Hearing: 11 March 2014, 23 Te Waipounamu MB 297 (23 TWP 297) (Heard at Dunedin) 1 May 2014, 25 Te Waipounamu MB 32 (25 TWP 32) (Heard at Christchurch)

Transcription

1 30 Te Waipounamu MB 168 IN THE MĀORI LAND COURT OF NEW ZEALAND TE WAIPOUNAMU DISTRICT A UNDER IN THE MATTER OF Section 18(1)(a) Te Ture Whenua Māori Act 1993 Arahura No 2A WIRITANGI PAPAKURA TAINUI Applicant Hearing: 11 March 2014, 23 Te Waipounamu MB 297 (23 TWP 297) (Heard at Dunedin) 1 May 2014, 25 Te Waipounamu MB 32 (25 TWP 32) (Heard at Christchurch) Appearances: Mr H Ellison, Counsel for the Applicant Judgment: 29 May 2015 RESERVED JUDGMENT OF JUDGE S F REEVES Copies to: Mr H Ellison, Ngai Tahu Maori Law Centre, PO Box 633, Dunedin, haines@ngaitahulaw.org.nz

2 30 Te Waipounamu MB 169 Introduction [1] Wiritangi Tainui seeks a declaration from the Court under s 18(1)(a) of Te Ture Whenua Māori Act 1993 (the Act) that she is the owner of a house located on Arahura No 2A block so that she may sell the house. [2] Arahura 2A is Māori freehold land located near Hokitika comprising 7967 m 2. There are 79 beneficial owners. The block is subject to an ahu whenua trust constituted in 1991 and the sole remaining trustee is James Mason Russell. 1 [3] In 1998 Mrs Tainui s late husband George Tainui purchased the house from his mother, Malta Tainui. At the time of the purchase, Malta owned interests in the block although George did not. [4] George was not an owner in the block at the time of his death in 2003, although he was a member of the hapū of the area, Kati Waewae, and was a trustee in the Malta Tainui Whānau Trust which holds an interest in the block. [5] George left a will for which probate was granted by the High Court in Greymouth on 27 May The will provided for succession to George s land interests by giving a life interest to his wife, with the remaindermen being his eight children. Mrs Tainui is the sole beneficiary in respect of the other provisions of the will which deal with George s worldly possessions as well as the residuary estate. There is no specific disposition of the house. [6] The relevant clauses of George s will are: 6. Specific Gifts I make the following specific gifts: I give to my spouse Wiritangi Papakura Tainui all my worldly possessions to do as she sees fit. I also give to her a life interest in all lands which I own on her death, to be given to my eight children equally. [ ] 8. Residuary Estate 1 72 South Island MB (72 SI ).

3 30 Te Waipounamu MB 170 I give the residue of my estate not otherwise disposed of: to my spouse Wiritangi Papakura Tainui but if she predeceases me, I give the residue of my estate to my daughter Moira Lee Geer. [7] There is no dispute by the children of George and Wiritangi or indeed the trustees of the block that Mrs Tainui is or should be the owner of the house. Additionally, she is an owner in the block in her own right. However the complex factual and legal background has complicated the issue of whether this Court has jurisdiction to make the order which is sought. [8] First, the history of ownership of the house indicates that its ownership has been considered to be separate to that of the land. [9] Second, in 1998 George entered into a bipartite deed with Housing Corporation of New Zealand (HNZ) to purchase the house. The mortgage is registered as a chattel security, and the deed expressly states that the house remains a chattel and does not become a fixture attaching to the land. [10] Third, the bipartite deed and other documents refer to a licence to occupy the land being granted by the trustees of the block. The trust order reveals the trustees have only very limited powers which do not include the ability to grant such licences or otherwise regulate occupation of the block. 2 Issues [11] There are two issues for determination: first, whether the house is a fixture or a chattel; and second, if the house is a chattel, whether the Court retains jurisdiction to make an order. The other issue that arises is whether a separate right to occupy the land exists or has been created South Island MB (72 SI ).

4 30 Te Waipounamu MB 171 Background [12] Mr Russell, the trustee of the Arahura 2A Ahu Whenua Trust, has given some history of the block. In about 1920 Taapuwai Kaika, sometimes referred to as Arahura Pa, was partitioned into sections for the building of homes. Arahura 2A was set aside for the Tainui whānau and over the years six houses have been built on the block. Mr Russell states that while all current beneficial owners in the block are Tainui whānau descendants, only four of the six houses remain in Tainui whānau ownership. History of ownership [13] This Court has previously determined ownership of the house on two separate occasions under s 30(1)(a) of the Māori Affairs Act 1953 (the 1953 Act). 3 The minutes from these hearings contain information about the background and history of the house and block and provide useful context for the issue currently before the Court. [14] In the late 1960s or early 1970s George s uncle, another George Tainui known as Dennis or Dinny, built the weatherboard house on the site of an earlier family dwelling. 4 [15] Dennis was an owner in the land and it seems likely that other owners in the land were aware of his intention to build and that he had consulted about the proposed site for the dwelling. 5 Both Dennis and his sister Malta, the mother of George Tainui, had lived in the house at some stage. [16] In 1986, a vesting order was made to transfer Dennis shares in Arahura No 2A to his half-brother, Iraia Weepu. 6 The house was not included in this transfer, but the minutes from a subsequent 1987 hearing record Dennis intention that the house would also go to Iraia. 7 [17] In 1987, Malta applied to the Court under s 30(1)(a) of the 1953 Act for a determination that she was the owner of the house. She claimed there had been an 3 Orders made in 1987 at 69 South Island MB (69 SI 234); and in 1992 at 74 South Island 146 (74 SI 146) South Island MB (69 SI 234) at South Island MB (69 SI 234) at South Island MB 348 (68 SI 348) South Island MB 234 (69 SI 234) at 235.

5 30 Te Waipounamu MB 172 understanding that the house would go to her. 8 However the Court rejected this argument relying on confirmation by Dennis that he intended the house to go to Iraia. 9 [18] The Court issued an order under s 30(1)(a) declaring that Iraia was the owner at law and in equity of the house. 10 The minutes from the 1987 hearing also refer to a practice whereby an owner must first obtain the written consent of all other owners in the block before building a house on the land. 11 [19] Malta then purchased the house from Iraia in 1989 for $30, as is recorded in a deed of sale. 12 The deed states that as a result of an order of the Māori Land Court, Iraia Weepu was the owner of the relevant house. 13 The deed also expressly states that the purchase of the house does not give any interest in the shares of the land either held currently or in the future. 14 [20] In 1991, Malta applied to the Court for a determination pursuant to s 30(1)(a) of the 1953 Act that she was the owner of the house. On 3 February 1992 it was ordered that she was the owner of the house at law and in equity. 15 [21] Malta then sold the house in 1998 to her son George for $40, This transaction is recorded in another deed of sale which includes the following clause: In accordance with the custom and usage of the multiple owners of Arahura 2A (a) buildings erected with the consent of the Kaumatu[a] on the land remain the property of the builders of such buildings, their successors and assigns and do not merge as fixtures into realty. (b) the owners of such buildings have an exclusive licence to occupy the land on which the buildings sit together with an area of land surrounding the house and outbuildings of sufficient size for the better enjoyment and use of the house and buildings as the same is enclosed by fences South Island MB 234 (69 SI 234) at South Island MB 234 (69 SI 234) at South Island MB 234 (69 SI 234) South Island MB 234 (69 SI 234) at Deed of sale, TN 2451, 9 November At cl At cls 3.3 and South Island MB 146 (74 SI 146). 16 Deed of sale, TN 2452, 4 September 1998, at cl 2.

6 30 Te Waipounamu MB 173 The history of ownership on the block strongly indicates that ownership of houses has always been considered to be separate from that of the land. Ahu whenua trust [22] In 1991 an ahu whenua trust was formed and trustees appointed to facilitate the renovation of one of the other houses on the block. 17 The hearing minutes record that the need to establish a trust and appoint trustees arose from HNZ s preference to enter agreements with trustees rather than owners in relation to papakainga housing. 18 [23] The trust was established, although very limited powers were given to the trustees. As stated in the trust order, the only power given to the trustees was to enter into a tripartite agreement with HNZ solely for the purpose of financing the renovation of one of the other homes on Arahura 2A. 19 The minutes of the hearing confirm the trustees have no power of alienation whatsoever. 20 [24] The hearing minutes also state that there have been a number of transfers of ownership of houses on Arahura No 2A. However, examination of the Court record confirms that at that time only one determination (that of Iraia in 1987) had been made in relation to houses on the block. 21 At the time of the 1991 hearing, Malta had purchased the house that is the subject of the current application but had not yet applied for a determination to recognise her ownership. 22 [25] Following the establishment of the trust, applications for determination of ownership were made for two owners: Malta, and Te Maori Raukawa Tainui. An order made in February 1992 determined that Malta was the owner of a house on Arahura No 2A in law and in equity. 23 However, the order made in April 1992 simply states that Te Maori Raukawa is the owner of a house situated on Arahura 2A South Island MB (72 SI ) South Island MB (72 SI 352) at South Island MB (72 SI ) South Island MB (72 SI 352) at South Island MB (72 SI 352) at South Island MB (72 SI 352) at South Island MB 146 (74 SI 146) South Island MB 59 (75 SI 59).

7 30 Te Waipounamu MB 174 [26] The trustee, Mr Russell, supports the transfer of ownership to Mrs Tainui. However, he has also expressed concern that, in the future, the house may be sold to someone not of the Kati Waewae hapū. He has requested as a condition of the transfer that the house be removed should a future sale be made to a person who was not a member of the hapū. Bipartite agreement [27] The Home Mortgage Company (HMC) is now the lender under the bipartite agreement entered into between George Tainui and HNZ in Mr Ellison, counsel for Mrs Tainui, confirmed the loan remains in the name of the estate, although his client makes the monthly payments. The balance as at April 2015 was $16, and the loan matures in [28] HNZ and HMC did not take part in the hearing, and Mr Ellison provided the Court with a copy of the bipartite agreement. The first matter to note is that the agreement has been registered as a chattel security in the High Court at Greymouth on 30 October 1998 under CS 122/98. [29] Recital A of the agreement records: The Borrower has obtained a licence from the Owners to enable the Borrower to erect and occupy a House on the land described in Schedule 1 of this Deed for the personal residence of the Borrower and the Borrower s family. [30] Clause 1.1 defines Owner as the owner or owners of the land described in Schedule 1. The schedule only contains a site plan and no details of the Owner, but there is no dispute that the legal owners of the land are the trustees. [31] Clause 4(1)(a) sets out the Borrower s obligations and provides: The Borrower will apply the Principal Sum only for the following purposes: (a) To build a House on the site or to buy a House and transport it to and erect it on the site or to buy a House already erected on the site, which the Owners acknowledge remains a chattel capable of disposition separately from the site; [32] Clause 7 provides that the house remains a chattel, mortgaged to the lender, and states:

8 30 Te Waipounamu MB 175 All parties to this Deed agree that as between them and for all purposes the House remains a chattel and does not become a fixture attaching to the land. [33] Clause 8 deals with the consequences of default by the borrower. In the event that default is not remedied within the prescribed time clause 8(2) of the agreement provides the lender may: (a) (b) Enter upon the Borrower s property, or any part of it, including the House, to take possession of the House, subject to sections 14 to 18 of the Credit (Repossession) Act 1997, and having taken possession, issue the postpossession notice required by sections 20 and 21 of the Act; If the agreement is not reinstated or settled within 15 days after service of the post-possession notice, require the Borrower and all other persons in possession of the House to deliver up possession of the House to the Lender, whereupon the Lender may enter the land and sever and remove the House from the site; [34] The agreement refers to the owners of the land but it does not deal explicitly with ownership of the house. The purpose of the loan was to finance and construct a personal residence for George and his family on the land, and in my interpretation it is implicit that George is the owner of the house subject to the security interest. Applicant s Submissions [35] At the hearing Mr Ellison made submissions on two main grounds to support his client s claim to ownership of the house: 1. The house is a chattel and is to be treated as part of the residue of George s estate and pass to Mrs Tainui pursuant to the terms of the will. 2. Alternatively, Mrs Tainui has an equitable entitlement to the house because: it was the family home, she had contributed to mortgage payments and rates prior to her husband s death, and had taken responsibility for these payments as well as the maintenance of the house since then. [36] Counsel raised several points in support of the submission that the house is a chattel:

9 30 Te Waipounamu MB The house sits on piles and can be removed if necessary; 2. The case law shows that if there is an express agreement reserving ownership of the dwelling to a mortgagee, by reason of contract the house can be considered a chattel; 3. The previous determinations under s 30(1)(a) of the 1953 Act have the effect of converting the house into a chattel; and 4. The ownership of the house has not followed ownership of the shares in previous transfers. [37] Counsel acknowledged that a finding by the Court that the house is a chattel would mean that it does not fall within the scope of the clause in George s will that disposes of his land interests, and s 18(1)(a) of the Act does not provide the Māori Land Court with jurisdiction to hear and determine claims in relation to chattels. [38] However, counsel submits that the Court should retain jurisdiction over the house because an owner of a house on multiply-owned Māori land has a possessory interest in the area of the land where the house is located. [39] Furthermore, the Māori Land Court should retain jurisdiction in relation to houses that are chattels because the purpose of the Act expressed in the Preamble and ss 2 and 17 of the Act is to promote and assist in the retention of Māori land in the hands of owners, and its effective use, management and development by, or on behalf of, the owners. [40] Counsel also argued that s 37 of the Act gives the Court the jurisdiction to deal with questions of importance to the Māori people, and that ownership of a house on multiply owned Māori freehold land is such a question. 25 [41] In the alternative, it was submitted that Mrs Tainui might own the house in equity. This approach is supported by the decision in Stock v Morris Wainui 2 D. 26 In this case it was said that the effect of a s 18(1)(a) order is that legal ownership of the land remains 25 Te Ture Whenua Māori Act, s 37(2)(a). 26 Stock v Morris Wainui 2D2B (2012) 41 Taitokerau MB 121 (41 TTK 121).

10 30 Te Waipounamu MB 177 unchanged but the Court may determine in equity that specified persons separately own improvements, such as the house. 27 [42] Furthermore, as the house was the family home and Mrs Tainui had lived there with her husband prior to his death, the house is relationship property. In addition, Mrs Tainui had paid the rates and mortgage and for maintenance of the property since her husband s death. Counsel also noted that Mrs Tainui is an owner in Arahura No 2A and is therefore a member of one of the preferred classes of alienee. [43] In subsequent written submissions Mr Ellison pointed the Court to clause 7.1 of the bipartite agreement with HNZ, which records the parties agreement that the house remains a chattel for all purposes and does not become a fixture attaching to the land. Statutory provisions [44] Section 18(1)(a) of the Act states: 18 General jurisdiction of Court (1) In addition to any jurisdiction specifically conferred on the Court otherwise than by this section, the Court shall have the following jurisdiction: (a) To hear and determine any claim, whether at law or in equity, to the ownership or possession of Maori freehold land, or to any right, title, estate, or interest in any such land or in the proceeds of the alienation of any such right, title, estate, or interest: [45] The Court s jurisdiction pursuant to s 18(1)(a) is declaratory in relation to existing rights of ownership at law or equity, and cannot be used to create, transfer or vest ownership rights. Discussion [46] The key issue is whether the house is a fixture or a chattel; if the house is fixture then I can make an order under s 18(1)(a) of the Act, if it is a chattel I do not have jurisdiction to make such an order. 27 At [48].

11 30 Te Waipounamu MB 178 [47] The history of the house indicates strongly that its ownership has always been considered as separate from that of the land. The previous orders of this Court give insight into how the Court has viewed the rights of past owners, but are not necessarily determinative of whether the house should currently be treated as a chattel or a fixture. [48] Anderson Te Raupo is a recent case concerning an application for determination of ownership of a house built as part of a papakainga scheme on the Te Raupo block and that was subject to a tripartite agreement with HNZ. 28 There are similar features to the present case, although the facts differ in two important respects: in Anderson the applicant was a non-owner, and the tripartite agreement did not expressly state that the house was a chattel. [49] In his decision, Judge Ambler summarised the relevant starting point for determining if a house is a fixture or a chattel: 29 Per Lockwood Buildings the starting point is that the law presumes a house that is affixed to the land to be part of the land and therefore a fixture unless the circumstances show it was to remain a chattel. There is no dispute that the house is affixed to the land as a permanent structure. The question therefore is whether the parties agreed to treat it as a chattel. [50] In the present case there is no question whether the parties have agreed to treat the house as a chattel. The bipartite agreement expressly states that the house is a chattel. [51] Mr Ellison did not dispute that the house is a chattel, but he went on to make a number of arguments why the Court should retain jurisdiction to determine ownership. [52] In relation to the point about possessory rights, I agree that Mrs Tainui is likely to have an equitable right to occupy the house. But the trustees do not currently have power to grant licences to occupy and so the legal right of Mrs Tainui or a purchaser to occupy the house must be properly addressed through an application for an occupation order, or by enhancement of the trustees powers, and not s 18(1)(a). 28 Anderson - Te Raupo (2015) 99 Taitokerau MB 206 (99 TTK 206). 29 At [52].

12 30 Te Waipounamu MB 179 [53] Counsel also submitted the Court should retain jurisdiction because of the Court s purpose and kaupapa as set out in the Preamble and ss 2 and 17, as well as s 37 of the Act. I have considerable sympathy for this view. An outcome that the Court s jurisdiction is ousted because a house on Māori land is a chattel seems an artificial and inconsistent with the purpose and kaupapa of the Act. But the law on this point is clear and unequivocal and I am unable to make a determination pursuant to s18(1)(a) if the house does not form part of the land. [54] Mr Ellison also suggested that Mrs Tainui might own the house in equity. I agree that she may have an equitable claim to a share in the house, but there was insufficient evidence placed before the Court to make an accurate assessment of the extent of Mrs Tainui s equitable interest. [55] I am also unable to determine whether Mrs Tainui can succeed to the house, as it does not fall within the definition of a beneficial interest in Māori freehold land. Section 99(2) of the Act sets out the Court s jurisdiction in relation to estates in Part 4 of the Act: 99 Interpretation [ ] (2) For the purposes of this Part of this Act, a beneficial interest in Maori freehold land shall be deemed to include the interest of the freehold owner in all buildings and other fixtures attached to the land, and all things growing on the land. [56] Succession to the house is subject to the Administration Act 1969 and the jurisdiction of the High Court. As Mrs Tainui is her husband s sole beneficiary outside of the Māori land interests, how should the house pass to her? Specifically, which clause of the will applies? [57] Even though ownership of a house on Māori land is not an interest in the land itself, it is in the nature of an interest in real estate as defined in s 2 of the Administration Act. For this reason, it would be more consistent to include this interest within the residue provision of George Tainui s will rather than the provision disposing of other worldly goods. [58] The Māori Appellate Court in Bidois Te Puna approved this approach commenting that a residue clause or gift includes all property that a will-maker has not

13 30 Te Waipounamu MB 180 otherwise specifically disposed of in the will. 30 In the present situation because the house is not specifically mentioned in the will, a common-sense reading strongly indicates that ownership of the house should pass to Mrs Tainui by virtue of the residue clause to which she is the sole beneficiary. [59] The applicant will also need to clarify the right to legally occupy the house. The trust order does not include a power to grant a licence to occupy. The trustees may be able to exercise that power under s 226(2) of the Act, but that is probably limited by the narrow purposes of the trust. [60] There is also no occupation order in place. There is a long history of this whānau occupying the house and Mrs Tainui could claim an equitable right to occupy. But in order to make absolutely sure, there should be an application for an occupation order. [61] There will also need to be a review of the ahu whenua trust as the current trustee powers are very limited and there is only one trustee remaining. The trustee has expressed concerns about sale of houses outside the Tainui whānau, and whether such houses should be removed from the block. Beneficial owners should be given the opportunity to discuss this and other issues concerning the block within a review process. I note the trust has not been previously reviewed. Conclusion [62] I conclude that the house is a chattel for the purposes of s 18(1)(a) of the Act and the Court does not have jurisdiction to determine ownership. [63] The application for an order pursuant to s 18(1)(a) of the Act is dismissed. Pronounced in open court at Christchurch at 2.00 pm on this 29th day of May S F Reeves JUDGE 30 Bidois Te Puna 154D3B2B (2008) 12 Waiariki Appellate 102 (12 AP 102) at [39].