Te Ture Whenua Māori (Succession, Dispute Resolution and Related Matters) Amendment Bill: Trusts and Incorporations

The Government has recently introduced Te Ture Whenua Māori (Succession, Dispute Resolution and Related Matters) Amendment Bill. The Bill introduces a number of practical and technical amendments to Te Ture Whenua Māori Act 1993 designed to enable Māori land to work better for whānau. The purpose of the Bill is to ensure the intergenerational wellbeing of Māori landowners and to provide for the utilisation of their whenua.

The Bill targets five key areas of the Act – Dispute Resolution, Succession, Court Powers, Trusts and Incorporations, and Property Law. Over this series of articles we take a look at the key areas of amendment and discuss how the amendments will affect owners of Māori land, trusts, and people dealing with Māori land. 

Our second article (click here to read the first article) examines the substance of those amendments and the practical effects of the proposed amendments.

In 2016 it was proposed that wholesale changes be made to the governance provisions of Te Ture Whenua Māori Act 1993 (“TTWMA”). It was anticipated that decisions on governance would lie with owners determining which governance model suited them and the rules that would govern those entities. 

In contrast, the Te Ture Whenua Māori (Succession, Dispute Resolution and Related Matters) Amendment Bill (“the Bill”) has taken a targeted approach to amendments to Māori Trusts and Māori Incorporations. We discuss our observations on those amendments below.

New Registrar Powers

The Bill gives the Registrar the power to determine simple and uncontested trust matters. Simple, uncontested matters are defined in the Bill as including termination of trusts and replacement of trustees, establishment of whānau trust, determination of kaitiaki and appointment of trustees to whānau trusts. 

An Applicant must make a request to the Registrar to do so. Such applications will not require a hearing. This will be advantageous to Māori landowners and trustees as it will reduce the likelihood for legal costs and Court processing times. 

Of course, the Registrar will only be able to determine an application of this nature if it is simple or uncontested. If at any time the matter is no longer simple or uncontested, it can be referred to Court. The key here is that the matter must be uncontested. Without further detail in the Bill it is difficult to see how frequently this power will be used. 

We consider that there is a real possibility issues such as natural justice, or the right to be heard, are likely to arise where people are unaware of applications and do not actively contest matters. Added to this, applications like termination of trust and the appointment of trustees are likely to become increasingly difficult as the beneficiary class of trusts expand and multiple generations of beneficiaries become involved.

While there are positive steps toward creating a more streamlined Court process, we note that Registrar’s will need to be appropriately trained and resourced to determine these types of applications. We see the potential for rehearing, appeals and/or section 45 applications to be increased if Māori landowners are not aware or have no knowledge of the applications concerning their whenua.

Removal of a Trustee

The Bill proposes that the grounds for the removal of a trustee be expanded to include the following:

• The trustee has lost the capacity to perform the functions of a trustee;
• The removal is desirable for the proper execution of the trust, and 1 or more of the following grounds for removal are met:
  • The trustee repeatedly refuses or fails to act as trustee;
  • The trustee becomes an undischarged bankrupt;
  • The trustee is a corporate trustee that is subject to an insolvency event; or 
  • The trustee is no longer suitable to hold office as trustee because of the trustee’s conduct or circumstances.

These amendments largely mirror the provisions for removal in the new Trusts Act 2019 set to come into force in 2021. A noticeable difference is that for those trustees who have lost capacity their removal is compulsory. The same does not apply for Māori land trusts.

There will undoubtedly be issues of evidence to support elements of the above and the Court will need to consider what evidence will be sufficient to hold office as a trustee. We consider that though the amendments suggest a more streamlined approach to matters which may be cost effective and timely, there is a real possibility to create issues of natural justice, accuracy and paternalism, not unlike the current functions performed by the Māori Land Court.

It may have been useful for the Bill to go wider to include amendments similar to that of the Trusts Act 2019 concerning the duties of trustees and particularly the provision of information to beneficiaries given the increasing cases before the Court requiring an investigation into the affairs of a Trust. Notably the Bill does propose that the Trust will have wider powers in respect of equitable remedies such as tracing and accounting for profits. This again adds to what the Court is already doing on the ground in dealing with Māori trusts.

Māori Incorporations

A handful of administrative amendments for Māori Incorporations are proposed in the Bill. This includes the grounds that disqualify a person from being a member of the committee of management, the requirements to establish a Māori Incorporation and the requirements on Maori Incorporations to keep the details of dividends paid to shareholders, and a register of interests.

Given the existing difficulty in assessing the legal test for “sufficiency of support”, a term well used in TTWMA, we see some concerns with determining whether sufficiency will be based on shareholding, beneficiary numbers, a combination of both or shareholding and numbers of those present.  

Kylee is an Associate in our Māori Legal Team and can be contacted on 07 958 7424.