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The second Commission recommended a system of management that placed the reserves under the control of the Public Trustee rather than the owners. Under the West Coast Settlement Reserves Act of 1881, reserves were placed under the administration of the Public Trustee, who was to act both for “the benefit of the natives” and “the promotion of settlement”. The Act provided for leases of up to twenty-one years for agricultural purposes and firty-two years for building purposes, with rents being based on “the best improved rent obtainable at the time”. The Act also enabled the Public Trustee to lease or sell the reserves to non-Maori tenants.
The West Coast Settlement Reserves Act of 1881 instructed the Public Trustee to consult with Maori about the management of reserves “as far as conveniently may be”, and to administer each reserve “as far as possible in accordance with the interests of the Natives interested in such reserve”. However, final decisions around the administration of reserves were made at the discretion of the Trustee. Invariably, those decisions benefitted leaseholders. Much of the land under the Public Trustee’s administration was leased without the consent of the owners. While Europeans were granted long-term leases on the reserves against which they could borrow, Maori were granted less-secure short-term leases and occupation licences, which were terminable at short notice.
The West Coast Settlement Reserves Act 1881 was amended at least five times over the next ten years. As a consequence of these changes, leasing regulations became increasingly inconsistent, and their legality uncertain. In 1892, the laws governing the leasing of the Taranaki reserves were re-written as the West Coast Settlement Reserves Act 1892. The 1892 Act vested all West Coast Reserves in the Public Trustee in trust for the Maori owners. The Act provided for perpetually renewable leases with rent based on the unimproved value of the land. In effect, these leases created permanent European settlements on the reserves. Leases previously granted by the Public Trustee which conflicted with the terms of the Crown grants were validated, as were earlier reductions in rent. Charges for surveying, constructing fences, drainage, and roads were paid out of rents.
In 1934, after the arbitration system for setting rentals resulted in a reduction of rents, the Native Trustee, on behalf of the Maori beneficiaries, successfully pursued the matter in the Supreme Court. In response, Parliament passed the Native Purposes Act 1935 to amend the definition of improvements. In effect, this nullified the court decision and led to a reduction in rents Maori would otherwise have received. In 1948, a Royal Commission of Inquiry into the West Coast Settlement Reserves condemned the 1935 Act, stating that its hurried passage through Parliament without Maori knowledge had deprived Maori of any opportunity to protest, despite its importance to their interests. The Commission also concluded that Maori had “suffered a grave injustice” as a result of the 1935 Act, and recommended that the beneficial owners should receive £30,000 in compensation.
The Maori Reserved Land Act 1955 continued the system of perpetual leases, empowering the Maori Trustee to convert any outstanding fixed term leases to leases in perpetuity. The legislation also allowed to Maori Trustee to acquire uneconomical interests or purchase any interest that the beneficiary or beneficiaries in question wished to sell, and to sell that land under such terms as the Trustee saw fit.