Restraint of Trade: Booths Logistics v. Millard

 

Three years after selling their Central Otago trucking business for $12.3 million, Ross Millard and spouse Barbara are being sued by Palmerston North purchaser Booths Logistics alleging they failed to stop family setting up a rival business in breach of a restraint of trade agreed on sale.

The Millards claim they have done nothing wrong and that any complaints about Booths loss of local business is its own fault.

The High Court refused an injunction to immediately enforce the disputed restraint of trade.

Justice Harland said preliminary evidence indicated Booths Logistics Ltd has a valid complaint, but a further court hearing is needed to establish the full facts.

Booths alleges Mr Millard actively assisted daughter Ashley and son-in-law Rick Rodgers in setting up a rival trucking business after the 2022 sale to Booths.  It claims he helped finance their company, MELX Linehaul Ltd, and at times helped out as a driver.

The Rodgers had previously worked for the Millard family trucking business, then known as Summerland Express Freight.  They carried on working for Booths for a period after the sale.

They claim Booths Logistics at all times agreed to their MELX operations, with the two businesses often working in tandem to complete contract work.

In the High Court, Booths Logistics says a specific clause in the sale contract requires the Millards as vendors to ensure relatives do not set up in competition with Booths for a period of six years from date of sale.

Whether the Millards did breach their contract has yet to be decided.

Booths Logistics Ltd v. Millard – High Court (19.08.25)

25.181

Body Corporate: Bremner v. Body Corporate 51615

 

Failure by owners of six houses in a Lower Hutt development to agree on body corporate policy saw the High Court appoint an independent administrator to make all body corporate decisions for an initial three year period, overriding infighting between residents.

Willing to take on the role was property manager Everything Body Corporate Ltd, based hundreds of kilometres away in Tauranga, charging a base annual fee of $4600 for admin costs plus an hourly rate for all other work.

Justice Gendall gave owners an opportunity to see sense and to achieve a working relationship; they can at any time apply to have this court-imposed administration terminated.       

The property on White Lines West in Woburn consists of six single-storey standalone units built in the early 1980s with individual titles held under the Unit Titles Act.

Evidence was given of unit owners operating as though they were independent freehold owners: no body corporate meetings were held; no long-term maintenance plan drawn up; a suggested need for drainage inspection shelved; and one instance of an owner constructing a shed on what is common land owned by all.

The High Court was told of resident owner Adrienne Bremner seeking to bring order to this legal morass.  Her efforts were met with combinations of indifference and hostility.

It took an application by her to the Tenancy Tribunal to force removal of the misplaced shed.  

A 2022 residents meeting saw a majority of owners vote down a proposed long-term maintenance plan, with a decision not to set up a body corporate bank account.

Ms Bremner’s request for reimbursement of legal fees for the earlier Tenancy Tribunal application was voted down.

A further meeting three months later decided on a $16 body corporate weekly levy, payable by owners of each of the six properties.  A dispute followed that this levy was not properly calculated according to the ownership interest of each.    

Appointing Everything Body Corporate as administrator, Justice Gendall ruled the history of dysfunctional behaviour was such that an independent administrator be appointed to ensure Unit Titles Act rules are followed.

Between owners, most contentious was the need for and content of a long-term maintenance plan and associated funding.

The Unit Titles Act allows body corporate members by special resolution to decide not to establish a long-term maintenance fund.

There was no evidence that the owners considered this option, Justice Gendall said.

Bremner v. Body Corporate 51615 – High Court (19.08.25)

25.180

Bankrupt: Lister v. Sadiq

 

Mohammed and Shamina Saqiq were bankrupted following failure to pay a $286,000 deposit on an Auckland house purchase.  The High Court dismissed as unconvincing their claim of being able to pay soon, having millions held in an offshore bank account awaiting clearance through a newly developed ‘quantum financial system.’

Mr Sadiq told the High Court he has for the last twelve years been working on projects to repatriate historical objects.  He said some sixty projects are currently underway.  He produced documents on the letterhead of a ‘United States Historical Program’ indicating he was owed money for his services.

Confidentiality requirements prevented him from providing details, Mr Sadiq said.

He provided bank statements to the court, supposedly from an off-shore bank account he controlled, recording a current balance of USD one billion.

Mr Sadiq said he was awaiting payment to be actioned through a ‘denominated quantum financial system.’

Bankrupting both Mr and Mrs Sadiq on the unpaid debt, Associate Judge Brittain said the two can later apply for annulment of their respective bankruptcies should the expected payments arrive and all debts be cleared.   

Annulment is retrospective; the debtor is treated as never being bankrupt.

Lister v. Sadiq – High Court (18.08.25)

25.179

Maori Land: re Round Corner Ltd

 

Wellington property developers Mark and Anna Rudings failed in their Maori Land Court challenge over the status of prime development land at Otaki, claiming a four decades old administrative mistake listing Maori freehold land as general land should stand.

Maori freehold land has limited commercial value because of constraints on ownership.

Through their company Round Corner Ltd, the Rudings purchased the Otaki land in 2021 with plans for a mix of retail and residential lots.  They thought it was general land.

Later learning it was in fact Maori freehold land, they challenged Maori Land Court moves to correct the land register.

The court acknowledged the Rudings difficulties were just one of many where Land Court administrative errors have seen confusion over the status of land sold, leading to onerous commercial consequences.

Maori freehold land is a subset of Maori land where common ownership is registered in the names of individuals of Maori descent who on sale must first offer this land to relatives.

This constraint on sale affects both sale prices and the ability to raise finance; what is described as a ‘status discount.’  Lenders taking security over Maori freehold land face a limited pool of potential buyers in a forced sale.

The Rudings said Round Corner’s plans for redevelopment were potentially affected by any reinstatement of the land as Maori freehold land.

What started out with best intentions to harmonise the Maori Land register (overseen by the Maori Land Court) and the general land register (overseen by Land Information New Zealand) has seen a bureaucratic muddle.

An unknown number of Maori freehold titles have been recorded on the Land Information register with no notation recording the status of this land as Maori freehold land.

In these cases, buyers searching only the Land Information register assume the property is general land.

A separate Maori Land register search is needed to learn the land’s status is Maori freehold.

Lawyers acting for the Rudings company, Round Corner Ltd, did not search the Maori land register.

Round Corner Ltd is a corporate.  It never had Maori Land Court consent for its Otaki purchase.

Round Corner could not rely on the common legal maxim concerning title to land, that ‘the register is everything:’

Land Transfer Act rules confirming title to land do not guarantee status of the land.  Just because title to the Otaki property was listed on the general register did not promise it was not Maori land.

In the Maori Land Court, Judge Thomas determined the Otaki land purchased by Round Corner Ltd remained Maori freehold land, despite no ‘Maori flag’ noted on the Land Information register.

She invited the Rudings to return to the Maori Land Court should this decision negatively impact on their proposed development.

The court was told development plans had been paused while the Rudings awaited final government plans to re-route state highway one around Otaki.

re Round Corner Ltd – Maori Land Court (14.08.25)

25.178

Will: re Selwyn Gallot

 It is not a good look in light of the Public Trust’s regular advertising campaigns emphasising the importance of keeping your will up to date.  Public Trust needed High Court approval to implement testamentary instructions of a terminally ill client when he died with no will finalised nearly three months after first contacting Public Trust asking that a new will be prepared.

The High Court was told Selwyn Gallot was an existing Public Trust client at time of asking his will be updated, having named it as his executor in an earlier 2006 will.

He took steps to have Public Trust update this earlier will after a terminal cancer diagnosis.

In December 2023, he typed up the main points to be included in a new will.

He retained one signed copy and emailed what was an unsigned copy to the Public Trust, after contacting their call centre several weeks later, arranging a meeting.

A month later, he met with Public Trust staff, being told a new will would be ready for signature in seven to ten days.

Despite Mr Gallot’s follow up calls with Public Trust in the weeks prior to his death, no final draft was made ready for signature.

After his death, the Public Trust made a Wills Act application for his December typed notes approved as a valid will.  While he had signed the notes, his signature had not been witnessed as required by the Wills Act.

Affected beneficiaries had no objections to approval being given.

Approving the notes as a valid will, Justice Grau said the typed notes reflected Mr Gallot’s new testamentary instructions.

Public Trust told the High Court that costs of getting Wills Act approval would not be charged to his estate.

re will of Selwyn Gallot – High Court (13.08.25)

25.177

Takeover: Empire Technology v. Vital Ltd

 

Aborted takeovers of NZX listed companies can result in a bill from the target company, with Empire Technology disputing a $247,000 bill claimed by Vital after Empire backed out of a 2024 takeover claiming Vital’s market information pre-takeover was misleading.

Empire alleges Vital kept the securities market in the dark through 2024 about its declining profitability and the prospect of losing a major customer, in breach of market rules requiring ‘continuous disclosure’ of all material information.  

Vital Ltd provides radiocommunication services nationwide.

Empire Technology Ltd, controlled by Simon Herbert, made an unsolicited bid for Vital in August 2024 at $0.375 per share.

It later withdrew, alleging Vital management misled the market.

It claims Vital’s forecast net profit after tax of $400,00-$700,000 disclosed to the market in February 2024 was grossly misleading given an actual profit figure of $253,000 was announced shortly after Empire Tech’s August takeover offer.

It also claims Vital failed to publicly disclose the potential revenue loss should major customer Hato Hone St John shift its callout services to a new Public Safety Network.

Empire Tech learnt later that the Hone Hato St John contract was worth $3.7 million to Vital in 2024.   

After Empire Tech withdrew, Vital got a ruling from the Takeovers Panel holding Empire liable to pay $247,036 as compensation for its costs in responding to Empire Tech’s takeover offer.

Empire Tech is challenging the validity of this Takeover Panel ruling in the High Court.

Separately, Vital sued to put Empire Tech into liquidation for non-payment of the $247,000 claimed compensation.

Empire Tech countered, claiming it was entitled to damages from Vital alleging breaches of NZX listing rules, Financial Markets Conduct Act and Fair Trading Act.

Justice Gendall put Vital’s winding up application on hold.

A full court hearing is needed to consider whether Empire Tech is entitled to damages for alleged breaches of the ‘continuous disclosure’ rules by Vital.

The Financial Markets Conduct Act requires listed companies to pro-actively release all information that a reasonable person would consider having a material effect on market prices.

Empire Technology Ltd v. Vital Ltd – High Court (12.08.25)

25.176

Investment: Hua v. Zhang

 

Commercial practice in China having investors disguise their activities caused confusion during a High Court hearing before the court ruled that investor Yu Hua’s $700,000 was not a loan due for repayment but lost in a failed retail venture as an equity investment.

Use of intermediaries to transfer funds and failures to maintain correct shareholder records were explained away as steps commonly taken to avoid drawing attention from government officials in China.

The High Court was told Yu Hua, also known as Kevin Hua, agreed in 2017 to join with two others, Jingjing Zhang and Jie Wen, to establish a retail store.

Whilst initially seeking to convince the High Court that this venture was intended to operate in New Zealand, Mr Hua later acknowledged the proposed deal was to set up a company in China, leasing commercial premises in Baoji City to sell tea, wine and other products imported from New Zealand.

When the business failed, he claimed the $700,000 he put in was a loan and that Ms Zhang, also known as Cathy Zhang, had personally promised repayment.  This promise was supposedly made at a meeting between the two in Auckland at a Sylvia Park McDonalds in August 2018.

The circuitous route taken to send funds to China supported Ms Zhang’s claim that China was at all times the intended site of their retail store.

Initial tranches of Mr Hua’s $700,000 investment were sent from New Zealand via a China bank account operated by Ms Zhang’s mother.  Her mother asked that to stop; as a senior local government official she would come under suspicion if large sums of money passed through her bank account.  Subsequent tranches passed through the China bank account of Ms Zhang’s mother-in-law.

Shaoyuan Trading Ltd was incorporated in China for their intended business.  It did not name either Mr Hua or Ms Wen as shareholders.  Ms Zhang and several close relatives were listed as shareholders.

Ms Zhang told the court that Mr Hua, for reasons not disclosed to her, did not want his name recorded on any official documents in China.

Ms Wen was excluded from the public record because she did not live in China; getting her signature was difficult.

Justice van Bohemen was asked to rule whether Mr Hua’s investment was a loan, to be repaid by Ms Zhang, or an equity investment, lost when the business failed following severe covid-19 pandemic lockdowns in China.

Some of the evidence given did not make sense and some was clearly false, he said.

The tenor of WeChat messages between Mr Hua, Ms Zhang and Ms Wen made it clear that Mr Hua was an equity investor in the Baoji City business, he ruled.

Justice van Bohemen ruled there was insufficient evidence that Ms Zhang personally promised in 2018 to repay the $700,000 investment.  The only written record of such a promise was in a WeChat message sent by a third party who was not present at the 2018 McDonalds meeting.

Ms Zhang said the 2018 meeting discussed an ongoing dispute with a contractor fitting out their Baoji City business premises.  She denied ever accepting personal responsibility for repayment of Mr Hua’s investment.

Hua v. Zhang – High Court (6.08.25)

25.175

Contempt: Francis v. Ranita Handyman Services

 

Rinish Kunjumon says the truck is his, handed over by Maxconcrete Ltd in lieu of a debt owed.  He now faces arrest for contempt of court after failing to hand back the truck to Maxconcrete liquidators under Companies Act ‘clawback’ rules.

After Maxcroncrete went into liquidation in October 2024, liquidators had trouble getting any information out of Auckland-based director Gurwinder Singh.  One thing was clear, trucks owned by the company had disappeared.  Police were informed of the apparent thefts.

One truck was tracked down to a Kelston address, the vehicle in possession of Rinish Kunjumon and being used by his business Ranita Handyman Services & Transport Ltd.  He told liquidators the Hino Ranger was handed over in satisfaction of a debt owed by Maxconcrete.

Liquidators demanded its return.  Companies Act clawback rules require company assets transferred in the six months prior to insolvent liquidation be returned, leaving the former owner as an unsecured creditor for any debt owed.

Mr Kunjumon did not co-operate, adamant the truck was now his.

He did not respond to liquidators’ High Court application forcing recovery.

When a repossession agent, armed with a court order for recovery, contacted Mr Kunjumon he was told arrangements would be texted next day for a handover address.

No text was sent.  The truck disappeared, for a second time.

Back in the High Court, liquidators applied to have Ranita Handyman Services and Mr Kunjumon held in contempt of court.

Mr Kunjumon was given clear notice of the court order and its effect, Justice O’Gorman said.

A warrant for his arrest was issued, suspended for a week to give Mr Kunjumon one last chance to comply with the court order, handing over the truck.

Francis v. Ranita Handyman Services & Transport Ltd – High Court (5.08.25)

25.174

Loan: Lifestyle Loans v. Pope

 

It was an expletive-ridden stoush as Wellington’s Matt Ryan and Auckland’s Laurence Pope, both property moguls, faced off arguing repayment terms on a half million dollar loan.  Pope did not repay a six month twenty per cent bridging loan as promised; Ryan was no more than a disappointed unsecured creditor with no right to security over properties owned by Pope, the High Court ruled.

In early 2024, Mr Pope’s Samcro Trust was in dire financial straits.  The court was told he was under considerable pressure from both suppliers and Inland Revenue.  In addition, he desperately needed $210,000 cash to settle his purchase of a property on Auckland’s North Shore at Glendu Road.

In a brief exchange of emails, Mr Ryan arranged for his Lifestyle Loans Ltd to advance $550,000 against Mr Pope’s promise to repay out of a planned rapid on-sale of Glendhu Road.

Mr Ryan was apoplectic after learning Glendhu Road was resold within six weeks and that Mr Pope had failed to pay down his earlier loan from the net $391,000 received on sale.

A barrage of expletive-filled emails and texts followed.

Mr Ryan’s Lifestyle Loans then sued, claiming Mr Pope fraudulently used the net proceeds to buy further properties.

Lifestyle Loans claimed an interest in these properties as beneficiary under a constructive trust, lodging caveats on title to two properties subsequently purchased by Mr Pope.

Lifestyle needed to prove there was a common intention that it would share an ownership interest in properties owned by Mr Pope, Associate Judge Cogswell said.

There was no such intention, he ruled.

Lifestyle Loans stands simply as an unsecured creditor with Mr Pope personally liable to repay the loan, he said.

Judge Cogswell ordered removal of the remaining caveat on a Glen Eden property.

Earlier, a second caveat, over a property in Ranui, was removed by agreement so the property could be sold.  Lifestyle Loans received nothing from this sale, the court was told.

Lifestyle Loans Ltd v. Pope – High Court (5.08.25)

25.173

Joint Venture: Ngaruahine Iwi v. Mountian View Developments

 

Based in the South Taranaki township of Manaia, Ngaruahine Iwi Authority thought it had negotiated a joint venture partnership with Ravikumar Gaddam for construction of social housing in nearby Hawera.  Ngaruahine lodged a caveat to temporarily stop an intended 34 lot subdivision going ahead, alleging Mr Gaddam was siphoning off their money to develop other projects.

The High Court was told Mr Gaddam met with Ngaruahine staff in early 2024 promoting a social housing project off County Drive in Hawera involving his company Mountain View Developments.

Ngaruahine already provides social housing in Manaia, rented to iwi members.

Plans firmed up with Ngaruahine agreeing to buy from Mountain View a half share in County Drive for one million dollars.

Ngaruahine staff told the High Court they were under the impression this was its initial contribution to a joint venture project in which each side would pay half the costs, splitting assets 50/50 on completion.  There was no formal joint venture agreement signed.

Ngaruahine later learnt Mountain View did not have title to the County Drive land at time of Mr Gaddam’s half share sale.

Evidence was given that when agreeing to a part sale to Ngaruahine, Mountain View was in default on its prior agreement to buy the land.  It settled this purchase, late, at the time Ngaruahine paid across its one million dollars.

Mountain View acknowledged it was making a profit on this immediate on-sale of a half share in County Drive, but refused to disclose the profit made.

Raising further concerns for Ngaruahine was news that Mountain View had mortgaged the Country Drive land with no explanation as to where this money was going.

Mountain View unsuccessfully challenged Ngaruahine’s registration of a caveat over County Drive.  A caveat has the effect of freezing all further dealing with the land.

Justice Gendall ruled Ngaruahine has an arguable case that preliminary joint venture discussions created a situation in which County Drive became a trust asset held by Mountain View for the benefit of both joint venture participants.

If proved to be a trust asset at a later court hearing, Mountain View is potentially liable to account for any profits made from the part-sale to Ngaruahine plus financial benefits arising from its borrowing secured over the joint asset.

Mountain View says the only agreement of relevance is the sale of a half share in County Drive to Ngaruahine for one million dollars.  Nothing else was agreed, it says.

Ngaruahine Iwi Authority v. Mountain View Developments and Constructions Ltd – High Court (31.07.25)

25.171

Asset Forfeiture: Commissioner of Police v. Foulds

 

Nearing retirement age, Stephen and Leonna Foulds were busted growing cannabis in an indoor commercial operation at their Opua home, in Northland near Russell.  Pleading guilty and sentenced to home detention, they negotiated a proceeds of crime settlement giving them six months to sell their home, raising $450,000 to be surrendered as proceeds of crime.

The High Court was told they purchased the Opua property in cash for $1.05 million, proceeds from sale of their previous Te Aroha home.  Opua is now estimated to be worth some $1.2 million.

Evidence was given of police in December 2023 finding a sophisticated commercial growing operation at the property capable of producing five crops a year.  High power needs to drive fans, air conditioning and indoor lighting saw their power usage being three to four times the local norm.

The court was told a police check of power records for the Foulds previous Te Aroha property found power usage there similarly well above local averages.

Their Opua home became ‘tainted’ and liable to forfeiture under Criminal Proceeds (Recovery) Act by reason of cash from cannabis sales used to maintain and refurbish the property.

A Mazda CX-5, purchased with tainted cash was at risk of forfeiture as well.

It was agreed with police that cash generated from cannabis sales approximated $450,000.

The Foulds were given until end of January 2026 to sell their Opua home.  Failing that, Insolvency Service is authorised to carry out a forced sale, paying net surplus to the Foulds after deduction of $450,000.

In the Kaikohe District Court, Mr Foulds was sentenced to ten months home detention for cultivating cannabis and selling, Mrs Foulds eight months for cultivation.

Commissioner of Police v. Foulds – High Court (31.07.25)

25.172

Asset Forfeiture: Commissioner of Police v. Rivers

Known also as Mai Qu, former chartered accountant Luke Daniel Rivers surrendered one million dollars as part of a court approved proceeds of crime settlement after making false covid-19 wage subsidy applications.  After telling the High Court his repayment proposal was, in part, intended to reduce the severity of a court sentence for fraud, he was subsequently sentenced to nearly six years imprisonment.   

The High Court was told a wage subsidy audit uncovered his fraud.  When claiming subsidies, Rivers described himself as a full-time employee while supposedly working simultaneously for multiple companies.

According to an Inland Revenue media release, he used as cover two separate identities, each with their own IRD number.  One, using his given name of Mai Qu; the other, as Luke Daniel Rivers being the name he adopted by statutory declaration in 2004.

His fraudulent applications also claimed subsidies in names of supposed full-time employees for whom Inland Revenue holds no PAYE tax records.  Other applications were in false names.

Just under $978,000 fraudulently obtained for covid-19 employee support was deposited to bank accounts controlled by Rivers.  None was used to cover employee wages.

He transferred some of these funds to a Singapore bank account he controlled, but in the name of a fake identity.

As part of the agreed Criminal Proceeds (Recovery) Act settlement, Rivers agreed to repay extra, taking the total for repayment to one million dollars; to ‘demonstrate his remorse,’ Rivers said.   

Approving the settlement, Justice O’Gorman gave Rivers one week to pay.

Failing that, Insolvency Service is to sell two Auckland properties controlled by Rivers, with any surplus returned to Rivers after deductions for mortgages secured over the properties and payment of the one million dollars being surrendered.

Commissioner of Police v. Rivers – High Court (30.07.25)

25.170

Maori Land: Henderson v. Brooking

 

Apirana Henderson was removed as trustee of a Hicks Bay ahu whenua trust on complaints from a fellow trustee that Mr Henderson had wrongly taken control of trust assets; giving himself an all-expenses paid place to live, with the trust in addition giving him sundry cash handouts.

Mr Henderson showed a complete failure to understand obligations of a trustee, with a series of blatant and repeated breaches of trustee duties, the Court of Appeal said.

Leaving him as trustee risked one family locking up control of trust assets against the interests of its 364 hapu-related beneficial owners, the court said.

The court dismissed claims by Mr Henderson that his actions were an honourable application of tikanga Maori in which rangatira were expected to have close oversight of communal assets.  Instead, trust law principles which prohibit self-dealing by trustees are paramount, the court ruled.

The Wharekahika A47 Trust owns nearly 1200 hectares of Maori freehold land near Hicks Bay on North Island’s East Coast.  With six trustees, it operates as an ahu whenua land-based trust under the Te Ture Whenua Maori Act.  Designed to better facilitate administration of communally-owned assets, the Maori Land Court appoints ahu whenua trustees and supervises trust operations.

Trustee Ashley Brooking challenged a series of deals which benefitted fellow trustee, Apirana Henderson.

In 2018, Mr Henderson promoted an arrangement in which the trust paid him $10,000; a supposed reward for his efforts in removing a long-term lessee from trust land and time spent making good on deferred maintenance.  A further payment of $5000 followed three years later.

In 2019, he had four trustees, including himself, sign authorisation for him to occupy a house on trust land with the trust to pay rates, petrol, internet, power and mobile phone charges.

Mr Brooking complained that this informal approval amounted to approval given by Mr Henderson himself and by two of his siblings who are also trustees.

In addition, a loosely worded ‘proposal,’ set out future payments for various work including stock management and fencing.  There was no commitment to actually do any of this work.

The court was told Mr Henderson did not get formal approval from all trustees, or approval from trust beneficiaries, for these self-interested deals.

Warned by trust lawyers of the potential consequences of trustee self-dealing, Mr Henderson chose to repay that part of an insurance premium paid by the trust which provided insurance cover for his own personal assets.

A 2022 Maori Land Court hearing saw Mr Henderson removed as trustee on grounds he had improperly used trustee powers for his own personal benefit.  This decision was confirmed by the Court of Appeal.

It is not a question of the court simply exercising a discretion to remove an ahu whenua trustee, the Court of Appeal said.  When poor behaviour by a trustee reaches a certain threshold, removal follows automatically, it ruled.

Mr Henderson’s rights to any payment for his services required him first to negotiate a contract of employment with the trust, the Court of Appeal said.  Agreed payments then would be validly received as an employee; rather than wrongly taken as a trustee.

The Court of Appeal pointed out that the Maori Land Court had suggested, when removing Mr Henderson as trustee, that he then be offered a five year management contract.

This was not to Mr Henderson’s liking.  He chose to appeal, unsuccessfully challenging the court’s power to dismiss him as trustee.

Henderson v. Brooking – Court of Appeal (28.07.25)

25.169

Leaky Home: Turret Trustees v. Profit

 

It is a pyrrhic victory.  Previous owners sold their Auckland leaky home for $1.01 million before disappearing overseas, leaving Scott Meads family trust holding an $883,000 High Court order for damages, but little chance of full recovery.

The Meads family trust, Turret Trustees Ltd, purchased a Cathedral Place property in Parnell for $1.01 million in 2016.  It is a 1990s monolithic plaster-clad townhouse.

Before settling their purchase, the Meads discovered a new roof had been installed.  There were doubts whether installation required Building Act consent and whether it was code-compliant.

A sum of $175,000 was held back in their lawyer’s trust account until this was sorted out.

After shifting in, the Meads found evidence of ongoing water ingress.  They learnt previous owners Francois Profit and Laure Tsobny had carried out substantial remediation work: replacing rotten timber wall framing and rotting particle flooring; and recoating exterior walls with a further layer of plaster.

The Meads shifted out while repairs were made.

In the High Court, Justice Becroft ruled Mr Profit and Ms Tsobny were in breach of contract.

They signed an agreement for sale and purchase containing a standard clause promising they had obtained any necessary building consents for work done.

Evidence was given that the extent of remedial work they carried out did require consent.

Justice Becroft awarded damages for breach of contract totalling $883,000: including $800,000 for the cost of bringing the property up to consented standard; $53,000 for rent lost to the family trust whilst the Meads moved out; and $30,000 general damages for stress, anxiety and inconvenience.

He ordered that the $175,000 still held in a lawyer’s trust account, plus accrued interest, be handed over to the Meads’ family trust in part payment.

Mr Profit and Ms Tsobny did not defend the claim.  Recovery of the balance from them may prove difficult, Justice Becroft said.  Ms Tsobny has returned to Cameroon.  Mr Profit is believed to be in France.

Turret Trustees Ltd v. Profit – High Court (25.07.25)

25.168

Lease: Stills v. McCormack

 

Arrears of rent and failure to challenge a rent review cost the Stills family rights to renew their lease of land at Little Akaloa on Banks Peninsular, losing rights to use a rudimentary bach on the property after the family’s near fifty year occupation.

Andrew Stills argued their family was victim of a stitch-up; claiming rights to purchase were ignored, and further alleging fraud in a mix-up over rights of way giving access to their bach on Lukes Road.

The High Court was told land on Lukes Road at Little Akaloa was bequeathed to the Anglican Church in the 1950s.  Subdivided lots were then leased out by the Church on renewable twenty-one year leases.

The Stills family came to occupy 36D Lukes Road in 1975.  Their leasehold interest passed down through the generations.

Tensions arose within the Stills family; some wedded to the family history, others interested in selling to neighbours Robert and Elizabeth McCormack.

The McCormacks have a holiday home on a neighbouring site.  Mr McCormack founded Christchurch real estate firm Harcourts Grenadiers.

Matters reached a head following the McCormacks 2021 purchase of the Anglican Church’s freehold interest in 36D Lukes Road.  The Stills current twenty-one year lease for 36D was up for renewal in March 2022.

Their rights of renewal were disputed.

Andrew Stills led the charge, arguing unsuccessfully in the High Court that the Church had ignored what the Stills claimed was a right of first refusal should the Church sell its freehold.

Evidence was given that the McCormacks paid $400,000 to purchase the freehold for 36D.  The Stills offered $160,000.

Mr Stills argued there had been duplicity between the Church and the McCormacks in that earlier land title registrations removed any record of the Stills’ then existing legal right of access through their neighbour’s land to their bach at 36D.

With no enforceable legal access, the land at 36D was worth nothing, he said. Rent due should now be zero, Mr Stills claimed.

Evidence was given that these legal rights of access have been reinstated, after valuers pointed out an obvious error in not carrying forward an easement on the title years previously, when new land titles were issued.

There was no evidence of fraud, Justice Osborne ruled.

The Stills family made no formal response to the McCormacks’ 2022 rent review, which offered a further twenty-one year lease renewal at an annual rental of $28,080.  Capital value of 36D was assessed at $432,000 in August 2021.

Rent under the then current twenty-one year lease was in arrears.  Mr Stills said this was because invoices were sent to the wrong email address.

In the High Court, Justice Osborne said it is the leaseholder’s responsibility to ensure rent is paid, regardless of whether invoices are received or not.

Being late in paying rent, plus a failure to engage in the rent review process, meant the Stills’ lease expired in March 2022, without renewal.

The Stills became trespassers by remaining in possession.  The McCormacks, as owners of the freehold, were entitled to take possession of 36D, Justice Osborne ruled.

The Stills were ordered to pay a $60,450 occupation rent for the period running from the March 2022 expiry of their lease.

Stills v. McCormack – High Court (17.08.23 & 22.07.25)

25.167

Cryptocurrency: re Digital Asset Exchange

 

With cryptocurrency exchange Dasset in liquidation, and users facing an apparent six million dollar shortfall, liquidators have High Court approval to treat the $600,000 remaining as trust assets to be divided pro rata between unpaid customers.  Co-founder Stephen Macaskill has gone to ground; believed now to be overseas.  A Serious Fraud Office investigation into Dasset operations is underway. 

Digital Asset Exchange Ltd, trading as Dasset, was established in 2017 as an online trading platform with the stated aim of being a custodial trustee, holding individual currency and crypto-currency accounts on behalf of customers.

Dasset offered to action trades on behalf of customers, promising transactions would be recorded under each users name.  This did not happen.

Liquidators have found that Dasset simply dumped all currency and crypto-currency holdings into one bucket.  Poor record keeping meant specific assets could not be identified as held on behalf of any one customer.

Dasset’s liquidators have identified unauthorised and unrecorded withdrawals totalling some five million USD were actioned in the three years prior to Dasset’s 2023 liquidation.

A further complication facing liquidators is that customer trades were executed by Dasset through a master account held with third party provider Bittrex.  Mr Macaskill alone holds the digital master key.

Operations by US-based Bittrex are currently being wound down.  Its crypto-currency exchanges in Lichenstein and Bermuda are both in liquidation.

The High Court was told Dasset liquidators suspect that company operations collapsed at some point into a ponzi scheme.  Customers asking for their positions to be cashed out were paid from new money coming in, leaving user accounts unreconciled.

Dasset has about 5000 registered users.

The High Court approved liquidators’ application for all funds recovered to be held in one pool, with users to be paid pro-rata on the basis of how much they are owed.

Poor record keeping by Dasset meant this was the only pragmatic approach, Justice Gendall ruled.

These funds, currently totalling some $600,000, are trust assets, not available to meet claims by Dasset’s trade creditors, he further ruled.  Wording of Dasset’s contracts with customers promised their money would be held separately, in trust, with Dasset as custodian.

Liquidators have given Dasset’s registered users until 10 November 2025 to file proof of how much they are owed.  Late applications risk missing out on any pro rata payout.

re Digital Asset Exchange Ltd – High Court (18.07.25)

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