Compulsory review of a Whānau Trust by the Māori Land Court: the importance of Trustees knowing the terms of the Trust order…

The trustees of a Whānau Trust were the children of the original Māori land owner who had since passed away.  The Whānau Trust had been established by a Trust Order from the Māori Land Court. 

One of the trustees was looking through the Trust Order to check something and noticed a clause which said that in the tenth year after the establishment of the Whānau Trust the trustees had to apply to the Māori Land Court for a review of the Trust. 

The trustee realised that it was more than half way through the tenth year, and the trustees were not aware of what they had to do to have the Whānau Trust reviewed. 

Review of a Whānau Trust

Te Ture Whenua Māori Act 1993 sets out that trustees (or beneficiaries) of a Māori land trust established under the Act can apply to the Māori Land Court to review the terms, operations, or other aspects of that trust. 

Compulsory Review

Many Orders establishing a Whānau Trust include a clause that the trustees must apply to the Court for review at a set time. Trustees must be aware of this and plan ahead for the review.

The Process

To make the application, trustees need to fill out an application form for the Māori Land Court, including the relevant supporting documentation, and pay the application fee.  It is important to consult with a professional with expertise in Māori land matters, so they can assist to make sure the application is made correctly.

The Court’s Powers

When carrying out a review, the Court may:

• Confirm no changes are needed;
• Vary the Trust Order as required (including removing trustees who are not doing their job properly); or
• Terminate the Trust. In doing so the Court will look at things like the day-to-day management of the Trust, the financial management of the Trust, the documentation of the Trust,  and whether the terms of the Trust Order are still suitable.

Trustee Responsibilities

As part of carrying out their role, trustees must be familiar with the terms of the Trust Order, and should be aware of key dates, and responsibilities that they have to perform from time to time.  Although they may not have a lot to do to keep the Trust operating, trustees should ensure that they meet regularly – at least once a year – to stay on top of managing the Trust, and keep a written record of its activities.

If the trustees in this case had failed to apply for a Trust review in the tenth year, they would have been in breach of their trustee duties.  This is very serious, and could have resulted in them being removed from office if a beneficiary or other interested party had made an application to the Court.

This is a timely reminder for trustees of Whānau Trusts to review the Trust Order and make sure they are familiar with its terms.  Trustees who have overlooked a compulsory review, or who need assistance with filing a review application, should seek advice from a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.