A routine 2023 annual audit of New Plymouth-based Ngati Tawhirikura Hapu Charitable Trust found $487,000 was paid in wages in the past year with no contracts in place. Questions were raised at the Trust AGM asking why employee numbers had jumped by six hundred per cent. Differences have now spilled over into litigation with Trust board members suing fellow Trust board members, litigation seeing so-called ‘tribal trusts’ allowed a generous interpretation of what qualifies as a charity.
Charitable status has tax benefits. Charities are excused payment of income tax.
Before their intra-trust board dispute even gets a hearing, the Maori Land Court was asked to unravel the status of Ngati Tawhirikura’s trust.
The Trust has valuable land holdings, primarily a former Ravensdown fertiliser site on New Plymouth’s northern boundary, valued in trust financial statements at a little over one million dollars.
Judge Warren ruled the Trust is a charity.
One key component of the legal test for recognition as a charitable trust is that benefits must extend to society in general. Limit the numbers who benefit; the charitable purpose is not satisfied.
Tax benefits for charities are justified as a reward where non-state actors carry out good works of benefit to society as a whole, reducing the financial burden which might otherwise fall on general taxpayers.
The legal mantra is that charitable trusts are trusts for a purpose. In contrast, private trusts (like discretionary family trusts) are trusts for persons.
Tribal trusts do have a purpose, but by definition they are not trusts for the benefit of society as a whole; they benefit a restricted number of individuals, those who whakapapa from a common ancestor.
Judge Warren ruled tribal trusts benefiting individuals narrowly defined by blood line can be charitable; allowing Maori institutions to enjoy the legal and taxation benefits of charitable status without having to fully satisfy the underlying legal test for a charity.
In any event, the Ngati Tawhirikura Hapu trust deed envisages members of the wider Taranaki community benefiting, allowing a possibility that benefits could pass to people outside the hapu.
Generally, legal issues involving charities are heard in the High Court.
Control and management of the Trust lies with Ngati Tawhirikura, Judge Warren said.
This gives the Maori Land Court jurisdiction to hear their dispute, he ruled.
re Ngati Tawhirikura Hapu Charitable Trust – Maori Land Court (14.03.25)
25.084