Rameka v Hall [2013] NZCA 203 (5 June 2013)

Last Updated: 20 June 2013

IN THE COURT OF APPEAL OF NEW ZEALAND
CA775/2011 [2013] NZCA 203
BETWEEN	EMILY RAMEKA AND PUTI PUTI BIEL Appellants
AND	WILLIAM TEMUERA ROBERT HALL Respondent

Hearing:	27 and 28 February 2013
Court:	Ellen France, Harrison and Stevens JJ
Counsel:	P D McKenzie QC and S L Opai for Appellants M S McKechnie for Respondent
Judgment:	5 June 2013 at 2.30 pm

JUDGMENT OF THE COURT

1. We decline the application to admit new evidence.
2. The appeal is dismissed.

100. The appellants must pay the respondent costs for a standard appeal on a band A basis together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Ellen France J)

Table of Contents

Para No
Introduction [1]
Background [3]
The judgments in the Maori Land and Maori Appellate Courts [9]
The statutory scheme [15]
The relevant legal principles [27]
The mussel farm venture [34]
Opepe diversifies its investments [34]
The approach to the appellants’ actions in the courts below [37]
The appeal [40]
Sufficient notice? [41]
Unsatisfactory conduct? [46]
Assessment [50]
Mangamawhitiwhiti [57]
The chronology [57]
The approach in the courts below [59]
Submissions on appeal [62]
Evaluation [63]
Tauhara North [68]
Partnership deed [74]
Analysis [75]
Failure to obtain professional advice [77]
Payment of $120,000 [80]
Conclusion on whether there was unsatisfactory conduct [81]
The decision to remove [82]
The approach in the Maori Land Court [84]
Submissions on appeal [85]
Decision [90]
Result [97]

Introduction

[1] Emily Rameka and Puti Puti Biel, the appellants, were removed as trustees of the Opepe Farm Trust (Opepe) by an order of Judge Harvey in the Maori Land Court made under s 240 of Te Ture Whenua Maori Act 1993 (the Act).^[1] Section 240 provides that the Court may make an order for removal, relevantly, if satisfied “the trustee has failed to carry out the duties of a trustee satisfactorily”. The order for removal was made following an application to the Maori Land Court by the respondent, William Hall. Mrs Rameka and Mrs Biel’s appeal to the Maori Appellate Court from Judge Harvey’s decision was unsuccessful.^[2] They now appeal to this Court.^[3]
[2] The parties accept that consideration of the appeal requires a two-stage inquiry. The first question is whether Mrs Rameka and Mrs Biel breached their responsibilities as trustees in relation to three transactions. The first of these transactions is Opepe’s investment in a mussel farm venture. The second, a property development at Mangamawhitiwhiti, and finally, the purchase of land at Tauhara North. The second question is whether, if the Court was satisfied that they failed to carry out the duties of a trustee satisfactorily in relation to one or more of these transactions, a removal order is appropriate.

Background

[3] Opepe is trustee for a block of Maori freehold land, Tauhara Middle 4A 2B 2C. The block comprises 2,681.136 hectares and was created by a partition order in 1948. As at the date of the Maori Land Court judgment, there were 4,534 beneficial owners. The trust is an ahu whenua (care of the land) trust created under s 215 of the Act. Ahu whenua trusts may be constituted in respect of any Maori land or General land owned by Maori.
[4] The land was initially vested in the Perpetual Trustees Estate and Agency Company of New Zealand Ltd as custodian trustee on 9 March 1992. A “custodian trustee” is a trustee in whom the property is vested but who is not responsible for the administration of the trust.^[4] At the time of Perpetual’s appointment, eight men were appointed as responsible trustees. A “responsible trustee” is responsible for the trust administration, whether or not the trust property is vested in that trustee.^[5] The responsible trustees included Hupa James Maniapoto, Hemi Biddle and Owen Purcell. These three men remained as trustees until 16 December 2009 when, while the matter was still before Judge Harvey, they resigned.
[5] The appellants were appointed as responsible trustees on 29 November 2001. After the resignation of Messrs Maniapoto, Biddle and Purcell in 2009, Judge Harvey appointed three interim trustees, the respondent Mr Hall, Dr Charlotte Severne and Hemi Biddle (Jnr).
[6] As its name suggests, the core business of the “Opepe Farm Trust” is in farming. Opepe’s business at the time of Judge Harvey’s decision was valued at over $50 million. The investments in issue in this case involve some diversification of the trust business into mussel farming and property development. The investments involved significant sums of money. As we shall see, over $3.5 million was invested in the mussel farm venture, the trust lost $1 million in the Mangamawhitiwhiti purchase, and incurred a $4 million loan in the purchase of Tauhara North. We deal with the detail of these transactions when we come to consider each in turn.
[7] The timing of the key events relating to the transactions in issue and the proceeding is summarised in the table which follows.

Date	Event
23 November 2001	Mussel farm venture partnership agreement entered into.
29 November 2001	Appointment of the appellants as trustees of Opepe.
17 May 2002	Hearing before Maori Land Court to decide whether the Opepe trustees had authority to enter into the mussel farm venture. The Court concluded the trustees had power to do so.
2002	Mussel farm and processing factory bought by the partnership.
2006	The majority trustees enter into an unsecured loan of $1 million to Te Whenua Venture Holdings Ltd (TWVHL), the principal asset of which was the Mangamawhitiwhiti block.
6 November 2006	Hikuwai Hapu Lands Trust established for purpose of making Tauhara North purchase.
Late 2006	$4 million purchase price borrowed by Opepe and loaned to Hikuwai Hapu Lands Trust to go towards Tauhara North purchase.
June 2007	Tauhara North block purchased.
19 May 2009	The respondent applies to the Maori Land Court for an injunction against the Opepe trustees.
10 June 2009	Injunction granted by Maori Land Court restraining the trustees from incurring further liability.[6]
29 October 2010	Order made for appellants’ removal as trustees.
19 November 2010	Reasons for decision as to removal.
25 October 2011	Maori Appellate Court dismisses appeal.

[8] The summary of the financial position and performance of the trust since 2006 from the trust’s accountant, David Cairncross, referred to by Judge Harvey is set out as an appendix to this decision. The appellants sought leave to introduce as new evidence updated financial statements. We have not found it necessary to refer to that evidence and so decline to admit it.

The judgments in the Maori Land and Maori Appellate Courts

[9] Judge Harvey in the Maori Land Court found, first, in relation to the mussel farm investment, that all five trustees failed in their duties to be prudent and to protect Opepe’s assets. The mussel farm investment had lost several million dollars over a period of eight years. The Judge said that the trustees’ conduct on this issue was enough to warrant their removal.
[10] Secondly, the Judge found that the three male trustees had breached the trust order by lending $1 million to TWVHL on an unsecured basis and guaranteeing debt taken on by TWVHL. Further, the appellants, who initially had no knowledge of the loan, failed to promptly seek directions from the Maori Land Court as they had been advised to do when they found out about the loan. This conduct was in itself found to be sufficient to warrant their removal.
[11] Finally, Judge Harvey found that the trustees breached their duties by lending $4 million to the Hikuwai Hapu Lands Trust without security for the purchase of Tauhara North, a block of land. Mrs Rameka sat on both Opepe and the Hikuwai Hapu Lands trusts when this transaction was negotiated, which should have been recognised as a conflict of interest but was not. The trustees also failed to enter into a written partnership agreement with the Tauhara Middle 15 Trust, their joint investor in this project, to protect Opepe’s position. Nor did they seek professional advice on the venture. Again, the trustees’ conduct on this issue was enough to warrant their removal.
[12] On the basis of this finding of misconduct, Mrs Rameka and Mrs Biel were removed as trustees under s 240 of the Act. As we have noted, the three male trustees resigned in the course of the hearing before the Maori Land Court.
[13] The Maori Appellate Court dismissed the appellants’ appeal. The Court noted that the decision to remove the trustees was an exercise of discretion. Although the Maori Appellate Court did not expressly refer to the twostage approach we apply to s 240, the Court did in effect look at whether the Maori Land Court was correct in its factual findings and then at that Court’s approach to removal. Having found that there was no significant error of fact or law in the approach of the Maori Land Court, there was no basis to interfere with the decision to remove. The Maori Appellate Court did, though, take a different view from Judge Harvey on one aspect. The Maori Appellate Court found that the appellants were not conflicted in relation to the purchase of the Tauhara North block. However, the Court did not consider this was a significant error or one that affected the outcome of the decision.
[14] Before we turn to the individual transactions, we first set out the relevant statutory provisions and then discuss the applicable legal principles.

The statutory scheme

[15] The Preamble to the Act emphasises, amongst other things, the desirability of promoting the retention of land in the hands of its owners, their whanau and their hapu. The relevant part of the Preamble states:

And whereas it is desirable to recognise that land is a taonga tuku iho of special significance to Maori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu: And whereas it is desirable to maintain a Court and to establish mechanisms to assist the Maori people to achieve the implementation of these principles.

[16] Section 2(1) provides that the provisions of the Act are to be interpreted in a manner that “best furthers the principles set out in the Preamble”. Section 2(2) again emphasises the importance of promoting the retention, use, development, and control of land by Maori owners.
[17] Section 17 sets out the general objectives of the Act. Section 17(1) states that in exercising its jurisdiction and powers under the Act, the Maori Land Court’s primary objective is to promote and assist in:

(a) [t]he retention of Maori land and General land owned by Maori in the hands of the owners; and

(b) [t]he effective use, management, and development, by or on behalf of the owners, of Maori land and General land owned by Maori.

[18] Further, s 17(2) provides that in applying subs (1), the Court shall seek to achieve the following further objectives:

(a) To ascertain and give effect to the wishes of the owners of any land to which the proceedings relate:

(b) To provide a means whereby the owners may be kept informed of any proposals relating to any land, and a forum in which the owners might discuss any such proposal:

(c) To determine or facilitate the settlement of disputes and other matters among the owners of any land:

(d) To protect minority interests in any land against an oppressive majority, and to protect majority interests in the land against an unreasonable minority:

(e) To ensure fairness in dealings with the owners of any land in multiple ownership:

(f) To promote practical solutions to problems arising in the use or management of any land.

[19] The Act provides that these objectives are to be achieved by the appointment of responsible trustees as the legal owners of the trust assets. The trustees have obligations to the beneficiaries to administer the trust property in accordance with general trust law, the requirements of the Trustee Act 1956 and the provisions of the Act.^[7] In other words, trustees are subject to traditional trustee duties with the statutory overlay of particular obligations arising from the context of ahu whenua trusts.
[20] The Maori Land Court has exclusive jurisdiction to constitute ahu whenua trusts. Those are defined in s 215 and may be constituted where “the Court is satisfied that the constitution of the trust would promote and facilitate the use and administration of the land in the interests of the persons beneficially entitled to” that land.
[21] The appointment of trustees is dealt with in s 222. In deciding whether to appoint any individual as a trustee the Court is directed to “have regard to the ability, experience, and knowledge of the individual”.^[8] Further, the Court is directed not to appoint an individual as a trustee unless satisfied that the appointment of that individual “would be broadly acceptable to the beneficiaries”.^[9] A responsible trustee’s general responsibilities are set out in s 223 and trustees’ general powers in s 226. The Court in the trust order may confer on the trustees such powers as the Court thinks appropriate having regard to the nature and purposes of the trust. Importantly, in terms of what occurred in this case, s 227 makes it clear that trustees may act by a majority.
[22] Section 231 of the Act provides that the trustees or a beneficiary of a trust may apply to the Court to review the terms, operation, or other aspect of the trust.
[23] The jurisdiction of the Maori Land Court in relation to trusts set up under the Act is found in s 237 of the Act. Subject to the express provisions of pt 12 of the Act, the Court has and may exercise “all the same powers and authorities as the High Court has (whether by statute or by any rule of law or by virtue of its inherent jurisdiction) in respect of trusts generally”. Nothing in this section affects or limits the jurisdiction of the High Court.^[10]
[24] Section 238 of the Act deals with the enforcement of the obligations of a trust. Under s 238(1), the Court may at any time require a trustee to file a written report in the Court and to appear before the Court for questioning on the report or on “any matter relating to the administration of the trust or the performance of his or her duties as a trustee”. Section 238(2) provides that the Court may enforce the obligations of a trustee including by way of an injunction.
[25] As we have noted, the appellants were appointed as responsible trustees. In addition to responsible trustees and custodian trustees, the Act also envisages the appointment of an advisory trustee. Section 210 provides that an advisory trustee is one who is appointed “to advise the responsible trustee ... on the administration of the trust generally or on any particular matter” relating to the trust. An advisory trustee is not responsible for the administration of the trust and the trust property is not vested in the advisory trustee.
[26] Section 240 of the Act dealing with removal of trustees provides that the Court may make an order for the removal of a trustee, if it is satisfied:

• (a) [t]hat the trustee has failed to carry out the duties of a trustee satisfactorily; or
• (b) [b]ecause of lack of competence or prolonged absence, the trustee is or will be incapable of carrying out those duties satisfactorily.

The relevant legal principles

[27] There is no real dispute about the applicable principles. As Judge Harvey observed, “[i]t is trite law that the paramount duty of trustees is to obey their terms of trust”.^[11]
[28] The general responsibilities of responsible trustees are set out in s 223 of the Act. That section refers to the following:

• (a) Carrying out the terms of the trust:
• (b) The proper administration and management of the business of the trust:
• (c) The preservation of the assets of the trust:
• (d) The collection and distribution of the income of the trust.

[29] As we have noted, these statutory duties are not exhaustive and general trustee law principles are also relevant. Further, the trust order applicable to the trust may add other responsibilities. The relevant obligations of trustees have been described by the Maori Appellate Court in these terms:^[12]

1. A duty to acquaint themselves with the terms of trust;
2. A duty to adhere rigidly to the terms of trust;

100. A duty to transfer property only to beneficiaries or to the objects of a power of appointment or to persons authorised under a trust instrument or the general law to receive property such as a custodian trustee;

4. A duty to act fairly by all beneficiaries;
5. A duty of trustees to invest the trust funds in accordance with the trust instrument or as the law provides;
6. A duty to keep and render accounts and provide information;
7. A duty of diligence and prudence as an ordinary prudent person of business would exercise and conduct in that business if it were his or her own;
8. A duty not to delegate his or her powers not even to co-trustees;
9. A duty not to make a profit for themselves out of the trust property or out of the office of trust: Garrow and Kelly Law of Trusts and Trustees (sixth edition, pp 523–582 inclusive).

[30] The settled approach in the Maori Appellate Court in applying s 240 is to make an assessment of these standard duties together with what the Court has described as:^[13]

... the broader approach having regard to the special nature of Maori land trusts and the provisions of [the Act]. Thus the prerequisite for removal of a trustee was not a simple failure or neglect of duties, but a failure to perform them satisfactorily. Accordingly an assessment of the trustee’s performance was essential when applying s 240.

We endorse this approach as part of the first stage inquiry.

[31] This was the test Judge Harvey set out as applicable to his decision. As to what is encompassed by the term “satisfactory” in the context of s 240, Judge Harvey also discussed Bramley v Hiruharama Ponui Inc – Committee of Management – Hiruharama Ponui Inc.^[14] In Bramley the Maori Appellate Court rejected the appellant’s argument that all members of the committee be removed, stressing the importance of measuring unsatisfactory conduct against the principles of the Act as found in the Preamble and s 2. The key principles for these purposes are that the Court should encourage retention of Maori land in its owners’ hands, the use and development of that land, and control of the land by the owners, through their representatives.^[15]
[32] Judge Harvey in the present case noted the emphasis in Bramley on assessing whether or not there was evidence of any real risk to trust assets before the Court could contemplate intervention. The Judge cited this passage from Bramley:^[16]

[9] Whether governance performance has been satisfactory or not must depend then on whether there is a clear and present apprehension of risk to the incorporation asset or to the wider interests of the incorporation shareholders as a result of action or inaction of the committee. It is not every unsatisfactory act or omission which should lead to removal, but those that go to the principles of the Act. To adopt any other approach, would lead to removal being the primary remedy available for any technical breach of the Act. We do not think that wholesale removal of Maori governance members is consistent with the principles of the Act or the intentions of the legislature.

[33] Bramley involved an incorporation, not a trust, although the provisions relating to removal are similar.^[17] Further, Bramley concerned allegations of longstanding breaches of the Act and regulations of a procedural kind. Those differences with the current case acknowledged, we agree that in determining whether removal is appropriate the Court will need to consider the impact of the trustee’s actions on the beneficiaries and any apprehension of risk to the assets.

The mussel farm venture

Opepe diversifies its investments

[34] On 23 November 2001, the then-custodian trustee entered into a partnership agreement with another trust, the Poripori Farm A Trust, to purchase a mussel farm and processing factory. The partners agreed to carry on business in partnership as a joint venture with Ngati Rarua Atiawa Iwi Trust (Ngati Rarua) in the purchase of marine farms and the processing, marketing and sale of produce. This partnership agreement preceded the appointment of the appellants as trustees on 29 November 2001. However, apparently because the venture reflected a departure for the trust from its usual business of farming, an application for directions was made to the Maori Land Court under s 229 of the Act.
[35] Under s 229, the Court may approve an extension of the activities of a trust. The Court shall not exercise its powers under s 229(1) unless satisfied that the beneficial owners have had sufficient opportunity to consider the proposal and that there is “a sufficient degree of support among the owners” for it.^[18] The application under s 229 was heard by Judge Savage on 17 May 2002. The Judge gave directions that the venture was within the power of the trust.
[36] Things did not go well for this venture. As Judge Harvey found, “the investment has been a failure almost from the outset”.^[19] As the Judge also notes, it is necessary to acknowledge that various factors conspired against the trustees over which they had limited control including “the high exchange rate and an oversupply of the market”.^[20] That said, the unchallenged evidence of the accountant, Mr Cairncross, was that over $1.5 million of trust funds was paid into the venture in 2003 alone. Further, “despite continuing demands for money for the investment without any appropriate return the trustees paid further funds in excess of $2 million over several years”.^[21] Yet, by mid-2008, the minutes of the trustees’ meeting recorded they were considering the following options in relation to this venture: find an equity partner and sell down some farms in Abel Tasman Seafoods Ltd;^[22] carry on business as usual; or liquidate. Mr Biddle supported the last option while his colleagues approved the first option.

The approach to the appellants’ actions in the courts below

[37] Judge Harvey approached this transaction on the basis that the trustees were to be assessed on the processes followed whilst investing, “not necessarily the eventual outcome, unless it can be demonstrated that the ... decision making process was so patently flawed as to warrant liability”.^[23] The Judge’s summary of the position in relation to this venture is as follows:

[61] ... outside of the TWVHL example, the mussel farm has been the single most disastrous investment for Opepe in recent times probably since its existence. [Mrs Rameka and Mrs Biel] have stated that the investment was made before they were appointed and so they cannot be held responsible. That is incorrect since they were appointed in November 2001. They then said that they had opposed the investment. That claim is not supported by their statements to the Court in May 2002 or their subsequent conduct in both permitting further funds to be invested on such a significant scale and in not having their dissent recorded per s 227 of the Act. [Mrs Rameka and Mrs Biel] claimed they relied on the advice of Dr Severne, an interim trustee, and should not be removed for relying on her advice. While that may be correct, as Mrs Biel acknowledged, Dr Severne’s advice was sought in the context of an exit strategy at least four years after the original investment decision and after the trust had already began to lose significant sums.

[62] My overall conclusion therefore is that all five trustees have failed in their duties of prudency and of protecting the assets of the trust regarding the mussel farming investment losing millions of dollars of trust funds over a period of eight years. They could have sought further direction from the Court but omitted to take that step. I am satisfied that their conduct regarding this investment is sufficiently serious to warrant their removal.

[38] The Maori Appellate Court agreed with Judge Harvey that the appellants had not actively opposed this investment. The Court said that this failure was “despite significant owner opposition and advice against investing in the venture”.^[24] Further, the Court did not consider Judge Harvey had erred in holding the appellants responsible. The Court said that the minutes of the hearing before Judge Savage showed that the decision to invest had not yet been made at the time the trustees applied for directions under s 229.^[25]
[39] The Maori Appellate Court agreed with Judge Harvey’s “overall conclusion” that there was a failure by all of the trustees to act prudently and protect the trust’s assets in relation to the mussel farm. The Court continued:

[36] ... This includes their failure to seek the direction of the Court when faced with proposals to invest further significant amounts in the failing investment. It is settled law that in circumstances of particular difficulty trustees should apply to the Court for directions. Failure to seek directions can be the basis for a finding that trustees have acted imprudently.

(Footnote omitted.)

The appeal

[40] The issues on appeal in relation to this investment are two-fold. First, the appellants say that they were taken by surprise by the focus on the mussel farming venture. Secondly, they state that the Maori Appellate Court was wrong to conclude that they failed in their duty to act prudently and to protect the assets. We deal with each in turn.

Sufficient notice?

[41] In terms of the procedural aspect, the complaint is that the appellants were not put on notice that their actions in relation to the mussel farm venture would be in issue. That is because the initial focus of Mr Hall’s application was on the Mangamawhitiwhiti transaction.
[42] We agree with Mr McKechnie for the respondent that there was sufficient material for the appellants to be put on notice that the prudence of the mussel farm investment was in issue. The focus of Mr Hall’s application was on the Mangamawhitiwhiti transaction. However, the mussel farm venture was referred to in Mr Hall’s initial affidavit of 19 May 2009. In his second affidavit of 4 November 2009, Mr Hall said that the mussel farm venture “continues to be an area of substantial difficulty”. The statement of claim referred also to the ongoing borrowing. Hence, in response, Mr Maniapoto referred to the mussel farm in his affidavits of 10 July and 21 September 2009 as did Mrs Biel in her affidavit of 10 July 2009, albeit briefly.
[43] Further, on 30 October 2009 Judge Harvey issued pre-trial directions. The Judge relied on s 238 of the Act and required the trustees to file a report on the administration of the trust. The focus, again, was on Mangamawhitiwhiti but it was clear a report on the administration of the trust as a whole was sought. The report dealt with the mussel farm venture.
[44] Finally, the hearing before the Maori Land Court took place over four days in June and December 2009 and in March 2010. By the time, at the very latest, of the first of the December hearing dates it was apparent that investment in the mussel farm was an issue. Both appellants were legally represented at the hearing. As Judge Harvey said, the s 238 report:^[26]

... [W]as subject to rigorous cross examination from counsel as well as questions from the bench. All trustees were therefore under no doubt as to the issues before the Court and the seriousness of the position of both the trustees as individuals and the trust itself. I am satisfied therefore that the issues of the enforcement of obligations of trust and removal were squarely before the trustees and that they understood the claims made against them and the consequences should the Court consider the allegations valid in the absence of a tenable defence. I am also satisfied that they have been provided with proper opportunity to seek and receive legal advice, to answer the allegations and to provide rebuttal evidence and submissions in reply.

[45] We agree.

Unsatisfactory conduct?

[46] In challenging the finding of unsatisfactory conduct in relation to the mussel farm venture, the appellants say, first, that by the time they were appointed, the investment in this venture was already in train. Secondly, given the dynamics of the situation, Mr McKenzie QC submits it was difficult for the appellants to do any more than what they did, that is, seek the endorsement of the owners before a hearing of the Maori Land Court. The particular dynamics he refers to here are that the appellants were only recently appointed and were the first women trustees.
[47] In developing these submissions, Mr McKenzie points out that the s 229 application to the Maori Land Court involved a hearing in the presence of a large number of owners. He says that the two appellants were entitled to see the outcome as one giving endorsement to the venture. There was no evidence to suggest that at this point in time it was an irresponsible investment.
[48] Added to that, the appellants submit that the subsequent activity reflected what they thought was the best way of extracting themselves from the transaction. It was already a disastrous investment and there was no evidence that what occurred made it worse. There was also some concern on Mr Maniapoto’s part that they might face a damages claim if they exited prematurely. Further, Mr McKenzie says that there was no evidence that directions from the Court could have assisted the trust to exit the venture any more expeditiously.
[49] Mr McKenzie accepted that the appellants did not record their opposition to the mussel farm venture as they had initially argued. They also now accept that Judge Savage did not approve the merits of the transaction. Nor is there any challenge to the evidence of Mr Cairncross referred to above as to the trust funds expended on this venture.

Assessment

[50] There is force in the submission that, on their appointment, the appellants could not have been expected to do more than they did given the transaction was in train. Further, there was subsequent endorsement from owners to satisfy the Judge considering the s 229 application. However, the courts below are plainly correct that, as the investment continued to go sour, the trustees did not act prudently. The matter was simply allowed to drag on for too long, given the considerable sums of money involved.
[51] A number of steps could and should have been taken. For a start, the appellants could have expressed and had recorded their opposition to the ongoing investment of funds into the venture.^[27] That course is envisaged by s 227 of the Act. Section 227(6) provides that where any trustee dissents in writing from the majority decision before the decision is implemented, that trustee is absolved from any personal liability arising out of the decision. The dynamics of the situation in which the two women found themselves does not explain why they did not expressly oppose the ongoing payment of funds and have that dissent recorded. As we shall see, dynamics as between trustees did not prevent them from expressing and recording their dissent in relation to the Mangamawhitiwhiti transaction.
[52] One possible advantage of seeking directions from the Maori Land Court was that an advisory trustee with the necessary expertise could have been appointed. Mrs Biel was candid in admitting that in terms of this venture, at least at the outset, she was out of her depth.
[53] The evidence that the trustees were actively operating an exit strategy is vague at best. Mr Maniapoto said that the trustees made a decision “some time ago” to work their way out but that the exit had to be carefully managed. He stated that the exit also had to manage the “very high value” of the marine space owned by the farm. Mr Maniapoto suggested that they were looking at paying “well in excess of $1.5 million” to get out. Mrs Rameka suggested it would cost the trust $1.2 million, that is, more to pull out rather than to stay in. Mrs Rameka referred also to advice the trustees obtained about this venture from Dr Severne. Mrs Rameka explained they also brought Dean Stebbing on board. It appears he had some fisheries expertise. There was little evidence about the nature of his advice. Mrs Biel said they were looking at a strategy in relation to whether they could exit plus a strategy to reduce exposure.
[54] Mr Cairncross, the accountant, was asked in the course of giving evidence whether an exit strategy was problematic. He said it was problematic because it would involve the realisation of a specialised mussel processing factory in Christchurch. Mr Cairncross said the directors had a choice about trying a realisation of that asset or trying to continue on and find a joint venture partner “after recovering the financial loss position”. The following exchange then occurred:

1. ... Detailed work was done on whether it was best to try and continue or to try and sell out. The decision was made I must say with 100 percent agreement with those partners having their own financial advice and there were two other chartered accountants on that board at the time one of whom had very substantial experience in the mussel industry. The advice of the directors’ meeting was to try to continue and keep the factory open and try to sell it as a going concern.

...

17. Water space, you touched very briefly on it but the joint venture owns water space in the mussel farm?
1. Abel Tasman Seafood Limited owns, I think it is, 34 hectares of water space and although the market is probably around $100,000.00 per hectare or somewhere about that.
17. In your opinion ..., is there a realistic expectation of the sale of the water space assisting this joint venture to break even at least?
1. The sale of water space has been discussed by the board and my recollection of that is that water space is regarded a bit like gold and that it is a worthwhile investment to hold onto whereas the trading side is very difficult to achieve money there. The trust was assisted by Dr Charlotte Severne to get that sort of view. Dr Severne is employed by NIWA so she has expertise in that field.

[55] This is the best evidence for the appellants. That said, it does not explain the failure to act more promptly. Although there is some evidence about the potential value of the resource, the evidence about the high cost of exiting the arrangement is otherwise not compelling. Mr McKenzie points to a clause in the partnership agreement with the Poripori Trust that provides for each partner to make capital contributions being one half of the monies as the partnership becomes liable to contribute to a joint venture with Ngati Rarua pursuant to an agreement between the partnership and Ngati Rarua. There is also a provision requiring indemnification for breach. However, the agreement also provides for dissolution of the partnership on three months notice which on its face suggests that a straightforward exit strategy was available. In any event, as Judge Harvey noted, consideration of an exit strategy and of advice from others such as Dr Severne all came too late.
[56] When the matter is looked at in the round, the findings the appellants should have done more to protect the trust assets in relation to this venture were inevitable. The key factors in this conclusion are the magnitude of the sums involved and the extended period of inaction, including a failure to apply for directions to the Maori Land Court.

Mangamawhitiwhiti

The chronology

[57] In 2006 on the decision of the three male trustees, Opepe lent $1 million on an unsecured basis to TWVHL. When the loan was not repaid it was converted into an “investment” in the company in early July 2006. The principal asset of the company was the Mangamawhitiwhiti block. That comprised about 927 hectares near Turangi township which was to be developed into a golf course, a sports academy, residential sections, a hotel and associated infrastructure and facilities. The venture failed and the $1 million was lost. In addition, as Judge Harvey explained:

[65] ... TWVHL also borrowed approximately $10 million from Dorchester Finance Ltd and Westpac. These loans had been guaranteed in part by both Opepe and [the majority male trustees] personally ... . In the subsequent summary judgment action in the High Court brought by Dorchester the [majority male trustees] mounted various defences including claims that they did not know what they were signing when making both Opepe and themselves liable for the borrowings.

[66] By judgment dated 8 February 2010 Associate Judge Doogue ordered, inter alia, that the trustees of the Opepe Farm Trust in their personal capacities and the trust itself was liable for a debt of approximately $4.5 million incurred by [the majority male trustees] as part of the financing of the TWVHL investment.

[58] At this point we also need to note that in September and again in November 2008, Peter Fanning of Le Pine & Co, the trust’s solicitors, advised the trustees of the risks for the trust arising out of this investment and that they should seek directions from the Maori Land Court. As we shall discuss, this advice was ignored. The appellants, upon finding out about the investment in July 2006, began to express opposition and concerns about what was happening. It appears that matters as between the appellants and the other trustees deteriorated to the point that, in December 2008, the appellants filed proceedings in the High Court. Those proceedings were apparently settled by the trustees reaching an agreement to work together. The legal costs associated with these proceedings amounted to some $140,000.^[28] The other matter we should note is that on 17 July 2009, there was a meeting of owners about the affairs of the trust.

The approach in the courts below

[59] Judge Harvey concluded that lending $1 million unsecured comprised a “reckless” breach of the trust order by the male trustees. Ultimately, not only did the trust lose the $1 million but the trust was put at risk for over $10 million of debt and did not obtain directions of the Maori Land Court in that respect. The Judge noted that as late as 5 November 2008 the trustees were advised to seek directions from that Court but failed to do so. This alone was sufficient knowledge that the cotrustees had lent money on an unsecured basis that they themselves had borrowed. This should have led to an application for directions in the absence of any credible response. They also incurred $140,000 in legal costs. Those costs would have been minimised if not eliminated by taking the matter up in the Maori Land Court rather than in the High Court.
[60] Judge Harvey found that “as early as 7 July 2006” Mrs Rameka and Mrs Biel were writing to the other trustees “in unequivocal terms expressing serious concerns over the latter’s actions surrounding the TWVHL loan and investment”.^[29] In these circumstances, the Judge said the two women had a duty to preserve the trust’s assets and seek directions. But, he said, “they failed to do so at the earliest reasonable opportunity and for that omission they must now be held to account”.^[30]
[61] The Maori Appellate Court agreed that Mrs Rameka and Mrs Biel had expressed their dissent in relation to the $1 million loan and that they had not ratified the actions of the male majority trustees. However, the Court said, they did not do enough as prudent trustees. The Court stated:

[46] ... The appellants knew about the unsecured loan as early as August 2006. They knew in November 2008 that the loan was a breach of trust. They disregarded advice on a number of occasions during November 2008 from their own and the Trust’s professional advisers to seek directions from the Maori Land Court. It was not until December 2008 that the appellants finally filed proceedings in the High Court.

[47] We agree with the lower court that the appellants did not do enough, soon enough, as prudent trustees to preserve the assets of the trust. The appropriate course of action was to alert the Court, and to seek directions, once the appellants were aware of the conduct of their colleagues in relation to the unsecured loan of borrowed funds.

Submissions on appeal

[62] The appellants say they fulfilled their duties because they expressed and recorded their dissent about this transaction. They say the Maori Appellate Court found that they did not know the lending was in breach of trust until Mr Fanning advised them of this in November 2008. Accordingly, the submission is that the Maori Appellate Court did not concur with the Maori Land Court finding that the duty to act arose in July 2006. On that basis, they say no complaint can be made about the fact the appellants did not place the matter before the High Court until December 2008. Finally, the appellants say that s 38 of the Trustee Act supports their approach because the section limits the liability of a trustee to his or her own acts and to those situations where loss is caused through the trustee’s wilful default.

Evaluation

[63] We consider that when the decision of the Maori Appellate Court is read as a whole, there is a clear concurrence with the Maori Land Court in finding a breach from July/August 2006. In addition to the passage we have already cited, the Maori Appellate Court expressed agreement with the finding that directions should have been sought “once the appellants were aware of the conduct of their colleagues in relation to the unsecured loan in the second half of 2006”.^[31] Further, the Court said this:

[71] We agree with the lower Court’s finding that the appellants had a duty to act as prudent trustees and preserve the assets of the Trust. In the circumstances the trustees found themselves in during the period July 2006 to November 2008, they did not act sufficiently to preserve the assets of the Trust. The prudent course of action was to alert the Court and apply for directions. Failure to do so was a breach of duty by the trustees including the appellants.

[64] Finally, the Court stated:

[72] The lower Court concluded as a matter of fact in paragraphs [68] and [69] that the appellants had knowledge of the unsecured lending in 2006, not 2008 as the appellants claim. Therefore we cannot accept that section 38 of the Trustee Act 1956 applies because the appellants had knowledge early on that the majority trustees had used trust funds in an irregular fashion to invest in TWVHL.

[65] Those findings are consistent with the evidence. In a letter of 27 July 2006, the appellants wrote to Mr Cairncross expressing their “very deep concerns” about what was happening. That letter does not refer to the unsecured nature of the loan but in her affidavit to the High Court, Mrs Biel says, first, that some time after 6 July 2006, she requested details from the Bank of New Zealand about the $1 million advance and received a letter in reply dated 12 July 2006. Mrs Biel says that Mrs Rameka wrote to the trust, in a letter dated 7 August 2006, expressing their “deep concern over the unsecured interest free loan”. She also said that the minutes of a trust meeting in mid-September 2006 record their concerns “regarding this unsecured loan”. We are satisfied that there is sufficient evidence to support the concurrent findings that the trustees must have known about the unsecured nature of the loan in mid-2006.
[66] We agree with the appellants that it is difficult to criticise the appellants for invoking the jurisdiction of the High Court rather than that of the Maori Land Court. The High Court has jurisdiction. We should add, though, that the trust order envisages that directions will be sought from the Maori Land Court. And, in any event, as we understand it, the real concern in the judgments below was about the extent of costs incurred by the choice of forum and the element of self-protection apparent in the trustees’ actions.

32. Finally, we do not consider s 38 provides a helpful analogy. It deals with the situation in which a trustee shall be chargeable.^[32]

Tauhara North

[68] In early 2006, various hapu from Ngati Tuwharetoa decided to regain some land of cultural significance from Landcorp. The $4 million purchase price was borrowed by the trust. The issues on appeal concerning this transaction relate, first, to the fact that there was no executed partnership deed in place prior to this investment, secondly, to the failure to obtain professional advice on the transaction and, finally, to whether or not the trust paid $120,000 by way of commission on a cancelled purchase.
[69] On the first issue concerning the partnership agreement, the Maori Land Court concluded the trustees had not acted prudently in failing to conclude a written agreement with their partner in the purchase of the Tauhara North land, the Tauhara Middle 15 Trust, when the purchase was settled. The Maori Appellate Court dealt with this aspect in this way:

[95] The question here is whether a prudent person of business would have documented a partnership arrangement involving $4 million of borrowed funds, against a background of previous failed business ventures? The answer is inarguable. A prudent trustee would document such arrangements between themselves and another party, and that failure to do so is a breach of the trustee’s duty to act prudently and preserve the assets of the Trust. In this instance the trustees’ failure to properly document the partnership arrangement is a breach of trustee duty.

[70] As to the lack of professional advice on the transaction, Judge Harvey considered it was surprising the trust did not discuss the purchase of “one of the most significant assets” the trust had acquired with “their principal financial adviser”, their accountant.^[33] The need for professional advice was important where, as here, the trust borrowed all of the purchase price. The annual borrowings (to cover interest costs) were over $300,000 in contrast to the trust’s income from Tauhara North which was about $17,000 per annum plus a one-off payment for trees harvested from the land. In this context, the Judge was concerned at Mrs Rameka’s inability to say how the loan would be repaid.
[71] Judge Harvey also expressed concern that the trust had incurred a penalty of $120,000 by abandoning an agreement to purchase land at Rakaunui in favour of the Tauhara North purchase.
[72] The Maori Appellate Court questioned whether, by using the trust’s resources to act in the interests of a wider group than their own beneficial owners, the trustees were acting to the “best advantage of the beneficial owners” as required by the trust order. The Court also said that the trustees:

[108] ... proceeded to purchase in a manner that was not consistent with their duty to act as diligent and prudent trustees. This included failure to obtain any legal or financial advice, failing to enter into a written partnership agreement ..., and jettisoning the agreement to purchase with Rakaunui land for which a penalty of $120,000 was incurred.

[73] We deal first with the question of the need for a partnership agreement, secondly, with the failure to obtain professional advice and, finally, with the question of the $120,000 payment.

Partnership deed

[74] The appellants make two main submissions about this matter. First, they say that a partnership deed was signed. Secondly, they say the evidence showed that at the time of the purchase of the land each party had agreed on their respective shareholding. There was no evidence to suggest that the investment was at risk and no dispute over the shares. The Partnership Act 1908 would govern the situation in the absence of a written partnership agreement. Accordingly, they submit that while it was clearly desirable that the parties proceed on the basis of an executed agreement, the failure not to enter into one was not a breach of trust.

Analysis

[75] We do not accept that the partnership agreement was signed by both parties. In cross-examination, Mr Maniapoto expressed some uncertainty as to whether or not the trustees of the Tauhara Middle 15 Trust had signed the agreement. The appellants’ evidence on this is equivocal. Further, there is evidence, accepted by the Maori Land Court in related proceedings, that the agreement was not executed by the Tauhara Middle 15 Trust.^[34] Finally, the contemporaneous documentation from the solicitors is not determinative of the issue.
[76] We agree with the courts below that it was not prudent to proceed with such a significant acquisition without an executed partnership agreement. “Near enough” was not good enough. Although the partners’ respective shares were agreed, the trust left itself in a vulnerable position should any subsequent dispute arise. The purpose was to run a business in the future but nothing was in place to govern the arrangement at the time of acquisition. It was not sufficient in the circumstances to rely on the application of the Partnership Act.

Failure to obtain professional advice

[77] The appellants emphasise that the motivation for the Tauhara land purchase was cultural, that is, to achieve a return of land of cultural significance. Mr Maniapoto put it in this way:

[T]he land was never purchased with profitability as the primary motive. ... The people at the northern end of the lake, the Hikuwai people, had pleaded with the trustees to make this purchase.

[78] We acknowledge there are tensions for trustees in this situation. The views of the owners, as the appellants correctly emphasised, are important. But that does not mean that it was prudent to proceed without having obtained some advice about how they were going to service the debt incurred in such a significant transaction especially where the evidence showed that Mrs Rameka, at least, could not explain that. As the courts below have found, the motivation to regain land of cultural significance does not displace the duties on the trustees to act prudently.^[35] Judge Harvey put the point well when he said, albeit in the context of Mangamawhitiwhiti:

[105] Much was made of the return of haukainga land for cultural and historic reasons. That desire is both understandable and laudable. Where owners have lost land through various means over time there is often a strong wish to recover such lands, especially those areas with iconic significance and where the opportunity presents itself for such restoration. But those objectives cannot override the trustees’ principal duties of protecting the existing assets of the trust and their duty to act prudently.

[79] We agree with the concurrent findings of the Courts below that failure to obtain professional advice concerning this significant transaction was a failure to carry out the trustee duties satisfactorily.

Payment of $120,000

[80] We agree that there may be an issue over the correctness of the Maori Land Court’s finding, upheld by the Maori Appellate Court, that the trust paid a $120,000 penalty on withdrawing from the Rakaunui purchase. It appears from the limited information available to us that what happened was that the amount was recorded as a figure to be paid in the relevant accounts. Hence, Mr Cairncross on being shown these accounts said it had been paid. Mr Maniapoto’s evidence on the point was confused. The appellants maintained the amount was not paid and it appears that ultimately the amount was not paid. However, we do not see this error as significant. It was one, relatively insignificant, factor in the reasoning of both Courts.

Conclusion on whether there was unsatisfactory conduct

[81] We conclude that, even if it is arguable that Mrs Rameka and Mrs Biel were not in breach of their duties in failing to dissent from the mussel farm venture following appointment, each of the other material findings taken on its own constitutes a serious breach of trustee responsibilities within s 223 and provides a discrete basis for considering removal. Collectively these facts and circumstances are evidence of unsatisfactory conduct. The trustees committed a series of breaches of their duties by failing to manage and administer trust business properly and, in particular, to preserve trust assets. As a result the trust suffered substantial losses over a number of years.

The decision to remove

[82] It is common ground that, once there are findings of unsatisfactory conduct in relation to a trustee, the Maori Land Court exercises a discretion in deciding whether or not to remove that trustee. Nor is there any dispute as to the judgment required of the Court in this situation. Although in a different context, the position is accurately described in Miller v Cameron by Dixon J who said:^[36]

The jurisdiction to remove a trustee is exercised with a view to the interests of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee. In deciding to remove a trustee the Court forms a judgment based upon considerations, possibly large in number and varied in character, which combine to show that the welfare of the beneficiaries is opposed to his continued occupation of the office. Such a judgment must be largely discretionary. A trustee is not to be removed unless circumstances exist which afford ground upon which the jurisdiction may be exercised. But in a case where enough appears to authorize the Court to act, the delicate question whether it should act and proceed to remove the trustee is one upon which the decision of a primary Judge is entitled to especial weight.

[83] Accordingly, the remaining question is whether at this second stage there was a reviewable error when exercising the discretion to remove, that is, whether the Maori Land Court erred in law, gave inadequate or excessive weight to a factor, or was plainly wrong.

The approach in the Maori Land Court

[84] The Maori Land Court took into account the breaches of trust already discussed. In addition, the Court gave some weight to other factors including the expenditure of substantial amounts in legal fees ($140,000) in the High Court litigation; the failure to keep beneficiaries properly informed, particularly, misleading them at the July 2009 meeting called to investigate and report on the trust’s affairs; and the impact of the breaches on the trust enterprise.

Submissions on appeal

[85] The appellants say that although the test for removal was properly expressed, the courts below have not correctly applied that test. Removal was too harsh a response in the circumstances. In submissions on this point, a number of themes emerge which we summarise as follows.
[86] First, it is said that removal was too severe a response where there are no allegations of breach of trust as such on the part of the appellants and no findings of dishonesty or impropriety. No one benefited from the action taken. Nor is there an ongoing risk to the trust assets. Accordingly, the case was one of lack of competence (if anything) rather than deliberate action. The appellants were not motivated by self-interest.
[87] Secondly, the appellants submit there was insufficient focus on their individual positions. Another way of putting this is that they say they were effectively tarred with the same brush as the male trustees.
[88] Thirdly, associated with the second point, it is said that the judgments under appeal do not properly recognise the dynamics of the situation and so fail to reflect on the minority position of the two women trustees. The two women had the courage in that dynamic to dissent and oppose the major Mangamawhitiwhiti transaction. That was the case although they were excluded from information giving them an appreciation of the scale of the investment.
[89] Finally, the submission is that the courts have not sufficiently recognised the special nature of the trust under the Act with the focus on the protection of land for whanau and their hapu and the kinship character of relationships involved in such trusts. Mr McKenzie referred to Mrs Rameka’s statement about the importance of matters of kinship as follows:

So for today and for the last week we have had trials and tribulations but we still have to acknowledge our bloodlines and those three trustees are still us. I still love them for what they are. Our chairman in particular comes from the [T]uakana family so we acknowledge that and it relates directly to the paramountcy. You know apart from that we remember our parents and what they left us to look after. If we have not looked after it I don’t know what to do about it at this point in time. Apart from that if our bloodlines aren’t together then we will have breached and we will not have looked after that legacy.

Decision

[90] We agree that there is a need for caution before a trustee is removed. The issue of removal cannot be determined by viewing each relevant factor in isolation from others. The Maori Land Court must consider the bigger picture which may involve examining the history of the trust as well as each trustee’s performance.
[91] We accept that the appellants were in a difficult position being appointed as responsible trustees to a trust when the male members were so well-established in their role. Further, at times the two women did not get the full information about what was happening. They made their decision about the purchase of Tauhara North, for example, without knowing the full story about Mangamawhitiwhiti. However, responsible trustees are just that; and they must comply with their legal obligations.
[92] It must also be acknowledged that there are some special features of trusts under the Act with the emphasis on matters such as the owners’ views and the importance of retention of land that come into play. Finally, there may also be issues of kinship and familial relationships that will need to be taken into account. Those features do not of course detract from the fact that the trustee must meet his or her duties and that those duties may involve protection of a tribal asset and, as in the present case, the operation of what is a valuable business.
[93] In any event, it does not seem to us that these sorts of factors are decisive here. That is because what was involved in this case was unsatisfactory conduct on such a scale and over such a period as to mean removal was almost inevitable. None of the matters raised by the appellants addresses this. Further, proper weight must be given to the trial Judge’s findings and exercise of discretion. He saw and heard parties over some days of hearing. He had an evidential foundation for concluding that the appellants were out of their depth and removal was the appropriate response. The Maori Appellate Court agreed.
[94] The appellants took issue with Judge Harvey’s conclusion about the inadequacy of disclosure at the meeting of the owners on 17 July 2009. Mr McKenzie said that the trustees made an honest attempt to convey the relevant information in a situation where, again, the dynamics limited them. However, Judge Harvey’s findings on this aspect reflected his assessment of the evidence particularly that of Mrs Biel. We see no reason to interfere with that assessment.
[95] In their written submissions, the appellants also challenged aspects of the judgments below relating to the financial status of the trust. In oral argument there was no challenge to the key findings in this respect, particularly those concerning the amounts paid out on the mussel farm investment, and the failure to obtain professional advice before entering into the Tauhara North transaction. Further, as Judge Harvey noted, the trust’s financial position had been assisted considerably by a “bail out by iwi interests”.^[37] We see no basis for taking a different view from that of the Courts below.
[96] Finally, in these circumstances, no issue can be taken with the conclusion that s 73 of the Trustee Act did not apply. Section 73 provides that a trustee may be excused from personal liability for a breach of trust where the trustee has acted honestly and reasonably. Judge Harvey accepted that the trustees had acted honestly but found that, given the advice they received and the duties they owed, their conduct was not reasonable. Thus, relief under s 73 was not granted. We agree with that decision.

Result

[97] For these reasons, the appeal is dismissed. Costs should follow the event. Mr McKenzie accepted that course was appropriate if the appeal was unsuccessful on the key matters relating to the three transactions. It was also accepted that if the appellants were unsuccessful, this was not a case where costs should be recovered from the trust. The appellants must accordingly pay the respondent costs for a standard appeal on a band A basis together with usual disbursements.

Solicitors:
Walters Law, Auckland for Appellants
McKechnie Quirke & Lewis, Rotorua for Respondent

APPENDIX

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^[1] Hall v Opepe Farm Trust (2010) 19 Waiariki MB 258 (19 WAR 258).

^[2] Rameka v Hall – Opepe Farm Trust (2011) Maori Appellate Court MB 535 (2011 APPEAL 535).

^[3] There is a right of general appeal to this Court: Te Ture Whenua Maori Act 1993, s 58A.

^[4] Te Ture Whenua Maori Act, s 210.

^[5] Te Ture Whenua Maori Act, s 210.

^[6] The various procedural steps in terms of the present proceeding are discussed in Judge Harvey’s decision: Hall v Opepe Farm Trust, above n 1, at [14]–[21].

^[7] The statutory duties are not exhaustive, see: Doug McPhail “Trusts Relating to Māori Land” in Richard Boast and others Māori Land Law (2nd ed, LexisNexis, Wellington, 2004) 163 at [8.4.1]. Another commentator makes the point that Maori land trustees are “under the same obligations as other trustees to, for example, act impartially and fairly between beneficiaries, prudently invest trust funds, and to act jointly”: Jacinta Ruru “Equity and Māori” in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 1249 at [43.2.7].

^[8] Section 222(2)(a).

^[9] Section 222(2)(b).

^[10] Section 237(2).

^[11] At [156] (footnote omitted).

^[12] Apatu v Trustees of Owhaoko C Trust – Owhaoko C1 and C2 (2010) Maori Appellate Court MB 34 (2010 AP 34) at [16].

^[13] Apatu, above n 12, at [14]. See also Ellis v Faulkner – Poripori Farm A Block (1996) 57 Tauranga MB 7 (57 T 7); Perenara v Pryor – Matata 930 (2004) 10 Waiariki Appellate MB 233 (10 AP 233); and Marino – Repongaere 4G (Part) (2004) 34 Gisborne Appellate MB 98 (34 APGS 98).

^[14] Bramley v Hiruharama Ponui Inc – Committee of Management – Hiruharama Ponui Inc (2006) 11 Waiariki Appellate MB 144 (11 AP 144).

^[15] At [8].

^[16] At [159].

^[17] Section 269(3) refers to the responsibility for the proper administration and management of the incorporation in the same way as s 223(b) and s 269(4) provides for removal of members in the same way as s 240.

^[18] Section 229(2).

^[19] At [59].

^[20] At [59].

^[21] At [58].

^[22] The trust was a shareholder in Abel Tasman Seafoods Ltd which we understand was one of the joint venture companies with the Poripori and Ngati Rarua trusts.

^[23] At [56].

^[24] At [18].

^[25] At [32].

^[26] Hall v Opepe Farm Trust, above n 1, at [170].

^[27] In the written submissions, the appellants say they did oppose the venture but that matter was not pursued in oral argument. There are concurrent findings of fact against the appellants on this point and it is plain from the whole of the evidence that initially the concern of both women was to ensure the owners had their say. Subsequently, while they may have had misgivings, they did not record opposition.

^[28] After the hearing in this Court, a memorandum was filed by one of the counsel who had acted in the High Court proceedings about the legal costs. We did not seek that information and we decline to consider it.

^[29] At [109]. The letter to the other trustees before the Court is dated 7 August 2006. However, the trustees did write to Mr Cairncross on 27 July 2006. In that letter they refer to making inquiries “several weeks” earlier of Mr Cairncross, about the transfer of monies out of the BNZ to “a certain account”.

^[30] At [109].

^[31] At [62].

32. ^[32] Section 38 provides that a trustee shall be chargeable: only for money and securities actually received by him, notwithstanding his signing any receipt for the sake of conformity, and shall be answerable and accountable only for his own acts, receipts, neglects, or defaults, and not for those of any other trustee, nor for any bank, broker, or other person with whom any trust money or securities may be deposited, nor for the insufficiency or deficiency of any securities, nor for any other loss, unless the same happens through his own wilful default.
    
    

^[33] At [131].

^[34] Wall v Karaitiana – Tauhara Middle 15 Trust (2008) 87 Taupo MB 107 (87 TPO 107) at [106].

^[35] We have noted the interest only loan commitment of over $300,000 per annum thereby incurred on a property earning approximately $17,000 per annum.

^[36] Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 at 580–581.

^[37] At [175].