The trustees of a Māori land block agreed with one of the beneficial owners of the block that he could build a house on part of the Trust’s block of land.  The beneficial owner went ahead and did that, and lived there for most of his life. 

Many years later, it transpired that the Trust didn’t actually own that block of land. They thought they owned it, and were even paying rates for it, but the trustees had not kept proper records of this after an amalgamation occurred with another block. They had also not kept proper records of a grazing arrangement that was in place.

The Trust therefore had no right to let anyone build on the land in the first place, and by doing so was stopping the rightful owners from using it.

The whanau of the beneficial owner who had built on the land brought proceedings against the Trust for the wrongly placed dwelling.  The Court found the Trust liable for losses and costs including:

  • The costs of moving the dwelling that had been built on the land;
  • Trespass on the land; and
  • Payment of compensation for alternative living arrangements for the rightful owner

Key lessons for trustees

This case is a reminder to all trustees of what can result from a lack of trustee involvement in the running of a Māori land trust, and poor record keeping. 

The Court spelt out some key lessons that can be learnt from this case for trustees:

  1. Know where trust lands are located.  If there have been partition orders or other orders such as amalgamations that change who owns the blocks, it is vital to keep on top of this;
  2. Trusts must keep proper records and accounts.  In this instance the Trustees had failed to keep records and had breached both their trust deed and the agreement they had reached with the beneficial owner who built on the block;
  3. Trusts must ensure funds are paid for proper purposes.  By paying rates on a block they did not own, the Trust was not making proper use of trust funds held on behalf of the beneficiaries;
  4. Trusts should not enter into legal arrangements lightly.  The Trust in this case signed an agreement and licence with the beneficial owner without first checking they had such authority and ownership to do so.


Ultimately, as a result of the failure to record the grazing agreement, ensure ownership of the land, and the trustees failing to remain actively aware of trust business, the Trust must now pay significant sums of money to both the beneficial owner and rightful owner.  This could lead to further claims of losses by other beneficial owners.

It is important to take legal advice about your rights and obligations, and in particular take professional advice before you enter into legal arrangements.

Claire Tyler