Tamihere 'deserving' but trust takes hit

17:00, Apr 13 2013
Controversy: The West Harbour townhouse at the centre of the Waipareira controversy.

Waipareira Trust cleared the path for a $500,000 loan to former MP John Tamihere in 2008 as a "reward" for his leadership, a former trustee says.

The $500,000 loan - obtained after West Harbour sold the previously-mortgaged property and advanced the sum to Tamihere - is a central transaction in a summary judgement proceeding being brought by West Harbour against Tamihere in the Auckland High Court.

Tamihere disputes the action, claiming it is unclear which Ivil entity should be repaid and that the sum should be offset by a $210,000 loan he made to Ivil in 2007. The High Court was told $290,000 has been paid into solicitor's trust account to be repaid at the direction of the court. The court heard evidence that Trust chief executive Tamihere witnessed documents waiving the trust's security over a townhouse to smooth the path for the loan from his then-friend, property developer Brent Ivil.

Deserving: Waipareira Trust cleared the path for a $500,000 loan to former MP John Tamihere as a "reward" for his leadership.

The loan, obtained by Waipareira waiving a mortgage partly securing a $2 million loan to a Hobsonville development managed by Ivil, has effectively cost the trust $600,000 after a property deal soured, according to liquidator's estimates.

The court heard a development project between the trust and Ivil's company, West Harbour Holdings, disintegrated in 2011, along with Tamihere and Ivil's friendship.

Judge Pamela Andrews, hearing the summary judgment application, has reserved her decision.


According to an affidavit filed by Tamihere for the case, the decision to waive the mortgage over townhouse 7D was made by the directors of Waipareira Investments Evelyn Taumaunu and Ngaire Te Hira who were satisfied sufficient security remained to protect the Trusts' $2.2m loan.

Tamihere said in his affidavit both Taumaunu and Te Hira were aware lifting of the mortgage would allow him to receive a personal loan.

According to waiver documents filed in court, on May 5 2008 Taumaunu and Te Hira signed the waiver allowing Ivil to sell the property. Tamihere also signed the document as a witness.

The following day Tamihere received $500,000 and settled the purchase of a $1.36m Te Atatu house he had successful bid for at auction three months earlier.

Te Hira, a former secretary of Waipareira who has since stood down as a trustee, told Sunday Star-Times she recalled signing the waiver.

"I've been the director on that board, I understood what I was doing," she said.

She said the waiver was approved to reward Tamihere for his service to Waipareira.

"At the end of the day, why did we sign it off? Because the people who are leading our people are deserving," she said.

"We sign off things, we waiver things - we're about building our leadership. We reward our leadership."

Asked about the subsequent collapse of the development, and the prospect of large losses for Waipareira, Te Hira said: "There are sometimes winners, sometimes losers. That can happen to anyone."

Messages left for Taumaunu, a current Waipareira trustee, were not returned. The Waipareira Trust did not answer questions as to whether it was meeting Tamihere's legal bills in the case or whether the $290,000 was advanced by the Trust.

Waipareira is a registered charity delivering social services to West Auckland Maori through government contracts. According to their annual reports, in the 2012 financial year the Waipareira group received $15.5m in government contracts, down from $30.8m the year before.

Tamihere took the reins at Waipareira in 1991, taking a break between 1999-2005 to serve as a Labour Party cabinet minister. He has recently rejoined the Party and signalled his intention to run as a candidate in the 2014 General Election.

Waipareira and Tamihere did not return calls or answer questions this week and the Trust's communications director Joseph Lose said Tamihere and trustees were "extremely busy".

Lose said the Waipareira board had received independent legal advice on the matter, expressed full confidence in Tamihere as chief executive but would not be commenting further as the matter was before the Courts.

At a creditors meeting for West Harbour held on April 5, Waipareira's exposure to the deal was claimed to be $4.6m including losses from the venture's failure and more than $300,000 in legal bills.

According to estimates provided at the meeting by West Harbour's liquidator, Waterstone Insolvency, Waipareira is facing a loss of $2.2m from its involvement in the development.

The liquidator's estimates indicate this loss is exacerbated by the mortgage waiver as townhouse 7D - with a valuation of around $600,000 - is no longer available to settle Waipareira's debt. Waipareira has initiated mortgagee sales of the three townhouses it holds security over. The Trust's motion at the creditors meeting to replace Waterstone as liquidators was voted down.

Sunday Star Times