Idyllic eco-village dream mired in deception claims and court action
LONDON: The pitfalls of boomer community living are manifest in a project that has gone seriously awry.
Kotare Village, nestled in a fertile, picturesque valley in northern Hawke’s Bay, was supposed to be an eco-village for settlers and families “sharing a dream of a regenerative future through independent village living, local economies and co-evolution”.
But that dream has ended in bitter argument, claims of deceit and misrepresentation, unhappy residents and court action.
The village was an idea hatched by Bob Corker and his wife Kay Baxter, well known for forming the Koanga Institute, a Charitable Trust, that aimed to protect, develop and share New Zealand’s heritage food plants, with an emphasis on regenerative systems.
In about 2010 Corker and Baxter took their concept further and set about founding a “living model of life-affirming community that meets people’s needs, in a process that is regenerative of both their environment and their social relationships”.
They chose a piece of land on Kotare Rd, 24km northwest of Wairoa, and set about developing an “intentional community of approximately 150 people in a well-resourced environment”.
They formed the Kotare Community Land Trust in 2014 and people began arriving and living in what was to be the community.
The plan was to strengthen Koanga Institute and put it “at the centre of the transformation encompassed in Kotare village”.
The village made available for lease 28 sections of about 1000m2 and invited those interested to become members of Kotare Village Incorporated, which would manage the legal agreements and the common lands, as well as electing representatives to the Kotare Community Land Trust.
Those joining the village would lease a site on which to build a house and gardens, access to the common land, including community areas, reserves and walking tracks, and an opportunity to lease or license other resources within the farm, and to participate in co-operative economic development.
Leases went for between $59,000 and $99,000. They ran for 34 years and would be reissued every 10 years thereafter.
Settlers were able to pay a deposit up front and work off the balance as “sweat equity” over a negotiated period.
The land for Kotare Village is owned by the trust, governance of which was to be performed by four trustees: two appointed by the Koanga Institute, and two elected by the settlers.
The settlers began arriving in early 2015. As time went on and the vision they were sold failed to transpire, some settlers began asking questions.
The precise nature of the unhappy settlers’ concerns is unknown, but a recent court ruling shines a light on the basis for their grievance.
According to court documents, these settlers and the trust claim that the original promoters of the village engaged in “misleading and deceptive conduct when promoting investment in the village, in contravention of the Fair Trading Act 1986”. They say there was contractual misrepresentation and breach of trust, and they sought orders from the High Court to restructure the trust.
The Koanga Institute, of which Baxter and Corker are trustees along with Peter Alexander, applied to the court to liquidate the trust.
The claims and counterclaims were heard by Justice Francis Cooke in the High Court at Napier this month.
Justice Cooke said the dispute had the potential to become “long, complex and expensive, which is not in anybody’s best interest”.
He said Koanga appeared to be seeking liquidation in order to sell the freehold land and remaining leasehold interests and distribute the proceeds equally, but noted the settlers were opposed to this as it would allow Koanga to achieve an advantage by misleading conduct.
The judge also noted an audit report by Crowe New Zealand Audit Partnership, completed in July last year, which said there was “an overall theme that evidence is suggesting that the parties involved in the arrangement have not acted in the best interest of the [Kotare Trust] and its members (including future intended members)”.
He accepted there was a proper basis for the settlers’ claims under the Fair Trading Act, but said they would need to be made by individuals as they cannot be made in a representative form.
He said the settlers had been substantially successful in their claims and told them to file an amended statement of claim.
Justice Cooke dismissed the settlers’ claim of misrepresentation, but allowed the others, and he dismissed Koanga’s claims and awarded costs in the settlers’ favour.
A spokesperson for the unhappy settlers, who did not wish to be identified, told Stuff: “As beneficiaries of our community land trust we are defending ourselves against the Koanga Institute to avoid significant financial losses to the trust and to us personally”.
“We look forward to resolving this complex situation so that we can get on with developing the village into the vibrant community it is meant to be,” the spokesperson said.
Corker referred all questions to lawyer Jol Bates, who spoke on behalf of Corker, Baxter, Alexander and the Koanga Institute.
“The decision is helpful in terms of clarifying the issues that the court will decide at trial,” Bates said.
It meant that the unhappy settlers would not be able to presume they were taking a case on behalf of others who were not participating in the action, he said.
Bates said the trustees rejected any allegation that they had acted improperly in any way and they would defend their position in court.
“The evidence has not been tested to date. The intention is that it will be thoroughly tested and the allegations of impropriety are denied,” he said.
