RUDD v MUAŪPOKO TRIBAL AUTHORITY [2015] NZHC 927

RUDD v MUAŪPOKO TRIBAL AUTHORITY [2015] NZHC 927 [5 May 2015]IN THE HIGH COURT OF NEW ZEALANDPALMERSTON NORTH REGISTRYCIV-2011-454-000749[2015] NZHC 927UNDER the Incorporated Societies Act 1908BETWEEN CHARLES RUDDPlaintiffAND MUAŪPOKO TRIBAL AUTHORITYDefendantHearing: 29 April 2015Counsel: K L Ertel and R N Zwaan for PlaintiffP J Radich QC and M M E Wikaira for DefendantJudgment: 5 May 2015JUDGMENT OF COLLINS JIntroduction[1] Mr Rudd is a member of the Muaūpoko Tribal Authority (the Authority). Hehas sought declarations under s 21(3A) of the Incorporated Societies Act 1908 (the Act).[2] The essence of Mr Rudd's claim is that rules of the Authority which were registered with the Registrar of Incorporated Societies in 2011 (the 2011 Rules) were not created validly and ought to be revoked.[3] I am dismissing Mr Rudd's claim because he has failed to establish that the2011 Rules were not created validly. Even if Mr Rudd had succeeded in this part of his claim, I would not have exercised my discretion under s 21(3A) of the Act to revoke the 2011 Rules because of the significant prejudice the Authority would incur if I granted the relief sought by Mr Rudd.Part IBackground[4] Today the headquarters of the Muaūpoko iwi is in Taitoko (Levin). For Treaty of Waitangi (Treaty) settlement purposes, the Muaūpoko area of interest traverses the land from Pukerua Bay in the south to the Manawatū River in the north,bordered by the Tasman Sea (including Kāpiti Island) to the west and the Tararua Ranges to the east. Members of the Muaūpoko iwi are generally those who affiliate with seven hapū1 although for Treaty claim purposes, descendants of some otherhapū2 fall within the Muaūpoko mandate.[5] It is not possible to determine the exact population of Muaūpoko. Official figures suggest the Muaūpoko iwi have approximately 3,000 members, but that number is likely to understate the real number of Muaūpoko people.[6] In 2005 the Authority was incorporated as a society under the Act.[7] When it was established the Authority had three traditional charitable objectives, namely:(1) relief of poverty;(2) to advance education; and(3) to develop a community or communities.[8] The first rules of the Authority (the 2005 Rules) provided for the creation ofMuaūpoko Kaunihera Kaumātua me nga Kuia (council of elders) comprising at least one person from each of the seven hapū referred to in footnote 1 of this judgment.The 2005 Rules also provided for the appointment of a Board and prescribed the process for the appointment and removal of Board members.1 Ngāti Te Ao, Ngārue, Ngāti Hine, Ngāti Pāriri, Ngāti Tamarangi, Ngāti Whanokirangi andPunahau.2 Ngāti Tairatu, Ngāti Kuratuauru, Ngāti Rongopatahi, Ngāti Te Riunga, Ngāti Puri, Ngāti Akahu and Ngāti Rangi.[9] Clause 9 of the 2005 Rules required the Authority to establish and oversee the operations of a company to manage the allocation of fisheries assets from the Treaty of Waitangi Fisheries Commission.[10] Clause 13 of the 2005 Rules provided for annual general meetings and special general meetings of the Authority. Under cl 13.2 of the 2005 Rules, an annual general meeting required the presence of 25 members of the Muaūpoko iwiwho were of voting age.[11] The method of voting at an annual general meeting was described in cl 13.4 of the 2005 Rules. Generally, voting was to be by voice, show of hands or by poll onthe "demand by any 5 or more persons present" at an annual general meeting.[12] The Chairman had authority to control an annual general meeting and supervise the voting process. Clause 13.5 for the 2005 Rules stated:A declaration by the Chairperson of any meeting to the effect that any resolution submitted at such meeting has been carried or been carried by a particular majority, or lost, and an entry to that effect in the Minute book of the Authority shall be conclusive evidence of the fact without proof of the number of votes recorded in favour of or against the resolution.[13] Pursuant to cl 21 of the 2005 Rules, the provisions of the 2005 Rules could be changed by a resolution passed by a 75 per cent majority of the votes cast at an annual general meeting. However, no changes could be made to the rules which detracted from the charitable purposes of the Authority. Clause 21 of the 2005 Rules provided:ALTERATION OF CONSTITUTIONSubject to the provisions of the Incorporated Societies Act 1908, the provisions of this Constitution may be altered, amended[,] added to or rescinded by a resolution passed by a seventy five percent majority of the votes cast at an Annual General Meeting or Special General Meeting provided that no alteration, amendment or rescission shall be made that in any way detracts from the charitable purposes of the Authority. Any alteration, amendment addition or rescission of the Constitution shall be registered with the Registrar of Incorporated Societies.[14] The Authority adopted a new set of rules at an annual general meeting held on 12 December 2009. Those rules were filed with the Registrar of IncorporatedSocieties on 20 July 2010 (the 2010 Rules). It transpired however that the application to register the 2010 Rules had to be withdrawn when issues about the process followed in adopting those rules emerged.[15] After the Authority withdrew its application to register the 2010 Rules it convened consultation hui to explain changes that were intended to be made to the 2005 Rules. Those hui were held on 29 August 2010, 31 October 2010 and 28 November 2010.[16] The key purpose of the new rules was to ensure the Authority satisfied the requirements of the Maori Fisheries Act 2004 so as to enable it to receive fisheries settlement assets from Te Ohu Kaimoana. The new rules also enabled the Authority to become an Iwi Aquaculture Organisation under the Maori Commercial Aquaculture Claims Settlement Act 2004.[17] The Board put in place arrangements for the 2011 annual general meeting to be held on 19 June 2011 at Kohuturoa Marae, Hokio Beach Road, Levin. Notices of the annual general meeting were published in the Dominion Post and the Levin Chronicle newspapers. Those notices advised of the intention to adopt new rules for the Authority at the annual general meeting and that copies of the new rules wouldbe available at the Authority's office from 23 May 2011.The 2011 annual general meeting[18] Sunday 19 June 2011 was a particularly wet day. An unexpectedly large crowd crammed into the whare tipuna (Pariri). Not all who were at the Kohuturoa Marae were able to enter Pariri. Mr Stone, for example, who had driven from Auckland, decided to remain in his car. He believes there were between 6 to 12 people unable to enter Pariri during the annual general meeting.[19] The Chairperson of the Authority at the time of the 2011 annual general meeting was Mr Mahanga Williams. The Chief Executive of the Authority arranged for an attendance register to be compiled. The minutes for the meeting were taken by Ms Maia Putaka-Williams. I have not seen the original attendance records or Ms Putaka-Williams' contemporaneous notes. I have, however, the benefit of thetyped minutes based on the attendance records and the notes made by Ms Maia Putaka-Williams. Those minutes record eight members of the Board of the Authorityand a further 65 registered members of Muaūpoko iwi were present. Four others, including the Authority's accountant and Ms Thornton, a legal advisor who was there to represent two of the attendees, were also at the meeting.[20] The annual general meeting followed a routine agenda. It commenced with a karakia, followed by the recording of apologies and the adoption of the minutes ofthe previous annual general meetings, the Chairman's report, the Chief Executive'sreport and a subsidiary company report. All of these reports are recorded as having been the subject of motions that were moved, seconded and carried.[21] Part way through the meeting the financial report was discussed, following which a motion was put that the financial report be accepted. The minutes record 33 people voted in favour of the motion and 17 against.[22] Mr Rudd, Ms Thornton and Ms Taueki are adamant that particular vote was tied. They believe that a hand count was taken and that 20 attendees voted for the motion and 20 voted against it. On the other hand, Mr Mahanga Williams, Ms Maia Putaka-Williams, Ms Louana Williams and Mr Sword, who at the time was a legal advisor to the Authority, are equally adamant the minutes accurately record the votes for and against accepting the financial report.[23] I do not have to resolve this particular factual dispute. Suffice to say the division of views about the voting in relation to the financial report was a portent for the dispute over the voting in relation to the motion that the new rules be adopted.[24] The motion that the new rules be adopted was moved by Mr Rautahi and seconded by Ms Gamble. The fact Ms Gamble seconded the motion caused some degree of commotion because she was widely believed to be opposed to the new rules. Ms Gamble explained to me that although she seconded the motion, she didnot vote for it because she was confused. This aspect of Ms Gamble's evidence isaccepted by Mr Mahanga Williams on behalf of the defendant.33 Evidence in Chief of M Williams at [16].[25] From this point there is a divergence of recollections as to what transpired.Some of the plaintiff's witnesses believe Mr Mahanga Williams called for a voicevote. This seems unlikely because Mr Mahanga Williams knew the motion was contentious and required a 75 per cent majority to be carried.[26] I do accept the plaintiff's evidence that by this time there were some peoplecoming and going from Pariri and that it is not possible to know the exact number in Pariri at the time Mr Mahanga Williams called for a show of hands in support of themotion. Mr Rudd believes there were " not 60 people in [the] hui by the time "the vote on the new rules took place.4[27] Ms Taueki believes the number of votes in relation to the new rules motion was close to the 40 she says voted in relation to the financial report motion. Ms Thornton, who was representing Ms Taueki and Mr William Taueki, is adamant that it was not possible to determine who supported the motion.[28] The main reason for the apparent confusion was that when Mr Mahanga Williams called for a hand vote he stopped counting the number in favour when he was satisfied that 50 people supported the motion. At this point he stopped counting because of the commotion that had developed with opponents of the motion expressing their disappointment at Ms Gamble for seconding the motion and how the votes were tallying.[29] Rather than continue to count the number in support of the motion, Mr Mahanga Williams decided that it would be simpler to count the votes in opposition. This he did. He concluded there were 12 opposed to the motion. Mr Mahanga Williams told me that he conferred with the Chief Executive over the voting. He then informed the meeting that the motion was carried. Mr Mahanga Williams said that just before he decided the motion had been carried one of the opponents of the motion, Mr Philip Taueki, stood up and said in a disgruntled manner that the proponents of the motion had "the numbers". Mr Mahanga Williamswas not challenged on this point in his evidence. Mr Philip Taueki did not give evidence and the statement attributed to him is not admissible as evidence of the4 Evidence in Chief of C Rudd at [5].truth of the contents of that statement.5 It is, however, admissible as evidence of MrMahanga Williams' belief as to how the vote had concluded. The way Mr Mahanga Williams understood Mr Philip Taueki's reaction confirmed for Mr Mahanga Williams that it was "absolutely clear that the required 75% majority had beenachieved ".6Key subsequent events[30] The following day Mr Sword arranged for three of the Board members to certify the new rules. He then arranged for the new rules to be filed with the Registrar of Incorporated Societies. In doing so Mr Sword certified the new rules had been made in accordance with the 2005 Rules. Mr Sword explained to me that he was familiar with cl 13.5 of the 2005 Rules. He explained that he relied on the declaration of the Chairman and the record and the minutes of the vote when certifying that the new rules had been properly adopted at the annual general meeting.[31] Following the 2011 annual general meeting the Authority applied to becomethe Mandated Iwi Organisation for Muaūpoko under the Maori Fisheries Act 2004 and an Iwi Aquaculture Organisation under the Maori Commercial Aquaculture Claims Settlement Act 2004.[32] Further comparatively minor changes were required to be made to the 2011 Rules in order for the Authority to become a Mandated Iwi Organisation and an Iwi Aquaculture Organisation. Those changes were voted on by postal ballot in September and October 2012. Of those who voted, 87.85 per cent supported the resolutions. As a consequence, in December 2012 the Authority became a Mandated Iwi Organisation and an Iwi Aquaculture Organisation. Muaūpoko fisheries assets were conveyed to Muaūpoko Trading Company Ltd, a wholly-owned subsidiary of the Authority.5 See definition of "hearsay statement" in Evidence Act 2006, s 4.6 Evidence in Chief of M Williams at [17].[33] In addition, the Authority became the Mandated Authority for Treaty ofWaitangi claims (the Mandated Authority) on behalf of Muaūpoko. The Authoritybecame the Mandated Authority after a postal vote was taken in 2012.[34] I appreciate there are some Muaūpoko who do not support or recognise theAuthority's mandate to represent all Muaūpoko in settling Treaty claims. I cannotresolve that dispute in this proceeding.Why the new rules were properly adopted[35] It is unfortunate Mr Mahanga Williams did not complete the task of counting the total number of votes in support of the resolution to adopt the 2011 Rules. There are, however, two reasons why I am satisfied the 2011 Rules were properly adopted.[36] First, Mr Mahanga Williams had a sound basis for believing 75 per cent of those who were voting supported the resolution. He counted 50 people in favour and 12 against. While this barely passed the 75 per cent threshold, Mr Mahanga Williams believed that there were more than 50 people voting who supported the motion. He reached his belief that more than 75 per cent of those voting supported the motion after he conferred with the Chief Executive and after he had one of the proponents express annoyance about how the votes had tallied.[37] In this case, the onus was on Mr Rudd and his supporters to satisfy me on the balance of probabilities that 75 per cent of those present at the annual general meeting did not support the motion to adopt the 2011 Rules. Mr Rudd has not discharged this onus of proof. On the contrary, had I been required to do so I would have found Mr Mahanga Williams satisfied me that at least 75 per cent of those voting at the annual general meeting probably supported the motion that Mr Mahanga Williams declared had been carried.[38] The second reason I have reached this conclusion lies in the language of cl 13.5 of the 2005 Rules. Mr Mahanga Williams' declaration, and the entry of that declaration in the minutes, is "conclusive evidence" that the resolution in favour ofthe 2011 Rules was passed.Part II[39] Even if Mr Rudd and his supporters had succeeded in relation to the issues I have dealt with in Part I of this judgment, he would have faced an insurmountable challenge to persuade me to exercise my discretion under s 21(3A) of the Act.[40] Section 21 of the Act explains the requirements for alterations to rules of incorporated societies. Alterations must be in writing, signed by at least three members of the society and delivered to the Registrar of Incorporated Societies accompanied by a prescribed certificate.7 Under s 21(3) of the Act, the Registrar is to register the alteration to the rules: if satisfied that the alteration has been duly made, and that the rules as so altered conform in all respects to [the] Act Such registration shall beconclusive evidence that all conditions precedent to the making of the alteration, or to the registration thereof, have been duly fulfilled.[41] Section 21(3A) of the Act provides:Notwithstanding anything in subsection (3) of this section, the High Court, on an application made to it by any member of the society, may in its discretion, if it is satisfied that any such condition as aforesaid has not been duly fulfilled, declare the alteration to be void in whole or in part, and order that the registration be cancelled in whole or in part, and may by the order give such directions and make such provisions as seem just in the circumstances of the case. On the delivery to the Registrar of a sealed copy of the Court's order he shall forthwith amend the register accordingly.[42] The effect of s 21(3A) of the Act is that I may direct the Registrar of Incorporated Societies to set aside the 2011 Rules if I am satisfied they were not properly made.[43] In view of my conclusion that the new rules were properly made, I need only briefly deal with the issues relating to the exercise of my discretion under s 21(3A) of the Act.[44] Two important factors which may lead a Court to exercise its discretion to intervene in the registration of new rules under the Act are:87 Incorporated Societies Act 1908, s 21(2).8 Pap v Hungarian Society (Auckland) Inc HC Auckland M1616/93, 13 December 1993 and Ngati Kikopiri Marae Maori Komiti Incorporated Society v Te Runanga O Raukawa Inc HC(1) whether the new rules are "material and significant" or have a "far-reaching effect"; and(2) whether the society can point to any disadvantage or prejudice if the new rules are remitted back to the society members for further consideration.[45] In the present case, the 2011 Rules do not impact upon the charitable purposes of the Authority.[46] The 2011 Rules complement and expand upon the "fishing" provisions in cl 9of the 2005 Rules.[47] Since adopting the 2011 Rules, the Authority has undertaken significant work in receiving and distributing benefits from fisheries assets.[48] Even if I had decided the 2011 Rules had not been properly created I would have concluded that the developments that have occurred since the adoption of the 2011 Rules were so significant that the Authority should not be forced to return to the position it was in prior to the annual general meeting held on 19 June 2011. The Authority would have been unfairly prejudiced9 by me issuing the orders sought by Mr Rudd.Costs[49] Ms Ertel, counsel for the plaintiff, advised me that the plaintiff has applied for legal aid. At the time of the hearing that application had not been determined. Iwill reserve the question of costs until the plaintiff's legal aid application isdetermined.Conclusion[50] Mr Rudd has failed to establish that the 2011 Rules of the Authority were not validly created.Palmerston North CIV-2005-454-409, 22 August 2006.9 See Lower Hutt City Council v Bank [1974] 1 NZLR 545 (CA).[51] The application for declarations under s 21(3A) of the Act is dismissed.[52] Costs are reserved.________________________D B Collins JSolicitors:Kathy Ertel & Co, Wellington for PlaintiffKahui Legal, Wellington for Defendant