before endorsing the memorandum of transfer. It submits that, unless the Registrar has this function, there is no other process that provides a check on whether there has been compliance with the statutory requirements for disposal of Māori land held by a Māori incorporation. It submits this would undermine the protective legislative regime for Māori land. The Incorporation draws an analogy with the Deputy Land Registrar rejecting the memorandum of transfer when first lodged because it did not have an endorsement from the Māori Land Court.

[154]          This issue was before the Māori Land Court. The Deputy Chief Judge of that Court rejected the Incorporation’s submissions. In so doing, she relied on two decisions of the High Court which had held that the Registrar’s function was an administrative one and the Registrar had no power or duty to determine the validity of the instrument.75

[155]          The Incorporation seeks to distinguish these cases on the basis they involved, respectively, a lease that did not comply with the terms of a trust and a mortgage. The Incorporation made the same submission to the Māori Land Court. In effect, the Incorporation seeks to review that Court’s decision on this point. I decline to do so because I am not persuaded the decisions are distinguishable – the nature of the Registrar’s role does not change because of the nature of the instrument to be memorialised or the nature of the alleged invalidity of the transaction. In any case, it is unnecessary for the determination of the causes of action that are before me to determine the Registrar’s role under s 233 of the Māori Affairs Act 1953.

75     Pihema v Pehikano, above n 22; and Housing Corporation of New Zealand v Māori Trustee [1988] 2 NZLR 662 (HC).

What are the consequences of non-compliance?

[156]          At the time relevant to this proceeding the provisions of the Land Transfer Act 1952 applied.76 Pursuant to s 62 of that Act, Wamoana obtained an indefeasible title subject to its limited exceptions. Further, pursuant to s 63, no action can be brought for the recovery of the land subject to some limited exceptions.77

[157]          This is not contested by the Incorporation. It submits that an exception applies, namely that it has an in personam claim against Wamoana. Such claims were described in Regal Castings Ltd v Lightbody as follows:78

An in personam claim against a registered proprietor looks to the state of the registered proprietor's conscience and denies him the right to rely on the fact he has an indefeasible title if he has so conducted himself that it would be unconscionable for him to rely on the register. Such a claim is concerned with the personal obligations of the registered proprietor rather than with the sanctity of their title.

[158]A person claiming in personam must show:79

(a)it has a cause of action entitling it to the assistance of the Court, indefeasibility issues aside;

(b)it would be unconscionable (contrary to good conscience) for the registered proprietor to rely on their indefeasible title; and

(c)depriving the registered proprietors of an indefeasible title would not be contrary to the policy and purposes of the Torrens system.

76 The Land Transfer Act 1952 has been repealed by the Land Transfer Act 2017. However, sch 1 of pt 1 of the Land Transfer Act 2017 contains transitional provisions which provide that “court proceedings under the Land Transfer Act 1952 in progress before the commencement of this clause” must be dealt with in accordance with the 1952 Act as if it has not been repealed but after it has been dealt with, has effect as if it had been dealt with under the 2017 Act. Therefore, the 1952 Act is the one applying for these provisions.

77 See, for example, Assets Co Ltd v Mere Roihi [1905] AC 176, (1905) NZPCC 275 (PC); Boyd v Mayor of Wellington [1924] NZLR 1174 (CA); and Frazer v Walker [1967] NZLR 1069, [1967] 1 AC 569.

78 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433 at [148] per Tipping J.

79 At [157]-[170].

[159]          Two of the pleaded claims contend there was no contract entered into. This contention is made on the basis the parties were not ad idem. This was because Wamoana intended a sale whereas the Incorporation intended a partition application, what was intended by the consideration was unclear, and no consideration was ever paid. The Incorporation contends in these circumstances that Wamoana was unjustly enriched and she holds the Te Kani land on a resulting trust for the benefit of the Incorporation.

[160]          I do not accept this submission. I have found that a sale was intended by the parties who signed the memorandum of transfer. I have found that the intended consideration was an adjustment of Wamoana’s shares, which would be made on the basis that the transferred land had a value of $26,000 and Wamoana’s interest in the assets of the Incorporation had been reduced to this extent. Under the Māori Affairs Act 1953 (as amended), Wamoana’s shares were to be adjusted to reflect that reduced value of her interest in the Incorporation in proportion to the value of the Incorporation’s total assets at that time. That adjustment was not made, but it was always open to the Incorporation to do so from the time Wamoana’s title to the land was registered. A resulting trust does not arise because one party to a contract has simply failed to exercise its rights to receive the consideration it is due.80

[161]          The other two causes of action proceed on the basis that the Court finds there was a contract for the sale of land. The Incorporation claims the contract was void as an illegal contract under the Illegal Contracts Act 1979. Alternatively, the Incorporation submits it was entitled to cancel the contract because the consideration was not paid. The Incorporation purported to give notice of cancellation under s 8 of the Contractual Remedies Act 1979. The Incorporation submits this cancellation and the contract’s illegality under the Illegal Contracts Act gave rise to a resulting trust in the Te Kani land in favour of the plaintiff.

[162]          The Incorporation’s claim for a resulting trust rests on the basis that the transfer of the land occurred without complying with the legal requirements for that transfer.

80   Equity responds by imposing a resulting trust when property has been transferred to another and it can be said that the provider did not intend to benefit the recipient: Robert Chambers Resulting Trusts (Oxford University Press, Oxford, 1997) at 2–3.

The starting principle is that, upon registration, Wamoana obtained an indefeasible title despite any defects in the transferor’s authority to transfer the title or the process by which the transfer occurred.81 A resulting trust, giving rise to an in personam claim, is not imposed against a bona fide purchaser for value without notice of the matter said to give rise to the invalidity of the transfer.82

[163]          There is no basis to find that Wamoana had notice of the defects in the process here. She instructed appropriate advisers (a surveyor and a lawyer) who were of the view that a partition and resource consent were not required. They were not alone in that view, the Principal Assistant Land Registrar agreed. The Incorporation’s lawyers were involved in the transfer and could be expected to have considered whether there was appropriate authority from the Incorporation to transfer the title. In these circumstances, the Incorporation cannot establish a cause of action for a resulting trust.

[164]          Further, to defeat an indefeasible title it must be unconscionable for Wamoana to rely on her indefeasible title. I do not accept that any unconscionability exists.83 There is no identifiable wrongdoing, impropriety, misuse of power, misrepresentation, or lack of probity in the process by which the land was partitioned and Wamoana was registered on the title. Wamoana, and her agents, acted conscientiously and transparently. They communicated with officers of the District Land Registrar and followed their direction. The Incorporation’s lawyers were not only apprised of the steps being taken to transfer the land, they participated in those steps.

[165]          For these reasons I conclude the Incorporation is not entitled to a declaration that Wamoana holds Lot 1 under a resulting trust for the benefit of the Incorporation, nor an order requiring the return of Lot 1 to the Incorporation.

81 See the discussion above at [156] and the authorities cited above at n 77.

82 Resulting Trusts, above n 80, at 35, 125 and 132. See for example Kukutai v Dyer (2008) 9 NZCPR 803.

83   See, for example, Dollars & Sense Finance Ltd v Nathan [2007] NZCA 177, [2007] 2 NZLR 747 at [30]–[32] per William Young J and [138]–[139] per Glazebrook J (with Robertson J agreeing). The Supreme Court did not consider the issue on appeal: Dollars & Sense Finance Ltd v Nathan [2008] NZSC 20, [2008] 2 NZLR 557 at [51].

Limitation Act

[166]          As the acts relied on by the Incorporation occurred before 1 January 2011, the Limitation Act 1950 applies.84 Subject to some limitations that are not presently relevant, this Act applies to Māori land. Section 7(2) of the Act provides that no action could be brought “to recover any land after the expiration of 12 years from the right of action accrued to him”. By s 10(1), s 7(2) applied to equitable interests in land in like manner as they apply to legal estates. By s 8, the cause of action accrued when the person bringing an action to recover land that he or she has been in possession of, has been dispossessed of that land.85

[167]          The defendant submits the Incorporation’s cause of action arose when it was dispossessed of the land with the registration of the transfer on 5 March 1993. This meant the Incorporation’s proceeding needed to be filed by 5 March 2005. As it was not filed until 7 October 2013, it is now out of time.

[168]          The Incorporation submits the limitation period was extended by s 28(1). This section provides that, where the action is for relief from the consequences of a mistake, the limitation period does not begin to run until the Incorporation has discovered the mistake, or could with reasonable diligence have discovered it. The Incorporation submits it was not until 2010 when it received the letter from Burnard Bull with the certificate of title that the Incorporation was on notice that the land had been transferred to Wamoana.

[169]          I do not accept this submission. I have found that representatives of the Committee reached an oral agreement with Wamoana and Parekura to sell the land to Wamoana. The Incorporation’s solicitors were involved in the steps necessary to effect the transfer. There was no mistake about the intention to transfer the land to Wamoana. The Incorporation has been on notice from this time. Moreover, even if that was not so, the Committee was aware of the transfer on 21 July 1999 when, in the context of the succession of Wamoana’s shares, they discussed the fact that the shares

84     Limitation Act 2010, s 59.

85     See Kukatai v Dyer, above n 82, at [97]–[102].

had not been adjusted for the land that had been transferred.86 That would mean the proceeding needed to be brought before 21 July 2011 and it was not so brought.

What about the shares?

[170]          In the alternative, the Incorporation seeks an order vesting in it the shares (and accumulated dividends) in the Incorporation held by Renata. That is not appropriate given that the land transferred to Wamoana was significantly less than Wharekahika A15 in which, through succession, Renata’s shareholding is derived. At best, this order would be confined to the proportionate value that the transferred land represented as against the Incorporation’s total assets as valued in 1993. The agreed value of the transferred land was $26,000 at that time. The value of the Incorporation’s total assets in 1993 would need to be assessed. The audited 1993 accounts provide a basis for this assessment to be made.

[171]          A claim for breach of the agreement to pay the agreed consideration has been brought too late. An action upon a deed must be brought within 12 years from when the cause of action occurred. However, there may be an argument that there was no breach. Rather, the transfer was agreed and, as such, by s 41(7) of the Māori Affairs Amendment Act 1967, the shares were deemed to be held by the Incorporation on behalf of the shareholders. It was then for the Incorporation to take the necessary steps to adjust the shareholding in accordance with s 41(7) at the end of the next financial year.

[172]          If that is correct, it is still open to the Incorporation to make this adjustment. This would mean that Wamoana may have received more dividends than she was entitled to from 1993 onwards. It should be possible for an accountant to calculate the dividends Wamoana ought to have received on her reduced shareholding entitlement following the land transfer as against the dividends she actually received. The amount she received above her entitlement could then be deducted from her (Renata’s) share of the retained dividends (also to be calculated based on Renata’s reduced shareholding). It seems to me that this would be a fair way to resolve this dispute, which has been around since 1999.

86     Refer [65] and [87] above.

Result

[173]          The claim for a declaration that the Te Kani land is held on a resulting trust for the benefit of the Incorporation is dismissed. The associated claim for a return of the Te Kani land is also dismissed.

[174] The adjustment of Renata’s shares in the Incorporation remains outstanding. The parties are to have the opportunity to attempt to resolve this on the basis discussed at [170]–[172] above. Because of the Christmas period, they have until 31 January 2020 to do so (they can seek leave to extend this period if necessary). The parties are to advise the Court by that day if they have resolved the matter.

[175] If they have not been able to resolve the matter, and do not obtain leave to extend the period for a resolution, they will then have until 14 February 2020 to make submissions as to whether it is open to me to make orders directing an adjustment of the shares and dividends in the manner discussed at [170]–[172] above or whether some other form of relief is available to regularise the share and dividend position.

Costs

[176]          My preliminary view is that costs should lie where they fall. If the parties have a different view, they may submit brief memoranda by 31 January 2020.

Mallon J