Bankruptcy: Little v. Nicholls

  

Struck off for misappropriating client funds, Auckland lawyer Aaron Rodney Nicholls was bankrupted by a former client who had $535,000 stolen, proceeds of their 2023 house sale.

Pania and Mark Little were left with a $100,000 payout from the Lawyer’s Fidelity Fund.

In the High Court, Nicholls argued without success that bankruptcy should be refused because the $535,000 amount claimed stolen was not correct, he had not received proper notice of their bankruptcy application and the Littles’ court paperwork did not comply with court filing rules.

Associate judge Gellert ruled the incorrect paperwork was not material; capable of being corrected.

Judge Gellert was sceptical of Nicholl’s complaint he did not receive proper notice.  Substituted service was required after Nicholls did not respond to emails or phone messages.

Nicholls said the bankruptcy application overstated how much was owed the Littles.  No credit had been given for either the $100,000 insurance compensation received or $178,800 paid from his trust account to Littles’ builder constructing their new house, he said.

Regardless, Nicholls owed $535,000 Judge Gellert said.  This total was owed collectively to The Littles, the Lawyers’ Fidelity Fund (having part-compensated the Littles) and other clients of Nicholl’s law firm whose money was used to pay Littles’ builder.

It is for Insolvency Service to sort out exactly who is owed how much, Judge Gellert stated.

The Littles were awarded an increased contribution to their bankruptcy application costs on grounds Nicholls objections had no merit, causing unnecessary delays.

Insolvency Act ranks these costs as a preferential payout on Nicholls’ bankruptcy.

Little v. Nicholls – High Court (16.02.26)

26.080

Housebuild: Burns v. Lewis

  

Parking vehicles to block a concrete pour for foundations at a new build on a site neighbouring their home at Bay Hill subdivision in Wellington’s Island Bay, Maria Burns and Robert Seymour did not help their legal claim that the neighbour’s plans did not comply with subdivision design rules.  If later found not to comply, damages will suffice, the High Court ruled.  Similar cases have seen modest damages awarded; little more than $25,000.

Island Bay Ltd’s subdivision has covenants registered on each of 37 titles requiring consent from Island Bay for all build designs.

William and Stacey Lewis faced objections from future neighbours Maria Burns and Robert Seymour claiming their proposed house plans did not comply with Island Bay’s design guide.

A list of multiple complaints reinforced their primary objections; shading and a loss of privacy, with claims the Lewis’ proposed new build would overlook their kitchen, dining room and outdoor living area.

Attempts were made to accommodate these complaints by having location of the Lewis family’s new home moved two metres further north and rotated slightly further away.

Ms Burns and Mr Seymour sued to block the planned build.

The Lewis family, with their fixed price contract at risk of being cancelled, looked to get work underway.

The High Court was told Mr Seymour used a truck and a ute to block road access for a December 2025 concrete delivery to pour foundations at the Lewis’ building site.  The concrete truck left.

They claim this ‘self-help’ remedy was necessary to preserve the status quo; stability of the site at their shared boundary might be at risk if the concrete had to be drilled out later.   

In the High Court two months later, Justice McHerron ruled there were no grounds to call an immediate halt to the Lewis’ planned build.

They are free to resume construction.

If a later court hearing determines there has been a failure to properly comply with Island Bay’s design guide, damages is an adequate remedy, he ruled.

Justice McHerron pointed out that Island Bay’s design guide is a ‘guide,’ not a set of rules.

The court was told Island Bay had approved the Lewis family’s building design before work commenced.

Burns v. Lewis – High Court (13.02.26)

26.079

Arbitration: Gatfield v. HInton

  

Court of Appeal ruled new Trust Act powers can force disaffected family trust beneficiaries into mediation and arbitration to settle internal trust disputes, even if they prefer a hearing in open court.

More than a decade on from the 2012 death of Kenneth Gatfield, daughter Gillian together with her niece challenge sale of an estate asset: a family bach at Lake Rotoma in the Rotorua Lakes District.

The court was told his estate was left equally to his five daughters.  Named as executor is Anne Hinton; one of his daughters and a now-retired High Court judge.

Disaffected beneficiaries object to sale of the bach.

In 2022, Ms Hinton as executor sold the bach to two of the other sisters.  They paid $331,000.

No longer having a right of access, the disappointed beneficiaries claim they had an agreement with Ms Hinton as far back as 2013 that part-ownership would be transferred to them.

They sued.

In 2024, the High Court ordered Trusts Act mediation and arbitration, over top of their objections.  They prefer a court hearing, primarily because of concerns that any mediator or arbitrator will not be neutral, swayed by having a High Court judge as one of the parties.

Mediation was not successful.

Disappointed beneficiaries then challenged being forced into the next step: compulsory arbitration.

There are very limited grounds to challenge an arbitrator’s ruling.  An arbitration award can be enforced as if it were a court order.

Ruling for the first time on how new Trusts Act compulsory mediation and arbitration rules might operate, the Court of Appeal said arbitration can be ordered without agreement from all affected beneficiaries.

Arbitration is appropriate in this case, the court said.

Gatfield v. Hinton – Court of Appeal (12.02.26)

26.076

Treaty Settlement: Attorney-General v. Wairau

  

It is not government’s job to referee intra-iwi disputes over allocation of Treaty settlement assets the High Court ruled, ordering Alice Wairau end her occupation of land at Opoutama near Mahia peninsula which she claims should be handed over for use by her hapu Ngai Te Rakato.

A 2016 Treaty settlement with Maori having historical connections to Wairoa in northern Hawkes Bay has seen deep divisions between local Maori about future use of assets transferred as part of the $100 million settlement. 

The settlement agreement names Tatau Tatau as the trust taking ownership of assets transferred in compensation.  Within this Trust, seven different entities represent separate iwi interests as beneficiaries.

The High Court was told Te Rakato is a hapu forming part of one of these entities: Rongomaiwahine Iwi Trust.

For over a decade, members of Te Rakato have used a former school site at Opautama for community outreach programmes, paying rent under an informal lease.

They object to government transferring the school site to Tatau Tatau, in part-payment of the agreed $100 million Treaty settlement, without first acknowledging this land should come under Te Rakato control.

Tatau Tatau has agreed with government a $440,000 transfer value for the school site, refusing to settle until Ms Wairau and her supporters are removed.  Their ongoing informal lease was cancelled by government in March 2025.

They claim deep ancestral links to the site.

Ms Wairau told the High Court Te Rakato suspect Tatau Tatau will use the site for commercial gain, preventing local hapu from continuing use of the land for community benefit.

Doing so would eradicate Te Rakato’s footprint and voice, she says.

She challenged government moves to eject her.

In the High Court, Justice Paulsen gave Ms Wairau seven days to vacate.

As current registered owner, government is entitled to possession of the land, he ruled.

Ms Wairau and her supporters have no legal right of occupation.

Any dispute Te Rakato may have with Tatau Tatau over future use of the school site must be dealt with through dispute resolution procedures in the Tatau and Rongomaiwahine trust deeds, he said.

Government is under no obligation to ‘actively protect’ Te Rakato’s claimed interest, he ruled.

Attorney-General v. Wairau – High Court (12.02.26)

26.078

Trust Deed: Matchitt v. Matchitt

  

Indecision by Maori artist and sculptor Para Matchitt over purpose of a trust to hold his artwork saw his children in court after his 2021 death arguing over control.  They were removed as trustees of his Kia Manaaki Trust with specialists appointed to determine how best to preserve and promote his art.  

Seven months before his death, Mr Matchitt signed a trust deed creating the Kia Manaaki Trust.

Unusually, the deed lacks a detailed purpose clause setting out the Trust’s goals and objectives.  It simply states his children are to benefit, without specifying how they are to benefit.

His four surviving children are named as trustees, together with Hawkes Bay lawyer Andrew Gallie.

The High Court was told daughter Marita envisaged sale of some artwork to fund a building exhibiting his work.  She is against plans to reproduce or commercialise his work without expert guidance, claiming this will devalue and disrespect their father’s work.

She claims artwork owned at time of his death is at risk; uninsured and currently stored in a shed needing repair.

The only Trust asset is a bank account, with a balance of a few hundred dollars.

Another daughter has been paying rates for the shed, along with separate tax and accounting debts owed by Mr Matchitt’s estate. 

Marita’s siblings claim she has been obstructive, failing to attend trustee meetings and unhelpfully blocking transfer of Mr Matchitt’s work to the Trust.  They supposedly fired her as a trustee.     

In the High Court, Justice Churchman ruled trustees’ dysfunctional behaviour called for removal of them all.

A trust deed requirement that all trustees act unanimously meant no decisions could be made about the Trust’s future direction.

Any suggestion that the Trust build a gallery to exhibit Mr Matchitt’s work is unrealistic, he said.  The Trust does not have funds to do so.  A proposed site is on Maori land.  Getting separate title issued by the Maori Land Court for a gallery is problematic.

Trusts Act court appointment of replacement trustees was clouded by the fact it would be an unpaid job; the Trust currently has no income and no assets.

Justice Churchman re-appointed lawyer Andrew Gallie as trustee. In addition, Justice Churchman appointed two art experts as new trustees, John McCormack and Megan Tamati-Quennell; appointed for their familiarity with Para Matchitt’s work.

None are to be paid for their work as trustee.  They are free to resign at any time.

Matchitt v. Matchitt – High Court (12.02.26)

26.077

Asset Forfeiture: Commissioner of Police v. Hu

  

Assets totalling $3.29 million were forfeited as proceeds of crime with police evidence that Daniel Hu facilitated cross-border transfers of some $256 million, failing to comply with anti-money laundering rules.  The High Court was told police suspect Hu has other assets liable for seizure in Singapore and China, but practical difficulties hamper any further recovery.

Hu pleaded guilty in 2022 and 2023 to charges of laundering proceeds of crime and structuring transactions avoiding compliance with Anti-Money Laundering and Countering Financing of Terrorism Act.  He operated a money remittance business.

The court was told Hu laundered through bank accounts under his control cash that he knew was derived from methamphetamine dealing, fraud and cigarette smuggling.

In addition, Hu used bank accounts he controlled to transfer client funds from China to New Zealand, circumventing China’s foreign exchange controls.

He was sentenced to nine months home detention.

Seized as proceeds of crime were luxury motor vehicles including a Rolls Royce, Porsche Cayenne and Range Rover plus cash totalling $221,000.

In the High Court, Justice Wilkinson-Smith approved an agreed Criminal Proceeds (Recovery) Act settlement with forfeiture of $3.29 million funded from sale of his motor vehicles, forfeiture of cash seized and sale of real estate linked to Hu in central Auckland.

From this settlement, $92,700 goes to Insolvency Service in payment of Hu’s bankruptcy debts.  In 2022, Hu was bankrupted on an unpaid debt.

Commissioner of Police v. Hu – High Court (10.02.26)

26.075

A&P Association: Howe v. Carmichael

  

Ohura A&P Showgrounds near Taumaranui is proving a legal battleground with dispute over who is in control of Ohura’s Agricultural & Pastoral Association coupled with allegations of a land grab engineered by locals Maria and Les Howe on behalf of local hapu Ngati Toi.  Attempting to assert their control, Howes legal claims filed in the District Court were thrown out as either lacking the required detail or seeking remedies a District Court has no power to grant.  

News reports tell of the Howe family gaining control of the Association at its August 2025 annual general meeting, voted in by supporters recently signed up as Association members.

Manner of their appointment is disputed.

The Howes sued in the District Court alleging the old guard, now supposedly out of office, were improperly retaining control of Association property.

Judge Rowe pointed out that District Courts do not have a general power to oversee governance of A&P Associations.  That lies with the High Court.

The Howes specific claims that members of the old guard were liable for defamation, trespass, negligence, misrepresentation, invasion of privacy and breach of statutory duty were struck out.

Insufficient detail was provided to support these claims.

It is a basic tenet of New Zealand’s legal system that any claim must include sufficient detail enabling defendants to respond.     

Judge Rowe questioned why the Howes included Ngati Toi as plaintiff in their claim.

Hapu and iwi do not have a legal existence separate from their members.  Individual members cannot be dragged into court proceedings without their consent.

There was no evidence that the Howes had consent from individual Ngati Toi members to take legal action in their name, Judge Rowe said.

Howe v. Carmichael – District Court (9.02.26)

26.074

Insolvency: re Tawhiti

  

Agreeing not to sue for balance of a debt due did not prevent financier Otis Trustee Ltd voting against a scheme of arrangement put up by insolvent house removal specialist Shannon Tawhiti offering creditors three cents in the dollar.

Mr Tawhiti lives in Havelock North.  His Hawkes Bay removal business was described as once being worth over twenty million dollars, owning over one hundred properties.

No longer.

He faces bankruptcy; naming personal, market and business disruptions for collapse of his business operations, all exacerbated by COVID-19 pandemic restrictions.

Otis Trustee Ltd, controlled by Auckland-based Ian McKay, put a key part of Mr Tawhiti’s business operations into receivership after defaults on payments due.

Companies Office receivership records show an Otis debt of some $800,000 was not repaid in full.

The High Court was told of a 2025 stand-still agreement between Otis Trustee and Mr Tawhiti.  Otis agreed not to take any legal action against Mr Tawhiti personally; but reserved the right to claim in any bankruptcy.

Mr Tawhiti’s Insolvency Act offer of three cents in the dollar to creditors in final settlement of debts owed will avoid potential bankruptcy.

He says the proposal will be funded by family members, friends and future earnings.

When counting creditor votes on Mr Tawhiti’s offered part-payment scheme, a proposed trustee handling voting procedures disallowed a vote against sent in by Otis Trustee.

Otis claims it is now owed $2.037 million by Mr Tawhiti.

The trustee says wording of the stand-still agreement prevents Otis Trustee from voting.

In the High Court, Associate Judge Skelton ruled Otis’ vote should have been accepted provisionally, with a final ruling on validity left to the High Court.

All Insolvency Act part-payment schemes require High Court approval after creditors vote.

The proposed trustee is now required to have all Mr Tawhiti’s creditors reconsider his part-payment proposal, with Otis Trustee’s vote to be included, provisionally or otherwise.

re Tawhiti – High Court (9.02.26)

26.073

Trademark: Blue River Dairy v. Spring Sheep Dairy

  

Asked to sort out the sheep from the goats, the High Court decided they are both the same when it comes to trade mark protection for milk-based products, giving protection to Landcorp’s SPRING SHEEP trademark, preventing Hong Kong-owned Blue River Dairy using SPRING GOAT as a trademark for sale of its product in New Zealand.

Spring Sheep Dairy LP is a joint venture between government-owned Landcorp and SLC Ventures LP.

It challenged Blue River’s 2017 Intellectual Property Office application for registration of SPRING GOAT as a trademark.  It claimed SPRING GOAT was sufficiently similar to its existing SPRING SHEEP trademark as to cause confusion where they competed in the same product market.

Blue River and Spring Sheep are two of three main sheep milking operators in New Zealand.

In the High Court, Justice McQueen said it is the word ‘spring’ which does the heavy-lifting in both brands.  Both use the word ‘spring’ as the first word.

This is likely to confuse customers, she ruled.  Even an attentive customer would likely perceive SPRING GOAT to be a brand extension of SPRING SHEEP and attribute both products to the same source, she added.   

Blue River’s application to register SPRING GOAT as a trade mark was disallowed.

Separately, Blue River asked that Spring Sheep Dairy’s existing registration for SPRING SHEEP be revoked for non-use.

Failure to make commercial use of a trademark for a three year period can lead to revocation.  This ‘use it or lose it’ rule is intended to prevent clogging the trademark register with unused trademarks.

The High Court reviewed Spring Sheep Dairy’s use of its SPRING SHEEP trademark for the period 2016–2019; the period surrounding Blue River’s filing for SPRING SHEEP’s revocation.

Revocation was refused.

The High Court heard evidence of Spring Sheep Dairy selling branded SPRING SHEEP product to cheesemakers since 2015 and a branded gelato product from the following year.

In addition, brand awareness existed with preliminary steps taken by Spring Sheep to have its infant formula stocked by supermarkets across New Zealand.

Finally, Blue River asked that Spring Sheep’s trade mark protection be limited to sheep milk product only.

Stating that this would be pernickety, Justice McQueen allowed that the trademark could be used across milk-based products derived from other animals.

Blue River itself did not limit its application to only goat milk products in its unsuccessful application to trademark SPRING GOAT, she noted.

Blue River markets cows’ milk, sheep and goat milk products.

Blue River Dairy LP v. Spring Sheep Dairy NZ Limited Partnership – High Court (5.02.26)

26.072

Appeal: NZ Premium Trading v. AFFCO

  

More than five years out of time, Hawkes Bay’s Andrew Parkinson was refused permission to appeal an eight million dollar loss of profits claim against meat processor AFFCO, in part because Parkinson’s NZ Premium Trading Company Ltd has yet to pay AFFCO $77,600 previously ordered by the High Court.

Problems for exporter NZ Premium kicked off over a decade ago with China border controls disrupting meat imports from New Zealand.

One of AFFCO’s meat processing plants was ‘de-listed’ by Chinese authorities for a time.

Some of NZ Premium’s AFFCO product was held up at the border.

Its trade account with AFFCO was a mess, complicated by NZ Premium’s habit of making payments in lump sums with no reference to specific invoice numbers and its further habit of claiming credits without first waiting for AFFCO approval.

Unable to reconcile their trade account, both sides headed to the High Court making claims and counter claims.

End result: NZ Premium was ordered in 2018 to pay $97,900.  AFFCO recovered part-payment from funds NZ Premium paid into court prior to trial, leaving $77,600 still outstanding.

NZ Premium signalled a planned appeal, but did nothing during the twenty working days allowed.  

Over five years later, Mr Parkinson sought leave for his company NZ Premium to appeal out of time.

He claims an eight million dollar loss of profits claim was not properly considered at the 2018 trial.  This claim turned on Mr Parkinson’s disputed claim that AFFCO had agreed to supply forty containers of product for a customer named as Shandong Taihua Food.  AFFCO’s failure to deliver saw Shandong then cancel a proposed long-term contract, he claims.

Delays in bringing an appeal arose because of COVID-19 pandemic restrictions plus his need to get on and ‘make a living,’ generating funds to pay for an appeal, he said. 

It was not in the interests of justice to allow an appeal out of time, the Court of Appeal ruled.

The delay was substantial.  The $77,600 previously ordered by the High Court remained unpaid.  And the likelihood of a successful appeal was weak, the court said.

NZ Premium Trading Co Ltd v. AFFCO New Zealand Ltd – Court of Appeal (5.02.26)

26.071

Guarantee: Federal Capital v. Simunovich

  

With short-term loans taken out by interests associated with Peter Simunovich to prop up his ailing fishing operations in Australia, his supposed $450,000 repayment guarantee proved unenforceable after he gained control of collateral securities.

The High Court was told of a series of short term loans taken out in 2019 by Simunovich-owned Seafish Tasmania Pty Ltd; cash needed to refinance existing debt and pay quota licence fees.

Seafish was at risk of Australian authorities confiscating its quota allocation; a fishing quota valued by Seafish at $23 million. 

Litigation followed failure to repay two six month loans falling due late 2019; loans arranged through Auckland-based Federal Capital Ltd, controlled by Mel Stewart.

Legal issues centred on a May 2019 security sharing agreement, a tri-partite agreement between Federal Capital, Mr Simunovich and existing Seafish financier FE Investments Ltd.  FE held mortgage security over Seafish quota.

Mr Stewart held controlling interests in both Federal Capital and FE Investments.

The High Court was told Mr Stewart was under the impression that the sharing agreement would enable Federal Capital to extend Mr Simunovich’s obligation as guarantor of FE Investments existing loans to include the new Federal Capital funding.

Not so, ruled the High Court.

Property Law Act rules state there is no liability as guarantor unless the guarantee is in writing, signed by the guarantor.

Mr Simunovich did sign as named guarantor on Federal Capital loan documents, but there was no operative clause in these documents imposing a guarantee.

Federal Capital argued in the High Court that it could enforce existing FE Investments guarantees as permitted by the tri-partite security sharing agreement signed by Mr Simunovich as guarantor.

The legal complication was that interests associated with Mr Simunovich bought out FE Investments’ debt in February 2020 at a time when FE threatened to call in its loan and sell off Seafish’s quota.  The deal was structured as cash in return for an assignment of FE Investments’ rights.

Mr Simunovich now wore two of the three hats in their tri-partite agreement; personally as guarantor of FE Investment’s loans and separately as owner of these same loans. 

Justice Harvey ruled the tri-partite agreement gave Mr Stewart’s Federal Capital the right only to share in the proceeds of any enforcement by FE Investment; it could not force FE Investment to enforce its rights against Mr Simunovich.

Mr Stewart and Mr Simunovich go back a long way.  In the early 2000s Simunovich money helped fund Mr Stewart’s investment in FE Investment, the High Court was told.

Federal Capital Ltd v. Simunovich – High Court (2.02.26)

26.070

Asset Forfeiture: Commssioner of Police v. Morris

  

Four years after Daniel Basil Morris’ conviction for possession and supply of meth, his parents recovered $81,200 out of assets otherwise forfeit as proceeds of crime being financial assistance they provided for his purchase of a New Plymouth home.

Morris was convicted in 2021 of methamphetamine possession for supply plus possession of material and equipment for cooking meth.

Restraining orders were imposed over his Parsons Street house in Vogeltown, plus two Subaru Impreza motor vehicles.

During examination on oath about extent of his assets, he disclosed that his parents helped fund purchase of Parsons Street and stood as guarantors for his mortgage.

The High Court was told Morris died at home in 2024.  Circumstances of his death are not suspicious.    

Police sought Criminal Proceeds (Recovery) Act forfeiture for the $136,400 realised from sale of Parsons Street and the two Subarus.

Justice Grau approved an agreed settlement between Police and Morris’ parents having $81,200 diverted to a bank account of their choice.  This represented a loan to their son for purchase of Parsons Street, plus mortgage interest payments they made following his death.

The remaining $55,200 was forfeit.

Commissioner of Police v. Morris – High Court (30.01.26)

26.069

Money Laundering: R. v. Sharma

  

Sentenced to three years nine months imprisonment for money laundering, Suren Sharma laundered $1.8 million over a twelve month period, money paid online by investment scam victims, shifting his activities from bank to bank after warnings the transactions appeared to be fraudulent.

The District Court dismissed his claim to be an innocent bystander, merely acting as a conduit for a supposedly legitimate bitcoin investment scheme.

A common pattern for all twelve victims saw Sharma transfer their funds deposited into his bank accounts across to his son’s bank account in Australia, retaining a ten per cent commission; this commission then filtered through multiple bank accounts he controlled, with some withdrawn in cash at Sky City casino in Auckland.

This took place through 2022-2023.  

The largest sum lost by any one victim was one million dollars, money supposedly invested through an entity called Worldinitiative AG Alliance.

Another victim, investing $100,000 through an entity called Argus International, had a private investigator chase up where his money had gone.  Mr Sharma, pressed to explain how the money came to pass through a bank account he controlled, produced a forged document supposedly signed by the victim giving Sharma authority to deal with the money.

The District Court was told of Sharma switching to a BNZ account after being warned by Westpac of suspected fraudulent activity in respect of funds passing through his Westpac account.

When BNZ closed Sharma’s account on suspicion of fraudulent activity, he switched to ASB, then ANZ, then turned full circle and reactivated use of his Westpac account.

Four banks warned him of suspicious transactions passing through his bank accounts.  At best, his behaviour was grossly reckless, Judge Bell ruled.

The court was told Sharma was a Justice of the Peace at time of offending, having in the past sat as a judge in court hearing minor offences.

Now aged 74, he holds qualifications in accountancy and filed client tax returns with Inland Revenue as a tax agent.

The court was told the High Court found Sharma liable in 2011 for acting fraudulently in breach of Companies Act director duties.

No reduction in sentence was made for Sharma’s offer to pay reparations at twenty dollars per week.  Full reimbursement for victims would take over 1600 years.

R. v. Sharma – District Court (29.01.26)

26.068

Trust: Bryers v. Broughton

  

Before his death at Whanganui in 2012, Toherangi Broughton transferred his substantial block of shares in customary Maori land to daughter Morania.  Her siblings were dismayed; their rights to inherit by descent were lost.  They were doubly dismayed when she in turn gifted this share to her son Perry Bryers.  They were appeased when he transferred his shares to a Toherangi Broughton Family Trust for the benefit of wider whanau, subsequently challenging his later efforts to get back these shares from the Trust.

In what was a departure from normal practice, the Maori Land Court refused recovery, ordering his shares remain within the Trust. 

The Maori Land Court was told of long-standing tensions between Toherangi Broughton’s descendants over circumstances in which Perry Bryers came to control their forebear’s landholdings.

Perry came to control this land prior to Toherangi’s death.

Some four years before Toherangi died, Perry transferred his shareholding, giving control over substantial blocks of Maori land, to a whanau trust named in Toherangi’s honour.

Years later, he wanted to reverse the process; taking the shares back out of Trust ownership, holding the land for the sole benefit of his immediate family.

In the Maori Land Court, Judge Warren commented the general rule is that termination of trust status for Maori land is normally approved, unless there are compelling reasons not to.

Commonly, all trust beneficiaries will have agreed to termination.  Or trust board dysfunction coupled with wider whanau issues justify termination.

There was no evidence of trust board dysfunction in this case.

Judge Warren ruled collective whanau benefit is to take priority over Perry family individual autonomy.

The size of shareholding previously gifted by Perry to the Trust is such that its return would imperil the Trust’s economic viability, compromising benefits wider whanau would otherwise enjoy, he said.

Principles of the Te Ture Whenua Maori Act are best served by maintaining the status quo, leaving the shareholding within the Trust under control of trustees, ensuring the land is retained and available for the benefit of wider whanau, he ruled.

Bryers v. Broughton – Maori Land Court (28.01.26)

26.067

Pastoral Lease: Glenthorne Station v. Commissioner of Crown Lands

  

With rent renewals still disputed for Crown land forming part of his South Island high country Glenthorne Station, investment banker John Shrimpton claims his offer to buy out the leasehold interest using legal rules still on the books since the late 1800s must be honoured.  His ingenious legal move was thwarted in the High Court; whilst the rules still exist, his offer comes 130 years too late.  Operation of ‘first come, first served’ land sales lapsed in 1892.  

The High Court was taken through a detailed survey of South Island land acquisitions made by early colonial governments.

Through what are now recognised as a series of grossly unfair purchases compounded by subsequent government failures to honour promises made, Ngai Tahu were systematically dispossessed of nearly all their land.

Prior to 1876, New Zealand operated with a quasi-federal system of government, having nine provincial legislatures.

Canterbury Province decided to parcel out huge swathes of pristine land now under its control by what became known as ‘open selection.’  Purchasing settlers need only write their name in a book next to section of land, pay the better of forty shillings or two pounds per acre, and the land was theirs: first come, first served.

High country land did not sell; pastoral farming is always marginally economic in rough mountainous country.

In 1873, Canterbury’s Provincial Council transferred on trust more than 300,000 acres of unsold high country land (121,000 hectares in today’s measurement) to Canterbury University.

Terms of trust require the University to hold this land available for ‘open selection,’ leasing it out in the interim, with rental income forming part of the University’s endowment.  

With Glenthorne Station, near Lake Coleridge, unable to reach agreement in its currently disputed rent review for that 36 per cent of its farm currently leased from Canterbury University, Mr Shrimpton set about making an ‘open selection’ offer to buy the freehold.

In the High Court, he conceded two pounds an acre is not an appropriate price; he is willing to pay market price.

The High Court ruled ‘open selection’ is no longer available.

Dissolution of provincial governments meant control over sale of pastoral leasehold land now lies with central government, specifically with the Commissioner of Crown Lands.

Sale to Glenthorne Station requires agreement of University of Canterbury, the Secretary of Education and the Commissioner of Crown Lands, Justice Boldt ruled.

Further complication is that the Ngai Tahu Claims Settlement Act gives Ngai Tahu right of first refusal should the freehold be offered for sale.

Glenthorne Station’s lease has been running on with lease payments disputed since 2009.

Glenthorne Station Ltd v. Commissioner of Crown Lands – High Court (27.01.26)

26.066

Corporate Governance: Lawless v. Ellis

  

Applying well-recognised accountancy rules defining what amounts to ‘control,’ compared with having ‘influence,’ may have helped squabbles over potential conflicts of interest within Tuwharetoa trust activities; a governance issue now common to many iwi as kinship relationships can overwhelm commercial realities.

What to outsiders looks to be an arcane judicial debate in the Maori Land Court about corporate governance was a tricky question over how many hats one person should wear, given that commercial activities for major iwi groups now operate under business structures similarly seen with large corporates: one central holding company with separate activities and interests hived off into a multitude of subsidiary companies, partnerships and trusts.

All these separate entities need policy direction of their own, coupled with general ‘head office’ oversight.

Add to this complexity the overlay of Maori culture; the common kinship shared by those both running and benefitting from iwi commercial operations.

Close family ties, compounded by historical cross-family disputes and jealousies, can led to what might be delicately called sub-optimal decision making.

Seeking to minimise such problems, trust deed for Ngati Tuwharetoa’s Lake Taupo Forest Trust restricts the circumstances in which any trustee can be involved in activities of any subsidiary.

Trust beneficiary Tane Lawless questioned whether a trustee should be allowed to continue with contract work for a Trust subsidiary: New Zealand Forest Managers (2022) Limited Partnership.

His Maori Land Court application continued as a test case after the trustee’s death.

The legal issue boiled down to whether Forest Managers was a ‘trust entity’ as defined by the trust deed.  If so, contracting work was disallowed as a conflict of interest.

Forest Managers exists as a partnership, but differs from the norm.

As a limited partnership it is made up of limited partners (who are not involved in management, are not liable for partnership debts, and do share in profits) and a general partner (who makes management decisions, is liable for partnership debts, and shares in profits).

For Forest Managers, decisions made by its general partner lie ultimately with Lake Taupo Forest Trust and a separate trust, Lake Rotoaira Forest Trust.  They each get to appoint two of the general partner’s four directors.

Forest Managers is not a ‘trust entity,’ Judge Warren ruled.

Lake Taupo Forest Trust does not have ‘control’ of Forest Managers; it does not appoint a majority of directors.

Neither does it have ‘indirect control’ through appointment of half the directors, he ruled.  This ‘limited’ or ‘shared’ control cannot be considered operative control.

It would be more intelligible to utilise accounting terminology: Lake Taupo Forest Trust’s right to appoint half Forest Managers’ board amounts to ‘influence,’ not ‘control.’

Lawless v. Ellis – Maori Land Court (22.01.26)

26.065