Q&A: Mandate for Appointing a Commissioner 8 September 2022
In order to properly answer questions regarding legal mandate to appoint a Commissioner, we first need to give some context.
Compliance issues and risks being faced by the Trust Board, resulted in a special meeting for the Board of Trustees of Ngā Maunga Whakahii o Kaipara Development Trust. This meeting was held on 3 May 2022 and the following recommendations were made:
That the board supports seeking the guidance and assistance of a commissioner to assist the Ngā Maunga Whakahii o Kaipara Development Trust Board toward transformational change. This intention includes a strategic organisational reset of the following:
1. Constitutional Trust Deed Reform.
2. The Governance Re-organisation. and
3. Operational Re-shape.
That a staged approach toward transformational change be adapted including the restructure of the Ngā Maunga Whakahii o Kaipara Development Trust Board subsidiaries.
The Board agreed to the following resolution unanimously.
Resolution of the Special Meeting
That as a Board we support Recommendation 1 and 2.
This motion was moved by Tracy Davis and unanimously seconded by the rest of the Board.
Decision Date: 3 May 2022
Mover: Tracy Davis
In order for the resolutions to be executed the following authorities to do so have been considered.
Rule of Law relating to Trusts:
Trustees must not delegate their responsibilities unless the trust order clearly allows this, or unless delegation is permitted by law. The trustees may, however, employ professionals to assist the trust.
The Board of Trustees in their sole discretion, unanimously agreed to the recommendations and resolution from the special meeting of May 2022. The Trust Deed enables us to appoint a Manahautū/CE (Tumuaki Kaiarahi) and we delegated her to exercise the powers and discretions for specific tasks.
Our Trust Deed gives us sole discretion to employ professionals to assist us, as this is part of enabling the Board to control and supervise the business of the Trust. The Trusts Act 2019 gives us the ability to appoint others and should it be required, delegate authority under circumstances where necessary. A Terms of Reference has been drafted for the Commissioner and is ready for the Trustees to consider and add their input to.
It is important to recognise that the power is within the Trustees to resist any intervention from the Crown or the Courts by following this process under the draft Terms of Reference.
This is an Iwi lead process that mitigates the risks that have befallen Ngā Maunga Whakahihi o Kaipara Development Trust over the past number of years. To maintain the mana motuhake of our Iwi and governors, these first steps of transformational change must take place in order to mitigate our non-compliance and risks due to the disunity within the Trust Board and so that we can learn and grow in the process.
THE TRUST DEED
Clause 6. APPOINTMENT, POWERS AND MEETINGS OF TRUSTEES
6.2 Trustees to control Trust affairs subject to any requirements imposed by this Trust Deed, any Deed of Settlement, and any Settlement Act, the Trustees shall control and supervise the business and the affairs of the Development Trust in such a manner as they, in their sole discretion, see fit.
Clause 7. TUMUAKI KAIARAHI AND OTHER EMPLOYEES
7.2 Delegations to Tumuaki Kaiarahi
The Tumuaki Kaiarahi shall be responsible for the employment of all other employees of the Development Trust and shall exercise such other powers and discretions as are delegated to him or her by the Trustees of the Development Trust from time to time.
The CE has exercised the powers and discretions delegated to her by the Trustees to execute the resolution.
THE TRUSTS ACT 2019
S67 (1) of the Trusts Act 2019 provides the Trustee’s the power to appoint others to exercise certain powers and functions. S67(2) provides a limitation to the appointment concerning assets, payments, fees power of appointment and other Trustee functions that remain with the Trustees. S67(3)(a) provides the appointed person does not take on the duties of the trustee under this Act but must act in accordance with the terms of the appointment and with any directions of the trustee.
S68 (1) (a) enables the Trustees to keep under review the arrangements under which the appointee acts and how those arrangements are being put into effect.
DELEGATION UNDER S70 TRUSTS ACT 2019
Delegation is only allowed:
where specifically permitted by the Trust Deed; or
where specifically permitted by statute; and
is for practicable purposes unavoidable; and
is in the usual course of business; and
concerns administrative tasks only; and
the particular agent is employed in the ordinary scope of his or her business. The New Zealand Court of Appeal has considered whether an independent trustee will be bound by an action which, although in line with past practice, was not one the independent trustee had been consulted about.
The Court held that while there was an empowering clause which authorised the trustee to appoint agents to implement decisions made by them, it did not empower the trustee to delegate to an agent a decision-making authority which was reserved to the trustees.
S70(2) states; the power to delegate may be exercised only in the circumstances where the delegation is necessary (or the trustee expects that it may from time to time become necessary) because of the trustee’s—
(a) absence from New Zealand; or
(b) temporary inability to be contacted; or
(c) temporary physical incapability; or
(d) temporary lack of capacity to perform the functions of a trustee.
The time frame is
the duration of the section 70(2) circumstances; and
NMWK’S GOVERNANCE MANUAL
NMWK’s Governance Manual comprises the governance policies and management practices relating to the entities of Ngā Maunga Whakahii o Kaipara and subsidiary Trusts. Within these adopted policies there is a mechanism provided for Delegation of authority.
Clause 10: Provides the procedure in which the delegation is to be carried out.