A Maori trust deep in negotiations with the Crown to settle Treaty of Waitangi claims has been hit by a court order for costs of more than half a million dollars.

The Ngai Tai Ki Tamaki tribal trust has been engaged in litigation the past eight years after squabbling led to the High Court appointing an administrator and later the trust ousting the administrator and contesting expenses he claimed.

On June 21 the Court of Appeal struck out a challenge to an order Mark Stevens, the appointed administrator of the trust between 2004 and 2009, should be paid $240,632. The Court of Appeal ruling also upheld a determination $374,615 in professional expenses incurred by Stevens while running the trust should also be paid.

The ruling catalogues a "state of disharmony" within the trust dating back to 1994 whereby two factions duelled for control. This state of affairs culminated in a 2004 decision by the High Court to appoint Stevens, not a trust member, as sole interim trustee.

Stevens still faced challenges, however, and an early High Court ruling on the case notes: "On occasions Mr Stevens has had to endure communications from those who opposed his stewardship that were both obscene and insulting." The judges dismissed claims from the trust that Stevens had overcharged, kept inadequate accounts and been dishonest in his administration.

The trust was caught up in allegations and counter-allegations of fraud earlier this year after a Sunday Star-Times investigation revealed Auckland businessman Daniel Kao had raised millions of dollars from the local Chinese community in 2005 with a plan to buy city landmark Hamlin's Hill off the trust.

Kao claimed the trust, then headed by Stevens, held $2 million of his investors' money and would transfer ownership of the Mt Wellington hill once it was secured as part of Treaty of Waitangi settlements.

But Stevens, and the new board of trustees appointed in 2009, vehemently denied receiving the $2 million and were incredulous at the suggestion they would sell a hill they did not own.

The trust's lawyer, Kitt Littlejohn, representing the current trustees, did not return Sunday Star-Times calls.

According to the Court of Appeal judgment, Stevens was hospitalised following a stroke in June 2009 and the following year bankrupted over unpaid tax debts.

The judgment puts further pressures on the troubled trust. The claim by Stevens is flagged as a contingent liability in accounts for the year to March 31, 2011, and notes by auditors said: "The realisation of these contingent liabilities may affect the Trust as a going concern."

For the year covered by the accounts the trust ran a $55,015 deficit and liabilities exceeded assets by $283,554. Overdue taxes and penalties, totalling $162,536, owing to the Inland Revenue Department were settled with a $25,000 payment and the remainder being written off.

The trust signed an agreement to settle Treaty claims with the Crown in November, indicating the Government would pay $11.5 million. It is understood final negotiations are ongoing.

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