Utilities: First Gas v. Commerce Commission

  

Taranaki-based First Gas successfully challenged Commerce Commission’s 2023 regulatory changes which would have had the effect of reducing prices for customers served by its 7500 kilometre network.

There was insufficient evidence to support departure from previous practice of setting gas utilities weighted average cost of capital at the same level as that for electricity utilities, the High Court ruled.

Gas and electricity utilities are natural monopolies.  It is unlikely that any competitor will seek to duplicate their distribution network.  Monopoly profits can be extracted with excessive pricing.

Commerce Commission seeks to limit monopoly profits, primarily by determining the ‘true’ cost of capital a particular utility would face if it were operating in a competitive market; a calculation requiring some speculative assumptions. This calculation feeds into prices charged consumers.

The Commission’s balancing act is that the weighted average cost of capital needs to be high enough to ensure utilities recoup the cost of their investment, but not so high as to generate excessive profits.

As part of its regular review of utility pricing, Commerce Commission decided in 2023 to differentiate between gas utilities and electricity utilities, favouring electricity utilities on the basis they require greater capital investment: failure of electricity supply is more common than failure of gas supply, with the economic effect of any failure in the electricity network being more catastrophic, the Commission decided.

A higher weighted average cost of capital is justified for electricity networks so as to reduce the possibility of under-investment in network assets, the Commission said.

Gas networks were no longer considered ‘similar enough’ to electricity networks for the two to be treated the same.    

The only major gas network disruption was in 2011, when a landslide cut a gas pipeline in Taranaki; an network outage not caused by any lack of investment.

On appeal by First Gas, the High Court ruled the Commission did not provide compelling new evidence or analysis as to why gas networks should now be treated differently.

Forcing a change to gas network’s weighted average cost of capital without adequate evidence would undermine confidence in the current regulatory framework, creating uncertainty for businesses and prejudicing future investment decisions, the High Court ruled.

First Gas Ltd v. Commerce Commission – High Court (7.05.26)

26.153

Bylaw: Burton v. Queenstown Lakes District

  

Bylaws restricting trading activity cannot be arbitrary and imposed without consultation the High Court ruled, invalidating a Queenstown Lakes bylaw having the perverse effect of requiring mobile food outlets to close for thirty minutes after every hour’s trading regardless of whether customers were waiting.

The bylaw made its way on to books of Queenstown Lakes District Council after a bylaw restricting busking was extended to mobile traders.

Lake foreshore promenade at Queenstown is approximately 150 metres long and six metres wide; prime real estate for businesses seeking to attract passing trade.

The High Court was told frequent complaints about buskers had previously led to Council intervention, requiring registration and limits on how long a performer could monopolise one foreshore spot.

As part of Queenstown Lakes regular review of existing bylaws, a new 2023 bylaw saw busking restrictions extended to mobile food outlets also working the promenade.

Evidence was given that no public notice was given of this intended change.  It was inserted for Council approval only after an earlier Council planning hearing had heard public objections to other planned bylaw amendments.

Affected mobile shop operators sued: complaining it was totally impracticable to require mobile shops to close periodically during trading hours; claiming enactment of the bylaw was invalid.

Customers would be left waiting in line, unable to be served for the next thirty minutes.  Outlets serving hot food faced further difficulties in keeping food safe.

It was also inadequate to impose a bylaw that there must be a fifty metre distance between mobile shops, they claimed.  It may be necessary to keep buskers fifty metres apart, but only three mobile traders could operate along the promenade at any one time if the same rule were to apply to them.

Justice Lang ruled Queenstown District’s operating and spacing rules were invalid as applied to mobile traders.  The bylaw is arbitrary and potentially unjustified, he ruled.

Council process in approving the new bylaw was flawed in that affected businesses were not given an opportunity to be heard, Justice Lang ruled.

Burton v. Queenstown Lakes District Council – High Court (6.05.26)

26.152

Resale: Pacific Heights v. Jeff

  

Forced resale of prime residential sections forming part of a new subdivision in a depressed market following a buyer’s default will alert potential buyers to the extent market prices have fallen.  Instead, Palmerston North developer Pacific Heights held off, retaining title and instead suing Elizabeth Jeff for the drop in market value after she defaulted on a 2021 purchase.  The one benefit for Ms Jeff is that she was not liable to pay the fourteen per cent contractual interest as further damages for default, because there had been no resale.

But the High Court did add discretionary Contract and Commercial Law Act interest at ten per cent to her liability for the section’s drop in market value.

Ms Jeff paid a deposit to Pacific Heights Development Ltd on her October 2021 purchase of a $489,000 section, part of a new subdivision on Atlantic Drive, Aokautere.   

The High Court was told she had vanished after it came to pay the balance three years later, when title to lots in the subdivision came available.

In April 2025, the High Court ruled she was liable to complete the contract.

Substituted service was needed to give her notice of the then pending case.

She made no appearance.

More than a year later, Pacific Heights returned to court, seeking to quantify damages.

Evidence was given that Pacific Heights still held title; it had tried to resell but could not find a buyer, it said.  Market conditions were described as depressed.

A registered valuer appraised the $489,000 section as now having a market value of $350,000.

Associate judge Skelton ruled Ms Jeff is liable for the difference in value, less her deposit paid previously: a sum of $115,800.

Pacific Heights unsuccessfully claimed interest for late payment should run on the $115,800 debt at the rate set out in their contract: fourteen per cent.

Contract wording for payment of interest applies where a buyer defaults and there is a shortfall on resale, Judge Skelton ruled.

There has been no resale.  Pacific Heights retained the property, claiming damages for the reduction in value.

Stating it would be unjust for Pacific Heights be paid no interest at all, Judge Skelton applied a Contract and Commercial Law Act discretion to award a reasonable rate of interest: assessed at ten per cent; running for the fifteen month period between Ms Jeff’s failure to settle and the subsequent court ruling holding her liable to pay $115,800 damages.

It was not clear whether Pacific Heights has been able to track down Ms Jeff.

Pacific Heights Development v. Jeff – High Court (5.05.26)

26.151

Trustee: Petersen v. Dudley

  

Suspended as trustee of a Kaitaia ahu whenua trust, Rose Dudley persisted in ignoring Maori Land Court orders as she attempted to negotiate favoured access to her own home at the expense of other customary owners, leading to her removal as trustee.

A twelve hectare block off Fairburn Road operates as an ahu whenua trust, hosting a papakainga for its customary owners.  Access to their homes depends upon an informal road permitted by pakeha owners of neighbouring land.

The Maori Land Court was told of customary owners obtaining funding to upgrade their housing, conditional in part on formal road access being established.  This required negotiations with their neighbour, and registration of a surveyed easement.

Evidence was given of Rose Dudley, as one of the customary owners, persistently undermining the trust’s proposed plans for an easement, favouring a route benefitting her home.

She countermanded trustee instructions given to surveyors, increasing trust costs with superfluous survey work undertaken.

In October 2025, the Maori Land Court suspended Ms Dudley’s authority to act as a trustee.

Then in May 2026, she was removed as a trustee with immediate effect.

Ms Dudley was no longer working in the best interest of their ahu whenua trust, Judge Williams said.

She had acted in contempt of court by ignoring her earlier suspension as trustee; contacting funding agencies causing confusion in their minds about trust plans and activities.

This raised a risk of funding being withdrawn, Judge Williams said.

It is very clear she has little comprehension of what is required of a trustee and the fact that she could not act unilaterally.  She refused to follow legal advice and refused to follow decisions made collectively by trustees, he said.    

Ms Dudley separately applied to have all the other trustees dismissed, without successs.

Petersen v. Dudley – Maori Land Court (5.05.26)

26.150

Credit Contract: Beaven v. ANZ

  

Adding to the $64 million already paid out for failing to make full credit contract disclosure to nearly 100,000 customers,  ANZ must refund all interest paid over a three year period by a further 17,000 customers with the High Court ruling financial consequences of the failed disclosure for each customer could not simply be dismissed by ANZ as a small rounding error.

Payment due is not finalised.  The High Court set out parameters for calculation across the 17,000 customer accounts, requiring return of interest payments made over the period 2015-2018.

ANZ has already compensated nearly 100,000 customers with payments totalling $64.4 million: of this $35 million being a Commerce Commission settlement with ANZ admitting a failure to exercise the due diligence and skill of a responsible lender; $29.4 million being further compensation for what was described as a ‘coding error.’

Corrected disclosure letters were eventually delivered to affected customers. 

ANZ’s problems followed use of a third party developer in 2015 to design and implement changes to the Bank’s existing software package generating Credit Contracts and Consumer Finance Act disclosure letters advising customers of loan terms and payment amounts.

The High Court was told the revised package failed to include interest accrued, but not yet charged, for those customers renegotiating existing loans.

This error was picked up only after customer complaints.

ANZ did not finally remediate disclosure for three years.

Bank customer Andrew Beavan was selected as lead plaintiff in a class action against ANZ.

In 2015, he had renegotiated his existing Bank home loan; agreeing a fixed interest rate on that part of his home loan previously floating.

The Bank admitted its disclosure error, failing to properly calculate ongoing fortnightly interest payments.

This disclosure failure was of no economic significance, the Bank claimed.  Deviation from the correct disclosure amounted to no more than 0.4 per cent and 0.19 per cent for interest payments incorrectly calculated on Mr Beaven’s renegotiated loan.

Justice Venning ruled strict compliance with the Act was necessary.

ANZ was ordered to refund $32,700 to Mr Beaven: all interest paid for the period ANZ failed to make correct disclosure.

Class action litigators will use this formula to finalise a global settlement with ANZ on behalf of the remaining 17,000 customers signed up to its class action.

Beaven v. ANZ Bank – High Court (4.05.26)

26.149

Freezing Order: NZ Wagyu Breeding v. SFJ Holdings

  

Having paid grazing fees twice over to stop its livestock being seized, wagyu beef farmer SFJ Holdings moved quickly to freeze sale proceeds from intended sale of a Rakaia farm claiming to be owed some five million dollars for construction of onsite feedlot barns, dismissing as commercially ridiculous claims that SFJ gifted the barns with no expectation of payment.

Japanese owned SFJ Holdings Ltd is managed in New Zealand by Temuka based Shannon Swete.

It has been caught up in the 2024 collapse of Arato Tsujino’s NZ Wagyu operations.  NZ Waygu’s liquidator is taking legal action against Mr Tsujino following allegations he diverted company funds to other business interests.

SFJ Holdings is by far the largest unsecured creditor in NZ Waygu’s liquidation.

NZ Waygu arranged grazing for approximately 36,000 SFJ beef cattle on farms across New Zealand.  SFJ paid grazing costs to NZ Waygu; payments supposed to have been on-paid to farmers providing grazing.

Evidence was given that payments owed to about 110 graziers are in arrears.  To avoid its cattle being seized, SFJ directly compensated graziers; forking out another four million dollars in addition to what had previously been paid to NZ Waygu, taking an assignment of graziers’ claims against NZ Waygu.

Almost as a side-show, SFJ Holdings’ Mr Swete heard on the rural grapevine that a farm on Rakaia Highway owned by a NZ Waygu affiliate was up for sale.

This was a property where SFJ Holdings had stumped up five million dollars to construct feedlot barns, used to finish stock prior to slaughter.

Circumstances of the Rakaia sale were suspicious.

NZ Waygu’s Mr Tsujino was the prime mover, despite no longer being a director of the affiliated company.  He wanted the sale conducted off-market; ‘under the radar.’

Mr Swete told the High Court a sale was imminent.

This at a time when reimbursement of the five million dollar feedlot cost was disputed.  NZ Waygu claims it was a gift, spent with no expectation of repayment.

Justice Dunningham ordered that proceeds of any Rakaia Highway sale be frozen, pending a full accounting of net liabilities between NZ Waygu and SFJ Holdings.

NZ Wagyu Breeding and Genetics Ltd v. SFJ Holdings Ltd – High Court (30.04.26)

26.148

Co-ownership: Ho v. Ho

  

Daughters’ empathy in buying an Auckland home for their parents to live in rent-free came unstuck seven years later when the two daughters fell out, leading to a forced sale.

Jennifer and Jessica Ho took on a substantial mortgage in 2019 when they purchased a Birkdale property on Auckland’s North Shore for their parents’ benefit.

Initially, Jessica lived at the property with her mother, while their father was in prison.  Jessica’s parents-in-law live nearby.

The High Court was told of increasing disagreement between the two daughters.  Jennifer claims Jessica is favouring their parents to her disadvantage.

Jennifer said Jessica has been receiving $600 each week from their parents; paid as rent she claims.  Reimbursement for expenses paid on their parents’ behalf, Jessica says.

In 2020, Jennifer moved to Australia.  Jessica moved to London in 2021.

Their dispute reached a head when Jennifer stopped paying her share of joint mortgage payments, forcing her sister to make good the difference.   

Attempts were made to have Jessica buy out Jennifer’s half share in the property.

The court was told Jessica could only afford to buy out her sister in stages; an offer Jennifer dismissed as unworkable.

Justice Johnstone approved Jennifer’s Property Law Act application to have the property sold, with net proceeds to be divided between the two sisters.

Jennifer is under no obligation to leave her capital tied up in a half share of the property, he said.  Her parents, aged in their early seventies, will be required to move, but they have had the benefit of seven years’ rent-free accommodation.

Justice Johnstone delayed a forced sale for two months, allowing a final chance for family to buy out Jennifer’s half share.

Ho v. Ho – High Court (28.04.26)

26.147

Maori Land: Moratti v. Pukerangiora Manatopu

  

In a novel twist, the Maori Land Court allowed a Taranaki hapu assume ownership of Maori land as an incorporated society, despite the society being a ‘legal person’ which cannot ever satisfy the usual test requiring new owners to prove ancestral links to the land. 

Judge Warren said rules in Pukerangiora Manatopu’s constitution ensure control remains with individuals having the necessary ancestral links.

In existence for three decades, Pukerangiora Incorporated, now known as Pukerangiora Manatopu, is based at Waitara, near New Plymouth.  Its primary purpose is to preserve and promote the hapu’s cultural identity. 

The Maori Land Court was told the hapu proposed purchasing a block of land, currently registered as Maori freehold land.

In advance of the purchase, Pukerangiora sought Maori Land Court consent to ownership being taken in name of their existing incorporated society.

An incorporated society is a legal person, separate from its membership.

Judge Warren ruled approval depended upon the incorporated society’s rules.

The court was told membership of Pukerangiora is limited to adults approved by the hapu whakapapa committee.  Non-hapu members are not eligible for membership.

Any proposal to sell land owned by Pukerangiora Manatopu requires approval from 75 per cent of members.

Should the incorporated society be dissolved, all assets must be transferred to an organisation having a similar purpose.

Approval was given for ownership of the Maori land offered for sale to be transferred to the hapu’s incorporated society.

Pukerangiora Manatopu exists exclusively for the benefit of one hapu, Judge Warren said.

The effect of Maori land being held in name of a hapu-controlled incorporated society means the Maori Land Court will exercise only indirect supervision; primary control lies within Incorporated Societies Act rules.

Moratti v. Pukerangiora Manatopu – Maori Land Court (24.04.26)

26.146

Will: Stokes v. Wilson-Hokianga

  

Constructing his will from a template downloaded from the internet led to Brownie Eruera Wilson’s supposed will being invalidated for failure to comply with the Wills Act, resulting in daughter Bronwyn no longer being disinherited.  

The High Court was told Mr Wilson died in 2023, survived by his wife and four children.

Six years previously, one of their children convinced her parents it was important to have a will.  Preliminary discussions with a firm of Te Puke lawyers petered out; potential legal costs meant the family decided instead to draft their own document.

The document signed by Mr Wilson stated his ownership of customary Maori land holdings was to pass to three of his four children, plus a grandson.

Daughter Bronwyn was specifically excluded; a consequence of allegations about abuse, leading to a split in the family, the High Court was told.

The supposed will did not comply with Wills Act formalities.  It was signed by one witness only, not the required two.

Justice Mount declined to validate the document, as permitted by the Wills Act, if it were a document ‘expressing the deceased’s testamentary intentions.’

There was no copy of the original available, only a photocopy.

There were blank spaces in the document which could be read as being a draft only, with further detail yet to be included, Justice Mount said.

There was no evidence of what was discussed earlier with his lawyer; information which could provide useful information about Mr Wilson’s intentions.

Inheritance of Mr Wilson’s customary land will now be decided by the Maori Land Court.  The general rule is that all children equally inherit customary Maori land on death of a parent.

Stokes v. Wilson-Hokianga – High Court (23.04.26)

26.142

Power of Attorney: Foster v. Seales

  

His mother stole $600,000 from a trusting friend through misuse of an enduring power of attorney.  Son Michael Seale was ordered personally to make repayment after winding up his parents’ estates without first ensuring the debt was repaid as an estate liability.

The High Court was told Noel Foster signed an enduring power of attorney in favour Sharmaine Seales in October 2020.   She was a work colleague at a garden centre; a long-time friend and someone he trusted.

Mrs Seales, together with Mr Foster, then met with staff at the Manukau branch of Bank of New Zealand setting up signing authority for her over all Mr Foster’s accounts.

In the following three months she took $600,000 out of his bank accounts; $125,000 transferred into her own bank account, the rest into a joint bank account held with her husband.

Both Mrs Seales and her husband died within weeks of each other some eighteen months later.  Sons Michael and Jamie were appointed administrators of each parent’s estate.

Evidence was given of them making no attempt to ascertain extent of estate liabilities, the debt owed Mr Foster being a debt of both their estates.

As joint estate administrators, the two sons transferred to themselves as beneficiaries their parents’ Manurewa home and proceeds of bank accounts; all completed within one month of their surviving parent’s death.

The Public Trust, as property manager for Mr Foster, sued to recover his lost $600,000.

Jamie paid $204,800 in an out of court settlement.  Legal action against him was discontinued.

Michael, who lives in Western Australia, did not defend the claim.

After a formal proof hearing, Justice Andrew ruled Mrs Seales acted in breach of trust when misappropriating money taken from Mr Foster’s bank accounts.

On her death, her estate was liable for repayment.

Michael as estate administrator became personally liable to make good this estate debt, having prematurely distributed estate assets.

He was ordered to pay $396,000.

Estate administrators seeking to avoid personal liability for unknown estate debts can protect themselves by first giving Trusts Act notice of intention to wind up an estate, Justice Andrew pointed out.

Foster v. Seales – High Court (23.04.26)

26.145

Financial Reporting: FMA v. QEX Logistics

  

For financial reporting, a first ever: former listed company QEX Logistics and director Jingjie Xue were fined for failing to file financial statements.

Ten years on from enactment, Financial Markets Authority for the first time has prosecuted a listed company for failing to file financial statements.

Financial Markets Conduct Act requires timely filing of financial statements by ‘reporting entities,’ intended to keep investors better informed.

With legal action filed in 2024, FMA decided to pick over the carcase of former listed company QEX Logistics Ltd.

It currently sits moribund on the Companies Office register.

QEX was floated to the public in 2018 as a vehicle promoting NZ/China trade; delisted in 2022 after reporting losses of stock valued at some four million dollars and mass resignation of all directors other than founding director Jingjie Xue.

The High Court was told QEX had over 400 shareholders by the 2020 financial year.

It has failed to file financial statements since the 2021 financial year.  Filing requirements continued beyond delisting.

Mr Xue said resignation of fellow directors left the company with insufficient expertise to prepare annual financial statements.

It was agreed failure to file was not a case of dishonesty, rather negligence and mismanagement.

Justice Powell fined QEX Logistics $875,000; Mr Xue $175,000 with payment by instalments over the next eight months.

Mr Xue was also banned from being director of any reporting entity for the next three years.  In general terms, a ‘reporting entity’ is any substantial commercial entity holding investor funds.

Financial Markets Authority v. QEX Logistics Ltd & Xue – High Court (23.04.26)

26.144

Negligence: Deer v. South Pacific Avionics

  

When Jason Deer flew his Cessna aircraft to Nelson’s private Malibu airfield for regular maintenance in May 2021, little did he expect to then see it on fire, written off when fuel vapour ignited after a South Pacific Avionics employee applied ground power to the aircraft whilst installing a new magnetometer.

Mr Deer received a $315,000 insurance payout.

Seeking to recover its losses, his insurer sued exercising its rights of subrogation, unsuccessfully claiming Auckland-based South Pacific Avionics Ltd was negligent.

Mr Deer was working at the back of the hanger when fire broke out, calling the fire brigade as his aircraft was pushed out of the hanger and futile attempts made to extinguish the blaze.

The District Court was told Jimmy Ferguson, operating as Ferguson Aero Ltd, was already working on engine maintenance when South Pacific Avionics’ employee, Ryan Ryder, was called to the job by Mr Deer, asking him to carry out a 24-month avionics inspection and also install a magnetometer, part of an aircraft’s navigation system.

Evidence was given of Mr Ferguson previously removing the aircraft battery before commencing work on the fuel lines.

The two were working at the same time on different parts of the aircraft.

Mr Deer claimed he did not hear Mr Ryder seek an all clear before connecting a ground power unit.

Mr Ferguson subsequently worked on the fuel lines for some ten minutes before fuel vapour ignited following a spark from an exposed alternator wire accidentally touching what was now a ‘live’ aircraft.

Judge Kelly ruled the insurer failed to prove any failure by Mr Ryder to check with Mr Ferguson before connecting ground power.  It is likely he did so, Judge Kelly said, but was unaware at the time that this would energise all aircraft electrical systems even with the aircraft master switch turned off.

Judge Kelly further said it is not unsafe under any circumstances to connect a ground power unit when maintenance work is underway; it is only unsafe for the brief period in which a fuel line might be open during maintenance.

The fire was ruled an accident; there was no proof of negligence.

Deer v. South Pacific Avionics Ltd – District Court (23.04.26)

16.143

Restructuring: Ge v. Francis

  

Described as repugnant commercial conduct, Cong Liu’s Little Hen Ltd was censured in the High Court for improperly forcing a property developer into liquidation and allegedly forging contracts; all part of a scheme to recover a commercial debt.

Liquidation of GLZJ Ltd was invalidated with control restored to Christchurch investor Binbo Ge.  Justice Becroft signalled Little Hen should pay compensation for wasted liquidation costs to date, estimated at about $50,000.

The High Court was told Little Hen sold land in 2022 at Onehunga in Auckland earmarked for property development to GLZJ Ltd for $8 million. Little Hen left in $2.6 million as vendor finance on a two year term loan.  It registered no mortgage; mortgage security went to another financier funding the proposed development.

GLZJ’s plans fell through.  Insufficient pre-sales killed the project.

It on-sold the land, finding a buyer at $6.47 million with $1.6 million left by GLZJ as vendor finance.

A scrap developed over this $1.6 million, being GLZJ’s only remaining asset after its foray into the Onehunga project.

Construction company Chimbusco, owned by Tingsong Qui wanted a slice, while Little Hen was increasingly nervous about recovery of its $2.6 million term loan.

Little Hen was instrumental in pushing GLZJ into liquidation.

Eighteen months elapsed before GLZJ challenged Little Hen’s actions, complaining no debt was due and that Little Hen was ‘motivated by ill will’ when it forced GLZJ into liquidation.

The High Court was told of an earlier flurry of emails in July 2023 in which Little Hen and GLZJ bargained over how to split repayments to be received by GLZJ’s on its $1.6 million vendor finance.

Justice Becroft ruled they agreed at that time that the two year $2.6 million term loan owed by GLZJ to Little Hen was to be cancelled, replaced by a ten year $800,000 term loan with payment of the reduced amount now personally guaranteed by Mr Ge.

This deal went beyond being simply an agreement to agree, Justice Becroft ruled.  Agreed terms were clear.  Little Hen, as promised, immediately withdrew a caveat otherwise blocking GLZJ’s onward sale of the Onehunga property.

Little Hen later improperly forced GLZJ into liquidation for supposed default on a two year term loan that no longer existed, Justice Becroft ruled.  The two year loan had been replaced by a new ten year term loan for a lesser amount.

Mr Ge’s promise to personally guarantee the reduced loan was an extra benefit, making the varied contract enforceable.

It came out in evidence that a critical part of negotiations on behalf of Little Hen was supposedly conducted by Chimbusco’s Mr Qui, rather than by owner of Little Hen, Mr Liu.

This formed part of an unsuccessful argument that the July 2023 email negotiations amounted to no more than an agreement to agree, rather than a binding contract.  

Justice Becroft questioned the credibility of both Mr Qui and Mr Liu as regards both their evidence about the 2023 negotiations and the validity of a September 2022 contract in which GLZJ supposedly sold some of its Onehunga land back to Little Hen.

The court was not asked to rule on validity of this 2022 contract, but Justice Becroft queried how a contract dated September 2022 came to be recorded on an Auckland District Law Society contract template that was not available for use prior to May 2023.

Ge v. Francis – High Court (22.04.26)

26.141

Professional Negligence: Harvestfield Holdings v. McIntyre

  

Consulting engineer Scott McIntyre was ordered to pay $2.6 million damages covering redesign costs and extra loan interest payments after his faulty work delayed a West Auckland subdivision.

The High Court was told work on Harvestfield Holdings 145-lot residential subdivision in Sunnyvale was delayed eighteen months while Mr McIntyre’s engineering designs were reworked and new council approvals obtained.

Evidence was given of his initial engineering plans setting benchmark levels too low.

Several lots did not have sufficient fall for connection to public mains.

Other lots were not of sufficient height to satisfy council requirements of finished floor levels to be at least one metre above neighbouring Oratia Stream’s baseline 100 year floodplain.

Roading set too low saw nearly thirty lots with driveway gradients exceeding those required by council.   

Stage one earthworks commenced in early 2016 were substantially complete before design errors became apparent.

Mr McIntyre initially worked with Harvestfield to correct mistakes, before being removed from the job.

In the High Court, Justice Andrew ruled Mr McIntyre liable for professional negligence.  

He was responsible for the initial engineering plans and designs, under subcontract from Projenz.

Errors made delayed construction.

Mr McIntyre is liable for costs caused by this delay Justice Andrew ruled: redesign and rebuild costs ($658,500) and wasted interest costs ($1.9 million).

Evidence was given of Harvestfield paying ongoing interest at 12.5 per cent on its loan finance during the eighteen month delay.

Mr McIntyre was disqualified from defending Harvestfield’s claim, after failing to comply with a court timetable for filing documents.

Harvestfield Holdings Ltd v. McIntyre – High Court (21.04.26)

26.140

Put Option: Wololo Ltd v. Dowell

  

What was intended as a rescue strategy salvaging something from the failure of advertising agency Lionize subsequently saw Wellington’s entrepreneurial investor Peter Dowell ordered to repay $1.5 million, forced to buy-back the business.

The High Court was told Mr Dowell joined Lionize director Michael Taylor in a 2022 salvage operation, picking the bones out of Lionize after it went into administration reportedly owing five million dollars.

They set up Playmaker Media Ltd, representing potential future income which might eventuate from former Lionize staff continuing in business, tapping existing industry contacts.

Wololo Ltd, controlled by Tim Pointer and Mat Rowe, purchased Playmaker Media following Mr Dowell’s indications the newly revived business could generate annual revenues of between $500,000 and $800,000.

Mr Dowell signed a put option and a guarantee, undertaking to buy back the business if a $500,000 target was not achieved in year one.  He also mortgaged, as security, a Petone property owned by a company he controlled: Cuba 444 Ltd.

Before the year was up, it was clear Playmaker Media would not get anywhere near projected sales targets.

Wololo Ltd put Cuba 444 into liquidation, forcing sale of the Petone property; getting nothing.  There was no surplus on sale after payment to a prior ranking secured creditor.

With Mr Dowell facing enforcement of the put option, he attempted to find new investors willing to take over Playmaker Media.

The High Court was told a third party buyer named as Close to Home Pty Ltd did sign an unconditional contract agreeing to pay AUD 1.7 million, but never settled.

When sued by Wololo Ltd, Mr Dowell claimed legal action should be taken against the defaulting Close to Home; any liability on the put option expired on this third party sale, he claimed. 

In the High Court, Justice Grau ruled any concessions Wololo Ltd allowed in giving Mr Dowell time to find a third party buyer did not detract from the clear and unambiguous put option and guarantee he had signed.

He was ordered to pay back $1.5 million to Wololo Ltd.

The High Court was told Mr Dowell was previously offered an opportunity to repay the debt by instalments, but did not take up Wololo’s offer.

Wololo Ltd v. Dowell – High Court (17.04.26)

26.139

Trust: re 'Generations Family Trust'

  

High Court ‘blessing’ in advance of trust restructuring absolves trustees from any personal liability, a process used by trustees of an un-named multi-million dollar discretionary family trust where tax consequences following restructuring are still unknown.

Given the alias ‘Generations Family Trust’ in a publicly released court judgment, the Wellington-based Trust was described as holding shares valued in the ‘tens of millions’ of dollars, together with five million dollars in bank term PIE deposits.

The Trust was established in 1984 by a couple who had no children together, but between them had nine children from previous relationships.

The two died a few years apart, more than twenty years ago.

Trustees have subsequently made annual payments to beneficiaries.

The High Court was told there are currently fifty trust beneficiaries: encompassing the settlors’ nine children, plus grand-children and great-grandchildren.  These beneficiaries live all round the world; primarily in New Zealand and Australia. 

Following general agreement that it was time to windup the Trust, trustees liaised with lawyers, accountants, actuaries and tax specialists, settling on a formula to divide trust capital into nine tranches.

Trustees propose cashing up trust assets; proceeds settled on new multiple trusts.

Their proposal put to beneficiaries raised no objections, other than concerns about potential tax liability.  With beneficiaries spread across multiple tax jurisdictions and with each jurisdiction having its own tax rules, some beneficiaries would see their windfall payout cut back because of tax due.

When applying to the High Court for Trusts Act ‘blessing’ to their proposal, trustees said they intend to hold back some assets from sale.

Payment in kind rather than cash might be more tax advantageous for some beneficiaries.

For others, the Trust might pay their tax bill out of trust assets.

Despite the lack of finality as to how assets might be distributed, Justice Boldt gave his blessing.   

The proposal is balanced and properly reflects the interests of beneficiaries, he said.

The consultation process has been robust and detailed, he added.

re ‘Generations Family Trust’ – High Court (15.04.26)

26.138