Class Action: Sillsco v. Hino Motors

  

A $10.9 million class action settlement agreed with Hino Motors following allegations it provided misleading information about fuel efficiency and emissions for its diesel vehicles will see consumers get $1440 compensation at best per affected vehicle, on par with similar payouts in Australia.

Trans-Tasman class action litigators Shine Lawyers are to receive $2.5 million for promoting and managing the New Zealand claim in which Hino was sued for alleged breaches of the Fair Trading Act and the Contract and Commercial Law Act.

Four months of negotiations between Shine Lawyers and Hino led to an out of court settlement approved by the High Court with Hino paying $10.9 million while making no admission of liability.

Class action litigation on both sides of the Tasman commenced after Hino Japan acknowledged in 2022 that there had been deficiencies in certification of vehicle emissions and fuel efficiency.

This data had been used to support NZ Transport Authority certification of new and used Hino diesel vehicles imported into New Zealand.

Just on 10,300 vehicles are affected.  

Evidence was given of Shine rounding up potential claimants ready to take legal action against Hino for what was a claimed over-payment when purchasing affected vehicles.  Just over 2,200 owners signed up.  Thirty-five opted out.  Two complained that projected compensation was too low, choosing to do nothing.

Shine Lawyers told the High Court that affected purchasers had been divided into owners of high value, medium value and low value vehicles.

Projected payouts would see a $720 payout for class action owners of a low value vehicle: doubled for owners of a high value vehicle, mid-way between the two for medium value.

Where a vehicle has been resold since importation, compensation is to be split between owners according to time owned.

Justice Blanchard ruled the proposed settlement and formula for distribution is fair and reasonable.

There is no ‘correct’ figure, he said.  It is only necessary that the agreed figure fits within a range of possible outcomes.

Approved as part of Shine Lawyers’ fees is a 25 per cent ‘premium,’ added to their fees recovery as reward for a successful outcome.  This premium was agreed by class action members when signing up.

Vehicle owners who ‘opted out’ of the class action can still bring their own legal claim against Hino, at their own cost.

Sillsco Ltd v. Hino Motors Ltd – High Court (16.06.26)

26.181

Investment: Clarendon v. Air Hull Technologies

  

Dargaville farmers Donald and Clare Fisher resisted attempts to have them self-certify as ‘wholesale investors’ before investing $200,000 in Air Hull Technologies, later getting a High Court order requiring Air Hull and former director Mark Goodhew repay the $200,000 plus interest following failure to provide a ‘product disclosure statement’ prior to investment, as required by Financial Markets Conduct Act.

Justice Becroft ruled Air Hull should have disclosed in advance with a product disclosure statement that Mr Goodhew and his spouse as majority shareholders were at war and at risk of separating.  He accepted the Fishers’ claim that they would never have invested if aware of these matrimonial difficulties.

The Goodhews did subsequently separate.

Auckland-based Air Hull Technologies Ltd was not a commercial success.  It was established to manufacture inflatable rubber-hulled boats.

The High Court was told Mr and Mrs Fisher were approached in 2017 by John Paine, owner of investment advisory company TBK Capital Ltd, sounding them out about an investment in Air Hull.  Mr Fisher had previously contacted TBK Capital seeking investment possibilities.

They were provided with financial information about Air Hull, together with an indicative valuation.

Evidence was given that Mr Paine encouraged them on multiple occasions to sign declarations that they were ‘wholesale investors.’  They did not sign, with Mr Fisher telling Mr Paine from the outset they did not qualify for that status.

Wholesale investors are considered sufficiently knowledgeable to not require full Financial Markets product information disclosure when investing; they can look after themselves.

Justice Becroft ruled both Air Hull and Mr Goodhew as director were aware that a Financial Markets Conduct Act product disclosure statement should have been supplied to the Fishers, setting out potential risks of their investment.

The fact husband and wife are majority shareholders of a company seeking investment is not, by itself, a business risk requiring disclosure, he said.

But the fact Mr Goodhew and his spouse were in this case at loggerheads at a time Air Hull was seeking new investment and that this disharmony was likely to disrupt company operations should have been disclosed as a business risk, he ruled.

Both Air Hull and Mr Goodhew were ordered to refund the investment made.

Mr Goodhew did not file a statement of defence, or attend the court hearing.

The Fishers also sued another Air Hull director: Harvinder Singh.

Mr Singh did file a statement of defence.

A full court hearing is required in respect of their claim against Mr Singh.

Clarendon Ltd v. Air Hull Technologies Ltd – High Court (16.06.26)

26.180

Mortgage: Ver v. American Dream Ltd

  

Both claim to have been maligned and unfairly targeted by vaguely defined ‘authorities.’  Caribbean-based bitcoin investor Roger Ver and current New Zealand resident Kim Dotcom were natural allies when it came to a supposed 2021 agreement setting up Fileshop, an online file-sharing service designed to encourage payment with bitcoin.

For more than a decade, Mr Dotcom has been resisting extradition to the United States where he faces breach of copyright allegations after sharing movies through his earlier file-sharing business: Megaupload.

Currently, he challenged repayment of a $15.1 million loan from Mr Ver suggesting this money has been lost in their unsuccessful Fileshop project.

The High Court was told of a 2021 agreement between the two with funds advanced to a company called American Dream Ltd, controlled by Mr Dotcom’s spouse.

The transaction was structured as a loan to American Dream, interest payable at six per cent.  Unusually, the loan was unsecured, with terms acknowledging these funds could be used to buy a residential property on Mount Alfred Ridge at Glenorchy, near Queenstown, with Mr Ver having the right on default to demand either repayment or registration of a mortgage over Mount Alfred.

Mr Dotcom told the High Court this unusual arrangement was at Mr Ver’s request; he did not want ‘scrutiny from the authorities.’

Three years on, American Dream stopped paying interest.  Because Mr Ver failed to stump up further capital allegedly promised for Fileshop, Mr Dotcom claimed in the High Court.

Mr Dotcom challenged Mr Ver’s court application to have a mortgage registered over Mount Alfred to now protect his earlier unsecured advance.

This loan was tied to their Fileshare project, Mr Dotcom said.  It could not be enforced when Mr Ver had reneged on further funding, he claimed.

Associate Judge Gambrill ruled any claim Mr Dotcom may have against Mr Ver’s alleged failure to further support Fileshare is completely separate from Mr Ver’s contractual right to force registration of a mortgage over title to the Mount Alfred property.

He questioned why Mr Dotcom failed to produce in court any evidence of Fileshop’s existence.

American Dream was given two days to complete necessary paperwork for registration of a mortgage.  Failing that, a High Court registrar was given authority to sign the necessary documents.

Ver v. American Dream Ltd – High Court (15.06.26)

26.179

Subdivision: NZ Trustee Services v. Burnside Trustees

  

Two decades after what was intended as a three year Christchurch property deal, investor Shayne Philpott has died with trustees of his family trust needing High Court intervention forcing a sale to extract his share of the venture. 

Back in 2004, Mr Philpott joined with two family trusts owned respectively by Greg Smith and Colin Stokes to buy a property on George Noble Road in Yaldhurst.  It has potential for subdivision into about thirteen lots.

Subdivision has been hampered by lack of legal access.  A 2025 High Court ruling did not help; deciding a neighbour had no obligation to upgrade an existing right of way to status of a legal road.

Mr Stokes lives at one house on site.  The other two houses are rented out by his fellow investors.

The High Court was told of some dissension between the three over ongoing funding for their stalled project.

Rates for George Noble Road were left unpaid.  Borrowings ran over ANZ Bank’s overdraft limit.   

Mr Stokes stopped paying his agreed share of ANZ Bank financing in 2024, complaining his fellow investors were making no progress on implementing an informal agreement that he be granted a larger share of the project in return for all the work he has done; acting as property manager on site and preparing for the currently unsuccessful litigation over road access.

NZ Trustee Services Ltd as trustee of the late Mr Philpott’s family trust wants out, seeking a High Court Property Law Act order for a sale with net proceeds to be split equally between the three.  Mr Stokes wants progress on a subdivision to continue.

Associate Judge Lester ordered a sale, subject to conditions.

The court was told two of the three investors favour a sale.

There was never any long-term commitment to the project.  It was agreed back at the start in 2004 that any one of the three investors could sell out, if they wished, after three years.

Now twenty years on, arguments over shared commitments to financing at a time when the bank loan is overdrawn raises the risk of a mortgagee sale, Judge Lester said.

Each of the investors’ family trusts are liable as guarantors.

He ordered a valuation of the project on the basis of current subdivision potential, with Mr Stokes given three months to buy out his fellow investors at that valuation.

Failing that, the un-subdivided property is to be sold on market, as is.

Judge Lester ordered that 25 per cent of funds realised, being either net sale price on sale in the open market or valuation price Mr Stokes pays to his fellow investors, be held in trust for a maximum of three months; these funds then released after agreement on financial compensation due Mr Stokes for work carried out over the years on all investors’ behalf.

NZ Trustee Services Ltd v. Burnside Trustees Ltd – High Court (15.06.26)

26.178

Asset Forfeiture: Commssioner of Police v. Whitehouse

  

While not charged with drug offences, Police had proceeds-of-crime restraining orders placed on four Auckland properties valued at $3.7 million registered in Richelle Jean Whitehouse’s name, claiming the properties were ‘tainted’ by reason of her alleged laundering of drug profits generated by family members, with one of the properties to be sold by court order.

Her son, daughter and estranged husband all have convictions for drug-related offending.

Ms Whitehouse herself has prior convictions for cultivation and supply of cannabis.

The High Court was told of a 2022 police raid discovering a methamphetamine lab and over $150,000 cash on a property in Waitakere owned by Ms Whitehouse.

Further investigation identified over $1.18 million of unexplained cash deposits in her bank accounts over a seven year period with some $880,000 transferred from unknown third parties.     

Police had restraining orders placed on properties registered in her name at Waitakere, South Head and two in Glen Eden.

The High Court subsequently approved an agreed Criminal Proceeds (Recovery) Act sale of the South Head property, intended to realise $748,000 to be held pending a further court-approved profit forfeiture order.

BNZ Bank was dragged into court proceedings by reason of Ms Whitehouse’s bank borrowings being securitised across all four properties.

The Bank agreed to lift its mortgage from the South Head property prior to sale; security adjusted over the remaining three.

It was agreed that after recovery of the agreed $748,000, restraining orders will be lifted from these other three properties.

Commissioner of Police v. Whitehouse – High Court (12.06.25)

26.177

Venture Capital: Jesani v. Ford

  

Venture capital valuations for start-up companies bear no similarity to share valuations for profitable businesses, a concept apparently misunderstood by a consortium of doctors who lost their investment in Ecolibrium Biologicals and then tried unsuccessfully to claim more than twice the value of their original investment from company directors after Ecolibrium was wound up insolvent.

Ecolibrium Biologicals Holdings Ltd was the brainchild of microbiologist Stephen Ford.  Based at Bombay in South Auckland, it looked to commercialise use of biological rather than chemical pesticides.

This venture eventually failed, the death-knell being receivership initiated by Mr Ford as secured creditor.

Ecolibrium’s assets were sold in 2022 to newly incorporated Cellora Ltd, with Mr Ford as minority shareholder.  Ecolibrium shareholders received nothing.

During Ecolibrium’s start-up phase, a consortium of doctors led by Mitul Jesani agreed to put in seed capital.  For Dr Jesani personally, this was an initial investment in 2018 of $500,000 giving her what was then a ten per cent shareholding.

Consortium members were later required to tip in further cash, typically as short term loans; some of which were converted to equity on terms that were never specifically agreed, the High Court was told.

Evidence was given off increasing tension between Ecolibrium management and the consortium as the company burned through cash.  Short term loans were advanced to meet monthly bills, primarily wages.

Consortium members were not willing to front up with a large sum as part of further capital raising, but at the same time were against dilution of their current holdings.

They were to later learn that management voted through major constitutional changes to Ecolibrium without their knowledge, ignoring their rights to vote.

Ms Jesani sued, demanding the consortium be bought out at a price of $6.21 per share, valuing the company at ten million dollars.  If successful, Ms Jesani would receive $1.04 million.

She said this was the value management put on the company prior to what she claimed was oppressive behaviour subsequently driving Ecolibrium into the ground.

The figure of ten million dollars was derived from management’s draft 2020 valuation of Ecolibrium intended to support a further capital injection from venture capitalists, a capital injection being proposed at a time when Ms Jesani and the consortium were discussing possibility of having their shares bought out.

No capital injection and no share buyout eventuated.

Giving evidence in the High Court, a valuer said no value could be ascribed to the company as at 2020 using normal valuation principles: no valuation could be assessed based on future earnings (there were no immediate prospects of future earnings and Ecolibrium was currently suffering substantial negative cashflows); and an assets-based valuation was not appropriate (product development was still only work in progress with commercial viability not yet established).

Raising venture capital for a start-up company is a back-to-front process: assumptions are made as to what a business might be worth in the future to estimate a future exit value on listing or sale, then working backwards to fix a share price to achieve the venture capitalists target return rate.

Venture capital investors realise most investments will fail, written off.  They spread their investments across multiple business opportunities.  If only ten per cent of investments prove profitable, losses might be recovered with overall returns potentially proving handsome.

Ecolibrium management’s 2020 ten million dollar valuation was more a pie-in-the sky estimate of future value than a then current valuation of their company.

Not surprising, management did not respond to the consortium’s request to be bought out at a share price based on this ten million dollar valuation.

In the High Court, Justice Robinson ruled circumstances in which Ecolibrium management ignored the consortium’s voting rights did amount to Companies Act ‘oppressive behaviour.’

No useful remedy is available, he said.

Ecolibrium is in no position to buy them out, certainly not at $6.21 a share; it is insolvent.

Majority shareholders responsible for any ‘oppressive behaviour’ could not be required to buy their shares; valueless now that the company is in liquidation insolvent.

At best, Ecolibrium should have been put into liquidation in 2020, two years earlier than it was, he said.  Whatever value could be extracted from company assets at that time could then have been distributed amongst all shareholders, including the consortium.

Jesani v. Ford – High Court (11.06.26)

26.176

Indemnity Costs: Heartland Bank v. Campbell

  

Years spent by Taranaki couple Caroline and Calvin Campbell in ultimately unsuccessful negotiations with Heartland Bank over payment due on a guaranteed debt saw them liable for $101,800 increased enforcement costs. 

The Bank’s contractual indemnity entitling it to recover all enforcement costs extended to legal costs incurred reviving what would otherwise have become a statute-barred debt, the High Court ruled.

Long-term commercial contracts typically include indemnity clauses holding debtors liable to pay in full any enforcement costs; justified as having the defaulter pay for costs of default.

Courts are wary of lawyers chucking the kitchen sink at indemnity cost recoveries, padding bills.  Indemnity costs claimed must be reasonable.

The Campbells’ legal difficulties followed a failed 2012 investment in New Plymouth commercial property by their family company.  A forced sale left a $910,000 shortfall; payment guaranteed by the Campbells.

Enforcement of this guarantee was delayed years whilst the Campbells first complained unsuccessfully to the Banking Ombudsman about manner of the forced sale, and then later after they pleaded for time, saying they planned to subdivide their residential property to generate cash.

With time running out for Heartland Bank as a Limitation Act deadline loomed, deeming the guarantee unenforceable after a six year delay, the Bank went to the High Court getting special permission for enforcement beyond six years.

The Campbells claimed this extra court application went beyond normal recovery procedures; they should not be liable to reimburse these Bank costs, they argued.

Back in the High Court, Justice Gardiner ruled these costs were included in the Bank’s indemnity clause as costs ‘connected’ with ‘protecting or enforcing’ its rights.

Having reviewed lawyer’s invoices paid by the Bank and finding costs charged reasonable, she ordered the Campbells pay Heartland Bank a further $101,800.

Heartland Bank v. Campbell – High Court (11.06.26)

26.175

Relationship Property: O'Connor v. Gnap

  

A nearly finalised Auckland property development is to be valued on an ‘as is’ basis, not an ‘as completed’ basis, the High Court ruled in a relationship property dispute.

This saw relationship property assets reduced by $700,000 on appeal from a Family Court ruling in a drawn-out property dispute between Simon O’Connor and Katarzyna Gnap following their decade long relationship.

One of their arguments centred on valuation of a property development in Birkdale on Auckland’s North Shore.

The court was first required to untangle terms of funding for the Birkdale project provided by Mr O’Connor’s fellow investor Gerhard Simanke plus further funding from a family estate for other property purchases.

It was only after Mr O’Connor and Ms Gnap separated that these informal funding lines were recorded in writing, leading to allegations that evidence was being cooked up to buttress Mr O’Connor’s claims this funding was a relationship debt; created to reduce Ms Gnap’s relationship property payout, it was alleged.

The funding was ruled a relationship debt.

The property development in dispute involved Mr O’Connor’s newly-formed company 258 Birkdale Road Ltd purchasing from Mr Simanke a house and land with intention of subdividing the land into three lots and construction of two further houses.  

Shares in 258 Birkdale were agreed to be relationship property.

Value of these company shares equated to the value of the underlying assets: the land and buildings.

The Family Court accepted at date their relationship property dispute came to a hearing that the project was worth $3.04 million, on the basis the project was complete.

The High Court ruled it was wrong to value the project as if it were complete.  It wasn’t.  There were still costs to come: payment of a development levy; final survey costs; obtaining code compliance certificates; and getting new titles issued.

These are all costs a potential buyer would take into account if sold, Justice O’Gorman ruled.

The Birkdale project was valued ‘as is’ at a reduced figure of $2.39 million.

O’Connor v. Gnap – High Court (10.06.26)

26.174

Chatham Islands: Moriori v. Attorney General

  

Almost two hundred years after Taranaki Maori forcefully occupied what is now known as the Chatham Islands, killing and enslaving its original Moriori inhabitants, Moriori descendants who claim these invaders hold no customary property rights to the Chathams and its resources have now failed in a legal attempt to block any possibility that these invaders might be granted ownership rights.  Treaty settlements are political decisions for government; courts do not interfere, the Court of Appeal ruled.     

The narrative begins five years prior to signing of the Treaty of Waitangi in 1840.

Non-violence was the cultural norm amongst Moriori.  This was in sharp contrast with the practice on New Zealand mainland where ‘might is right’ was the norm; land ownership was marked by occupation and occupation could be taken by force. 

When nine hundred Maori affiliated to Ngati Mutunga and Ngati Tama arrived on pakeha ships in 1835 they were greeted by Moriori peacefully, only to then be attacked with one sixth of the population killed and the rest enslaved.

This pre-Treaty land grab has now become a post-Treaty political problem.

A Treaty settlement was agreed with descendants of Moriori in 2021, over the top of an unsuccessful challenge by representatives of Ngati Mutunga.

Moriori now challenge government Treaty negotiations with Ngati Mutunga, claiming it would be ‘unlawful’ for government to recognise Ngati Mutunga as having any customary ownership rights over the Chatham Islands.

In 2025, government agreed Ngati Mutunga held rights of ownership; recognised as tino rangatiratanga, wrongly ignored by successive governments.  A deed initialled by both parties proposes legislation providing compensation in cash and kind.

Moriori sued to block any legislation giving effect to this deed, claiming enactment would be an existential threat to the name and mana of Moriori and its attachment to the Chathams.

The separation of powers between parliament and the courts mean the judiciary does not interfere with political decisions to present draft legislation to parliament, the Court of Appeal ruled.

Moriori v. Attorney General – Court of Appeal (10.06.26)

26.173

Honey: Springbank Honey v. Gifford

  

Similar claims, different outcomes.  Unpaid honey suppliers were fended off by Stephen Brown’s Springbank Honey with comments that their honey was below standard; suppliers argued their product had deteriorated because of Springbank’s poor processing and transportation.  Of multiple unpaid suppliers, Bay of Plenty’s Dale Gifford got a High Court order for payment of $484,700; an order of little substance since Springbank is now in receivership.  

Springbank Honey Ltd operated out of Cust in North Canterbury; processing honey for sale.

The High Court was told Mr Gifford supplied honey to Springbank in May 2024, with payment promised by instalments.

With $484,700 remaining unpaid, he applied to have Springbank liquidated on grounds of presumed insolvency – a common legal tactic used to force payment of company debts.

Three months previously, another unpaid supplier had tried a similar tactic.

Northland supplier Hillside Honey Ltd was chasing $587,500 unpaid.

Hillside’s claim was put on hold; Associate Judge Cogswell ruling there was a live dispute as to who was to blame for the allegedly poor quality of Hillside’s Honey.

The commercially critical component of manuka honey is levels of hydroxymethylfurfural (HMF).  The lower the better.  HMF increases naturally over time.  Levels can be affected by heat and transport.   

Judge Cogswell told Hillside further evidence is needed as to whether high HMF levels were the fault of Hillside or Springbank.

When Mr Gifford sued months later, Springbank put up the same argument, seeking to have this second court action also put on hold.

This time round, Associate Judge Brittain took a harder line, ruling Springbank had failed to provide any evidence that Mr Gifford’s honey was above contracted HMF levels at the time it was delivered.

Requests by Mr Gifford’s lawyers for relevant reliable evidence were ignored.

Tests supposedly done after his honey was blended with honey from other suppliers were not evidence of the HMF levels of Mr Gifford’s honey at time of delivery eight months earlier, lawyers said.

Springbank Honey was ordered to pay Mr Gifford the $484,700 still due, or face liquidation in three weeks.

Within days of that deadline, Bank of New Zealand appointed receivers.  They have taken control of all Springbank Honey’s assets.

Springbank Honey Ltd v. Gifford – High Court (10.06.26)

26.172

Estate: re Succession to Donald McLeod

  

Leaving his only child nothing led the Maori Land Court to award Donald McLeod’s daughter a quarter share of his Maori freehold land, exercising powers under the Family Protection Act to adjust terms of his will.  

The court was told he denied any existence of daughter Kim for most of his life.  She was raised by maternal grandparents who lied, telling Kim that her father had died in a car accident when she was young.

It was only after her grandparents’ deaths that she learnt her father was still alive.  She tracked him down by ringing those named McLeod in the Taumaranui phonebook.

Their relationship developed over the next fifteen years.

In the final year of her father’s life she shifted to Taupo to be closer to him, visiting him regularly and cooking for him. 

On his death in 2021, he left his entire estate to a grand-niece: Jacinta.  They were close.  She was raised by him.

Evidence was given that Donald McLeod’s will was signed a little over one year prior to his death, at a time when a close and supportive relationship had developed with daughter Kim.

There was no explanation in his will as to why nothing was left to his only child.

She made a Family Protection Act claim, stating her father breached a moral duty owed his daughter, severing her and her descendants’ ties to their ancestral land.

Judge Wara said it was a breach of Maori custom to exclude descendants from Maori land inheritance without prior discussion or giving reasons.

Donald McLeod’s also failed to recognise a moral duty owed his daughter, she ruled.

Daughter Kim was awarded a 25 per cent share in her late father’s Maori freehold land.

Her cousin Jacinta retains a 75 per cent share.

Jacinta did not challenge Kim’s Family Protection Act claim.

re Succession to Donald McLeod – Maori Land Court (9.06.26)

26.171

Fair Trading: Commerce Commission v. CityFitness

  

Disguising price increases for members as ‘transaction fees’ and ‘payment authority fees’ cost CityFitness $1.12 million, fined for breaching the Fair Trading Act.

The District Court was told of a calculated decision made in 2023 by CityFitness senior management to recover increased business costs without disclosing increased pricing in its headline advertising.

New members signing up were not told the extra ‘transaction fee’ loaded into weekly or monthly billing would be three per cent of their membership fee.

Existing members were unilaterally charged a ‘payment authority fee,’ adding three per cent to their existing fees.     

Commerce Commission investigated following complaints made by some twenty CityFitness members.

After investigation, it prosecuted CityFitness for breaching the Fair Trading Act; ‘misleading the public as to the nature or characteristic of the service provided.’

Evidence was given that the actual transaction cost on CityFitness billings was about forty cents for each credit card transaction, five cents for direct debits.

CityFitness admitted it was misleading to label its price increases as bank fees.  It denied acting dishonestly.

The Commission said its conduct was deliberate, deceitful and intentional.

CityFitness’ misleading pricing lasted for sixteen months, ending April 2025.

Evidence was given that Commerce Commission put CityFitness on notice in July 2024, with CityFitness failing to correct its advertising for a further nine months.

Judge Clark increased the fine imposed by fifteen per cent as an extra penalty to mark seriousness of the offending; noting CityFitness’ current financial position and ability to pay.

CityFitness annual turnover for the 2025 year was $120 million.  It holds an estimated forty per cent of the national gym membership market.

Commerce Commission v. CityFitness Group Ltd – District Court (5.06.26)

26.169

Trustee: re Ngati Tawhirikura Charitable Trust

  

Maori Land Court Judge Warren stepped back from dismissing warring trustees of a New Plymouth charitable trust which would have had the effect of them never again being able to act as trustee of Ngati Tawhirikura Charitable Trust.  With terms of office for five named trustees having expired or about to expire, he instead ruled each ineligible to stand again for prescribed periods ranging from two years to six years, part of a ‘cooling off’ process.

Trustees had split into two factions in what Judge Warren described as a war waged for control.  Evidence was given of trustees acting without authority and failing to hold or to attend trustee meetings, coupled with sustained patterns of aggressive bullying and disruptive behaviour.

Judge Warren said there were grounds for Te Ture Whenua Maori Act removal of trustees for cause.

The Trust’s governing deed prohibits any dismissed trustee from ever again standing for election as trustee.

There is no evidence that trustee conflict resulted in any significant financial loss to the Trust, he said.  This dysfunction was not attributable to one faction alone, but arose from a collective breakdown in relationships in which all trustees bear some responsibility, he stated.

A ‘cooling off’ period can restore harmony, he indicated.

A six year ban from standing as trustee was imposed on Glen Skipper and Rangi Kupa, described as being central to the conflict.

A lesser ban of three years was imposed on Beverly Gibson; two years for Sharron Wipiti and Tarina Macdonald, with these two described as being least to blame having taken a ‘follow the leader’ approach as divisions became entrenched.

Judge Warren left open for later consideration the question of whether all trustees should be ordered to return any remuneration or honorarium received as trustee.

re Ngati Tawhirikura Charitable Trust – Maori Land Court (5.06.26)

26.170

Money Laundering: Reserve Bank v. ASB

  

Failure to properly set up internal systems to identify possible money laundering cost ASB a $6.7 million fine after Reserve Bank intervention.

The High Court was told of ASB Bank persisting with inadequate software workarounds designed to automatically trigger alerts for suspicious transactions and then being overwhelmed by thousands of ‘false positives,’ many alerts left unexamined for months.

Evidence was given of ASB failing to implement improvements required after routine Reserve Bank audits and delaying purchase of software packages better able to provide monitoring required under the Anti-Money Laundering and Countering Financing of Terrorism Act.

‘Know your customer’ requirements imposed by money-laundering legislation has forced substantial costs on many businesses, particularly financial institutions where the volume and velocity of banking transactions can easily disguise the transfer of ill-gotten gains.

The High Court was told ASB Bank decided in 2012 to use its existing Predator software, designed to detect credit card fraud, as the prime means of detecting potential money laundering.

Predator proved singularly unsuited for this task, despite ASB re-setting parameters within which alerts would be triggered.

Extra staff, and eventually outside contractors, were taken on to follow up on the high volume of alerts generated.

Of some 120,000 Predator alerts involving transactions totalling nearly $12.1 billion, the longest period of time an alert remained unresolved was 1300 calendar days; for more serious high priority alerts, 520 working days.

This led to substantial delays in filing suspicious activity reports with the financial intelligence unit within NZ Police.

As banking industry supervisor, Reserve Bank was also critical of ASB’s limited oversight of transactions through bank accounts of those trusts having a foreign beneficiary; considered high risk as vehicles for money laundering.

Reserve Bank requires these customers to be monitored more frequently and in greater detail.

The High Court confirmed a $6.7 million fine negotiated between Reserve Bank and ASB.

Steps taken by ASB to deal with continued backlogs was patently inadequate and delays in remediation unacceptable, Justice O’Gorman said.

ASB undertook to keep Reserve Bank apprised of improvements to internal procedures.

Reserve Bank v. ASB Bank Ltd – High Court (3.06.26)

16.168

Construction: Keast v. Auckland Council

  

Buying an existing building yet to get Council compliance sign off and then repurposing the building set in train a decade long trail of legal issues leading to Nichola Keast suing Auckland Council for $7.5 million dollars alleging negligence.  Councils owe no duty to protect people from economic loss following council refusal to issue a Building Act code compliance certificate, the High Court ruled.

Problems multiplied for Ms Keast as Council required compliance with a building consent issued for the initial build constructed prior to her purchase plus compliance with a further building consent for her later work converting a West Auckland proposed retirement village into tenanted apartments.

In addition, further issues arose when it was discovered a re-survey of the land dividing the intended retirement village into three separate bodies corporate had inadvertently left Ms Keast’s building with no legal access to the street.

Her project intended in 2012 to create tenanted investment apartments providing retirement income eventually saw mortgagee sales of one of these apartments and a separate property on Big Bay Road north of Waiuku put up as collateral security.

Ms Keast claimed Auckland Council’s certifying process was to blame for her financial losses.

In the High Court, Justice Wilkinson-Smith said Auckland Council could not be held responsible for Ms Keast’s failure to appreciate the complexities of purchasing a building not having a code compliance certificate, her delays in applying for certification and her failure to act on advice received early in the project about lack of legal access.

Evidence was given of Ms Keast buying part of a newly built retirement village off McLeod Road in Te Atatu.

The village did not operate as a retirement village, being subdivided in 2008 into several different titles and sold off as investment assets.

Ms Keast purchased what became lots two and four in the subdivision; built as the administration and recreation centre for the proposed village, including an indoor swimming pool and tennis court.

A 2012 building consent allowed Ms Keast to convert this administration building into three apartments.

The court was told these apartments were completed and tenanted within a year, but no steps were taken for another three years to get Building Act code compliance signed off.

What followed was a further five years of ongoing disputes between Ms Keast and Council over what was or was not required to achieve compliance with both the original building consent and the further 2012 consent.

Ms Keast alleged Council unnecessarily and negligently delayed issuing a compliance certificate.

A compliance certificate was eventually issued in May 2019.

Then, when it was later proposed to further subdivide lot two, a lack of legal access became a complication.

Physical access for lot two exists, but without protection of a registered easement.

Justice Wilkinson-Smith ruled lack of an easement was not Council’s fault.

Ms Keast had preferred to rely on incorrect advice from surveyors instead of acting on corrected advice given her back in 2016, she said.

When sued, Auckland Council said there is no obligation on local authorities to tell property developers what to do to achieve code compliance; there is no duty to help, it said.

A code compliance certificate does have economic value: certifying a building satisfies the building code; consequentially enhancing value of the property and protecting commercial interests of the owner.

But delays in issuing a certificate at a time when a building is later shown to be compliant does not entitle a building owner to damages, Justice Wilkinson-Smith ruled.

That would shift the cost of establishing compliance from the building owner to Council and its ratepayers, she said.

Councils’ Building Act regulatory function does not create a private right to sue for economic loss, she ruled.

Keast v. Auckland Council – High Court (29.05.26)

26.167