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Tenths Trustee not told of potential deal with developers, High Court hears

Tuesday 16th August 2016

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A trustee of the Wellington Tenths Trust has told Wellington's High Court that she wasn't told about negotiations with land developers undertaken by trust chairman Ngatata Love's son about land the trust owned, and she would have expected full disclosure about such a significant deal.

Love is charged with obtaining a secret commission and obtaining significant sums by deception. The Crown says he signed an agreement in late 2006 with Auckland property developers Redwood Group and Equinox Group to ensure they could lease land owned by the Tenths Trust, and that he received service fees through Pipitea Street Development Limited (PSDL), a company owned by his partner Lorraine Skiffington, without the trust’s knowledge.

The Crown says Love and Skiffington used the money to repay a house loan. Skiffington was also charged but has been granted a permanent stay due to her ill health, while Ngatata Love's son Matene Love has already pleaded guilty to accepting a secret commission.

Liana Poutu, a then-trustee of the Tenths Trust, said that in 2006 and early 2007 she could only recall one development proposal being presented to the trust, from Redwood.

Grant Burston, the crown prosecutor, asked Poutu about correspondence between Matene Love and Equinox's Kerry Knight, where the two negotiated potential terms for the development deal. Poutu said she had never previously seen some of the documents she was given to read, there had been no resolution by the trust for Matene Love to negotiate on its behalf that she knew of, and she hadn't known about the negotiations until told by the Serious Fraud Office. 

Poutu agreed that as a managing trustee of the Tenths Trust she would have expected to be informed if Matene Love's company was going to receive money for providing an opportunity to developers Redwood, and would have expected any trustee who was aware to have disclosed it when the trust was considering the Redwood proposal.

"It was a significant land asset that was being put into a joint venture to be developed, so we were putting some of our tupuna land and our ancestral land potentially at risk because we were entering into a development proposal for it," Poutu said. 

She also said she would have expected to know about lease terms being discussed which would have meant $3 million being paid to the trust.

"As a managing trustee I'd expect there to be full disclosure and for us to have had a full discussion about that among the managing trustee," Poutu said. "It was an asset-rich, cash-poor organisation so that [$3 million] would have been significant for us at that time."

The developers paid $1.5 million plus GST to PSDL on Jan. 11 and Jan. 15, 2007, and Poutu said she hadn't known about that, nor that $1.4 million had been paid from the PDSL bank account to bank accounts of trusts settled by Ngatata Love and Skiffington. 

Colin Carruthers, Love's QC, said that the minutes of board meetings from 2006 showed there had been an extensive discussion of Redwood's proposal and up to Nov. 28, 2006, neither Poutu nor other trustees had made any complaint about the way Redwood and Equinox had been appointed. 

"My learned friend the prosecutor took you through a lot of negotiations, and you would know that before one gets to the point of approval for a proposal, there has to be a negotiation," Carruthers said. "What was happening in those documents was quite an extensive proposal with terms being traded back and forward." Poutu said she agreed.

Poutu agreed that the Tenths Trust had difficult property holdings because they involve Maori freehold land issues and the Maori Land Court, which wasn't regarded as attractive by developers at the time. Carruthers said the trust was looking at leasing the land and therefore having no risk from the land development, and the arrangement it came to with the developers avoided that. 

Carruthers suggested Poutu hadn't examined the services agreement nor the agreement to lease signed in December 2006, to which she agreed.

The trial will continue this week.

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