Methods of managing Māori land: Trusts, incorporations and reservations
Trustees and their duties
Who can be a trustee?
The court takes these things into account when deciding who can be a trustee:
- their knowledge, experience, and skills
- whether the beneficiaries will accept them as a trustee.
The person can’t be appointed without agreeing to be a trustee.
Types of trustees
There are three types of trustees for Māori land trusts. When it establishes the trust the Māori Land Court must appoint one or more “responsible trustees,” and it can also appoint one or more “custodian trustees” and one or more “advisory trustees”:
- Responsible trustees are responsible for:
- carrying out the terms of the trust order
- administering and managing the trust business
- preserving the trust assets, and
- collecting and distributing the trust income.
- Custodian trustees are responsible for:
- gathering together and holding the trust assets
- investing funds
- disposing of assets, and
- signing documents as directed by the responsible trustees.
- Advisory trustees give advice to the responsible trustees.
The powers, rights and duties of the trustees are set out in the trust order by the Māori Land Court. The trustees must also comply with Te Ture Whenua Māori Act and the Trusts Act 2019.
The trustees’ key duty is to maximise the assets and minimise the liabilities of the trust to the best of their ability.
Becoming a trustee is a serious responsibility, and the Māori Land Court has excellent resources to help you. For more information go the Māori Land Court website, here (or visit māorilandcourt.govt.nz and search “Trustees and committee members”.
Trustees’ meetings and decision-making
First meeting: Election of chair, secretary and treasurer
At the first meeting of the trustees they elect a chairperson, a secretary and a treasurer. The secretary doesn’t have to be a trustee.
The chairperson is responsible for:
- organising meetings (together with the secretary)
- making sure that proper processes are followed and all matters are dealt with
- endorsing minutes of trustee meetings, and
- making sure that each trustee who wants to speak is a given a fair hearing.
The secretary is responsible for:
- recording, endorsing and distributing the meeting minutes
- keeping a current record of the trustees’ details and making sure the Māori Land Court has an up-to-date version of these details
- receiving and sending the trust’s correspondences, and
- keeping information in order and readily accessible for the trustees and beneficiaries.
The treasurer is responsible for keeping detailed records of the trust’s financial transactions. They should make sure that:
- the signatories to the trust’s bank account are in order
- financial information is accessible so that it can be used in the annual report
- the trustees don’t exceed their financial limits
- all records of the trust’s spending are in order
- all trust funds are accounted for
- the financial reports are presented at each meeting, and
- all information is kept in order and made available to trustees and beneficiaries.
How often do trustees have to meet?
This will depend on the business needs of the trust. However, the trustees should expect to have to meet frequently when the trust is being formed.
Notice of trustees’ meetings
Trustees should be given adequate notice of any meeting to allow them to make proper travel and business arrangements. Two to three weeks’ notice is advisable, or whatever notice period the trust order specifies.
There should be a written notice of meeting that states the purpose and agenda items for the meeting.
How do trustees make decisions?
A certain number (a quorum) of trustees must be present to make any decision. Where there are three or more responsible trustees, a majority of the trustees is enough (unless the trust order sets a different quorum requirement). Once the quorum is established each attending trustee can vote. Absent trustees can vote by proxy (that is, appoint someone to vote on their behalf) if the trust order allows this. The trust order may also specify that the chairperson will have the deciding vote if voting on an issue is evenly split.
Note: Each office of the Māori Land Court has an advisory team that can provide a free, two-hour education session for trustees about their obligations.
Can trustees change the Trust Order?
No, only the court can change the Trust Order, with the support of the beneficiaries. A meeting of the beneficiaries should be held and, if the meeting agrees with the proposed changes, an application to change the Trust Order can be lodged with the court. For information about the application process see: “Applying to the Māori Land Court for an order”.
Can trustees be held responsible for making wrong decisions?
If the beneficiaries believe the trustees have made a wrong decision, they can lodge an application with the Māori Land Court or the High Court alleging that the trustee’s improper or negligent acts caused them loss. If the court finds the trustees were at fault, they may be required to pay for any losses they caused.
A trustee who says in writing that they don’t agree with a decision won’t be held personally liable if the decision ends up causing a loss.
Can trustees be removed?
The court can remove trustees if they have lost the capacity to perform the role.
The court can also remove trustees if removing them would be best for the running of the trust, and if one or more of the following things is true:
- there have been repeated failures or refusals to act as a trustee, or
- the trustee has become an undischarged bankrupt, or
- the trustee’s behaviour or circumstances are no longer suitable.
Getting information about the trustees
How do I find out who the trustees are?
To find out who the trustees of any trust except a whānau trust are you can search the name of the block on Pātaka Whenua on māorilandcourt.govt.nz/en/the-court-record/our-record/. For all kinds of trusts, the management structure details on that website will list the trustees’ names. Alternatively, you can contact the Māori Land Court directly to ask for that information.
How do I find out what the trustees have been doing?
Trustees should hold regular meetings of owners where they should report on trust activities. The trust order may say how often this needs to be.
However, if you want information you can also write to the trust asking for an update.
Note: When you become an owner of land under a Māori land trust, it’s a good idea to write to the trustees to tell them your current address details.
Beneficiaries of Māori land trusts
How can I find out who the other beneficiaries are?
The names of other landowners can be found online or by contacting the court. To find out who the other beneficiaries are, you can search the name of the block through māorilandcourt.govt.nz/en/the-court-record/our-record/, or you can visit any office of the court and ask for a copy of the beneficiaries’ details. For whānau trusts, there may not be a court record, but they are usually small enough that people know each other.
Trustees must also maintain a list of beneficiaries’ contact details.
How often do trustees have to hold meetings?
Usually the trust order will set out how often trustees have to hold meetings. Meetings of beneficiaries can also be called to discuss the election of trustees, variations to the trust order, the trust’s accounts, investments, major purchases or mortgages, and ending the trust.
In addition, trustees must keep beneficiaries informed about what is happening with the trust.
How will I know if a beneficiaries meeting has been called?
The trust order may say how beneficiaries have to be notified about meetings. It’s advisable for trustees to give beneficiaries two to three weeks’ notice of the meeting, in a way that will reach them.
Is a quorum required for the meeting?
The trust order may set a quorum for beneficiary meetings – that is, a minimum number of beneficiaries attending in order for the meeting’s decisions to be valid. If the trust order doesn’t specify a quorum, the Māori Land Court will decide whether certain requirements for a quorum were met. The court may consider, among other things, whether the owners had sufficient notice and time to discuss the issues, how much support there was for those matters, and any objections made to them.
What happens if I can’t attend the beneficiaries meeting?
In that case you can appoint someone to vote on your behalf (called a “proxy vote”), if the trust order allows this. The other person must be at least 20 years old, and you must give them written authorisation to vote on your behalf.
If the trust order doesn’t allow proxy voting, you can give a person a power of attorney so that they can vote on your behalf (see: “Decision making and powers of attorney”).
When will I get paid from the trust?
If there is money left over after paying for the trust accounts and expenses, the surplus may in some cases be distributed to the beneficiaries.
Note: Income to owners is paid at the discretion of the trustees by way of dividends, unless the trust order states otherwise. The trust order may include a “community purposes” clause, which will allow for distribution of trust income for purposes such as maintenance of marae, scholarships, and kaumātua grants for older owners.
Cancelling a Māori land trust or removing your shares
How is a trust brought to an end?
A court order is needed to end a trust. To cancel a Māori land trust a majority of the landowners must agree that the trust is no longer required. This can be agreed at a meeting of the owners, or all the people concerned can give their written consent. An application must then be made to the Māori Land Court.
Can I take my shares out of a trust?
If you are a beneficiary of one of the kinds of trusts where you hold shares, then you may be able to sell or gift your shares to someone else.
If you want to withdraw from a whānau trust, you can apply for a partial termination of the trust, to take your shares out.