IN THE MAORI LAND COURT W AIKA TO-MANIAPOTO DISTRICT A section 135, Te Ture Whenua Maori Act 1993 RESERVED DECISION OF JUDGE S R CLARK

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1 92 Tauranga MB 193 IN THE MAORI LAND COURT W AIKA TO-MANIAPOTO DISTRICT A UNDER IN THE MATTER OF section 135, Te Ture Whenua Maori Act 1993 Te Reti A23 Block - change from Maori freehold land to general land by status order LORNE MALCOLM BURROUGHS YVETTE MARY BURROUGHS Applicants Hearing: 31 March 2008 (Heard at Tauranga) Appearances: Mr Kearn, Counsel for the Applicants Mr M Sharp, Counsel for the PCA Judgment: 8 May 2008 RESERVED DECISION OF JUDGE S R CLARK Introduction [1] This proceeding concerns an application for change of status of a block of Maori freehold land known as Te Reti A23 to general land by status order pursuant to section 135 ofte Ture Whenua Maori Act The owners of the block are the applicants Lome and Yvette Burroughs. They are non-maori. [2] The matter was heard at Tauranga on 31 March In addition to the matters set out in the application, Counsel for the applicants also provided the COUli with written submissions with evidence attached. Similar to the Te Reti A22 application (A ), Mr Kearn, Counsel for the applicants took the opportunity to provide further written submissions and evidence to the Court, that material being filed with the COUli on 18 April LORNE MALCOLM BURROUGHS and YVETTE MARY BURROUGHS MLC A [8 May 2008J 92 TAURANGA MB

2 92 Tauranga MB 194 The Law [3] The relevant sections of the Act are sections 135 and 136. They read as follows: 135 Change from Maori land to General land by status order (I) The Maori Land Court shall have jurisdiction to make, in accordance with section 136 or section 137 of this Act, a status order declaring that any land shall cease to be Maori customary land or Maori freehold land and shall become General land. (2) The COUlt shall not make a status order under subsection (I) of this section unless it is satisfied that the order may be made in accordance with section 136 or section 137 of this Act. (3) A status order under subsection (I) of this section may be made conditional upon the registration of any instmment, order, 01' notice effecting a conveyance of the fee simple estate in the land to any person or persons specified in the order. 136 Power to change status of Maori land owned by not more than 10 persons The Maori Land Court may make a status order under section 135 ofthis Act where it is satisfied that- (a) The land is beneficially owned by not more than 10 persons as tenants in common; and (b) Neither the land nor any interest is subject to any tmst (other than a trust imposed by section 250(4) of this Act); and (c) The title to the land is registered under the Land Transfer Act 1952 or is capable of being so registered; and (d) The land can be managed or utilised more effectively as General land; and (e) The owners have had adequate opportunity to consider the proposed change of status and a sufficient proportion of the owners agree to it. [4] The leading authorities in this area are in re Loma Cleave - Part O/'okawa 3B (1995) 4 Taitokerau Appellate MB 95; In re Maket1l A2A - While (1999) I Waiariki Appellate MB 116; In re Papamoa 2Al - Hoko (2003) 20 APWM 167; In re OrokalVa 3B - Regeling (2004) 6 Whangarei Appellate MB 157; In I'e Wain1li 2F4D I Hereinafter all references to section numbers are references to Te Ture Whenua Maori Act LORNE MALCOLM BURROUGHS and YVETTE MARY BURROUGHS MLC A [8 May 2008] 92TAURANGAMB

3 92 Tau\'anga MB Craig (2006) 7 Whangarei Appellate ACMB and In re Ngarara West B3B (2007) I Whanganui Appellate MB I. [5] In a recent reserved decision Ngapaldhi it - Tahuparae (2008) 198 AOT MB 201, Judge Harvey identified the essential legal principles to be distilled from the authorities mentioned above. He also refelted to guidance from the Superior Courts on this issue. It is worth setting out a passage from that decision in full, it reads as follows: [8] The essential legal principles set out in the authorities relevant to status change are: (a) (b) (c) (d) (e) (f) (g) (h) those with rights or interests in the land go beyond the beneficial owners themselves to whanau, hapu and descendants of owners; land is a taonga tuku iho and should be retained within the kin group if possible;. owners should as far as possible be empowered to develop, manage and utilise and control their own lands; status change for the sale purpose of securing a higher sale price is not a reason to grant such an order; section 136 is to be read conjunctively. If the Court is dissatisfied that any of the criteria set out in that section have not been satisfied it need proceed no further; notice must be given to the preferred class of alienees to give that" group the opportunity to make submissions; a change of status is possible but only in limited range of situations and each application must be considered as to its merits and particular circumstances taking into. account the principles of retention and development; and an applicant's personal circumstances must always be taken into account when considering any application for a status change. [9] The superior courts have also provided guidance on the issue of status change and alienation generally. In addition to Brown v Maori Appellate Court there is of course the important judgment of the Court of Appeal Valuer-General v Proprietors Mangatu Incorporation [1997] 3 NZLR 641. At page 649 of the decision, Richardson P makes it plain that the Act provides for alienation but in limited circumstances: "The 1993 Act imposes very significant constraints on the sale of Maori freehold land, particularly sale to a purchaser who would seek to change its status from Maori freehold land to general land. Parliament could not have expressed tile policy more clearly. Drawing on the Treaty of Waitangi and LORNE MALCOLM BURROUGHS and YVEITE MARY BURROUGHS MLC A [8 May 2008] 92 TAURANGAMB

4 92 Tauranga MB 196 the special significance of land to Maori people the 1993 Act reflects as the primary objective to be applied throughout the legislation and by the Maori Land Court to the retention of Maori land by Maori and the use, development and control of Maori land by Maori. The machinery provisions allowing for alienation of land are directed and restricted to that end. There is no question of majority deeisions of owners necessarily carrying the day. Any agreement of the owners is subject to the contingeneies that the Maori Land Court may in exercise of its powers and responsibilities refuse to confirm the alienation or to change the status of the land." [10] A further refinement of these key principles can be discerned from the High and Court of Appeal judgments Edwards v Maori Land Court and Bruce v Edwards [2003]1 NZLR 515. In the latter decision the Court of Appeal held that the members of the PCAs had a statutory right of first refusal if Maori freehold land was to be alienated. The Court observed that since an order for change of status would bypass the right of first refusal and the restrictions on alienation, the PCAs should be giveu opportunity to make fully informed submissions before a status change application was dealt with. Approach [6] In the Wainui and Ngal'al'a decisions the Maori Appellate Cowt set out the approach for the Court to take when considering a change of status application. First the Court must consider the five specific requirements set out in section 136 of Te Ture Whenua Maori Act Those specific requirements are cumulative preconditions to the exercise of the Court's jurisdiction and are described in the Ngal'al'a decision as "threshold requirements". [7] Once an applicant has overcome those threshold requirements, the Court must then measure the application against the principles of the Act, in particular the Preamble, section 2, section 17, and the removal of the statutory right of first refusal reserved to the preferred class of alienees. 2 It is now well known that a change of status application should only be allowed where the application is in some material way outside the ordinary run of cases. 2 Hereinafter referred to as the PCA. LORNE MALCOLM BURROUGHS and YVETTE MARY BURROUGHS MLC A [8 May 2008] 92 TAURANGA ME

5 92 Tauranga MB 197 Section 136 Preconditions [8] Mr Kearn in his submission presented on 31 March 2008 and his second set of submissions filed on 18 April 2008 correctly identified that four of the five preconditions set out in section 136 of the Act were met. The sole threshold issue which the Court needs to consider is whether the land can be managed or utilised more effectively as general land. [9] The Ngal'al'a decision refers at paragraph 34 to the test whether the land can be more effectively managed as general land ought to be a relatively straightforward preliminary matter. The Appellate Court went on to say that if an applicant can demonstrate specific plans for the land which can be more easily or effectively achieved if it were general land, then the threshold requirement is met. That requirement must be tested to a reasonable level in the evidence. [10] In this case the applicants are able to point to valuation evidence from Property Solutions, Registered Valuers of Tauranga dated 11 April That evidence clearly demonstrates that if the block is to retain its Maori land status, there will be a decrease in its market valuation of 10% from $312, to $281, [11] This is significant as Mr and Mrs Burroughs have separated. They have placed evidence before the Court that Mrs Burroughs intends to refmance in order to inter alia payout Mr Burroughs his claims pursuant to the Propelty (Relationships) Act Thereafter Mrs Burroughs will become the sole owner of the Te Reti A23 block. [12] The applicants had agreed that Mr Burroughs would be paid the sum of $40, in full and final settlement of any claim under the Property (Relationships) Act The BUTI'oughs have now placed evidence before the COUli,4 the net effect of which is that Mr Burroughs' entitlement will reduce from $40, to $21, if it remains as Maori freehold land. 3 That evidence appears as attachment "A" to the submissions received Oil 18 April The valuation from Property Solutions dated II April 2008 and a letter from ANZ National Bank dated 16 April 2008, attachments "A" and "B" to the submissions dated 17 April LORNE MALCOLM BURROUGHS and YVETTE MARY BURROUGHS MLC A200700I3882 [8 May 2008] 92 TAURANGA MB

6 92 Tauranga MB 198 [13] Evidence was also placed before the Court of Mr Burroughs' health. s The Court accepts that Mr Burroughs has chronic health issues. In short they are: opioid dependence; cannabis dependence; major depression; Hepatitis C infection; cirrhosis of the liver, secondary to Hepatitis C. As such Mr Burroughs requires as much fmancial assistance as he can obtain. [14] The Court is satisfied that the applicants have specific plans for the land which can be more easily or effectively achieved if it were general land. The change in status will enable Mrs Burroughs to refmance many of her existing commitments but most importantly it will enable Mr Burroughs to be paid out his entitlement under the Property (Relationships) Act Consistency with Philosophy of the Act [15] The Wainui and Ngarara decisions underpin the fact that once the section 136 threshold issues are satisfied, the Court must the consider the application as against the general philosophy of the Act in particular the Preamble, section 2 and section 17 in particular the principle that retention of Maori land in ownership of Maori owners is a fundamental philosophy of the Act. [16] Running alongside that is the recognition by the Comt that a change of status from Maori freehold land to general land removes the perpetual statutory right of the first refusal reserved to the PCA members. For those reasons the Appellate Courts have recently indicated that a change of status should only be allowed when the application is in some material way outside the ordinary run of cases. Factors Relied Upon by the Applicants [17] The applicants in their application, at hearing and in further submissions and evidence put before the Comt on 18 April 2008 rely upon a number of factors. The Court takes a similar approach in this case as it did in the Te Reti A22 case (A ) that there is little point in listing each factor separately and, Attachment "AU to the submissions filed with the Cowt on 31 March LORNE MALCOLM BURROUGHS and YVEITE MARY BURROUGHS MLC A [8 May TAURANGA MB

7 92 Tauranga MB 199 discussing whether or not those factors assist the application or not. The Court must say however that there are some factors put forward by the applicants which the Court rejects outright. (18] First is the criticism of LINZ in particular its failure to note when accepting transfers for registration that the land in question was Maori freehold land and failing to seek confirmation from the Maori Land Court. [19] Whilst those complaints are accurate, similar criticisms can be just as easily made of all of the conveyancing solicitors involved in a series of transactions since None of them appeared to identify that the land in question was Maori freehold land. A cursory examination of the historical search copy should put competent conveyancing solicitors on notice that the block in question was Maori freehold land or at least on notice to make further inquiries. When one looks at the historical search copy for Certificate of Title 16A one notes the following: a) A notation referring to partition order S That notation refers to partition orders made on 27 April 1973 by the Maori Land Court in relation inter alia to Te Reti A23; b) The Maori appellation for the block, Te Reti A23 is also a signal that the land in question may have been Maori freehold land. [20] The applicants also make a submission that the Te Reti A23 block has become isolated from "the main block" and there is no longer any community of interest with it. They put this down to the severance of those lands caused by the presence of the four lane highway. The Court rejects that submission because inunediately adjacent the A23 block is a block of Maori freehold land known as Ie Reti B & C residue block. Indeed the plan attached to SA 116A notes the presence of an access way which provide the owners of that Maori freehold block access to their land. [21] The applicants also make submissions that on at least three occasions since 1973 the land has been alienated to non-maori. It is COl1'ect that there have been a LORNE MALCOLM BURROUGHS and YVETIE MARY BURROUGHS MLC A [8 May 2008] 92 TAURANGAMB

8 92 Tauranga MB 200 nwnber of alienations pnor to the applicants becoming owners of the block. However there is nothing in the evidence nor can one tell from the Celtificates of Title whether in fact the previous owners were Maori or non-maori. That argwnent too must be rejected. [22] There are however a nwnber of factors which when consideredcwnulatively take this case out of the ordinary and upon which the Court is prepared to order a change of status. [23] First the Court notes that the original partition order was made on 27 April 1973 by Judge Cull of the Maori Land Court in favour of Arthur Seeling and Karen Hinekakeha Seeling. Mrs Seeling died on 27 October Her death certificate identifies her as Maori and she is buried in Tauranga. It is unknown to the Cowi whether or not her husband Mr Seeling was Maori or not. Even if he were not, under the law which was in place prior to the commencement of Te Ture Whimua Maori Act 1993 he would have been entitled to succeed to Mrs Seeling's interests in the block. The Certificate of Title records a transmission to Mr Seeling on 3 November [24] Since then the block has been transferred twice on 30 September 1993 and then again to the current owners, the Burroughs, on 3 April Thus a nwnber of transfers have occurred prior to the Burroughs becoming owners of the block. It appears on no occasion were the Burroughs or the previous owners aware that the land was Maori freehold land. I accept that the Burroughs acquired this block in good faith, albeit on a mistaken belief that the block was general land. [25] Whilst the Act places heavy emphasis upon retention of Maori land in Maori ownership, as the Court of Appeal stated in Brown v Maori Appellate Court [2001]1 NZLR 87 at paragraph 67, there is no policy in Te Ture Whenua Maori Act 1993 which requires retention of Maori land by non-maori owners. [26] Secondly in relation to this application it was advertised on 10 and 17 March 2008 in the Bay of Plenty Times. The Court prior to the calling of this matter and the Te Reti A22 matter (A ) heard from Mr Sharp for the Trustees of the LORNE MALCOLM BURROUGHS and YVETTE MARY BURROUGHS MLC A [8 May TAURANGA MB

9 92 Tauranga MB 201 Te Reti B & C Residue block. Mr Sharp confirmed to the Court his clients, who fall within the definition of the PCA had no objection to the change of status applications. Their concern was in order to ensure that access was maintained to the Te Reti B & C Residue block. [27] Thirdly the applicants point to their financial position and humanitarian grounds. Both applicants are registered proprietors of the block. They have separated, Mr Burroughs is entitled to be paid out his entitlement pursuant to the Property (Relationships) Act Initially the applicants put forward a position that their fmanciers had withdrawn an offer of finance after discovery that the status of the block was Maori freehold land. The applicants placed reliance upon a letter received from the ANZ National Bank dated 28 March 2008, attached and marked "B" in the submissions of 31 March [28] The COUIt did not then nor does it now accept that fmance had been declined. Rather what the bank indicated it would do would reassess any offer of fmance. However prior to doing that it required a registered valuer's report. [29] More recently however, the applicants have put before the COUIt further evidence which confirms the following: a) That the market value of the block in question as general land would be $312, As Maori freehold land it is $281,000.00; b) As a result of the decrease in the market value of the property, Mr Burroughs' entitlement drops from $40, to $21, [30] As the Court referred to earlier it accepts that Mr Burroughs suffers from chronic health issues and needs as much financial assistance as possible. Initially the Court was sceptical as to whether or not personal circumstances could be taken into account when considering a change of status application. However in both the White and Tahuparae decisions reference is made to the fact that the owners wishes and personal circumstances can be taken into account and that the discretion to be exercised is not to be done on a totally objective basis. LORNE MALCOLM BURROUGHS and YVETIE MARY BURROUGHS MLC A [8 May 2008) 92 TAURANGA MB

10 92 Tauranga MB 202 [31] Cumulatively then, given the passage of time since the original partition order, the number of transfers that have taken place, the lack of objection by the PCA, the desire on the part of Mrs Burroughs to refmance in order to payout her husband's entitlement under the Property (Relationships) Act 1976 the Court is satisfied that there are reasons which take this case out of the ordinary. In those circumstances the Court is prepared to grant a status order pursuant to section 135 changing the status of the land from Maori freehold land to general land. Roadway Issue [32] At the commencement of this hearing, Mr Sharp, Counsel for the Te Reti B & C Residue Trust appeared. The concern of his client was to ensure that his clients continued to get access to their land via a roadway/access way which appears on a plan attached to SAI6A [33] Following the hearing research of this Court's records was undertaken to ascertain what the position was. The Court was of course concerned to ensure that any change of status order does not affect the ability of the owners of the Te Reti B & C Residue block to obtain access to their lands. [34] That research reveals that a roadway order was made on 24 October 1963 at 25 T The purpose of that order was to provide access to the land known as the Te Reti B block. The access way appears on ML [35] Recently as part of the Maori Freehold Land Registration Project a digital title plan ML was prepared in relation to Te Reti Band C. That plan came before this Couti and a Cetiificate of Approval was signed for that digital survey plan on 12 March The Court is informed by the Maori Freehold Land Registration Project team members that ML Plan will be lodged with LINZ and in due course a full title (CFR) will issue in relation to the Te Reti B & C residue block. [36] Importantly on the question of access, the digital title plan records an easement marked "B". The Court notes that that easement relates to an access way LORNE MALCOLM BURROUGHS and YVETIE MARY BURROUGHS MLC A [8 May 2008] 92 TAURANGA ME

11 92 Taul'anga MB 203 between Te Reti A22 and A23 which on the face of it should ensure that the owners continue to have access to the Te Reti B & C residue block. [37] Thus the Court makes an order pursuant to section 135 changing the status of the Te Reti A23 block from Maori freehold land to general status. However out of an abundance of caution that order is conditional pursuant to section 73. The order is conditional until such time that the Court receives a copy of the title which will issue from LINZ. The Court will wish to receive that title and any attached plans in order to check that the owners ofte Reti B & C continue to have access to their lands. [38] To that end the Court makes the following directions: a) The Maori Freehold Land Registration Project Team is to make urgent inquiries of LINZ as to when the full title for the Te Reti B & C block will be available; b) Upon receipt ofthat title to place that before the Court; c) The Case Manager is directed to forward this reserved decision to the solicitors acting for the applicants and Mr Sharp. In addition the Case Manager is directed to forward to both sets of solicitors a copy of the digital title plan ML , the Certificate of Approval for digital survey plan dated 12 March 2008 and a copy of the spatial map. [39] Upon the Court receiving confirmation that the Te Reti B & C owners will continue to receive access to their lands and that access will not in any way be effected by any change of status order to be made, fmal orders granting the change of status order can be made in Chambers. Pronounced in open Court at I ~. t.(!!~ ' Hamilton on the 8th day of May ~ S R Clark JUDGE LORNE MALCOLM BURROUGHS and YVETfE MARY BURROUGHS MLC A [8 May 2008] 92 TAURANGA MB