An ‘important’ legal case over the compulsory return of state-owned forest land to Māori will get its day in the Supreme Court – unless the Government intervenes again legislatively to stop a potential defeat for the Crown.
The case will test how much the general, negative effects of colonisation in a district can be considered by the Waitangi Tribunal in deciding to return forest land to Māori.
At its heart are blocks of land near Gisborne which claimants say were acquired in breach of the Treaty of Waitangi as late as 1961. The action has reverberated through various levels of the justice system since 1992.
It reaches back to the historic 1987 Court of Appeal judgment in the Treaty of Waitangi ‘lands’ case and another in 1989 covering ‘forests’.
The current case could have broad implications for land returns and financial compensation.
At issue are legal provisions covering the basis for return of land and forests that were transferred in the late 1980s to the newly formed State-Owned Enterprises and Crown forests by the Fourth Labour Government.
(The Treaty of Waitangi (State Enterprises) Act 1988 and the Crown Forests Assets Act 1989 followed what the Court of Appeal back then labelled a “momentous” agreement between the Crown and NZ Māori Council.)
Those legal solutions allowed the Crown to sell forestry rights and licences of state land while preserving Māori rights for possible return of the land if Treaty breaches were proved.
The Waitangi Tribunal cannot order the return of privately owned land but it can make compulsory orders over state-owned forestry lands.
The Poverty Bay case has now made its way to the nation’s top court.
A three-judge bench of the Supreme Court has agreed to hear a challenge to a Court of Appeal decision the claimants say narrowed the scope for their ‘resumption’ of ownership of the forestry land, and the compensation they should be paid.
One Court of Appeal judge had anticipated in that court’s judgment that it was likely their decision would be appealed to the Supreme Court irrespective of the result. “It is an issue of importance not only for the current parties but also more broadly.”
Crown lawyers for the Attorney-General opposed the claimants’ bid for leave to challenge that decision, but the Supreme Court accepted two grounds for appeal.
In times past, a full Supreme Court hearing would be certain.
Whether the case now makes it past the political watchdogs in the coalition Government is unclear. Despite the separation of Parliament and the courts, ministers have forged a record this term of stepping in to major public law cases to stop judges going beyond what the politicians see as Parliament’s original intent.
They have legislated in the middle of a landmark Marine and Coastal Areas (Takutai Moana) Act case and a climate case brought by activist Mike Smith before Supreme Court hearings.
What’s at stake
There are 18,900 acres of land in hills on the Mangatū blocks near Te Karaka, north of Gisborne. Claimants seek ‘resumption’ of ownership – or return of land in Crown forest licences under the Crown Forests Assets Act. They allege breaches of the Treaty of Waitangi when the blocks were acqired, as late as 1961 and, more broadly, for economic and social prejudice endured since then.
The case is known as Estate of Eric John Tupai Ruru vs the Attorney-General – the original claimant has died since it was lodged with the Waitangi Tribunal in 1992 on behalf of his Te Aitanga a Māhaki iwi and hapū.
Another applicant to the Supreme Court is Alan Hatonga on behalf of the Mangatū Incorporation.
The claim has been through multiple Waitangi Tribunal inquiries and reconsiderations, a proposed but rejected Treaty settlement, and been adjudicated in part in higher courts. Other cases raising similar issues over ‘resumption’ of land have also been decided, including one by the Supreme Court, while this case has been reconsidered at the Tribunal.
Its latest phases result from a Tribunal ‘remedies’ report in 2021 that took a broad view of the basis upon which the Mangatū land should be returned.
First, it found the actual 1961 acquisition by the Crown of the Mangatū 1 block for 81,000 pounds wrongly separated the owners from their ancestral lands in breach of the Treaty.
But more broadly, the Tribunal found other breaches of the Treaty in the Turanganui-a-kiwa district and the prejudice to Māori that resulted – even beyond the actual land deal at Mangatū – were appropriate to consider when making an order for return of that land.
These included a Crown attack at Waerenga a Hika and treatment of Te Kooti in the 1860s, a series of events held to have had catastrophic economic and social impacts.
The tribunal found activities of the Poverty Bay Commission and Māori Land Court in the district could also be considered in the Mangatu resumption.
The Tribunal’s remedies report said: “These inequities, across many areas of social and economic life have persisted throughout the generations and remain today. Unremedied, they will continue to affect the lives of future generations to the same degree.”
It also recommended maximum compensation under the law (where a statutory starting point was 5 percent of forest value, the tribunal recommended 100 percent, or around $44m) and said top-end interest rates should apply to cover delays.
Through the courts
The Crown sought judicial review in the High Court, but that court agreed with major aspects of the Tribunal findings, other than the determination on interest rates.
The Crown then took it to the Court of Appeal that submitting the Tribunal’s decision meant “the land was being returned as redress for a wide range of historical events beyond the scope of the statutory scheme, driven mostly by the Tribunal’s view of the impacts of colonisation throughout the district and the claimant groups’ customary relationships to the land.”
Lawyers for the Ruru and Mangatū applicants backed the High Court and Tribunal’s view that the events in the wider district, not just the land deal itself, were relevant and part of a “single, cohesive story”.
Claims had been advanced on a “thematic basis” since 1987 and assessments required a “broad and unquibbling approach”.
However the Court of Appeal overturned the High Court (and thus Tribunal) decisions over the basis used to decide ‘resumption’ of land ownership by the claimant group, and also the way the compensation was decided.
The appeal judges said the Tribunal should consider the matter again, based on their interpretations of the law.
Key to the appeal court judges’ reasoning was what they called the nexus between the Treaty breach and the Mangatū land acquisition.
Justice Francis Cooke wrote: “I consider that resumption is not available when there was no Treaty breach involved in the Crown’s acquisition of the land … On the Tribunal’s interpretation, this land could nevertheless be returned to compensate for other breaches.
“In my view, the provision does not create an additional discretionary power vested in the Tribunal to use to compensate for other, area-wide prejudice. An error of law accordingly arises.”
The majority judges, Justice Patricia Courtney and Rebecca Ellis, came to a different finding: “We do not consider it necessary for the breach to have led, directly or indirectly, to the loss of the land; interference in the management and control over the land while still in Māori hands could form a claim.”
But all three judges agreed there had to be a direct connection between the land involved and the alleged breaches of the Treaty, and repudiated the Tribunal’s broader consideration of district wide breaches.
“Prejudice from breaches unrelated to the subject land cannot be used to justify return of the land,” the majority wrote.
“It does not suffice to approach the question of relevant breaches on a district-wide basis. That is what the Tribunal wrongly did here.”
Later, the judges declared: “We agree with the Crown that the Tribunal wrongly had regard to the general effects of colonisation throughout the entire district on the claimant groups identified by the Tribunal as having customary interests in the Mangatū land. This is an error which necessarily means the Tribunal overstated the extent of the relevant prejudice in this case.”
Calculating compensation
Under the Crown Forest Assets Act, if the tribunal orders that land be returned the recipient receives
- The land
- A capital sum being the accumulated rentals that have been paid by the forestry licensees to the Crown Forestry Rental Trust for access to that land
- The rights to future rental payments under the licences that will be transferred to that recipient
- The ability (after the expiry of the licences) to take over the forestry business on the land
- Compensation of, in general terms, the equivalent of 5 percent of the value of the trees that the Crown was allowed to sell as a consequence of the 1989 agreement
- Further compensation (also generally based on the value of the trees) as determined by the Tribunal
The 5 percent payment is automatic but the additional discretionary amount comes from the remaining 95 percent.
The Waitangi Tribunal in this case decided the full 95 percent should be awarded to fully restore the economic base of the claimants.
Crown lawyers again argued the compensation should not be for wider Treaty breaches or broad socio-economic prejudice, but for lack of access to an asset on return of the land.
The appeal court judgment estimated 100 percent compensation using a provision for a low level of interest would amount to $44m but if it was calculated using a higher tier interest rate provided for in the law, it would be around $200m, more than some total Treaty settlements. (The High Court ruled out the higher interest payment, and the appeal court endorsed that finding. The Supreme Court declined leave to appeal it.)
The Court of Appeal did not agree with the High Court, Tribunal or claimants that the discretionary compensation should address wider prejudice or be to restore claimants’ tino rangatiratanga.
“We consider there may be some relevance in wider historical factors, but only to the extent that they were directly relevant to the forest ownership.
“Had Parliament intended that compensation be awarded to address that prejudice, we consider it would have said so.”
When the Tribunal gave its Mangatū Remedies Report in 2021, it wished the claimants and Crown well and outlined how separate Treaty settlements would be needed to be reached with each iwi or hapū group beyond the return of the land.
Five years on, even the first step – resumption and compensation – is still not complete.
