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Maori Land Court of New Zealand |
IN THE MAORI LAND COURT
OF NEW
ZEALAND
WAIKATO-MANIAPOTO DISTRICT
114 HAURAKI MB
34
A20070008668
UNDER Sections 26B, 26C, 26D and 26E of Te
Ture Whenua Maori Act 1993 and Sections 180, 181, 182 and 183 of the Maori Fisheries Act 2004
BETWEEN DAVID TAIPARI, WILLIAM PETERS, PAHI TUPUHI AND JOHN TAMIHERE Applicants
AND HAURAKI MAORI TRUST BOARD Respondent
Hearing: 6 December 2007
(Heard at Hamilton)
Appearances: Mr Paul Majurey
Mr Martin Logan
Mr Jamie Ferguson
Ms Justine Inns
Judgment: 30 April 2008
RESERVED JUDGMENT OF JUDGE S TE A MILROY
Summary of Decision
[1] This decision holds as follows:
a) The meaning of section 17(2)(b)(i) of the Maori Fisheries Act 2004 is that constitutional documents referred to in section 17(1) of the Act must be ratified in the case of a mandated iwi organisation by 75% of the total vote of adult members of the iwi, whether they vote in person at a general meeting called fo the purpose of adopting the constitution or by postal ballot. The documents do not need to be ratified separately by 75% of the adult members of the iwi who vote at the general meeting and by 75% of the adult members of the iwi who vote in the postal ballot.
b) In accordance with the principles of the doctrine of equitable estoppel the Hauraki Maori Trust Board (“the Board) is estopped from applying to Te Ohu Kaimoana Trustee Limited (“Te Ohu”) for recognition as a Joint Mandated Iwi Organisation (“JMIO”). The Board’s representations to the iwi of Hauraki that:
i) The ratification hui was a valid, effective and integral part of the ratification process; and
ii) A vote giving 75% approval of the constitutional documents was required at the ratification hui,
were relied on by voters at the ratification hui.
All the voters at the hui suffered the detriment of their vote not being counted as valid by the Board in making its application to Te Ohu for recognition as a JMIO. The “no” voters at the hui suffered the additional detriment in that they held a reasonable expectation that if 75% approval was not obtained at the ratification hui the Board would not apply for JMIO recognition. By a narrow margin it is unconscionable for the Board to depart from the beliefs raised by the representations as that departure constituted a disenfranchisement of the voters who voted in person at the ratification hui.
c) On the basis of these findings the parties are now directed to proceed
to mediation.
A full discussion as to the grounds upon which the above findings are made is set out
in paragraphs [114] and following.
Background
[2] The Hauraki Maori Trust Board (“the Board”) is constituted pursuant to the Hauraki Maori Trust Board Act 1988. It is a Maori Trust Board within the meaning and for the purposes of the Maori Trust Boards Act 1955. The beneficiaries of the Board are the descendants of Ngati Hako, Ngati He, Ngati Maru, Ngati Paoa, Patukirikiri, Ngati Porou ki Harataunga ki Mataura, Ngati Pukenga ki Waio, Ngati Raheretumutumu, Ngai Tai, Ngati Tamatera, Ngati Taratokanui and Ngati Whanaunga. The Board is made up of twelve representatives, each representing one of the twelve Hauraki iwi. The application before the Court is made by four elected representatives of the Board (“the elected reps”) who challenge the decision of the Board to seek and obtain:
a) Recognition as a joint mandated iwi organisation (“JMIO”) by Te Ohu Kaimoana Trustee Limited (“Te Ohu”);
b) Recognition of the following constitutions under the Maori Fisheries
Act 2004 (“MFA”):
i) Pare Hauraki Fishing Trust Deed (“FTD”); and ii) Pare Hauraki
Asset Holdings Limited.
[3] The elected reps claim that the Board did not
comply with sections 14 and 17
of the MFA. Te Ohu was joined to the proceedings as an interested party by minute dated 23 November 2007.
[4] The Board and the elected reps agreed to enter a mediation process. As part
of the process the parties are seeking a non-binding ruling from the Maori Land Court pursuant to section 182(2)(b) as to whether the draft FTD was ratified in accordance with the MFA.
[5] The matter was set down for hearing on 6 December 2007. The timeframe
for filing of evidence and a statement of issues was compressed into two weeks in
order that the hearing could take place as soon as possible. Affidavits were filed and
it was agreed that deponents would not be cross-examined so that hearing time was devoted to the legal submissions of the parties. Counsel for the elected reps produced a statement of issues in order to focus the hearing on those matters at issue between the parties.
[6] At completion of the hearing it was agreed that Counsel for each of the parties would provide written closing submissions. The Court received the Board’s closing submissions on 24 December 2007. The submissions for the elected reps were received by the Court on 22 February 2008 after the minutes of the hearing were distributed to the parties. The Court did not receive written closing submissions from Te Ohu.
Facts
[7] The Board undertook a series of eight consultation hui with Hauraki iwi to explain the process for becoming a JMIO and for ratification of the constitutional documents. The consultation hui took place in May 2006 and culminated in a report back hui to advise iwi of the results of consultation and steps forward in the process on 3 June 2006.
[8] By letter dated 2 May 2006 Ms J Anderson, the Board’s CEO, sent a package
of documentation to the iwi of Hauraki as part of the Board’s process for seeking recognition from Te Ohu as the JMIO for the iwi of Hauraki. The documents stated:
“It is the Trust Deed that the Trust Board will ultimately be presenting to iwi members for ratification by way of a hui and postal vote.”
“The postal vote to make a decision on the Trust Deed will open on the 9th June 2006 and will run until the 7th July 2006 which will be complimented (sic) by a ratification hui on the 24th June 2006.”
[9] It is common ground between the parties that at the Board consultation
hui held on 6 May 2006 the Deputy Chair of the
Board confirmed that
75% or more approval of the draft Trust Deed would be separately required for
the postal ballot
and the ratification hui votes. At a Board meeting on
1 June 2006 Ms Anderson also
confirmed that 75% approval would be required in both votes. I note that Ms Anderson had obtained a legal opinion dated 23 May 2006 which advised that a ratification hui was not strictly required by the MFA as part of the ratification process. A copy of the opinion was not given to the elected reps or the iwi of Hauraki either prior to or at the ratification hui on 8 July 2006.
[10] Mr Taipari, for the elected reps gave evidence that he passed on the information that a 75% vote in favour was required in both the postal vote and hui vote to many tangata whenua at meetings of the Ngati Maru Runanga, the Marutuahu Whanui and his own whanau. That information was passed on further by people attending these hui.
[11] On 3 June 2006 the Board held a report back hui at Thames War Memorial Civic Centre. At the hui a PowerPoint slide presentation gave the information that the ratification hui would be on 8 July 2006 and that that vote would be by show of hands. The only criteria were that voters must whakapapa to one or more of Hauraki iwi, and be 18 years and over. No proxies were to be allowed. The postal vote was shown as commencing on 9 June 2006 with completion on 7 July 2006. To vote by post voters would need to be registered with the Board or be on the supplementary roll.
[12] On 12 June 2006 the Board publicly notified that a special general meeting (ratification hui) would be held on Saturday 8 July 2006. The notice specified the voting regime for the hui as follows:
“Voting at the special general meeting will be by show of hands unless a secret ballot is determined by the hui. All persons who whakapapa to Hauraki iwi and are 18 years or over may vote. No proxies or special votes will be accepted.”
[13] The notice also specified that the resolution to be voted on was whether the Trust Deed of the Pare Hauraki Fishing Trust should be adopted and whether the Hauraki Maori Trust Board should be ratified for the purposes of the MFA and the Maori Commercial Aquaculture Claim Settlement Act 2004.
[14] The public notice also stated as follows:
“A postal ballot will also be held on this resolution. Voting
forms will be sent...and must be returned by post no later
than 5.00pm, Friday 7
July 2006
OR in person at the special general meeting.”
[15] On about 14 June 2006 the Board sent out a package of documents (via post) including a private notice for its 8 July 2006 ratification hui and an explanatory note. The explanatory note stated:
“HOW YOU CAN PARTICIPATE To Participate:
Cast your postal
vote and return it by 5.00pm on 7 July 2006 or you can deliver your postal vote
in person at the hui on 8 July 2006.
Attend and vote at the decision making hui on 8 July 2006
at
Paeroa.”
[16] A total of 5, 191 ballot forms were issued to registered adult members of the Hauraki iwi. (The combined notional population of the Hauraki iwi in Schedule 3 of the MFA identifies that there are 13,622 people of Hauraki descent). The Board’s Tribal Register and Supplementary Roll have currently registered 7,852 persons of Hauraki descent. At the time of the fisheries ratification process the number on the register stood at 7,499. (Paragraph 18, J Anderson affidavit).
[17] Ballot forms were not sent to those members on the register who were either under 18 or for whom the Board did not hold current addresses. The public notice of the ballot invited members of Hauraki iwi not registered with the Board to request a postal ballot form. The private notice included an explanatory note, the ballot form, a copy of the Board’s strategic blueprint 2006-2012 and notice of the 8 July 2006 hui.
[18] The explanatory note pointed out that a full copy of the JMIO Trust Deed was available on the website or by request to the Board office. A freephone number was included together with a summary of the key elements of the Trust Deed.
[19] A copy of the JMIO Trust Deed was available on the website from 12 June
2006. Additional notice of the ballot and the ratification process was provided to iwi
members by written panui, e-mail and by phoning and texting beneficiaries during the voting period.
[20] On 5 July 2006 a Board meeting was held at which Mr Taipari sought confirmation that 75% would be required in both the hui and postal ballot. Ms Anderson’s affidavit confirms that she replied in the affirmative to that question.
[21] The results of the postal ballot were declared by Tony Coombe of McPherson
& Coombe, a Chartered Accounting firm who also acted as independent returning officer for the vote taken at the special general meeting on 8 July 2006.
[22] The results of the postal ballot were provided by Mr Coombe on 13 July 2006. A return rate of 29.7% was confirmed with 89.3% of the valid votes received being in favour of ratification. Of the 1,540 total votes returned, 1,374 votes were in favour of the resolution, 135 votes were against and 31 votes were invalid.
[23] A breakdown by iwi was also provided by the returning officer. Two iwi were 100% in favour, 8 were 90% plus in favour, one was 80% in favour and one iwi voted against ratification.
8 July 2006 – Ratification Hui
[24] The hui was held at the Paeroa War Memorial Hall. At that hui Ms Anderson confirmed that the hui voting process was in addition to the postal ballot. Ms Anderson also presented a PowerPoint slide at the hui which, consistent with the public notice, stated:
“Hui Vote
Show of hands unless otherwise determined by hui:
• 18 years and over
• Must whakapapa to one or more of Hauraki iwi
Open to challenge by others
If challenged, vote will become special vote until verified.”
[25] Ms Anderson outlined the process for the hui vote. There was no formal identifier, such as a registration number, used for those who participated in the vote. No challenges were made at the hui and no other steps were taken to verify the entitlement of those present at the hui.
[26] Ms Anderson also confirmed that the hui voting process was in addition to the postal ballot. Postal ballots received via post had to be postmarked no later than 5.00pm on 7 July 2007 to be valid or alternatively persons could deliver their votes at the hui by placing them in the ballot box provided. Any qualified voters who had misplaced the ballot form could also have their voting forms reissued and then cast a vote by placing it in the ballot box.
[27] Ms Anderson advised the hui that the postal ballot was
a legislative requirement and therefore the results
of that vote would
be crucial in determining recognition of the Board as the JMIO and
for ratification of the
Trust Deed. Ms Anderson also confirmed that a
threshold of 75% was the Board’s desired outcome
for the hui.
[28] When asked what the outcome would be if the 75% threshold test was not reached at the hui Ms Anderson stated that the results of the hui along with the postal ballot results would be taken back to the Board’s next meeting in order for it to make decisions about what steps to take next, as this was not an outcome the Board had considered previously.
[29] Mr Taipari stated that Ms Anderson’s comments at this hui were the first time there was any indication to the iwi that the Board might seek recognition as a JMIO even if the vote at the hui did not reach the 75% threshold.
[30] The people at the meeting then determined that a vote by show of hands should be taken. As the returning officer considered that the numbers looked even steps were then taken to put the yes and no voters into different rooms to enable a count to be taken.
[31] Those people who intended to vote in favour of the ratification were asked to stay in the main hall to be counted, and those voting against ratification were put into the kitchen wing. Mr Taipari’s affidavit states that offence was caused to kaumatua and others who objected to being treated “like cattle”. There was some dispute as to whether some “no” voters were locked out in the foyer but there was insufficient evidence to determine this one way or the other.
[32] The result of the vote was as follows:
Yes – 119
No – 118
Abstain – 1
Clearly this did not represent a vote of 75% in favour of the draft Trust Deed.
Approach to Te Ohu for Recognition as JMIO and Trust Deed Ratification
[33] On 19 July 2006 a Board meeting was held at Te Pai o Hauraki Marae. Ms Anderson gave oral advice as to the results of the postal ballot and ratification hui. The legal advisor to the Board also gave a PowerPoint presentation. The presentation sets out in side 6 the decisions the Board needed to make as follows:
• “Is the Board going to request that TOKM recognise it as the
JMIO for
Hauraki iwi?
• If not, what course will the Board follow?
- What company name?
- How many directors?
- Any other issues to be addressed in constitution?”
[34] Slide 7 of the presentation states as follows:
“Should the Board seek TOKM recognition as JMIO?”
Options:
- Request that TOKM recognise the Board as the JMIO
- Rerun all or part of the ratification process
- Begin the JMIO mandating process again on the basis of some other option
- Do nothing
All options carry litigation risk”
[35] Slide 8 continues as follows:
• “Key information:
- Results of consultation
- Results of postal ballot (complied with MFA)
- Results of hui vote (not necessary to MFA)
- Legal proceedings threatened if Board proceeds
Arguable case based on failure to secure 75% at hui
Ultimately difficult to sustain – would it be unconscionable for the Board to proceed?”
[36] Slide 9 states as follows:
• “Key considerations:
- What is in the best interests of all members of all iwi (NB: all members must act in the best interests of all beneficiaries not just own iwi)
- Don’t weight votes but add together – 85.5%?
- Unfair to proceed or, unfair to ignore the majority?
- Have the concerns of the ‘no’ vote already been considered and addressed?”
[37] Mr Taipari’s affidavit refers to the intense debate that took place at the meeting over the consequences of the failure to secure the necessary 75% ratification of the Trust Deed at the ratification hui given the previous repeated advice that such approval was a prerequisite for JMIO recognition of the Board.
[38] Mr Taipari also noted that the slide presentation was the first time the Board representatives were given an opinion that the ratification vote was not necessary to the MFA and could be combined with the postal ballot vote.
[39] Resolutions were ultimately passed by a simple majority of the Board representatives that the Board seek recognition under the MFA as the JMIO for the iwi of Hauraki.
Application to Te Ohu for Recognition
[40] The Trust Board by letter dated 26 July 2006 requested Te Ohu to recognise the Board in its capacity as Trustee of the Pare Hauraki Fishing Trust as the Hauraki JMIO. The letter, a copy of which was attached in the affidavit of Tamarapa Lloyd, General Counsel for Te Ohu, set out the consultation process followed by the Board in ‘seeking a mandate to bring the fisheries and aquaculture assets under the Maori Fisheries Act 2004 and Maori Commercial Aquaculture Settlement Claims Act 2004’ back to Hauraki. The letter confirms that eight consultative hui were held within Hauraki, Wellington, Auckland and Hamilton. The public and private notices for the consultative hui, the hui presentation, hui minutes and attendance schedules, the Fisheries Discussion Document and a schedule of written submissions received by the Board were attached to the letter.
[41] Section 5 of the letter discusses the ratification by postal ballot. Section 6 of the letter refers to the ratification hui. Paragraph 6.1 of the letter states as follows:
“6.1 Although the Maori Fisheries Act 2004 and Te Ohu Kaimoana did not require the Board to hold a ratification hui in conjunction with the postal ballot, the Board elected to do so because it was considered that hui provided an opportunity for decision making in accordance with our own internal processes.”
[42] In paragraph 6.2 of the letter it states as follows:
“6.2 It was clearly stated at the hui (and previous hui) that the postal ballot was a requirement of the Maori Fisheries Act 2004 and Te Ohu Kaimoana and that the results of this would determine recognition of the Board as the JMIO and the Trust Deed.”
[43] Paragraph 6.4 states as follows:
“6.4 Voting at the hui was by show of hands, and was open to all
members
of Hauraki iwi over the age of 18. Consistent with previous
Board practice at decision making hui, there was no formal identifier,
i.e.
a
registration number, for those who participated in the vote, rather
the
onus was on individuals to act honestly and to the hui
to publicly challenge any voter they did not believe met
the
criteria. No challenges were made at the hui and no other steps were
taken to verify the entitlement of those present
at the hui to
vote.”
The results of the hui vote were reported as above.
[44] In sections 7 and 8 the letter discusses factors influencing the 8 July 2006 hui. Paragraph 7.1 and following state:
“7.1 The results of the hui did not meet the 75% support for the
resolution that the Board had hoped to achieve. It is expected
that this will
be
a key platform for opponents to refute ratification of the Trust
Deed and the Board as the JMIO. These opponents are not
new to
the
Board and first appeared when the Board embarked on its
Treaty claim mandate process last year.
7.2 It was obvious that the opponents of the Board mobilised in
an attempt to have the hui vote lost to the Board and it
has to be noted that
the hui environment on the day can best be described
as
‘hostile’. In the days leading up to the hui a
rolling advertisement was placed on a local Pakeha radio station that
not only
said ‘say
no’ at the 8 July 2006 hui but also publicly
undermined the broader nation building kaupapa of the Board...
7.3 The weekend prior to the 8 July hui also saw the historic return of the Hauraki Treaty Claims Report by the Waitangi Tribunal in Paeroa. The report’s messages in terms of a way forward were generally consistent to the messages advocated by the Board when it embarked on the Treaty claims mandate process last year and again, this is another factor likely to have caused concern to opponents. In addition to this, the decision as to who has the mandate to negotiate and settle the Hauraki Treaty claims is close and tensions are certainly rising as evidenced in our opponents latest strategy of using the media to highlight a ‘perceived’ rift amongst the Hauraki tribes.
7.4 Making Te Ohu aware of the context and environment within which
Hauraki is operating at the moment was considered relevant to
an understanding
that a number of factors, many of which had nothing
to do with fish,
came into play at our 8 July hui.
7.5 On a positive note, despite not receiving the 75% sought by the Board and despite the best attempts by opponents on the day, the hui vote was won.
7.6 On a simple reading of section 17(2)(a) of the Act, it
would be legitimate to add together the results of the postal
ballot and hui
vote, giving a margin of 85.5% in favour of ratification. However because the
hui vote was treated as a non-statutory
internal process and therefore
not conducted in such a way as to make it possible to accurately
determine whether
persons who voted were entitled to do
so or whether
persons voted both at the hui and by post vote (i.e. cast two votes), we do not
believe that this would be a robust
approach.
7.7 In our view, Te Ohu is fairly limited in how it can have regard for the hui vote other than to recognise that it reflected an internal process for Hauraki iwi that the Board chose, rightly or wrongly to adopt. Having said that Te Ohu, like the Board, will weigh up all the information, including the results of the postal ballot and ratification hui, and make their decisions accordingly.
8.0 The Board’s Considerations
8.1 In response to questions at the ratification hui, it was explained that the Board had not made any decisions as to what course it would follow if the resolution was not supported by 75% of the voters at the hui. It was explained however, that should this occur, then all information including the results of the postal ballot, would be referred back to the Board and they would need to consider this information and make a decision on the next steps to take.
8.2 These matters were considered by the Board when it met on 19
July
2006. While disappointed not to have reached the 75%
benchmark
it set up for the hui, it was the Board’s
view that it had a responsibility to take into account all the
views of Hauraki iwi members and decided that the postal ballot
ultimately represented a robust, fairer and more representative picture
of the views of its iwi members and that it would not be right for the
views
of the significantly larger number of iwi members who took
part in the postal vote to be vetoed by the smaller number who attended
the hui.
8.3 In coming to the above conclusions the Board were mindful of its overriding obligation as a Trust Board to act in the best interests of all its beneficiaries, which is consistent with the obligations the Board will inherit as a JMIO to act for the benefit of all iwi members, irrespective of where they reside.
8.4 It is also important to record that the concerns of those who did not wish the Board to become the JMIO, which we have indicated are broader than just ‘fish’ have not been ignored. On the contrary, the Board has developed a strategic blueprint for the next six years with the key work stream in that plan being the creation of a new post- settlement governance entity (or entities) to take over from the Board, including its role as the JMIO. In our view, discussions about the shape and role of a new entity for Hauraki should be – and will be – conducted in this context, with everyone agreeing that the Board will come to the end of its useful life by 2012.
8.5 The Board therefore recorded its reasons for resolving to seek recognition as the JMIO for Hauraki iwi as follows:
(a) That it is believed that this is in the best interests of all; and
(b) The majority of votes cast [in the ratification process]; and
(c) The other processes that exist to consider and address concerns raised.”
[45] In dealing with such a request for recognition, Te Ohu staff prepared reports
to the Chief Executive of Te Ohu regarding the relevant legal requirements for the Hauraki JMIO. In regard to this matter the relevant report is that of Te Ohu’s Manager Asset Allocation and Transfer regarding the ratification of the Hauraki JMIO.
[46] In paragraph 8 and 9 the report deals with the 75% ratification requirement.
It states as follows:
“8. Section 17(2) requires that the constitutional documents of the
MIO are ratified by not less than 75% of adult members of
the iwi who vote
either at a general meeting called for the purpose of ratifying the
constitutional documents or by postal
ballot. Section 17(2) provides the
MIO with the option of either holding a general meeting and postal ballot
or a postal ballot only to ratify the constitutional
documents.
Evidence Received
9. The Trust Board elected to hold a
ratification hui in conjunction with a postal ballot to adopt the Pare
Hauraki Fishing
Trust Deed and ratify the Trust Board as the MIO under the
Act.”
[47] In paragraphs 14-21 of the report the ratification hui is discussed using virtually the same wording as that set out in the Board’s letter. It is a clear indication that the Board’s reasoning was adopted by the reporter. For instance at paragraph 16 of the report it states:
“However, because the hui vote was treated as a
non-statutory internal process and not conducted in a way to
make it
possible to accurately determine whether persons who voted were in fact
entitled to do so, or whether persons
voted both at the hui or by postal
ballot (i.e. cast two votes), this approach is not considered robust. For our
purposes the hui
vote should
be regarded as an internal process for
the Trust Board and not counted as part of the ratification vote under
section 17 of the Act.” (emphasis added).
[48] And again at paragraph 18 of the report it states:
“Pursuant to section 17(2)(a) of the Act it would be
legitimate to add together the results of the postal ballot and hui
vote, giving a margin of
85.5% in favour of
ratification...” (emphasis added).
[49] The final outcome in the report was set out at paragraph 21 as follows:
“We consider that the ratification process followed by the Trust Board satisfies the requirements of section 17 and kaupapa 4(2)(a) and 4(2)(b) of Schedule 7 of the Act.”
[50] The Board of Te Ohu resolved on 1 August 2006 that the Hauraki Maori Trust Board in its capacity as Trustee of the Pare Hauraki Fishing Trust be recognised as the JMIO for Hauraki.
[51] Mr Lloyd also provided a table showing that the return of postal ballots in the
Hauraki ratification ballot was 20.7% and compared favourably to other return rates for ratification ballots undertaken by other iwi.
Statement of Issues
[52] As indicated above, Counsel for the elected reps provided a statement of issues (“SOI”) to give focus to the hearing. The statement of issues is set out below:
STATEMENT OF ISSUES
1. In seeking recognition as a Joint Mandated Iwi Organisation (“JMIO”) for the iwi of Hauraki (“Iwi”), was the Hauraki Maori Trust Board (“HMTB”) required to meet the criteria in section 14 of the Maori Fisheries Act (“MFA”)?
2. Under section 14, was the proposed constitutional document of the HMTB fisheries governance entity (“Fish Constitution”) required to comply with section 17 of the MFA?
3. Did the Fish Constitution require HMTB to seek its ratification by,
at
least, a general meeting called for the purposes of adopting the
constitution?
4. If so, did section 17(2)(b) empower HMTB to also seek
ratification
of the Fish Constitution by a postal ballot?
5. Did HMTB elect to seek ratification of the Fish Constitution by the adult members of the iwi of Hauraki:
(a) In person at a general meeting in accordance with
section
17(2)(b)(i)(A) (“Ratification Hui”);
and
(b) By postal ballot in accordance with section 17(2)(b)(i)(B)?
6. Did HMTB vary or suspend the terms of the Fish Constitution to the extent that the voting provisions for the general (ratification) meeting were replaced or superseded by the voting process detailed in the notice for the Ratification Hui?
7. Is HMTB estopped from asserting it did not elect to require the
Fish
Constitution to be ratified in accordance with both
section
17(2)(b)(i)(A) and 17(2)(b)(i)(B) because:
(a) HMTB by words and conduct made a clear and unequivocal assurance to some
or all of the iwi of Hauraki that it would require ratification
of the Fish
Constitution via both a Ratification Hui and postal ballot at
which >75% approval
was required for each vote;
(b) Some of the iwi of Hauraki have taken HMTB at its word and acted on that assurance; and
(c) To allow HMTB to dishonour its assurance would be adverse to the position of those who relied on it.
8. If HMTB did make an election to require ratification of the
Fish
Constitution in accordance with both sections 17(2)(b)(i)(A)
and
17(2)(b)(i)(B), does the MFA allow the votes from each
separate process to be aggregated to meet the respective 75% thresholds?
9. If the Fish Constitution was not ratified in accordance with
section
17(2)(b), does it have any effect under the MFA?
Submissions for the Elected Reps
[53] Counsel for the elected reps submitted that it was common ground that
the answer to questions 1, 2 and 4 of the SOI is ‘yes’.
There was
no dispute in relation
to question 3, as the draft Trust Deed does require
the Board to seek its ratification
by a general meeting called for the purpose of adopting constitution. Nor is there any dispute that the Board chose to seek ratification of the draft Trust Deed by holding a general meeting in accordance with section 17(2)(b)(i)(A) of the MFA; and by postal ballot in accordance with section 17(2)(b)(i)(B) of the MFA. Moreover the Board gave public assurances to the iwi of Hauraki the hui vote would need to reach 75% approval. It is irrelevant what the Board personnel did or did not contemplate in making such assurances. Moreover Counsel for the elected reps argued that the Board’s contention that the ratification hui vote was a mere ‘internal process’ was never disclosed to the iwi of Hauraki prior to the ratification hui, and seems inconsistent with the Board’s use of professional scrutineers to attend the hui, count votes and release the vote results. It is also inconsistent with Slide 5 of the Board’s PowerPoint display which said that those voting at the hui were open to challenge by others.
[54] Counsel for the elected reps submitted that Mr Renata’s evidence for the Board was closer to the truth:
“10. ...the Board also wanted to have a hui because that was how we traditionally made important decisions. This is because kanohi ki te kanohi is important to us. We also know that our people liked having both a postal ballot and hui vote...”
[55] The elected reps went on to argue that the Board did not effectively withdraw
its 75% assurances at the ratification hui. The Board failed to achieve the 75% approval rate for the draft Trust Deed at the hui, and therefore should be bound by its word. Weight must be given to the fact that the people of the iwi of Hauraki travelled to the ratification hui at their own cost and elected to vote only at the ratification hui in reliance on the Board’s assurances.
[56] Counsel for the elected reps agreed that the ratification hui vote did not have
to comply with the draft Trust Deed because the terms of the draft Trust Deed were not fixed or final at the time of the hui. The Board also stipulated the rules for voting at the ratification hui in its public notice of 12 June 2006. As the Board was not bound by the terms of the draft Trust Deed as to its requirements for a general meeting the elected reps’ view is that the rules for voting as set out in the public notice ought to apply and be binding on the Board.
[57] The MFA does not require that the ratification hui voting follow the draft Trust Deed, nor is there anything in sections 14 or 17 of the MFA which would make the voting at the ratification hui ultra vires the MFA.
[58] The Board complied with the rules contained in Clause 2 of Schedule 7 – Kaupapa 2 of the MFA, but there is nothing in Clause 2 which puts the method of voting in person ultra vires the MFA.
[59] Counsel for the elected reps submitted that the Board was estopped from asserting that it did not elect to require the draft Trust Deed to be ratified in accordance with both sections 17(2)(b)(i)(A) and 17(2)(b)(i)(B). Counsel relied on the statement of the elements of estoppel set out in Burbury Mortgage Finance [1989] 1 NZLR 356. Counsel submitted that the Board:
a) Gave assurances to the iwi of Hauraki that 75% approval of the draft Trust Deed would separately be required for both the postal ballot and ratification hui votes.
b) Those assurances were intended to affect the legal relationship between the Board and the iwi of Hauraki because the Board:
i) Publicly committed itself to attain such levels of approval as a necessary part of the ratification process; and
ii) If successful, the Board would (on meeting all remaining MFA requirements) receive legal ownership of the fisheries assets (beneficially owned by the ‘iwi of Hauraki’).
c) The Board intended that such assurance be acted upon by the iwi of Hauraki because those assurances were given at public hui and the publicly notified ratification hui was duly held in accordance with those public and private notices.
d) People of the iwi of Hauraki acted in reliance on the Board assurances by only casting a vote at the ratification hui.
e) The Board did not withdraw its assurances at the ratification hui or give the people of the iwi of Hauraki any opportunity of resuming their position. In this respect the advice given at the ratification hui that people could still lodge a postal ballot and that the postal ballot was crucial to ratification was insufficient and given too late to notify the people. Moreover the Board did not advise people casting a vote by the show of hands process that their hui vote would be discounted.
f) There is a pre-existing legal relationship between the Board and the iwi of Hauraki as the Board is a recognised iwi organisation under the MFA. The Board was attempting to establish a legal relationship in the future by becoming a JMIO. The Board assurances were an integral part of that process to be recognised as a JMIO which would result in the Board receiving the legal ownership of the fisheries assets.
g) Finally, the Board and the iwi of Hauraki have a clear common interest in who ultimately becomes the lawfully recognised JMIO for the fisheries assets of the iwi Hauraki.
[60] Counsel agreed that the people of the iwi of Hauraki who relied on the Board’s assurances that it was required to achieve a 75% approval of the draft Trust Deed at the ratification hui, relied on that to their detriment. People who elected not to cast a postal ballot in favour of voting at the ratification hui were not advised that the 75% assurances were withdrawn, nor that their ratification vote would be discounted. They attended the hui at their own cost and their hui vote was discounted by the Board.
[61] The ratification hui vote was discounted because the Board on 19 July 2006 decided that the ratification hui and its vote result was a mere internal process and not a formal part of the Board’s ratification process under the MFA. At best the Board converted the hui votes into postal ballot votes – they were not treated as votes cast in a separate hui ratification process.
[62] Finally, the elected reps argued that those voting at the hui were
prevented from exercising a fundamental right recognised in
a Treaty settlement
statute – the
right to have their say on their Treaty assets
according to the rules laid down by the
group bidding for the JMIO recognition under the MFA. The Board ought to have maintained its position that the ratification hui was a separate ratification process for which 75% approval was required. Moreover the Board decision on 19 July 2006 was taken by five individuals – the ratification hui and the votes whether “yes” or “no” should not be cast aside on the basis of that decision.
[63] In respect of question 8 of the SOI the elected reps contend that if the Court determines that estoppel has been established against the Board, the Board is prevented from aggregating the two sets of ratification votes because of its assurance that a 75% approval rate of the draft Trust Deed would be separately required for each vote. If, on the other hand the hui vote is determined to be invalid for failing to comply with the requirements of the draft Trust Deed or the MFA then again aggregation of the results of the two votes cannot take place.
[64] Furthermore, the MFA does not permit aggregation on the basis
of the ordinary principles of statutory interpretation
and in light of
the principles of the Treaty of Waitangi. The plain reading of section
17(2) of the MFA means that the
intent is that a 75% approval rate be
obtained by those who vote in person at a general meeting or
through a postal ballot. The 75% approval requirement is
of
fundamental importance in the legislation. If Parliament had
intended that groups could run both ratification processes
in order to
aggregate votes to achieve 75% approval, it would have said so, but it did
not. The ‘or’ in section
17(2) of the MFA operates conjunctively to
require each vote to meet the 75% threshold.
[65] Counsel for the elected reps also referred to the Preamble and Purposes of the MFA and submitted that these provisions underscore the importance placed by Parliament on the requirements of the allocation framework being met prior to individual iwi allocation taking place. Reading the statute to require a 75% approval rate at both a ratification hui and through a postal ballot would be in accordance with the Preamble and Purposes section.
[66] Counsel for the elected reps found support for this reading of the
statute in the legislative history of the MFA. The original
Bill draft by the
Treaty of Waitangi
Fisheries Commissions (the Maori Fisheries
Development Bill) had an approval
threshold for the MIO of a simple majority of more than 50%. The first
reading also contained a simple majority threshold for MIO
approval. The
reported back version
of the Bill as recommended in the report of
the Fisheries and Other Sea Related
Legislation Committee, proposed an amendment to provide for the special majority
for MIO approval. Parliament chose to enact the special majority provision, thus underlining its importance in the legislative scheme.
[67] The elected reps argued that the MFA was to be interpreted in a manner consistent with the principles of the Treaty of Waitangi. The Treaty principles require that parties act reasonably, honourably and in good faith. The MFA ought also to provide active protection of the interests and rights of the iwi of Hauraki.
[68] For all these reasons the answer to question 8 of the SOI is, in the view of the elected reps, ‘no’.
[69] In respect of question 9 of the SOI the elected reps considered that the draft Trust Deed was not ratified in accordance with section 17(2)(b) of the MFA and therefore has no effect. Nor could it be argued that the Board had somehow complied with the “spirit” of the MFA, given the non-compliance with the statutory regime.
[70] Finally the elected reps submitted that the MFA, as a Treaty of Waitangi settlement statute which extinguished all Maori claims to commercial fisheries, ought to be enforced in such a way as to ensure that the ultimate distribution of the fisheries settlement assets has followed due process. If the Board has not done so then that needs to be recognised and the matter addressed via mediation.
Submissions for the Hauraki Maori Trust Board
[71] In its closing submissions the Trust Board firstly dealt with some factual issues and then the legal issues raised by the SOI.
Factual Issues
[72] The Board submitted that, contrary to the impression the Court may have received from the number of affidavits filed on the applicants’ behalf, there is no substantial backing among Hauraki iwi for the position adopted by the elected reps. The voting in the ratification process together with the iwi engagement of the Board and the Board’s earlier strategic and mandating processes show that there is no significant opposition to the Board within Hauraki iwi.
[73] The Board understood that ratification by 75% of iwi members taking part in
a postal ballot was a legal prerequisite to obtaining recognition
as the JMIO for Hauraki iwi. However, the Board felt
it was important to
hold a hui as part of the process because “traditionally that was how
Hauraki iwi made decisions”
(paragraph
14 of closing submissions). A
ratification hui conducted in accordance with the Act and equivalent provisions
of the Trust Deed would
have involved a ballot vote, not the “show of
hands” vote “that Hauraki people would expect to take
part
in” (paragraph 14 of closing submissions). The Board understood that
the ballot vote was “crucial”
to ratification but the vote by show
of hands to be held at the hui was important to its own mandate.
[74] The Board considered that the two types of vote had different standing as shown by the voting procedures adopted – the hui vote was much less formal and relied on an honesty system to check who was eligible to vote.
[75] The Board accepted that the status of the show of hands vote was never satisfactorily defined and that there was a lack of clarity in the Board’s mind regarding the nature and process of the hui vote. Examples of this lack of clarity are shown by the presentation to the Board on 26 April 2006 which described the vote at that ratification hui as being by “show of hands/simple majority”. The change in the majority to 75% was in response to questions from the applicants or their representatives and was not evidence of a considered decision to change the majority.
[76] The discussion document distributed to iwi members on 2 May 2006 describes the ratification hui as being complementary to the postal ballot. In fact the separate voting system that evolved was not complementary but had the potential to put the two processes in conflict, (paragraph 17 of Board’s closing submissions). The Board’s annual plan for July 2006 to June 2007, although adopted in September 2006, was drafted in the midst of the JMIO ratification process and refers to the ratification through postal ballot “in addition to an indicative ratification hui scheduled for 8 July 2006”.
[77] The Board did not contemplate that there might be a difference in the results
of the two votes, and consequently no advice was sought or offered on that possibility at the time the ratification process was put in motion.
[78] The possibility of a split vote was first put to the Board at the ratification hui before either of the vote results were known. The response given by the CEO of the Board was a genuine attempt to deal with a situation the Board had not foreseen. While failure to foresee the possibility of a split vote may seem naïve in retrospect, the only experience the Board had of running a combination postal ballot/hui process was its Treaty claims mandating exercise which resulted in positive votes of over 85%.
[79] The Board adopted the statutorily required ballot and the show of hands vote
as a genuine attempt to reconcile the legal requirement with the traditional way in which Hauraki iwi made decisions. In this the Board went further than it was legally required to do by the MFA.
[80] As the Board had not formed a clear view as to what would happen in the case of a split vote prior to the closing of the processes on 8 July 2006, it was not able to provide iwi members with clear advice on what it would do if the votes were split. Thus the Board did not change its position in regard to the binding nature of the ratification hui because it had never made a decision as to what would occur if there was a split vote. The Board did not set out to mislead Hauraki iwi.
[81] On 17 July 2006 the Board was advised that there was 89.3%
support for ratification in the postal ballot. On 18
July 2006 the Board
received legal advice that
it was legally entitled to seek recognition
as a JMIO. The Board’s decision of
19 July 2006 was to keep faith with the whole ratification process. It was not the Board’s intention to set up a system whereby the hui vote could override the postal ballot when the postal ballot received ten times as many votes.
[82] The hui vote was not discounted, but rather the Board put it in context with the rest of the process and weighed all of the indications as to the views of the iwi members appropriately.
[83] The Board also was required, in the context of the MFA, to act in the best interests of all iwi members “irrespective of where they reside” (section 12(1)(a)).
Legal Issues
[84] The Board submitted that it had not varied the terms of the Trust Deed or suspended its terms with regard to the voting procedure adopted at the ratification hui. The Board was relying on the ballot vote for ratification, while the hui was adopted as a separate internal indicative or complementary process which did not have to comply with the Trust Deed.
[85] Where a hui is held for ratification purposes those votes must be added
to the votes sent through the post provided that the
hui votes are made in
compliance with the Act. The requirement that the 75% threshold has to
be reached for both processes
is untenable. The “or” in section
17(2)(b)(i) of the Act would have to be read as an “and”.
Parliament
would not have intended to set up a voting process whereby
one form of voting could cancel out another. Tower New Zealand Limited v
Mercury Energy Limited [1997] 2 NZLR 669 is an example of where the word
“or”
in a statute must be read as “and”. However
that was an extreme case where it was clear from the scheme and purpose
of
the legislation that such a reading was necessary to make the Act work as
it was intended to do. That is not the situation
in
respect of section
17(2)(b) of the MFA. The section makes sense with “or” in
it.
Estoppel
[86] The law is clear that the fundamental elements of estoppel are:
a) That there must be a detrimental reliance;
b) On a representation;
c) To the extent that it would be unconscionable to allow the maker of the statement to resile from it: chapter 16 from “Equity and Trusts in New Zealand” and to the case Commonwealth of Australia v Verwayen [1990] 170 CLR 394 (HC of A).
[87] While the elected reps relied on the case Burbury Mortgage Finance, that factual situation was a classic case of detrimental reliance. In the present situation the reliance would need to be on the narrow representation that the Board sought a 75% majority at the ratification hui.
[88] While participants in the hui would have incurred travel expenses this cannot form the basis of an estoppel argument as all the attendees at the hui would have incurred travel expenses whether they were in support or in opposition to the resolution. The show of hands vote was taken into account but was put alongside the ballot vote and other parts of the process when the Board made its decision on 19 July. The travel expenses were therefore not wasted expenditure. Nor can the travel expenses be considered sufficient detriment to justify setting aside the entire ratification process. There are costs to all members of Hauraki iwi in delaying receipt of settlement assets, as there would be in re-running the ratification process. These costs greatly outweigh the detriment.
[89] The elected reps say that some people chose not to cast a
postal ballot, intending to attend the hui, but then being
unable to do so.
Those people have lost the opportunity to vote. However, the Board submits
that this could have affected the
“yes” voters as well as the
“no” voters so that it is a neutral situation in terms
of
detriment. Furthermore, there is no reason to assume that the votes
of such people
could affect the overall outcome. Those groups referred to in affidavits
who chose not to vote postally cannot be used to overturn
the voting process.
The evidence that some members were locked out of the hui vote is hearsay as no
one filed an affidavit saying
that they were locked out. There was no evidence
as to numbers of people who were locked out, if that occurred. If there
were any such people, they could have found their way back into the voting
hall through another door. Thus there is
no evidence of detriment occurring
to these people.
[90] In regard to those who could not vote as they were attending a tangi at Te Pai
o Hauraki Marae, there is a lack of specific information as to whether those people were truly prevented from attending the hui. The marae is less than five minutes drive from the hall where the hui was held. Those attending the tangi could have filled in a postal ballot and had it dropped off at the ratification hui.
[91] Even if some people acted to their detriment in reliance on the representation regarding the 75% majority, the elected reps would need to show that it is unconscionable to allow the Board to seek recognition as a JMIO. In attempting to take advantage of the Board’s mistake or misunderstanding they are unfairly holding the Board to its statement.
[92] The overall combined “yes” vote exceeded the 75% threshold. In the ballot
1,374 votes were cast in favour, and 135 votes against. If the 119 “no” votes cast at the hui were added into those totals the overall percentage in favour is still 84.4%. That figure does not take into account the “yes” votes cast at the hui.
[93] The question of unconscionability must be applied in all circumstances
and the Board’s decision to seek recognition as
a JMIO cannot be
unconscionable unless
it is clear that there would have been a
different outcome but for the Board’s representations and the
demonstrated
detrimental reliance on them.
[94] Even the “no” voters will receive an actual beneficial
interest in the asset, so they cannot be said to be prejudiced
by the
ratification. Those in opposition also have the remedy of withdrawing from
the JMIO by fulfilling the withdrawal criteria
set out in the
Deed.
[95] The principles of equitable estoppel can and should be applied to iwi organisations – there is no reason why such principles should be adjusted to take into account the Maori context within which Maori organisations work.
[96] Even if the estoppel argument could be established, there are difficulties as to what the remedy should be. The ratification process could be run strictly in accordance with the provisions of the Act and Trust Deed. The Board is confident that it would pass the 75% threshold if the process was adopted, so that this would be a wasteful exercise. There would be further delay in obtaining the assets. The reputation of the Board members would be damaged by re-running a process only to obtain the same result. Those who had participated in the ratification process to date, particularly those who had taken part in the postal ballot, would have their votes nullified for no good reason.
[97] Lastly, whether the decisions taken by the Board have been acceptable, satisfactory or honourable will be determined by the people of Hauraki in future election of Board members. In other words there are other ways in which the Board members can be held to account for their actions.
Submissions for Te Ohu Kaimoana Trustee Limited
[98] Mr Ferguson for Te Ohu submitted that the relevant legislation and documents in this matter are the Fishing Trust Deed (“FTD”), the Maori Trust Boards Act (“MTBA”), the specific Hauraki Maori Trust Board Act (“HMTBA”) and of course the Maori Fisheries Act (“MFA”).
[99] In Te Ohu’s view the Trust Board and the JMIO are required to meet the criteria of section 14, and section 20.
[100] Section 34(d) of the MFA requires Te Ohu to manage on a transitional
basis the settlement assets to be allocated to an iwi
until they are transferred
to the JMIO.
Thus Te Ohu is the Trustee for the iwi of Hauraki
collectively.
[101] The Trust Board has a legal status recognised under the MFA as a Recognised Iwi Organisation (“RIO”). It is listed as such in Schedule 4 of the MFA pursuant to section 27. Section 27(3) provides that a RIO has all the functions and powers of a Mandated Iwi Organisation (“MIO”), plus a series of rights including participation in annual catch entitlement processes, dispute resolution processes, representation of the iwi in consultation negotiations and proceedings relating to matters listed in that subsection. A RIO cannot receive the transfer of assets, sign off coastline agreements and engage in other matters of a final and permanent nature.
[102] Under section 12(1)(a) a RIO must act for the benefit of all members of the iwi irrespective of where those members reside. In interpreting other sections of the Act the Court must take into account section 12(1)(a) in determining which interpretation will give best effect to that requirement.
[103] Te Ohu is required by section 28(1) of the MFA to recognise and deal with a RIO as if it were a MIO until there is a MIO for the iwi. In short there is a presumption that the Trust Board has to act as a MIO in the interim even though it does not have the full status. Sections 152(2) and (3) provide that Te Ohu may sell the annual catch entitlement on the open market if a RIO does not make sufficient progress in meeting the criteria set out in section 14 so there are potential detriments to a RIO if it has not demonstrated reasonable progress in meeting the section 14 criteria in terms of how Te Ohu may treat the annual catch entitlements that would otherwise go to that iwi, at least on an interim basis.
[104] In Te Ohu’s view the FTD was not settled or sealed until the ratification process was completed, which was on 26 July 2006. The Trust Deed has no legal effect until it is settled, so that the clauses in the FTD were draft clauses of no binding effect. The Act requires that constitutional documents contain the matters set out in the Kaupapa in Schedule 7. Thus the provisions in the FTD relating to ratification of the FTD have simply become standard clauses to comply with the provisions of the Act. There is also a narrow possibility that a Trust may be established and settled before the ratification process has been carried out. In that case the terms in the FTD would have effect.
[105] Under section 17 the MFA does not direct how votes are to be counted
at a ratification hui. However, section 17(3) states
that notice of the
ratification hui must comply with Kaupapa 4(2) of Schedule 7. Kaupapa 4(2)
provides that in the case of
a ratification hui, the hui must be notified by
both a public notice and also a private notice sent to every adult member on the
register
of iwi members. The notice must include a copy of the ballot paper for
the vote to be taken at the meeting and advice
of the address to which and
the date by which the completed ballot paper must be returned. The notice
therefore anticipates that
a ballot process will take place in the context of
the hui. Thus in interpreting section 17(2)(b) opting to ratify
constitutional documents at a general meeting means that a postal ballot must
also be included. The options available under section
17(2)(b) are
therefore a general meeting plus postal ballot, or just a postal ballot. Such
an interpretation is supported by
section 12(1)(a) as holding a ratification hui
only would limit the members of the iwi who could take part to those who are
able
to travel to that hui on that particular date. A postal ballot, on
the other hand, allows members of the iwi to take
part regardless of
where they live.
[106] Te Ohu submitted that in its view what is required is a single ratification vote which must be carried by 75% of the adult members of the iwi. Te Ohu did not agree that section 17(2)(b)(i) could be read so as to require a 75% vote at the general meeting and also a 75% vote in favour through the postal ballot. In Te Ohu’s submission to have that outcome subsection 2(b) would have to read that the constitutional documents are ratified:
(A) By not less than 75% of adult members who vote in person at a general meeting; and
(B) By not less than 75% of adult members who vote by postal ballot.
[107] Te Ohu legitimately looked at the postal vote, which crossed
the 75% threshold, and then went a step further and
noted that the aggregate of
the hui vote and the postal ballot crossed the 75% threshold as well, although
the hui vote was by
show of hands.
[108] Even if everyone at the ratification hui was misled and had decided to vote
“no” there is still a large gap between the 75% threshold and the majority that would
be achieved.
[109] Lastly, Te Ohu made the point that if there is an estoppel it is against the Trust Board, not Te Ohu. Te Ohu has mandatory obligations in terms of recognition
of a MIO under section 13(1) of the MFA. Te Ohu is required to recognise a MIO or JMIO if the organisation meets the criteria of section 14 and section 17. Even if the Board is estopped from applying to Te Ohu for recognition as a JMIO, it would be open to an individual member of the iwi of Hauraki to apply.
The Law
[110] The relevant sections of the Maori Fisheries Act 2004 are:
12 Functions and powers of mandated iwi organisations
(1) Under this Act, a mandated iwi organisation must —
(a) act for the benefit of all the members of the iwi, irrespective of where those members reside;
13 Recognition of mandated iwi organisations
(1) As soon as is reasonably practicable after Te Ohu Kai Moana Trustee Limited is satisfied that an iwi or a withdrawing group has established an organisation that meets the criteria specified in section 14 or section 21(1), as the case may be, or that an iwi has an iwi governance entity that meets the criteria specified in section 15, Te Ohu Kai Moana Trustee Limited must, by special resolution, —
(a) recognise 1 mandated iwi organisation for that iwi or withdrawing group, as the case may be; and
(b) record its recognition of that mandated iwi organisation in the iwi register.
14 Criteria for recognition of mandated iwi organisation
The criteria for recognition and continuing recognition of a mandated iwi organisation under section 13(1) are that —
(a) the organisation is a company, trust, body corporate set up under an enactment, or incorporated society; and
(b) the constitutional
documents of the organisation comply with section
17; and
(c) the directors, trustees, or office holders, as the case may be, are
able
to demonstrate that, for the purposes of their responsibilities under
this Act, they have been duly elected or appointed
in accordance with
the constitutional documents of the organisation; and
(d) the organisation has a register of iwi members that — (i) complies
with kaupapa 5 of Schedule 7; and
(ii) has no fewer than the
minimum number of members specified in column 4 of Schedule 3.
17 Constitutional documents
(1) Every mandated iwi organisation, asset-holding company, and subsidiary of an asset-holding company must have 1 or more constitutional documents that comply with, and implement, the kaupapa set out in Schedule 7.
(2) The constitutional documents referred to in subsection (1) are of no effect under this Act until —
(a) they are approved as complying with the requirements of this Act, —
(i) in the case of a mandated iwi organisation, by Te
Ohu Kai
Moana Trustee Limited; and
(ii) in the case of each asset-holding company and subsidiary of an asset-holding company, by the mandated iwi organisation that owns the asset- holding company; and
(b) they are ratified, —
(i) in the case of a mandated iwi organisation, by not less than 75% of the adult members of the iwi who vote—
(A) in person at a general meeting called for the purpose of adopting a constitution; or
(B) by postal ballot; and
(ii) in the case of each asset-holding company and subsidiary of an asset-holding company, by not less than 75% of the directors, trustees, or office holders of the mandated iwi organisation that owns the asset-holding company.
...
Schedule 7
Kaupapa 4
(2) In the case of the general meeting of a mandated iwi organisation required by section 17(2) (which relates to ratification of the constitutional documents of the mandated iwi organisation), the meeting must be notified by both—
(a) a public notice that gives —
(i) the information required under subclause (1); and
(ii) advice that a vote is to be taken to ratify the constitutional documents of the mandated iwi organisation; and
(b) a private notice, sent to every adult member on the register of iwi members, that gives —
(i) the information required for the public notice; and
(ii) a copy of the ballot paper for the vote to be taken at the meeting; and
(iii) advice as to the address to which, and the date by which, the completed ballot paper must be returned.
[111] The Hauraki Maori Trust Board is constituted under the Hauraki Maori Trust Board Act 1988. Section 4 of the Hauraki Maori Trust Board Act provides as follows:
4 Hauraki Maori Trust Board constituted
(1) There is hereby constituted a body corporate to be known as the Hauraki Maori Trust Board, which shall be a Maori Trust Board within the meaning and for the purposes of the Maori Trust Boards Act 1955, and, subject to the provisions of this Act, the provisions of that Act shall apply accordingly.
(2) The beneficiaries of the Board shall be the descendants of Ngati Hako, Ngati Hei, Ngati Maru, Ngati Paoa, Patukirikiri, Ngati Porou ki Harataunga ki Mataora, Ngati Pukenga ki Waiau, Ngati Rahiri-Tumutumu, Ngai Tai, Ngati Tamatera, Ngati Tara Tokanui, and Ngati Whanaunga.
[112] The rest of the Act is very short and simply provides for the number of members of the Board, the roll of beneficiaries, and annual hui.
[113] The elements of equitable estoppel are set out at paragraph 16.2 of “Equity and Trusts in New Zealand” (ed Butler, A, 2003) at page 495. It states as follows:
“16.2 Invoking modern equitable estoppel doctrine: elements
Although the modern approach is “to depart from strict criteria and to direct attention to overall unconscionable behaviour”83 it is nevertheless clear that the party alleging an estoppel must show that:84
(a) A belief or expectation has been created or encouraged through some action, representation, or omission to act by the party against whom the estoppel is alleged;
(b) The belief or expectation has been relied on by the party alleging the estoppel;
(c) Detriment will be suffered if the belief or expectation is departed from; and
(d) It would be unconscionable for the party against whom the estoppel
is
alleged to depart from the belief or expectation.”
83 Gold Star Insurance Co Ltd v Gaunt [1998] 3 NZLR 80 (CA) (at p 86
per Holland J).
The position in Australia tends to be more rigid,
for example, in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988)
164 CLR 387; 62 ALJR 110 (HCA) Brennan J put forward a six-stage
test for determining the existence of an equitable estoppel (at
pp
428-429; p 127).
84 Hawke v B R Metcalfe Construction Ltd 5/6/92, Fisher J, HC Hamilton
AP131/90 (at pp
4-5); Gold Star Insurance Co Ltd v Gaunt ibid, at p 86
(per Holland J); Gillies v Keogh
[1989] 2 NZLR 327; (1989) 5 FRNZ 490
(CA) (at p 346; p 508 per Richardson J).
Discussion
[114] The application presently before the Court is for a non-binding
ruling as to the interpretation of section 17(2)(b) and as
to whether the Trust
Board has complied with the requirements of that section. Once the Court has
given its ruling the parties will
then enter into mediation to try and resolve
further matters between them. In such circumstances the function of the
Court
must be to interpret the law, and determine whether the Board has
complied with that law, but not to make orders as
to remedy, or at least not
yet.
Interpretation of Section 17(2)(b)(i) of the MFA
[115] There are two competing interpretations of section
17(2)(b)(i). The Board and Te Ohu say that the section requires
the Board to
hold a postal ballot and that it may also hold a general meeting for the purpose
of adopting the constitution. From
the votes cast the Board must obtain
a 75% vote in favour of adopting the proposed
constitution. Te Ohu and the Board rely on the provisions of section 12(1)(a), the wording of section 17(2)(b)(i) and Kaupapa 4(2) of Schedule 7 of the MFA.
[116] The elected reps on the other hand say that a 75% majority must be obtained
at a general meeting and also through the postal ballot where an organisation chooses to adopt both voting methods.
[117] The elected reps also rely on the wording of section 17(2)(b)(i) and the representations of the Trust Board’s representatives as to how the ratification process would be undertaken.
[118] There is considerable agreement on the facts as between the parties. The Board admits that representations were made in consultation hui and Board meetings that a 75% majority would be required from the postal ballot and also from the ratification hui in order to ratify the constitutional documents. The Board has also admitted that it was not expecting that the ratification hui would produce a different result from the postal ballot and was therefore caught unprepared for the result of that hui. Thus the question for the Court is whether, in applying to Te Ohu for recognition as a JMIO, the Board acted in compliance with the statute and was not estopped from making the application.
[119] I am strongly persuaded by the arguments of Te Ohu and the Board that section 17(2)(b)(i) is to be read in conjunction with section 12(1)(a). It is clear that the intention of the statute is that all members of the iwi must be able to take part in the decision-making relating to the fisheries assets in the ways provided by the MFA. Many Maori no longer live within their tribal rohe and find it difficult to travel back to hui for a variety of reasons including time, cost, other family responsibilities and the like. A postal ballot is a way of ensuring that such iwi members can participate if they wish to. Indeed, the elected reps had no difficulty with the Board’s decision to hold a postal ballot in conjunction with the ratification hui.
[120] I also think it was open to the Board to choose to hold only a postal ballot in order to achieve the mandate required. In that respect the “or” between section 17(2)(b)(i)(A) and section 17(2)(b)(i)(B) means “either/or/and”, not just “and”. Nor did I understand Mr Majurey, on behalf of the elected reps, to be seriously arguing that the statute required both a general meeting and a postal ballot.
[121] Rather Mr Majurey’s interpretation of the section was that the Board could hold a hui and/or hold a postal ballot but that in each type of vote the Board would have to obtain a 75% majority in favour of ratification. This was in effect the interpretation put to the Board’s representatives at the hui held on 6 May 2006 at Ngahutoitoi Marae by Mr Majurey. A similar question was asked at the 1 June Board meeting and again at the 5 July Board meeting, and the CEO of the Board confirmed that 75% approval would be required for both votes.
[122] I accept the evidence of the elected reps that various
groups acted on the basis of these representations and
determined to vote at
the hui. In my view it was inevitable that those in opposition to ratification
concentrated on the ratification
hui
as the chief opportunity they would
have to challenge, and perhaps overturn, the ratification vote. The
Board’s
own evidence suggests that those opposing the ratification
of the FTD put some effort into trying to canvass and rally support
for their
position prior to the ratification hui, as they were perfectly entitled to do.
The Board on the other hand had reason
to be confident that the ratification
vote would pass at or above the required threshold in both votes,
because of the
support the Board received in previous mandate votes during
Treaty negotiations and so on.
[123] In my view the question as to the interpretation of the statute per
se is quite straightforward. I am persuaded by the
argument put forward by
Te Ohu and the Trust Board that section 12(1)(a) and the Kaupapa 4(2) of
Schedule 7 of the MFA require
that there be a postal ballot. If an
organisation chose to use a postal ballot alone then, clearly, the ballot would
need to obtain
75% approval in favour of the constitutional documents. If the
organisation chose to have a general meeting for the purpose of
adopting the
constitution, then a postal ballot is inevitably included as part of the
voting process, but there is also
included an in-person vote at the meeting.
This strongly suggests that a postal ballot plus a hui vote is considered a
single ballot
and that therefore 75% is required of the total votes. That is
supported by the fact
that in the layout of the section the figure of
75% is immediately associated with that
phrasing, “the adult members of the iwi who vote” in section 17(2)(b)(i). In my view the 75% is therefore intended to affect “the adult members of the iwi who vote.” I therefore find it a stronger argument that the 75% approval refers to the total vote rather than to each ballot opportunity.
Equitable Estoppel
[124] In light of my view as to the interpretation of the section that leaves the Court
to consider the issue of estoppel. In other words the Court must consider the effect
of the representation and decisions made by the Board as to the
process it would adopt in seeking ratification of the
constitutional
documents. Here I should state that
I agree with Counsel for Te Ohu that Te
Ohu’s responsibilities are set out under the Act and they must comply with
them. The
focus of the following discussion is on the relationship between the
Board and its iwi members.
[125] In considering that relationship I bear in mind that the purpose of establishing JMIOs is to enable fisheries assets that belong to the iwi to be transferred to a body that will be able to manage and distribute those assets to the iwi. There is no doubt that a JMIO is acting as a Trustee – the Deed is called the Pare Hauraki Fishing Trust Deed. In order to obtain the position of a JMIO or MIO an organisation must obtain sufficient support from its constituency through a voting process. A JMIO has considerable powers in relation to the fisheries asset to be transferred by Te Ohu and the constitutional documents are intended to create a fiduciary relationship between iwi members and the JMIO. This is a heavy responsibility and the requirements under section 14 and section 17 create high hurdles for an iwi organisation to meet in order to be recognised as a JMIO. Having met those hurdles, is it still open to question the process by which the organisation obtained ratification?
[126] One can certainly imagine cases where there could be fraudulent enrolment
on the beneficiary roll or other sorts of electoral fraud which
would undoubtedly vitiate the process – although
I hasten to add that
there is nothing of that kind here. Rather, what is present in this case is
confusion on the part of the Board
as to the requirements of the MFA and the
consequences of departing from the clearest and
easiest process laid
down in the Act. Before continuing with this part of the
discussion I wish to emphasise that I accept that the Board acted in good
faith and with the best of intentions in reaching the decisions
and taking the
actions that it did. However I must still ask whether, nevertheless,
there has been a detriment to the
applicants and those they represent such
that the Court must find an estoppel against the Board.
[127] I will consider each element of the doctrine of equitable estoppel below, in light of the fact that there were two representations made by the Board in respect of the ratification hui:
ii) That a vote of 75% approval was required at the ratification hui.
A belief or expectation has been created or encouraged through some action, representation or omission to act by the party against whom the estoppel is alleged
[128] The representation that the ratification hui was a valid and
effective way for Hauraki iwi to participate in the ratification
process is
shown through the Board’s adoption of the consultation hui view that in
Hauraki use of both a ballot and hui
was the appropriate means to obtain the
necessary approval. The belief or expectation that a 75% vote in favour of
adopting the
constitution would be required in both the ratification hui and the
postal ballot is raised by the explicit statements of the Board
representatives.
The Board does not deny that the representations were made and those
representations must be coupled
with the presentations made at the
various consultation hui and the report back hui setting out the process for the
ratification
hui and also for the postal ballot. I have carefully
perused the consultation hui documents, the PowerPoint presentations
and the
public and private notices relating
to the vote. In my view a reasonable
person looking at all these things would have the impression that the
ratification hui
was an integral and important part of the process, as
was the postal vote. There was no statement prior to the ratification
hui that
only the postal ballot would count towards ratification of the constitution. In
my
view these documents are sufficient to raise a clear
expectation on the part of the
participants in the vote that the ratification hui would be valid and have effect as part
of the statutory ratification process. In addition those who heard or were made aware of the Board representatives’ assurances that a 75% majority would be required at the hui and in the postal ballot would have reasonable grounds to believe that the Board would not apply for ratification if the requisite approval was not obtained from the hui vote. Although the PowerPoint presentation at the ratification hui itself did state that the postal ballot was “crucial”, the terms in which that was put were insufficient in my view to make it clear to those at the hui that they must vote by putting the ballot paper into the box for their vote to count. Moreover I consider that that presentation came far too late to contradict the notices and information preceding it, all the more so since the hui seems to have suffered from some turmoil and disruption. Nor do I think the Board representatives’ statement at the ratification hui that if 75% approval was not obtained the results would need to be considered by the Board sufficient to give timely notice that 75% approval at the hui might not be required by the Board for it to seek JMIO recognition from Te Ohu.
The belief or expectation has been relied on by the party alleging the estoppel
[129] The evidence before me makes it clear that the elected reps and those
who support them relied on the belief or expectation
in relation to
the ratification hui. There is their direct affidavit evidence, which was
uncontradicted, and the evidence
of the Board that people were being
encouraged to attend the hui to vote against ratification. I should
state here
that the motive of those who opposed ratification is not relevant to
their belief or expectation. I am sure that the Board, after
undertaking
an
extensive exercise to obtain ratification, would feel some frustration that
others did not support all the objectives of the
Board and took an
opportunity to try and prevent the Board from achieving JMIO
recognition. Such motives may be considered
admirable or not depending
on one’s view. However, they do not impinge upon the present
considerations.
Detriment will be suffered if the belief or expectation is departed from
[130] The Board accepted that those who attended the hui would
have expected their vote to count, and would have expended
time and money in
attending the hui. This applied especially to the “no” voters who
would have seen the hui as the best
opportunity they had to prevent
ratification. It is clear that the “no” voters turned up
in
sufficient numbers to prevent a 75% majority in favour at the
hui. The final outcome of the hui vote was in favour
of ratification by 1 vote,
with 1 abstention. Of more concern, however, is the way in which the
ratification hui vote was treated
by the Board. Contrary to the notices
sent out to voters and the assurances given at consultation hui the
Board chose
to rely on the postal ballot as the valid method of voting. My
reasons for coming to this view of the facts arises from the application
the
Board made to Te Ohu requesting JMIO recognition.
[131] I note that paragraph 7.6 of the Board’s letter to Te Ohu refers to the hui vote
as being a “non-statutory internal process” and that it was not
conducted in a robust way. There is nothing in the consultation
documents or
hui notices to indicate that the ratification hui was a “non-statutory
internal process”. In my view the
opposite
is the case – prior
to the ratification hui the Board itself seemed to see the ratification hui as
coming under section
17(2)(b)(i). Otherwise why bother to give notices
setting out the voting process, or to make representations that the vote
would
need to obtain a 75% approval rate. Notwithstanding that, the
Board’s clear stance in paragraph 7.6 of its
letter to Te Ohu
is that the hui vote does not count for ratification.
[132] In effect the failure to inform the iwi members sufficiently before
the hui that they would need to vote postally for their
vote to be valid is a
significant detriment
to those who voted in person at the hui on the
understanding that a 75% approval was needed. In my view they were
disenfranchised
in a matter which touched upon iwi assets for which they are
the part owners. They were also disenfranchised in respect
of the
appointment of a trustee to handle their assets, since by accepting that the
Board had complied with statutory requirements,
Te Ohu recognised the
Board
as the JMIO, the trustee under the FTD. Such disenfranchisement
is a significant
detriment to those who voted at the hui.
It would be unconscionable for the party against whom the estoppel is alleged to depart from the belief or expectation
[133] The Board’s submissions on this point are that the Board acted
in good faith and in the best interests of all the iwi
members. If an estoppel
is found against the Board it could wipe out all the votes cast by way
of postal ballot, which
greatly exceeded those cast in person at the hui.
If the voting process had been conducted in
a way which complied entirely
with the Act then the “yes” vote would have comfortably
exceeded the 75%
threshold. The “no” votes would require, on
my calculations, some 245 additional votes to prevent that threshold
being
reached. In other words the Board’s view is that unless it is clear that
there would have been a different outcome
but for the Board’s
representations and the parties’ detrimental reliance on them then the
Board’s actions
cannot be unconscionable. Moreover the Board argues that
since the “no” voters will also receive a beneficial interest
in the
fisheries assets that benefit must be weighed against the detriment to them.
There are also other avenues via which the
“no” voters can obtain
their ends – for instance following through the withdrawal criteria
contained in
the FTD so that they can separate themselves and their
assets from the other iwi assets. The cost and loss of confidence that
would
be caused by requiring the Board to rerun the voting process, it is said,
outweighs the detriment to the applicants.
[134] There is considerable weight to the Board’s views on
this matter. Again I accept that the Board has tried
to act in the best
interests of all Hauraki iwi and that, given the strong support they have
enjoyed in the past, and will
still enjoy in the future, that it would
be a very serious thing to find that it would be unconscionable
for them to
rely on the ratification process.
[135] On the other hand the argument of the elected reps is that close enough is not good enough. This was a process for ratification of constitutional documents wherein some of those entitled to take part in that decision were effectively disenfranchised. That, as I indicated above, is a significant and serious detriment. Nor do I accept that the finding of an estoppel against the Board would be a long- term detriment to the “yes” voters. If the process was rerun all voters would have the opportunity to vote again. While there may be delay in the transfer of assets to Hauraki iwi, Te Ohu is still trustee for those assets acting in the meantime for the benefit of Hauraki iwi. So there is a time delay but not necessarily any financial loss. I cannot put myself in the place of Te Ohu in determining whether a delay caused by the estoppel would mean that Te Ohu might find the Board had not made sufficient progress toward ratification, but even if Te Ohu did so find, Counsel for Te Ohu confirmed that any detriment flowing from such a determination would be temporary. One might also ask about the likelihood of such a determination being made when the Board has taken so many steps towards ratification and Te Ohu have actually granted recognition as a JMIO on the basis of those steps.
[136] I have found it very difficult to weigh these competing interests. There is right on both sides. While the Board may have been at fault for implementing a voting process which ended in confusion and disagreement, a significant majority in excess of the 75% required approved the constitution, even when the votes at the hui are taken into account. It would take enormous effort on the part of those who disapproved the constitutional documents to gather enough votes in a new process to overturn the decision delivered by the existing vote.
[137] Nevertheless, despite my sympathies for the Board and the position in which
it found itself I am of the view that the disenfranchisement of those at the
hui vote, including the “yes” voters, is
too significant a matter to
be overlooked. It is only in the Maori context, such as through Te Ture Whenua
Maori Act 1993 and also
the MFA that Trusts can be imposed on the owners of
assets, without full consent from
all owners. Where legislation provides a
process which results in the imposition of a
Trust, then the process must be followed correctly. This is an electoral process, and
as a matter of policy the process must be correct whether the error in process affects
a small number or a large number of people. In this case all those at the
hui, but in particular the “no” voters,
were affected by the
failure of process. Where an electoral process is faulty, resulting in
confusion as to how to validly
and effectively take part, then it is
unconscionable to rely on it. The Board’s good intentions are
not
sufficient to diminish that unconscionability.
Decision
[138] To summarise I hold that the Board’s representations that:
i) The ratification hui was a valid, effective and integral part of the ratification process; and that
ii) A vote giving 75% approval was required at the ratification hui separately and together were relied on by the voters at the hui.
All the voters at the ratification hui suffered the detriment of their vote not being counted as valid and were effectively disenfranchised by the approach the Board subsequently took to the hui vote. The “no” voters suffered additional detriment by reason of the fact that they voted at the hui expecting that if the approval rate was less than 75% at the hui the Board would not apply for JMIO recognition. The Board did so apply. The consequence is that the “no” voters had no opportunity to reorganise so as to vote through the postal ballot and attempt to affect the outcome that way. In the circumstances and by a narrow margin it is unconscionable for the Board to depart from the beliefs raised by the representations.
[139] Thus I hold that the Board was estopped from applying to Te Ohu for recognition by reason of failure to adequately notify voters intending to vote at the ratification hui that they would need to put in a postal ballot to have an effective and valid vote.
[140] The parties are now directed to proceed to mediation on the basis of this finding.
Pronounced at Hamilton this 30th day of April 2008.
S Te A Milroy
JUDGE
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URL: http://www.nzlii.org/nz/cases/NZMLC/2008/25.html