Far North Mayor John Carter, second from left, with members of a Māori trust in 2014. The FNDC has now been ordered to pay the trust $80,000 in compensation for using some of their land for a dam.
Far North Mayor John Carter, second from left, with members of a Māori trust in 2014. The FNDC has now been ordered to pay the trust $80,000 in compensation for using some of their land for a dam.
The Far North District Council has been ordered to pay a Māori trust $80,000 after Mayor John Carter was found to have ''acted outside his authority''.
Trustees of the Ngākahu/Ngākohu Whānau Ahu Whenua Trust, which owns land near Kaitaia, took the council to court earlier this month seeking compensation fromthe council for 86 years from 1933 when and agreement to use their land for the Kaitaia Dam, was first signed.
In his decision, Judge Gary Harrison has ordered the council to pay the plaintiffs $80,000 in compensation.
The council said it welcomed the decision as the end to a long-running dispute and would not appeal.
The original purpose of the dam on the trustees' land was to supply water to Kaitaia Hospital in 1934. The then owners supported the water supply because many patients at the hospital were Māori and they wanted the hospital there, rather than in Mangonui.
The council was later granted a right-of-way easement across the land from a pipeline in 1983, but it became difficult to cross the land in winter so, in 2002, council staff negotiated access with two women who lived on the land.
However, this was challenged in 2013 by trustee Des Mahoney as the two women were not owners of the land nor trustees and the Māori Land Court ruled the agreement was invalid.
In 2013, Mahoney approached the council about the issue of compensation for using the trust's land for the dam. Shortly after being elected mayor in 2014, Carter advised the council he intended to meet the trustees to attempt to resolve the issues.
In 2015, two valuers were then instructed by the council to provide independent reports on the possible ''compensation value''. The valuations were $76,606 and $114,000.
Carter then forwarded the valuation to the trustees and later agreed with the trustees the council would pay them $80,000 compensation and there were handshakes and hongi in celebration at a meeting on September 9 that year.
In his evidence to the court, Carter was adamant he made it clear to all at the meeting that the agreement was subject to council approval, but the trustees did not agree with that contention.
Judge Harrison said in his decision he did not accept that the September 9 agreement was subject to the approval of council.
Kaitaia's Kauri Dam, on land owned by the Ngākahu/Ngākohu Whānau Ahu Whenua Trust.
''I accept unreservedly the good intentions and bona fides of Mr Carter. I am of the view, however, that his evidence has confused situations where an agreement is made subject to subsequent approval, from a situation where an agreement is reached which is later reduced to writing and signed by the parties.''
He said there was no mention in any of the documents of the September 9, 2015 agreement having to be approved by the council when settlement had been reached.
''I therefore do not accept that there were two parts to the agreement of September 9. It was concerned solely with agreeing what compensation should be paid for use of the land, with the basis of its future still uncertain,'' the judge said.
Judge Harrison said there was no evidence Carter was formally authorised to negotiate a $80,000 settlement with the trust, which means he fell into the position of an agent who had breached his warrant of authority.
The judge said there was no doubt Carter had the ostensible authority to bind the council, but had not been authorised to do so.
I accept unreservedly the good intentions and bona fides of Mr Carter. I am of the view, however, that his evidence has confused situations where an agreement is made subject to subsequent approval, from a situation where an agreement is reached which is later reduced to writing and signed by the parties.
In the circumstances, Carter could be held personally liable to pay the compensation, Judge Harrison said. However, after the plaintiffs applied to join Carter to the proceedings, the council resolved to indemnify him in accordance to S43 of the Local Government Act.
The judge also said there was no suggestion Carter acted in bad faith.
''When negotiating the settlement, Mr Carter was the Mayor of the Far North District Council and was clearly acting with ostensible authority. He had said himself that he had previously advised the council that he intended to meet with the trustees to attempt to resolve the disputes,'' Judge Harrison said.
''There was, however, no formal resolution of the council authorising Mr Carter to negotiate the agreed amount."
FNDC CEO Shaun Clarke said the council would not appeal and welcomed the decision, which compensates the owners of land where a council water source is located.
''We are pleased an independent authority has resolved a historic issue the council had been discussing with the Ngākahu/Ngākoho Whānau Ahu Whenua Trust for years. The compensation ordered by the court is in line with valuations previously provided to council by two registered property valuers,'' Clarke said.
He said the claim made apparent an unreasonable, potential liability on elected members when acting in good faith and in accordance with the powers of the local authority and on September 30, 2018, the council resolved to indemnify all elected members against this type of liability.
Clarke said the total cost of the judgment to the council was $124,211.25. That included the judgement sum of $80,000, plus $11,077.50 interest, $26,789 costs and $6344.75 in disbursements (filing claim, scheduling and hearing fees). It was impossible to assess the total cost in relation to staff time.
''This issue has run over several years and involved numerous staff in varying capacities. However, we think most people would consider that the judgement sum of $80,000 is not excessive, considering this represents compensation for acquisition of land, right of way and pipeline easements over an 86-year period,'' Clarke said.
Richard Marks, the lawyer for the trustees, said they were delighted with the decision, which vindicated their position.
''They have been treated very badly by successive councils for many years,'' Marks said.
''There was an agreement to pay and the council then refused to pay it.''
