Justice Builders is owned by Justin Hoani, a nephew of Ms Taungapeau and grandson of Ms Hoani.
Stage two was completed at the end of 2009 but no further work has been carried out since funding to complete the next stage was declined by the Lottery Marae Heritage and Facilities Commission.
The commission and the Department of Internal Affairs wrote to the trustees and raised concerns around the financial procedures and conflicts of interest on the marae committee.
Three trustees — David Scott, Donna Tamaki and Hepi Haika — filed applications in the Maori Land Court and sought, among other things, removal of the trustees with a focus on stage two of the project.
Judge Miharo Armstrong said no financial statements were prepared for 2010, 2011 and 2012, despite the fact that significant funds were spent on the project in 2009.
Ms Taungapeau and her mother Mereana Hoani should have declared a conflict of interest rather than voting in favour of Justice Builders to carry out the work, the judge said.
The judge also noted there was no principled basis upon which the trustees approved payment of $2000 per week to construction manager and Mereana Hoani's son and Ms Taungapeau's brother Kyle.
He was paid, through the Mohimere Trust which was not authorised by the court, a total of $36,202 despite a maximum of $15,000 agreed upon.
Judge Armstrong said Ms Taungapeau was also paid in breach of trust when carrying out work for the wharekai project.
"There is no credible evidence which demonstrates this was approved by the trustees, that conflicts were avoided, or that payments were justified or reasonable."
The present trustees of the marae are Hepi Haika, Clive Stone, Donna Tamaki, Evelyn Kenwright, Gina Tamaki, Richard Paikea, Secha Alach and Walter Hoori. David Scott stood down.