Beneficiaries of the Hawaiian Homes Act of 1920 began their case against the Department of Hawaiian Home Lands in state Circuit Court yesterday with testimony from two people who said they had been treated unfairly by the agency.

A state attorney, meanwhile, said in his opening statement that DHHL had not done anything that would amount to a breach of trust.

The class-action suit brought by Leona Kalima, Dianne Boner and Raynette Ah Chong on behalf of more than 2,700 DHHL beneficiaries accuses the state of failing to meet its trust obligations to Native Hawaiians by not offering homestead properties for lease to them in an efficient and prompt manner.

Kane'ohe resident Caroline Bright said she applied for a residential homestead in 1959 only to learn two years later that there was no record of her application. Now 85, Bright said she later applied for homesteads on Moloka'i and the Big Island and was offered a lease in Kona in the 1990s. But by then, she testified, she had retired and could no longer afford to pay for it.

The single mother of four eventually managed to build on a non-DHHL property on the Windward side.

"We had to put in our own roadway, the drainage and everything else," she said.

Questions asked by state attorneys indicated that DHHL tried unsuccessfully to contact Bright several times over the years.

Hawai'i Kai resident Wehilani Mitchell Ching testified that she and her husband went to the DHHL office in January 1962. Because both of them were at least 50 percent Hawaiian, the key requirement for those seeking a DHHL lease, both husband and wife began filling out applications, Ching said. But a DHHL employee at the office approached her and told her only one applicant per household was eligible to apply, she said.

Asked what would happen if the couple were to divorce, Ching said she and her husband were told "that becomes your problem."

Ching, now 71, did not reapply again until 1986, she said.

Under cross examination, Ching said her husband received a lease in 1993 or 1994. which was passed on to one of their children after his death.

She also acknowledged she was invited to apply for several homestead offerings but only wanted a homestead in Waimanalo.

Plaintiffs' attorney,Thomas Grande said that in the 1960s the average applicant was about 35 years old and waited about three years for a homestead.

The people represented in the lawsuit are more than 60 years old and waited an average of more than 22 years, he said.

"Instead of adding additional assets to address this crisis of need, the state withdrew and withheld resources in direct breach of its trust obligation, creating a pathway to failure through its mismanagement and breaches of trust," Grande said.

But Deputy Attorney General Randy Slaton said the Hawaiian Homes Act, as well as the state law creating DHHL, offer little room for the beneficiaries to sue.

"That act, contrary to what the plaintiffs would like, does not provide any beneficiary with any rights or entitlements other than to receive whatever the department can offer," Slaton said outside the courtroom. "Unfortunately, it's not what the plaintiffs want but it's what Congress decided."

State law says claims can only be brought against DHHL for actions that began after statehood, Slaton said. Many of the problems cited by DHHL beneficiaries arose from actions that occurred when Hawai'i was a U.S. territory, he said.

As of June 30, there were 19,886 Native Hawaiians waiting for residential leases. The 2,700 represented in the lawsuit went before a state-appointed review panel created in 1991 to resolve claims for the period between Aug. 21, 1959, and June 30, 1988.

That panel ran out of money before nearly all the claims were dealt with.