Walters v Wikiriwhi
[2022] NZCA 93
•29 March 2022 at 9.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA345/2021 [2022] NZCA 93 |
| BETWEEN | ERIC THOMAS HIRAU WALTERS, APERAHAMA WITHERS, STEVEN KORI TREVELYAN AND MICHELLE HURAE VALIANTINA SATCHELL |
| AND | SUNNY WIKIRIWHI AND RENEE DES BARRES |
| Hearing: | 10 February 2022 |
Court: | Kós P, Clifford and Collins JJ |
Counsel: | T J Conder and S A Stretton for Appellants |
Judgment: | 29 March 2022 at 9.30 am |
JUDGMENT OF THE COURT
AThe application to adduce further evidence is declined.
BThe appeal is dismissed.
CWe make no order for costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Collins J)
Introduction
At issue are the duties and liabilities of the trustees of an ahu whenua trust administered pursuant to the Te Ture Whenua Māori Act 1993 (the Act). The Trust is called the Oruanui Lands Trust (the Trust) and holds on behalf of its beneficiaries a farm located approximately 10 kilometres north-west of Taupō.[1]
[1]There are two separate trust orders, but they are both called the Oruanui Lands Trust and are administered together.
The Māori Land Court found the appellants, who were trustees of the Trust, had breached the duties they owed the beneficiaries when allowing Mr Walters (one of the trustees) to acquire a house and land that formed part of a block of farm land the Trust purchased in 2013.[2] The Māori Land Court ordered Mr Walters pay $101,000 by way of equitable damages and $27,475 for unpaid rent and subdivision costs.[3] The Court removed the appellants from their roles as trustees.[4]
[2]Wikiriwhi v Walters – Oruanui 9 Block and Part Oruanui 10 Block, Lot 1 Deposited Plan 471989 and Lot 2 Deposited Plan 471989 (2020) 232 Waiariki MB 212 (232 WAR 212) [Māori Land Court decision] at [68].
[3]At [100(d)].
[4]At [71].
The Māori Appellate Court upheld Mr Walters’ appeal concerning the payment of equitable damages and remitted that issue back to the Māori Land Court for redetermination.[5] The balance of the Māori Land Court judgment was upheld by the Māori Appellate Court.[6]
[5]Walters v Wikiriwhi – Oruanui 9 Block and Part Oruanui 10 Block, Lot 1 and 2 Deposited Plan 471989 [2021] Māori Appellate Court MB 102 (2021 APPEAL 102) [Māori Appellate Court decision] at [96]–[97].
[6]At [62]–[63] and [75]–[80].
The former trustees now appeal the decision of the Māori Appellate Court upholding their removal, and on behalf of Mr Walters, they appeal that Court’s decision as to equitable damages. The respondents, who sued in their capacities as beneficiaries of the Trust, oppose the appeal.
Background
Before the events in question, the Trust lands consisted of:
(a)Oruanui 9 Block: This comprised approximately 195 ha of Māori freehold land and, at the relevant time, had 652 beneficial owners.
(b)Part of Oruanui 10 Block: This is about 14.5 ha of Māori freehold land and had 643 beneficial owners. Of this land, about 10.5 ha was farmed. The remaining four hectares is administered as a Māori reservation for the purposes of a marae, urupā and church. The trustees do not administer the reservation.
The Māori Trustee acted as a custodian trustee from November 1994 to June 2014 (in relation to the Oruanui 9 Block) and 12 February 2015 (in relation to the Oruanui 10 Block).
The Trust leased its land to a farming enterprise, Gardon Ltd (Gardon). That company also leased a block of land from a Mr Corrigall (the Corrigall block). That land, which comprised about 19 ha, adjoined Oruanui 9 Block.
In or around June 2013, the manager of Gardon telephoned Mr Walters and informed him the Corrigall block was to be sold by auction. Mr Walters was told:
(a)If the Trust purchased the Corrigall block, Gardon would be able to pay more rent to the Trust.
(b)If, however, the Trust did not purchase the Corrigall block, Gardon would probably lose access to that land.
(c)If Gardon lost access to the Corrigall block it would be unlikely to renew its lease with the Trust.
The trustees were informed:
(a)The rateable value of the Corrigall block was $1,050,000.
(b)However, Mr Corrigall was hoping to receive $1.6 million from the sale of the land, which included a farm house and curtilages.
After investigating the Corrigall block the trustees decided that it was in the Trust’s interest to acquire that land. However:
(a)The house located on the property was considered to be superfluous to the Trust’s needs and probably a liability because of its poor condition.
(b)The Trust’s bank, Westpac New Zealand Ltd (Westpac), would only lend $650,000 to the Trust.
When faced with a potential funding shortfall two of the trustees, Ms Satchell and Mr Trevelyan, approached Mr Walters and put forward the following proposal:
(a)The Trust would bid up to $900,000 for the Corrigall block.
(b)Mr Walters would pay one-third of the purchase price.
(c)The home and a surrounding area of approximately 4.5 ha would be subdivided and transferred to Mr Walters.
(d)The cost of the subdivision would be met equally by Mr Walters and the Trust.
The trustees, including Mr Walters, held a meeting at 9.00 am on 1 November 2013. The courts below were satisfied that all of the trustees agreed to the proposal we have summarised at [11] before the Corrigall block was auctioned at 5.00 pm on 1 November. There is, however, no mention of that agreement in the minutes of the trustees’ meeting held on 1 November.
The Trust purchased the Corrigall block for just $595,000 at the auction held on 1 November 2013.
The key events that subsequently occurred can be conveniently explained under four headings.
Settlement
Settlement of the Corrigall block took place on 11 December 2013. The Māori Trustee became the registered owner until it was transferred to the Trust. The Corrigall block is ordinary freehold land.
Subdivision
On 12 November 2013, Mr Walters arranged for a surveyor to commence subdividing the Corrigall block into two lots. Lot 1 comprised about 4.5 ha and included the farm house.
Minutes of a meeting of the Trust held on 22 November 2013 record the Trust was to subdivide “less than five hectares and sell [that land and house] to the interested party”. The price was to be one-third of the purchase price of the Corrigall block. Mr Walters’ signature is on those minutes.
On 19 December 2013, the Trust signed an agreement for the sale of Lot 1 to Mr Walters and his wife. The agreed price was $198,333.33. Mr Walters signed the sale and purchase agreement as a vendor and as a purchaser.
On 6 January 2014, the surveyor applied to the Taupō District Council for consent for the subdivision. The applicants were the Trust, the Māori Trustee and Mr Walters.
The trustees met with the Trust’s solicitor on 10 January 2014. The minutes record Mr Walters left the meeting while the other trustees discussed the sale of Lot 1 to Mr and Mrs Walters. The solicitor for the Trust would later record in a memorandum:
While the arrangement between the Trustees had been entered into prior to the auction, I was not advised of this until afterwards. Subsequent to the completion of the purchase and at the Trustees meeting in January 2014, I advised the Trustees that because their arrangements with [Mr] Walters were not recorded in writing, they did not have to be bound by them. The Trustees confirmed to me that they needed to sell the house in any event, and they regarded themselves as bound by the commitment to [Mr] Walters who had agreed to step up to the mark to ensure the Trust was able to procure the land.
The minutes of the 10 January 2014 meeting of the trustees record three trustees (Ms Satchell, Mr Trevelyan and Mr Withers) agreed Mr Walters would purchase the house and approximately four hectares for one-third of the purchase price of the Corrigall block “regardless of the price at the time of purchase and the condition of the house”.
On 17 January 2014, the trustees resolved to share with Mr Walters the cost of securing a driveway onto Lot 1. Mr Walters proceeded to repair and fence the driveway.
Delays occurred in obtaining subdivision consent and in completing the subdivision. Minutes of a meeting of the trustees held on 12 December 2014 record the subdivision had been completed and that Mr Walters would “pay the Trust [for Lot 1] and the funds can be applied towards reduction of [the Trust’s] debt”. He did not do so for another year, and then, according to the Trust’s accounts, Mr Walters paid $189,082 for Lot 1.
The ownership of the Corrigall block was not transferred from the Māori Trustee to the Trust until 3 September 2015. The settlement of Lot 1 from the Trust to Mr and Mrs Walters finally occurred on 18 December 2015.
Māori Trustee
In early February 2014, the Māori Trustee became aware of the Trust’s intention to sell Lot 1 to Mr and Mrs Walters. The Māori Trustee sent an email to Ms Satchell on 7 February 2014, saying that it was concerned:
(a)It had not been told of the Trust’s intention to sell Lot 1 to Mr and Mrs Walters.
(b)The proposed purchase price of Lot 1 was not supported by any independent valuation.
The following day, Ms Satchell wrote to the Māori Trustee saying the Trust wanted the Māori Trustee to cease being a custodian trustee.
The Māori Trustee met with the trustees on 14 February 2014. The minutes record Mr Walters would instruct a valuer to prepare a registered valuation of Lot 1. Instead, Mr Walters arranged for a valuer to provide a report on apportionment of the purchase price of Lots 1 and 2. The valuer said the apportioned value of Lot 1 was $267,000.
On 17 April 2014, the Māori Trustee applied to the Māori Land Court for directions in relation to the Corrigall block. The trustees responded by applying to have the Māori Trustee removed as custodian trustee. Only the application by the trustees was granted.
As we have noted at [6], the Māori Trustee ceased to be a custodian trustee of Oruanui 9 Block in June 2014 and Oruanui 10 Block in February 2015.
Rental arrangements
Mr Walters and his wife moved into the house on Lot 1 in April 2014. He undertook maintenance and repair work up to the time he and his wife acquired the title to Lot 1 on 18 December 2015. The trustees chose not to charge Mr Walters and his wife rent during the 20-month period they lived in the house before they settled the purchase of Lot 1.
Pleadings
Ms Wikiriwhi and Ms des Barres are beneficial owners of Oruanui 9 Block and part of Oruanui 10 Block. They are also trustees of the reservation. In August 2016, they commenced proceedings in the Māori Land Court against Mr Walters and the three other trustees.
The claim against Mr Walters alleged that by acquiring Lot 1 from the Trust Mr Walters breached the fiduciary duties he owed as a trustee, including the duty to not personally profit from Trust property and to always act in the best interests of the beneficiaries.
The claim against the three other trustees alleged they breached their fiduciary duties to the beneficial owners of the Trust by, amongst other failings, allowing Mr Walters to advance his personal interest at the expense of the beneficial owners.
The appellants also pleaded Mr Walters breached s 227A(2) of the Act. Section 227A provides:
227A Interested trustees
(1)A person is not disqualified from being elected or from holding office as a trustee because of that person’s employment as a servant or officer of the trust, or interest or concern in any contract made by the trust.
(2)A trustee must not vote or participate in the discussion on any matter before the trust that directly or indirectly affects that person’s remuneration or the terms of that person’s employment as a servant or officer of the trust, or that directly or indirectly affects any contract in which that person may be interested or concerned other than as a trustee of another trust.
The applicants sought various declarations, equitable damages and an order removing all of the respondents as trustees of the Trust.
Māori Land Court decision
Judge Coxhead said that it was “clear Mr Walters had a conflict of interest with regard to the [Corrigall] Block transactions”.[7] That conflict existed by virtue of the arrangement between Mr Walters and the other trustees before the auction and continued during the time of the subdivision of the Corrigall block and the sale of Lot 1 to Mr and Mrs Walters. “He and his whānau continued to have distinct interests from those of the beneficiaries”.[8]
[7]Māori Land Court decision, above n 2, at [61].
[8]At [61].
The Judge said:[9]
… the evidence shows that Mr Walters: voted on and signed a resolution for the purchase of the [Corrigall] Block; was at least present for discussions relating to the subdivision and sale of Lot 1 to himself; signed the sale and purchase agreement for Lot 1 as both vendor and purchaser; was actively involved in engaging the surveyor and driving the subdivision process; and provided instructions to the valuer for an apportionment of the purchase price rather than a registered valuation …
[9]At [62].
Judge Coxhead was satisfied all four trustees had failed to carry out their duties satisfactorily and they should be removed from their positions.[10]
[10]At [71].
When assessing equitable damages, the Judge accepted the evidence of Mr McLaughlin, a valuer called by Ms Wikiriwhi and Ms des Barres, who valued Lot 1 at $500,000 as at 2015 (the McLaughlin valuation).[11] The Judge also accepted Mr Walters’ statement that he had spent about $200,000 in improving the property. The Judge deducted the amount Mr and Mrs Walters paid for Lot 1 from the McLaughlin valuation. He then deducted the $200,000 that Mr Walters said he had spent on improvements. This left, according to the Judge’s calculations, $101,000 which he directed be paid as equitable damages.[12]
[11]At [78].
[12]At [84].
The Judge also ruled that Mr Walters pay:[13]
(a)$7,475 for unpaid rent between April 2014 and December 2015;
(b)$20,000 being his share of subdivision costs; and
(c)interest on $128,475.
Māori Appellate Court decision
[13]At [100(d) and (e)].
The Māori Appellate Court upheld the judgment of the Māori Land Court in all but one respect.[14]
[14]Māori Appellate Court decision, above n 5, at [62]–[63] and [75]–[80].
In relation to the assessment of equitable damages made by Judge Coxhead, the Māori Appellate Court said:[15]
(a)“First, there was not any sufficiently reliable valuation evidence of the state of the Lot 1 house and curtilage prior to its sale so that a proper assessment of any improvements completed by Mr Walters could be made”. In particular, the Court was concerned the McLaughlin valuation was undermined by Mr McLaughlin not having access to the inside of the house.
(b)“Secondly, there was insufficient evidence of any significant expenditure by Mr Walters on improvements before the lower court that would warrant the $200,000 deduction”.
[15]At [96].
The Māori Appellate Court therefore allowed the appeal from the award of equitable damages and remitted the determination of the quantum of equitable damages to the Māori Land Court for further consideration.[16]
Grounds of appeal
[16]At [97].
The grounds of appeal were distilled by Mr Conder, counsel for the appellants, to four key points.
First, it was contended the courts below erred when they failed to appreciate that Mr Walters was not in fact involved in making the decision to sell Lot 1 to himself and his wife. It was submitted that before the auction on 1 November 2013, the trustees appreciated that Mr Walters could not participate in the Trust’s decision to sell what became Lot 1 to Mr Walters and his wife. “For this reason, Mr Walters was excluded from discussions”. Mr Conder sought to support this limb of the appellants’ case by seeking leave to adduce further evidence, which he said showed Mr Walters was not directly involved in the discussion to sell Lot 1 to himself and his wife. We will deal with the application to adduce further evidence at [50] to [56].
Second, even if Mr Walters did participate in the decision to sell what became Lot 1 to himself and his wife, the decision was ratified by three of the trustees at the meeting they had with the Trust’s lawyer on 10 January 2014. Mr Walters did not participate in that discussion. It was argued the courts below therefore erred when concluding the trustees were improperly influenced by Mr Walters’ conflicts of interest when they affirmed the decision to sell Lot 1 to Mr Walters and his wife.
Third, the courts below erred when holding that any breaches of duty by the trustees warranted their removal. It was contended:
(a)Any breach of duty by the trustees was relatively minor and happened in good faith.
(b)The trustees’ actions resulted in significant benefit to the Trust.
Fourth, the Māori Appellate Court erred when it remitted the issue of equitable damages back to the Māori Land Court to redetermine. Mr Conder said that the proper course was for the Māori Appellate Court to have ruled that the respondents had failed to prove their claim for equitable damages and entered judgment for the appellants in relation to that aspect of the case.
Respondents’ case
The respondents submitted:
(a)The application to adduce further evidence should be declined because the evidence was neither fresh nor cogent.
(b)There was overwhelming evidence that Mr Walters participated in the decision to sell Lot 1 to his wife and himself.
(c)The courts below made the correct decision to remove all of the appellants as trustees.
(d)The quantum of equitable damages should be redetermined by the Māori Land Court.
Application to adduce further evidence
Ms Satchell has sworn an affidavit attaching a statement from Mr Tahana, who, at the relevant time, was providing administrative, financial and other consultancy services to the Trust. Ms Satchell explains in her affidavit that the appellants wished to summons Mr Tahana in any new hearing in the Māori Land Court and that the statement attached to her affidavit forms the basis of the evidence he will give.
The application to adduce further evidence relies on r 45 of the Court of Appeal (Civil) Rules 2005. The criteria to admit new evidence in this Court are well established.[17] The evidence in question must be “fresh, credible and cogent. It will not be regarded as fresh if it could, with reasonable diligence, have been produced at the trial”.[18] In exceptional circumstances, evidence that is not fresh can still be adduced.[19] This Court must also be satisfied a miscarriage of justice would arise if the new evidence were not allowed to be produced.
[17]See Aotearoa International Ltd v Paper Reclaim Ltd (Further Evidence) (No 1) [2006] NZSC 59, [2007] 2 NZLR 1.
[18]Erceg v Balenia Ltd [2008] NZCA 535 at [15] citing Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 192.
[19]Rae v International Insurance Brokers (Nelson Marlborough) Ltd, above n 18, at 193.
Among the many difficulties that the appellants face in relation to the application to adduce further evidence is that we cannot determine exactly what evidence Mr Tahana would give.
Mr Tahana was invited to swear an affidavit drafted by the appellants’ lawyers and which was based on the statement attached to Ms Satchell’s affidavit. Mr Tahana wrote to the appellants’ lawyers, however, and said he was “not willing to swear the affidavit” and that he hoped the trustees gained “some useful learnings from this process, regardless of outcome”.
The proposed evidence therefore lacks cogency. It is also far from fresh. The appellants knew Mr Tahana attended a number of meetings with the trustees in 2013 and 2014. It is not sufficient for the appellants to now say that they did not appreciate before the hearing in the Māori Land Court that, potentially, Mr Tahana could have given evidence.
There are no exceptional circumstances to justify adducing the further evidence when it is not fresh. There can also be no miscarriage of justice in declining the application to adduce further evidence in circumstances where we can have no certainty about what the new evidence is.
The application to adduce further evidence is therefore declined.
Grounds of appeal: Analysis
We agree with Mr Koning, counsel for the respondents, when he submitted that there was a vast volume of evidence that showed Mr Walters actively participated in the decision to sell what became Lot 1 to himself and his wife. That evidence may be summarised under three headings.
Before the auction
The evidence that demonstrated Mr Walters agreed to purchase what became Lot 1 before the auction includes:
(a)the memorandum prepared by the Trusts’ lawyer, the relevant portions of which we have set out at [20], which records the agreement reached by all trustees before the auction that involved Mr Walters acquiring a portion of the Corrigall block for one-third of the total price the Trust would pay for that land;
(b)Mr Walters’ evidence in the Māori Land Court in which he acknowledged before 1 November 2013 he and the Trust had reached an agreement, whereby he would purchase part of the Corrigall block by paying one-third of the total purchase price for that block;
(c)an email dated 2 April 2014 from Mr Walters to the lawyer for the Māori Trustee in which he said:
This property was on the market for $1.6 million. We made a collective Trustee decision to go to auction and max our bid at 50% [$800,000] with ability to go a little higher if required based on the fact that my family would commit to one third of the buying price. A nice clean business deal. All above board. No hidden agendas. All transparent.
(emphasis added)
(d)the evidence of Mr Withers, Mr Trevelyan and Ms Satchell in the Māori Land Court, all of whom confirmed the agreement before the auction that the trustees, including Mr Walters, had reached whereby Mr Walters would acquire the house and part of the Corrigall block for one-third of the purchase price for the entire block.
After the auction
After the auction, Mr Walters played an active role in preparing for the subdivision of the Corrigall block.
Aside from the meeting of the trustees held on 10 January 2014, Mr Walters participated in and voted on resolutions during at least 12 meetings of the trustees that supported the subdivision work that was carried out under his direction.
Mr Walters signed the 19 December 2013 sale and purchase agreement, in which he and his wife agreed to purchase Lot 1. Mr Walters signed that agreement in his capacity as both a trustee vendor and as a purchaser.
The appellants place a lot of weight on the fact Mr Walters absented himself from part of the meeting of the trustees on 10 January 2014, when the remaining trustees affirmed the decision to sell what was to become Lot 1 to Mr Walters and his wife.
It was argued that by absenting himself from part of the 10 January meeting, Mr Walters complied with s 227A(2) of the Act, in that he did not vote or participate in the discussion that directly or indirectly affected the contract in which he was interested or concerned. Similarly, it was argued Mr Walters’ absence during the meeting of 10 January ensured compliance with cl 5 of the Order of the Māori Land Court establishing the Trust. Clause 5 mirrors s 227A(2) of the Act.
In Fenwick v Naera,[20] the Supreme Court considered, amongst other provisions, s 227A of the Act. For present purposes, it is sufficient to note that:
(a)The Court unanimously confirmed that general trust law applies to trusts under the Act to the extent that the general law is consistent with the scheme of the Act.[21]
(b)The trustees who had more than a de minimis personal beneficial interest in a contract with the Trust were conflicted and should not have participated in discussing or voting on the transaction.[22]
(c)By a majority, the Court said that s 227A was not to “be construed narrowly. The wording is expansive. … It applies to both an interest and a concern in a contract. It applies not only to a direct, but also to an indirect, interest or concern in any contract”.[23]
[20]Fenwick v Naera [2015] NZSC 68, [2016] 1 NZLR 354.
[21]At [55] and [148].
[22]At [60] and [164].
[23]At [53].
The Court held s 227A was designed to reflect the prohibition against self-dealing in equity by trustees. It was no answer to say that the breach had no effect because the decisions in question could have been made by a majority of other trustees. Section 227A was designed to avoid the appearance of risk of conflicts of interest and improper influences, whether conscious or unconscious.[24]
[24]At [54], [55], [61], [62] and [63].
Mr Walters’ absence from the trustee meeting on 10 January, when the remaining trustees reaffirmed the sale of Lot 1 to Mr and Mrs Walters, did not remedy the significant breaches of duties by the trustees that occurred in this case, because, as the evidence which we have summarised at [11] to [30] demonstrates, at all stages Mr Walters was fully involved in the plan whereby he and his wife would acquire Lot 1 from the Trust. The fact Mr Walters absented himself from part of the trustees’ meeting on 10 January did not counterbalance the vast volume of evidence that shows he was intricately involved from beginning to end in the Trust selling Lot 1 to himself and his wife.
Mr Withers, Mr Trevelyan and Ms Satchell must also share responsibility for the very clear breaches of trust that occurred. In particular:
(a)They knew Mr Walters and his whānau would benefit from acquiring Lot 1.
(b)They agreed to Mr Walters playing the lead role in the arrangements that led to him and his wife acquiring Lot 1.
All trustees had a duty to avoid the appearance, and risk, of Mr Walters personally benefitting from his role as a trustee. All trustees failed by a considerable margin to discharge that duty.
Further breaches of duty
As will be apparent from this judgment, the parties’ primary focus has been on whether Mr Walters participated in the decisions of the Trust to sell Lot 1 to himself and his wife and the effect of Mr Walters not participating in the relevant part of the trustees’ meeting on 10 January 2014. There is, however, another feature of this case which we believe equally demonstrates the trustees’ shortcomings.
When the trustees realised after the auction on 1 November 2013 that the Trust could purchase the Corrigall block without financial assistance from Mr Walters, the trustees were obliged to assess whether or not it was prudent to sell what became Lot 1 to Mr and Mrs Walters for one-third of the price paid for the Corrigall block.
The trustees appeared to have convinced themselves that they were obliged through a sense of loyalty to Mr Walters to continue with the pre-auction agreement concerning the purchase price of what became Lot 1 regardless of whether or not that arrangement was in the best interests of the Trust. The approach taken by the trustees however, involved them impermissibly dividing their loyalties between Mr Walters and the beneficiaries of the Trust. That also allowed Mr Walters to perpetuate the conflict between his personal interests and his duties to the beneficiaries.
The trustees may have avoided breaching their duties when selling Lot 1 to Mr Walters if they had obtained a proper independent valuation of Lot 1 and determined the sale price on the basis of that valuation. The trustees did not do so but instead simply adhered to the pre-auction agreement that the trustees had settled upon, regardless of the value of the land and house Mr Walters and his wife ended up acquiring.
We acknowledge that the purchase of the Corrigall block was beneficial to the Trust and that, ultimately, the Trust was able to avoid the challenges it would have faced if it had been required to either move or restore the farm house. Nevertheless, as we have already noted, the trustees needed to base their decision to sell Lot 1 to Mr Walters and his wife on sound evidence, and not base that decision on their sense of loyalty to Mr Walters.
Decision to remove trustees
We do not accept Mr Conder’s submission that the breaches of trust in this case were minor. Our reasons for agreeing with the decision of the courts below to remove the trustees are as follows:
(a)The breaches of trust started prior to the auction on 1 November 2013 and continued through to when Mr Walters and his wife settled the purchase of Lot 1 in December 2015. The breaches straddled a 25-month period.
(b)The trustees allowed Mr Walters to control almost every aspect of the subdivision and sale of Lot 1 to himself and his wife.
(c)The trustees ignored the concerns of the Māori Trustee when it drew the trustees’ attention to the difficulties with the arrangements to sell Lot 1 to Mr Walters and his wife. Instead of recognising and responding appropriately to the concerns of the Māori Trustee, the trustees immediately took steps to remove the Māori Trustee as a custodian trustee.
(d)Options were available to the trustees to go to the Māori Land Court to seek directions on the sale of Lot 1 to Mr Walters and his wife. They chose not to do so.
(e)The trustees did not inform beneficiaries of the decisions concerning the sale of Lot 1 to Mr Walters and his wife until 2016.
Both the Māori Land Court and the Māori Appellate Court were very concerned about the seriousness of the trustees’ breaches of their duties in this case. We share those concerns and uphold the decision to remove the trustees.
Reconsideration of equitable damages
We also see no merit in the complaint by Mr Conder that the Māori Land Court should not reconsider the amount of equitable damages that were awarded in this case. The Māori Appellate Court was understandably concerned about the evidence Judge Coxhead relied upon when assessing the amount of equitable damages Mr Walters should pay. The Māori Appellate Court properly invoked the jurisdiction conferred by s 56(e) of the Act when it directed a rehearing of the amount of equitable damages Mr Walters should pay. The order for rehearing in relation to that issue was entirely orthodox.
Result
The application to adduce further evidence is declined.
The appeal is dismissed.
We make no order for costs.
Solicitors:
Holland Beckett Law, Tauranga for Appellants
Joshua Gear, Tauranga for Respondents
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