Promoted as eco-friendly co-operative living, Kotare Village north of Wairoa has collapsed into an avalanche of claims and counter-claims as residents allege founders led by Robert Corker misrepresented the deal and have acted in breach of trust. Proposals to sell off the village led to a storm of protests; founders will get an unwarranted financial benefit, residents claim.
Kotare Community Land Trust Board sits at the head of legal structures governing the co-operative. Those joining the rural community purchased 34 year leases giving the right to build a house and share in use of land set aside for heritage plants and bio-intensive gardening. The Trust is registered as a charity under the Charitable Trusts Act. The High Court was told it should never have been registered; the private benefit enjoyed by community residents means it does not satisfy the legal definition of a charity. The Trust has failed to file regular financial statements as required by the Act.
Antagonism between community founders and subsequent residents saw the founders take steps to liquidate the Trust. This would see the underlying freehold sold, while leaving community members entitled to stay on their leased land. A group of residents objected; the founders would escape providing compensation for allegedly promoting village operation in a misleading fashion, in breach of the Fair Trading Act, they say. Net proceeds from sale of the freehold would not be divided equitably, they complain. In addition, they dispute valuations of land offered for lease and allege breaches of rules governing GST. An independent report criticises the current legal structure as potentially not being in the best interests of residents. Aggrieved residents want the village kept intact, with village operations restructured.
In a preliminary High Court hearing, Justice Cooke set out guidelines for a subsequent full trial. He signalled one possible solution is to replace current Kotare Trust trustees with court-appointed trustees. Robert Corker resigned as a trustee in 2018. There have been multiple changes to the positions of trustee since that date.
Koanga Institute Incorporated v. Kotare Community Land Trust Board – High Court (15.02.21)
21.031