147 Waiariki MB 143
IN THE MĀORI LAND COURT OF NEW ZEALAND
WAIARIKI DISTRICT
A20160001042
UNDER
Sections 43, 231 and 244 of Te Ture Whenua Māori
Act 1993
IN THE MATTER OF
Matata Parish 39A 2B 2B 2A and Matata 39A 2A
BETWEEN
HUIA ANN PACEY, JOHN TIONGA SAVAGE
AND SAMUEL KELVIN BARNS AS TRUSTEES
OF THE MATATA PARISH 39A 2B 2B 2A TRUST
First Applicant
AND
SAMUEL KELVIN BARNS, JOHN TIONGA
SAVAGE AND TAMTI DRAWBRIDGE AS
TRUSTEES OF THE MATATA PARISH 39A 2A
TRUST
Second Applicant
AND
RAE BEVERLEY ADLAM
First Respondent
AND
HELEN MARIA SAVAGE AND RAELYN ARIHIA
PEITA AS TRUSTEES OF THE OTONGA
WHĀNAU TRUST
Second Respondent
AND
LAWRENCE TE AOKAHARI NIAO
Third Respondent
Hearing:
18 August 2016
(Heard at Rotorua)
Appearances:
D Wackrow for the First Applicant
D Dowthwaite for the Second Applicant
L Van for the First Respondent
T Wara for the Second Respondent
M Sharp for the Third Respondent
Judgment:
9 September 2016
RESERVED JUDGMENT OF JUDGE C T COXHEAD
Copies to:
D Wackrow, PO Box 461, Auckland 1140 - [email protected]
D Dowthwaite, DX JP30009, Rotorua 3046 - [email protected]
L Van, PO Box 2646 Auckland 1140
T Wara, DX JP30025, Rotorua 3046 – [email protected]
M Sharp, PO Box 5111, Mount Maunganui – [email protected]
147 Waiariki MB 144
Introduction
[1]
The applications have arisen as a result of Lawrence Niao gifting 0.00001 of his
shares to 60 members of his whānau. Vesting orders were granted on 20 April 2015, 11
November 2015, 10 March 2016 and 7 June 2016.1 As a result, the beneficial ownership of
the Matata Parish 39A 2B 2B 2A block (the Farm Trust) has risen from 91 to 144 and the
Parish of Matata 39A 2A block (the Bath Trust) from 76 to 135.
[2]
The applicants argue that Mr Niao is seeking to unbalance the voting power
between the majority shareholders and minority shareholders, which the Court went to
great lengths to consider prior to the issuing of the 10 September 2015 judgment
(September judgment).2
[3]
The majority trustees of the Farm Trust and the majority trustees of the Bath Trust
have filed identical applications requesting the following:
(a)
Recall of paragraphs [5], [52] and [62](a) of the reserved judgment
delivered on 10 September 2015 at 127 Waiariki MB 184;
(b)
A rehearing, per s 43 of the Act, of part of the Trust Orders provided in the
reserved judgment;
(c)
A review of the terms of trust of both the Bath Trust and the Farm Trust, per
s 231 of the Act; and
(d)
A variation of the trust orders, per s 244, for both the Bath Trust and Farm
Trust.
[4]
The applicants also seek further clarification as to the provisions concerning
independent trustees and proxy voting procedures.
[5]
Mr Niao, currently a trustee of both the Bath Trust and Farm trust, opposes the
application. Mr Niao argues that he started transferring his shares to whānau members
1
2
119 Waiariki MB 128 (119 WAR 128), 131 Waiariki MB 191 (131 WAR 191), 137 Waiariki MB 139
(137 WAR 139) and 142 Waiariki MB 144 (142 WAR 144).
Barnes v Adlam – Matata Parish 39A 2A (2015) 127 Waiariki MB 184 (127 WAR 184).
147 Waiariki MB 145
well before the September judgment was issued and maintains that the transfer of shares
(share splitting) has nothing to do with attempting to manipulate the voting provisions for
the trusts.
[6]
The last time these parties were in Court I thought matters had concluded on a
positive note with a pathway forward in terms of finalising a new trust order and
movement towards the appointment of new trustees. On a number of occasions I have
encouraged and prayed to the parties that they find it within themselves to resolve their
own issues. Unfortunately, the Court is again asked to assist. It is hoped that this decision
will provide guidance and a way forward towards the election of new trustees.
Background
September Judgment
[7]
On 10 September 2015 I delivered a reserved judgment dealing with the trust deeds
for both trusts. I determined that voting should be by show of hands with one vote per
person, unless a poll is demanded by 15 per cent of the beneficial owners present at the
general meeting, in which case voting will be by share holding.
[8]
I also determined that it was up to the beneficiaries to decide if an independent
trustee should be elected and considered that there should be no allowance for dual
trusteeship across the trusts.
Issue
[9]
The issue for determination is whether the Court should grant any of the orders as
sought by the applicants’ to vary the voting provisions of the trusts.
Submissions for the applicants’
[10]
Mr Wackrow provided submissions on behalf of the Farm Trust.
Those
submissions were supported by counsel for the Bath Trust.
[11]
Mr Wackrow submits that throughout the proceedings the issue of striking a
balance in the voting provisions between the majority and minority shareholders was
147 Waiariki MB 146
prominent. Various options were put forward for the Court to consider. The Court
ultimately determined that the threshold for calling a poll vote would be 15 per cent of
beneficiaries present at a General or Special meeting.
Mr Wackrow submits that following the substantive hearing, on 5 August 2015,3 Mr
[12]
Niao vested a portion of his shares in a number of recipients, resulting in an increase in the
beneficial ownership of the trusts. All of the new owners hold 0.00001 shares each and are
descendents of two of the original eight owners. The addition of these owners, Mr
Wackrow states, disturbs the substratum on which the September judgment was based.
Counsel submits that this outcome was not anticipated by the Court or any of the other
parties.
[13]
In addition, Mr Wackrow points out that the applicant, Samuel Barns, holds more
than 857,000 times more shares than any of the new beneficial owners. The Otonga
Whānau Trust have in excess of a 5.4 million times larger shareholding, Ms Adlam more
than 1.9 million, Mr Lanham more than 1.9 million and both the Barbara Sarah Pacey
Whānau Trust and the Pateriki Savage Whānau Trust each has more than a 1.7 million
times larger shareholding than the new beneficial owners.
[14]
Mr Wackrow argues that the new beneficial owners have the ability to block the
majority shareholders from calling a poll vote.
[15]
Mr Wackrow acknowledges that while a meeting of owners does not bind the Court
or the trustees, except where provided for in the trust order, the outcome of voting is highly
influential. Counsel submits that the Court will never be properly informed as to the
owners’ wishes if a poll vote is prevented from occurring.
[16]
In addition, counsel argues that the ability to vote by proxy may add to the voting
imbalance. While at general law the holders of proxies cannot vote by show of hands, that
general rule can be overridden by specific provision in the trust order. Counsel argues that
cl 15 of the trust order, which sets out the procedure in respect of proxies, presents an
added danger that Mr Niao and Rihi Vercoe will wield voting power using proxies well in
3
125 Waiariki MB 184-199 (125 WAR 184-199).
147 Waiariki MB 147
excess of their numbers and therefore exercise powers greatly disproportionate to their
beneficial ownership. As such, the trigger point for poll voting requires modification.
Submissions for Mr Niao
[17]
Mr Sharp submits that Mr Niao commenced transferring shares well before the 5
August 2015 hearing. He argues that the vesting orders were an attempt to balance the
ownership of each of the trusts.
[18]
Counsel submits that at the hearing held on 20 April 2015 in respect of one of the
vesting applications, Huia Pacey appeared and objected to the application.4 Ms Pacey’s
objection was based on the argument that Mr Niao was trying to manipulate voting for the
upcoming election of trustees.
Mr Sharp submits that Judge Harvey rejected those
arguments finding that Mr Niao’s motivation for gifting the shares, and any prior
arrangement that the parties to the transfer may have entered into were irrelevant to the
application.
[19]
Mr Sharp argues that Ms Pacey cannot now argue that it was completely
unexpected that Mr Niao would make further vesting order applications.
[20]
In addition, Mr Sharp points out that the application for vesting order made on 21
August 2015 to eight persons occurred prior to the September judgment being delivered.
As such it is not credible for the applicants’ to argue that Mr Niao anticipated the outcome
of the Court’s judgment.
[21]
Mr Sharp also points out that the applicants did not raise any issues with the further
vesting order applications. It was not until 23 December 2015 that the applicants filed
their application. Mr Niao’s conduct has been consistent with wanting to expand and
equate the shareholding of each of the two trusts before and after the September judgment
was delivered.
[22]
In addition, Mr Sharp argues that the present application is an attempt by the
applicants to delay the election of trustees.
4
119 Waiariki MB 128-134 (119 WAR 128-134).
147 Waiariki MB 148
Submissions for Ms Adlam
[23]
Ms Adlam supports in principle the recall application and variation of the
provisions of the trust order so that five beneficial owners present at a meeting may call a
poll vote.
[24]
As far as the voting issues are concerned, Ms Adlam states the dilution of shares
over time has enabled shareholders with a small shareholding to effectively control the
outcome of voting. Ms Adlam believes the Court must strike a balance between the
interests of family lines with a larger number of shareholdings and small shareholding
interests. Ms Adlam considers that reducing the threshold for calling a poll vote to five
beneficial owners present at a meeting will balance the rights and interests of all parties.
Should the recall application be granted?
Applicants’ submissions
[25]
Mr Wackrow submits that, despite the fact that there is no explicit provision in the
Act or the Māori Land Court Rules 2011 which provide the Court with a general right of
recall, the Court has the ability to do what is necessary to enable it to exercise its functions,
powers and duties. In accordance with Proprietors of Hiruharama Ponui Block Inc v
Attorney General (No 2),5 and R v Smith,6 this Court has the ability to reopen a decision
and recall a judgment prior to orders being sealed. Mr Wackrow relies on the Supreme
Court decisions of Saxmere Co Ltd v Wool Board Disestablishment Co Ltd and
Horowhenua County v Nash (No 2),7 to argue that this Court has the inherent jurisdiction to
recall a decision where there is a “very special reason”.
[26]
In this case, Mr Wackrow submits, the very special reason is the share splitting
undertaken by Mr Niao post the 5 August 2015 hearing. Counsel asks that the balance be
reset by adjusting the threshold for a poll vote to be five beneficial owners present at the
meeting.
5
6
7
Proprietors of Hiruharama Ponui Block Inc v Attorney General (No 2)[2004] 1 NZLR 394.
R v Smith [2003] 3 NZLR 617.
Saxmere Co Ltd v Wool Board Disestablishment Co Ltd (No 2)[2009] NZSC 122; Horowhenua County
v Nash (No 2) [1968] NZLR 632.
147 Waiariki MB 149
Mr Niao’s submissions
Mr Sharp submits that, contrary to the applicants’ submissions, there is no
[27]
precedent for this Court recalling judgments in the circumstances that arise here. Other
jurisdictions have the ability to recall judgments to correct errors or significant changes in
law.
It would not be appropriate in the circumstances of this case, where there is
subsequently discovered evidence, for parties to attempt to circumvent the specific
rehearing process, set out in s 43 of the Act, by applying for a recall.
Legal principles
There is no specific provision in Te Ture Whenua Māori Act 1993 which provides
[28]
for the recall of a judgment, and there are no helpful Māori Appellate Court authorities on
point.
[29]
The applicants referred me to a number of decisions of the Māori Land Court,
which they say provide authority for this Court to revisit its decisions in exceptional
circumstances, when required by the interests of justice.
[30]
In Taueki – Horowhenua 11 (Lake) Māori Reservation Trust regarding an
application for rehearing and a stay of proceedings the Court considered that:8
[12] The Māori Land Court does not possess any inherent jurisdiction, other than
where it has been accorded the same powers and authorities of the High Court in
respect of trusts under section 237 of Te Ture Whenua Māori Act 1993. While the
original application to the Court was for the removal of a trustee under the Court’s
trust powers, the power to issue a stay of execution cannot properly be interpreted
as a part of the “powers and authorities of the High Court in respect of trusts”, and
the Māori Land Court accordingly does not have the authority to issue a stay in
reliance on the High Court’s inherent jurisdiction.
[31]
Further, in Tito – Mangakahia 2B2 No 2A1A, which concerned an appeal against a
decision of the lower court to appoint the Māori trustee as responsible trustee for the trust,
the Māori Appellate Court held that:9
8
9
Taueki – Horowhenua 11 (Lake) Māori Reservation Trust (2012) 279 Aotea MB 101 (279 AOT 101).
Tito – Mangakahia 2B2 No 2A1A [2011] Maori Appellate Court MB 86 (2011 APPEAL 86).
147 Waiariki MB 150
[48] In Maxwell v Parata – Maruata 2B2 the Māori Appellate Court found that
where there is no application before the Court under section 240 to remove trustees,
and the Court wishes to remove trustees of its own motion, it must exercise the
jurisdiction under section 37(3) of the Act. Section 37(3) allows the Court in the
course of any proceedings to exercise any other part of its jurisdiction as it sees fit.
However, as set out in both of these decisions, persons affected by the exercise of
this jurisdiction must be given notice so that they can appear and be heard in
respect of their removal.
[32]
I was also referred to the High Court decision of Proprietors of Hiruharama Ponui
Block Inc v Attorney General (No 2). In that decision the applicant sought a recall on the
basis of new evidence on the Court’s finding and the failure to draw to the Court’s attention
the principle of indefeasibility. The Court held:10
The interests of justice strongly favoured the admission of the new evidence, for
the following reasons: there was no adverse interest affected; no question of
possible prejudice arose; the application was not opposed; the evidence was
unchallenged and germane to the issues; there was no risk of injustice if the
evidence was considered; and it would permit the issues to be considered in their
full factual context…
[33]
The High Court recalled the judgment on the basis that new evidence the Court was
satisfied that the lease had been granted pursuant to the special resolution, and that the land
had been alienated before the amendment to the Act came into force. But even if the
Court’s earlier conclusion had been correct, the indefeasibility principle would
nevertheless have applied to the leasehold interest once it was registered under the Land
Transfer Act 1952. On either view the approval of the Māori Land Court was not required
for the variation and assignment.
Discussion
[34]
I accept that there is no precedent for this Court recalling judgments in the
circumstances that have arisen here. However, this Court must have the jurisdiction to do
what is necessary and have proper processes to enable it to exercise the functions and
duties of a Court. In order to function with proper process the Court requires the ability to
reopen a decision and recall a judgment prior to orders being sealed.
[35]
I also agree that in order for this Court to recall a decision there must be “very
special reasons.”
10
Proprietors of Hiruharama Ponui Block Inc v Attorney General (No 2) [2004] 1 NZLR 394 at 394.
147 Waiariki MB 151
[36]
The applicants have submitted that share splitting constitutes an appropriate “very
special reason” for the September judgment to be recalled and for the relevant point of
balance to be appropriately reset.
[37]
In these circumstances I do not think that the vesting orders sought by Mr Niao and
granted by the Court, both before and after the September judgment, amounts to a very
special reason sufficient to justify the recalling of the September judgment. Share splitting
is undertaken in this Court for a number of reasons. Some parties seek to ensure their
descendants have shares in Māori land, while other parties split their shares for voting
purposes. This is not uncommon.
[38]
I also note, and will comment further on this later, that while voting is important in
terms of the election of trustees and showing sufficient support for a proposed trustee,
ultimately appointments are made by Court order and while the Court will always be
guided by the collective voice of the beneficial owners, it is not bound by those views.
[39]
Therefore, I am satisfied that this Court can consider the degree of support for the
persons elected by considering support in terms of people present as well as shareholding.
[40]
The application for recall is dismissed.
Should the application for a rehearing be granted?
Applicants’ submissions
[41]
In the alternative, Mr Wackrow submits that the matter should be reheard per s 43
of the Act. Counsel argues that the Court has on previous occasions granted a rehearing
out of time.
[42]
In this case Mr Wackrow submits that the share splitting occurred post the 5 August
2015 hearing and as such that evidence was not before the Court. Counsel argues that the
real point of difference was the orders granted on 11 November 2015 permitting the share
split in respect of 38 new owners for the Bath Trust and 32 new owners for the Farm
147 Waiariki MB 152
Trust.11 This number, Mr Wackrow argues, was significantly higher than the previous
vesting orders granted.
[43]
As such, Mr Wackrow submits that the application for rehearing was made on 23
December 2015 because the triggering event, being the 11 November 2015 orders, only
arose on that date. Following that, the applicants required time to consider the effect of
those orders. Counsel argues that the application for rehearing could not reasonably have
been made sooner and the share splitting is likely to cause a miscarriage of justice that was
not intended by the September decision. In such circumstances a rehearing is justified.
Mr Niao’s submissions
[44]
In relation to the rehearing application, Mr Sharp states that it should have been
foreseeable to the applicants that Mr Niao would make further gifting applications, given
that they appeared and opposed the applications.
[45]
Mr Sharp submits that the September judgment took into account the possibility of
share splitting and its impact on the voting process. The Court balanced this and other
factors and ultimately decided that the 15 per cent threshold was appropriate.
[46]
Further, even if the further vesting orders could not have been contemplated, this is
not a case where a rehearing should be granted, and even if a rehearing is granted there is
no evidence that the outcome will be any different. As such, a rehearing should be denied.
Legal principles
[47]
The principles for granting a rehearing are set out in Henare v Māori Trustee –
Parengarenga 3G:12
[14] A rehearing requires the balancing of two considerations. On one hand, it is
important to ensure that there is a proper administration of justice. This is balanced
against the need for finality of Court proceedings, rather than allowing an
unsuccessful party another opportunity to argue their case without good reason. In
Realtycare Corporation Ltd v Cooper Tomkins J considered the two policy
considerations that are involved in an inquiry into miscarriage of justice justifying a
new trial:
11
12
131 Waiariki MB 191-199 (131 WAR 191-199).
Henare v Māori Trustee – Parengarenga 3G [2012] Māori Appellate Court MB 1 (2012 APPEAL 1).
147 Waiariki MB 153
The first is that it is in the public interest in the proper administration of
justice that there be an end to litigation. It is contrary to that public interest
to allow a party the right to a new trial on an entirely different issue to that
which was litigated at the original trial. The second is that the successful
party should not be subjected to a further additional hearing simply because
the other party had omitted to raise an issue that could have been raised at
the original hearing.
[15] Section 43 contemplates a two step approach. First, the applicant must have
made the application within 28 days of the order unless the Judge is satisfied that
the application could not reasonably have been made sooner.
[16] Where an application is filed outside the 28 day period it is incumbent on
judges to satisfy themselves based on the Court record and/or evidence before them
that the application for rehearing could reasonably have been made within the 28
days. If the Judge is not satisfied that the application could reasonably have been
made sooner, then the Judge shall not grant a rehearing and the application will be
at an end.
[17] If the Judge is satisfied that the application could not reasonably have been
made within the 28 days, the next step is to consider whether a rehearing should be
granted pursuant to s 43(1).
[18] Section 43(1) contemplates that the Court has a discretion to grant a rehearing
in circumstances which might otherwise give rise to a miscarriage of justice.
Discussion
[48]
The application for rehearing is outside the 28 day statutory time period. The
difficulty for the applicants is that Mr Niao made applications for vesting orders prior to
the September judgment. Ms Pacey appeared before the Court on 20 April 2015, well
before the September judgment, and opposed the vesting orders. It was therefore well
known to the applicants that Mr Niao was undertaking this activity.
[49]
Further, the issue of share gifting among owners for voting purposes was a “live”
issue at the hearing held on 5 August 2015. In my decision I referred to this as follows:13
[35] Share gifting among owners for voting purposes is not a new phenomenon
within Māori Land Trusts. It is not uncommon for this Court to receive applications
where a parent will gift to their children a small proportion of their shares that they
hold in a land block. This is done for voting purposes in order that those children
can attend meetings and vote on a show of hands basis. This is not illegal. But it
does highlight the possibility that a show of hands voting process can potentially be
open to manipulation.
[36] Voting by a show of hands gives owners with very small shareholdings the
same voting rights as a larger shareholder. In these circumstances voting by a show
13
Barns v Adlam – Matata Parish 39A2A (2015) 127 Waiariki MB 184 (127 WAR 184) at [35] and [36].
147 Waiariki MB 154
of hands will reward those families who have looked to distribute their shares to as
many of their whānau as possible, while disadvantaging those whānau who have
looked to retain their shareholdings within a whānau trust.
[50]
The issue of share splitting is a matter that I took into consideration in my decision.
At that stage all that was considered was the possibility of share splitting and now that
possibility has occurred.
[51]
Mr Wackrow stressed that, while the applicants were aware of the earlier vesting
orders and the Court contemplated those orders, it was not until the applicants became
aware the 11 November 2015 orders that they were alive to Mr Niao’s applications for
gifting at a scale not previously seen or contemplated.
[52]
I am satisfied that the applicants could not have made the application sooner. The
scale of the vesting order granted on 11 November 2015, vesting shares in 30 new
beneficial owners, could not have reasonably been contemplated by the applicants at the
time of the August hearing.
[53]
As noted, the granting of a rehearing is a two step process. Having found that the
application could not have been made sooner the next step is to consider whether a
rehearing should be granted pursuant to s 43(1) of the Act.
[54]
Section 43(1) contemplates that the Court has a discretion to grant a rehearing in
circumstances which might otherwise give rise to a miscarriage of justice. Therefore, the
ultimate question in the case of an application for a rehearing is whether the applicant has
established circumstances which, in their totality, amount to a miscarriage of justice that
justifies a rehearing.14 The onus is on the applicant to establish circumstances having those
attributes.
[55]
The evidence and submissions as to the “miscarriage of justice” suffered by the
applicants is lacking. I take it that the applicants contend that Mr Niao’s subsequent gifting
of shares is new evidence that could not reasonably have been adduced by the applicant at
the original hearing, given that the evidence did not exist at the time.
14
Henare v Māori Trustee – Parengarenga 3G [2012] Māori Appellate Court MB 1 (2012 APPEAL 1) at
[25].
147 Waiariki MB 155
[56]
In this situation the applicants had the opportunity to be heard and took that
opportunity. The issue of share gifting was, as I have said, directly and squarely before the
Court at the August hearing and I referred to that issue in my September judgment.
[57]
I therefore find that there has not been a miscarriage of justice in these
circumstances to warrant the granting of a rehearing.
[58]
The application for rehearing is dismissed.
Should the review and variation applications be granted?
Applicants’ submissions
[59]
Mr Wackrow submits that a further alternative option for redress is to review the
trust per s 231 of the Act. Counsel argues that the Court will then be able to invoke its
inherent jurisdiction per s 237 to make the necessary changes to the September judgment.
[60]
Further, counsel states that s 231(3)(b) of the Act expressly adds a statutory power
enabling the Court on review to exercise the powers under s 244 to vary the trust order.
[61]
The fourth alternative, Mr Wackrow submits, is for the Court to vary the trust order
per s 244 of the Act. There is evidence, counsel argues, that the trigger point for when a
poll vote is called has been discussed at previous meetings and hearings, and at no stage
was it anticipated that share splitting would occur which would impact on those previous
discussions.
[62]
In terms of these applications to review and vary the trust orders for each of the
trusts it is necessary to point out that those orders are yet to be finalised. The applicants
acknowledge this fact.
Mr Niao’s submissions
[63]
Mr Sharp submits that, given the terms of trust have not been finalised and sealed,
there are no grounds to seek a review or variation of the trust.
147 Waiariki MB 156
Discussion
[64]
In the Proprietors of Mangakino Township v The Māori Land Court the Court of
Appeal discussed in some detail the Court’s extensive powers on a review of a trust: 15
[19] We entirely agree with McGechan J that a review of the trust cannot sensibly
be conducted unless the Court pays some regard to its performance — how well or
how badly have its affairs been running? That necessarily requires the Court to look
at the competence of the trustee(s). What Parliament has called for in ss 231 and
351 is a general review of the trust's governance and management of its assets on
behalf of the beneficial owners. Are those assets being administered in the best
interests of the beneficiaries? Is the trust fulfilling its purpose as an ahu whenua
(care of the land) trust, as that purpose appears from the statute (s 215, read in the
light of the preamble to the Act and s 2) and from the objects stated in the trust
order?
...
[21] In carrying out a general review of this kind the Court ought to concentrate on
the broader picture and not become drawn into matters of detail, but it is in our
view impossible to see any bright line between matters of governance and policy,
on the one hand, and questions of operational management, on the other. As
McGechan J appreciated and as is reflected as well in comments of Judge Savage
during one of the hearings, it comes down to a question of common-sense how far
into the affairs of a trust the Maori Land Court should burrow. Certainly its primary
focus ought to be on the policies that the trust is pursuing and on how in a general
way those policies are being implemented, but in order to see whether a policy is
working at ground level in the best interest of the beneficiaries the Court can hardly
avoid some consideration of particular operational matters.
[22] There is indeed a danger that by concentrating too much on detail the Court
could distract itself from the real issues facing a trust, which may require its
direction, but we see no way in which the extent of the Court's investigations can
be prescribed and limited as a matter of law. Even if any such prescription could be
found, it would be of no continuing relevance as soon as the Court invoked its
powers under s 238
…
[24] There is an armoury of powers given to the Court in relation to trusts under
Part XII so that it can carry out its guardianship role and there is good reason to
read ss 231 and 351, which apply to the particular situation of a general review, in a
manner consistent with those powers.
[65]
An application for review is normally filed in circumstances where there are
allegations of breach of trust by the trustees. This is not the case here. The Māori Land
Court has wide supervisory and enforcement powers under s 238 to enforce the obligations
15
Proprietors of Mangakino Township v The Māori Land Court CA65/99, 16 June 1999.
147 Waiariki MB 157
of the trust.16 In this case what is being sought is a review of the voting provision
contained in the trust order. The review is sought by the trustees.
[66]
Further, in Trustees of Pukeroa Oruawhata Trust v Mitchell the Court of Appeal
commented that a variation via ss 231 and 244 must comply strictly with the sufficiency of
notice, opportunity for discussion and sufficiency of support tests.17
[67]
As yet, the applicants have not filed evidence as to whether there has been
sufficient notice or support for the variations sought. All parties are aware that there was
an extensive process that was undertaken to vary the trust order to those which now sit in
draft before the Court. That process included the opportunity for all parties to meet,
discuss and consider the variations in detail. I have no evidence before me to support the
variation as sought.
[68]
The applications to review the trusts and vary the trust orders are dismissed.
The Voting Method – Proxies
[69]
The applicants also sought clarification as to the issue of proxies in relation to cl
14.1 of the trust deed. As I understand the issue, it is whether proxies can be counted in
terms of voting for or against a poll vote.
[70]
As regards proxy voting, Mr Sharp submits that the allegation that Mr Niao is
“wielding voting powers” by the use of proxies is without basis. Clause 14 of the trust
order requires that on a demand for a poll vote it is the persons present who must make the
demand. As such proxies cannot be counted for demand purposes.
[71]
Clause 14.1 provides that voting will be by show of hands with one vote per person,
unless a poll is demanded by 15 percent of the beneficial owners present at the general
meeting, in which case voting would be in accordance with the voting beneficial interest in
the Trust.
16
17
Clarke v Karaitiana [2011] NZCA 154.
Trustees of Pukeroa Oruawhata Trust v Mitchell [2008] NZCA 518.
147 Waiariki MB 158
[72]
At the hearing there was discussion regarding the timing of the demand for a poll
vote. Mr Wackrow submitted that it could occur after a show of hands. Mr Sharp
submitted before the show of hands.
[73]
At common law, a demand for a poll vote can occur either before or immediately
following a vote by show of hands. In Stratford Borough v C A Wilkinson Limited the
Court stated:18
Where there is no prescription as to any particular method of voting, the commonlaw rule is that the vote should be taken by a show of hands, and any person
dissatisfied with the declaration on the show of hands has the right there and then to
demand a poll: 8 Halsbury's Laws of England, 2nd Ed 59.
[74]
Further Halsbury’s Laws of England states:19
The right [to demand a poll] may be exercised at different times depending on the
articles; where the articles provide that a resolution is to be decided on a show of
hands unless a poll is demanded 'before or on the declaration' of the result of the
show of hands, a poll may be validly demanded without going through the
formality of a show of hands.
[75]
Clause 14.1 provides that a beneficial owner needs to be present at the meeting in
order to demand a poll vote. Once a poll vote has been demanded the Chairperson is
required to conduct a vote based on the shareholding.20
Independent trustees
[76]
In addition, the applicants sought clarification with regards to the position of
independent trustees.
[77]
Mr Wackrow submits that the Court should also clarify whether there is a limit on
the number of independent trustees that may be elected.
[78]
Mr Sharp argues that, as far as the request to recall the paragraph of the September
judgment concerning independent trustees, that request should not be granted. There is no
need for the Court to provide any further provision as to whether there needs to be an
18
19
20
Stratford Borough v C A Wilkinson Limited [1951] NZLR 814 at 818.
Halsbury’s Laws of England (online ed) Companies at 727.
Roger Pitchforth, Meetings: Practice and Procedure in New Zealand (4th ed, CCH New Zealand Ltd
2010).
147 Waiariki MB 159
independent trustee or not. This was a matter for the owners to determine. He argues that
there is no minimum or maximum number of independent trustees able to be appointed.
The matter could have been raised at the hearing and is not appropriate for a rehearing.
[79]
Ms Adlam further considers that there should be no limit on the number of
independent trustees, provided they are properly qualified and voted in by the beneficial
owners at a properly convened meeting by the requisite majority.
[80]
As I indicated at hearing, it was certainly not something I contemplated, that there
would be a limit on the number of independent trustees voted in at an election. The point
made in the September judgment at paras [57] to [61] was that expertise may be required to
assist the trustees in administering the significant trust funds and significant trust assets. If
the trust needs scientists, an accountant, or geothermal expert, and those skills are not
evident from those who are trustees, then it seems sensible that, especially given the
significance of the trust assets, people with those expertise are put forward for the owners
to consider and support if they so desire.
Decision
[81]
The applications are dismissed.
Directions in relation to elections
[82]
That is not the end of the matter. The trust orders require finalisation and will also
need to be sealed. Further, elections need to take place.
[83]
It was explained that the Farm Trust has already notified owners and sought
nominations for trustees. However, I understand that this process will be started afresh.
The Bath Trust has been awaiting the outcome of these proceedings before taking any steps
with regards to elections.
[84]
It is important that progress be made towards appointing new trustees for both
Trusts. Concern was expressed at the hearing as to the election process and there was a
call for an independent Returning Officer.
147 Waiariki MB 160
[85]
The Court will assist with the running of the elections for both Trusts. The Deputy
Registrar is referred to the Trust deeds, which provide guidance in terms of the calling of
meetings, proxy votes at a general or special meeting, nominations for position of trustees.
In addition, cl 16.4 which provides that the first general or special meeting following the
date of the Trust Order, where all existing trustees shall retire and an election held to
appoint seven replacement trustees.
[86]
Once the Trust orders are sealed I would expect that the Deputy Registrar will call
and set a date for a special meeting for both Trusts, with the sole purpose being the election
of trustees. The Deputy Registrar will provide appropriate notice to owners.
[87]
There will be a first notice to owners that will need to address:
(a)
The date, time and venue of the hui for election of trustees; and
(b)
Call for nominations for trustees to be made in writing and filed will the
Court at least 21 days before the date of the meeting. Nomination will need
to provide a CV and a one page biography.
[88]
All nomination are to be received by the Court prior to the hui and no further
nomination can be received at the hui.
[89]
There will be a second notice, once again provided by the Deputy Registrar. This
notice will be provided two weeks before the date of the hui and address:
(a)
The date, time and venue of the hui for election of trustees;
(b)
State the names of those nominated; and
(c)
The notice sent to owners must include:
(i)
The biography of the nominees; and
(ii)
A proxy form for those wishing to give a proxy to someone attending
the meeting.
147 Waiariki MB 161
[90]
I also direct that the Deputy Registrar to engage an independent facilitator to chair
the meetings of both the Trusts.
[91]
The Deputy Registrar may seek further directions if needed with regard to the
meetings.
[92]
When the election takes place I want to ensure that the Court will be able to assess
the support that each proposed trustee obtains, in terms of votes per show of hands and in
terms of support of shareholdings. This will allow the Court to consider support in terms
of people present as well as shareholding. I therefore direct the Deputy Registrar to record
votes that each candidate obtains in terms of votes they receive by show of hands,
including proxies, and votes they receive in terms of shareholding.
[93]
A copy of this decision is to be sent to all interested parties.
Pronounced in open Court at 2.00pm in Wellington on this 9th day of September 2016
C T Coxhead
JUDGE