Bid to uphold settlement blunder rejected
An effort by a Taranaki iwi to uphold a Treaty settlement blunder that would have allowed it to buy properties from the Crown at 20 per cent less than market price has been rejected by the High Court.
In September, Te Kotahitanga o Te A¯ tiawa Trust, the post-settlement governance entity for Te A¯ tiawa, sought to enforce the error, arguing the terms were unambiguous and now ‘‘entrenched in statute’’.
But the Crown argued that properly interpreted the 20 per cent adjustment in the deed applied to only a single property – the land on which the New Plymouth Courthouse is situated.
The Crown calculated it could stand to lose nearly $10 million if that reduction was applied to all properties Te A¯ tiawa had an option to buy as part of their settlement.
In the High Court decision it was stated that the error, written into the settlement deed by a Crown agent, went undiscovered for four years after the deed was signed.
Both parties agreed the discount, with the exception of the courthouse, did not feature in the settlement negotiations.
The Crown counterclaimed against the iwi position that it was now entitled to the discount and sought an amendment of the deed, which was granted by Justice Karen Clark.
Details of the case were revealed in the judgment, made this month. Te A¯ tiawa has been approached for comment.
In 2014, Te A¯ tiawa, Taranaki’s largest iwi, signed its Treaty of Waitangi settlement deal, which included an $87 million cash payment along with cultural and commercial redress.
Under the terms of the deed, the trust could elect to purchase certain properties at market value, less 20 per cent.
The schedule of properties to which the reduction is said to apply listed 52 Ministry of Justice properties – one being the New Plymouth Courthouse, and 51 landbank properties. Another property was the New Plymouth Police Station.
In early 2017, the trust gave notice of its interest in purchasing the land beneath the courthouse and police station, and then a further 16 properties later in the year.
Elections to purchase six of those properties were made in mid-2018.
‘‘At no point when notices of interest were given, or when elections to purchase were made, was a 20 per cent reduction mentioned or sought,’’ the judgment stated.
Meanwhile, in June 2018, Land Information New Zealand advised the Office of Treaty Settlements (OTS), the agency responsible for the landbank properties, of a possible error in one of the schedules to the settlement deed.
From August 2018, Te A¯ tiawa began to claim a 20 per cent reduction on the landbank properties, the judgement stated.
The following month, the Ministry wrote to the trust to explain how the error had occurred.
It described a period of ‘‘intense activity’’ in the weeks prior to the initialling the deed of settlement as a number of issues were ‘‘brought to a resolution’’.
‘‘New draft deeds had been provided pursuant to drafting instructions and in its final reviews of the settlement deed, OTS had not picked up the discrepancy in the labelling of the landbank properties.’’
OTS received the final draft of the deed only hours before the parties initialled, it said.
The letter further advised that the 20 per cent reduction could not be applied to the sale of several landbank properties due to settle.
‘‘There had been no appropriation for such loss on sale and if the Crown took that step it would be in breach of the Public Finance Act 1989.’’
The Crown said it had in all times acted in good faith, the decision stated.
However, Te A¯ tiawa was put in a very difficult position, it said.
‘‘Confronted with an entitlement on the face of the settlement deed, the trustees were obligated to extract the entitlement.’’
Justice Clark granted a rectification of the deed, stating it reflected the parties intentions at settlement.
‘‘Te A¯ tiawa has suffered no loss,’’ she said. ‘‘I also acknowledge Te Atiawa’s frustration at getting to the point of execution after years of negotiation.’’