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

Asset Forfeiture: Commissioner of Police v. Xia

  

Suspicious Auckland restaurant staff called police after three men fled a nearby car crash to huddle in the restaurant toilet before returning to their vehicle to extract a shopping bag full of cash and then attempting to bribe staff to hide the cash for them.  They abandoned $77,800 cash at the restaurant, later confiscated as proceeds of crime.

Also abandoned at the restaurant were small quantities of ketamine, methamphetamine and cocaine, some left in the shopping bag, the rest hidden in the toilet cistern at the restaurant.

Catalyst for this chaos was a June 2024 car crash on Remuera Road in which an Audi travelling at speed hit two parked cars.

Police later caught up with occupants of the Audi.

Shuang Xia was arrested for careless driving and possession of methamphetamine for supply.

He said the cash were profits from playing poker.

Forensic examination of his banking records for the previous five years identified $1.7 million coming onto his bank account from unknown sources and $2.8 million transferred out to unidentifiable third parties.

No taxable income was declared in 2024; $5800 declared in 2023.

In the High Court, Justice Mount agreed Xia’s conduct created a strong inference that the abandoned $77,800 cash came from proceeds of crime.  He ordered the cash forfeit under the Criminal Proceeds (Recovery) Act.

The court was told Xia was convicted and fined $250 for careless driving.

Police decided not to charge him with methamphetamine dealing.

Once this decision was made, Police had no further legal justification for retaining the shopping bag cash; it should have been returned to Xia.

Police admitted their wrongdoing.  Justice Mount said it would be contrary to the public interest to refuse forfeiture of the cash simply because Police earlier wrongly held onto the money.

Xia did not attend court to challenge the forfeiture application.

Commissioner of Police v. Xia – High Court (25.5.26)

26.165

Maori Land: Puketapu E Maori Reservation v. Knuckey

  

A schism within a Te Atiawa hapu in New Plymouth is coming to a head with Maori Land Court ordering hapu members removal from their own land, ending a protest occupation near a now disused sewage treatment plant on what was previously Maori land.

The political dispute is over land taken under the Public Works Act for a sewage treatment plant near Bell Block.  It ceased operation in the mid-1980s.  Some members of the Te Atiawa Puketapu hapu demand return of the land to iwi ownership, supporting their views with a long-running land occupation.

The Maori Land Court was told named individuals who whakapapa to Puketapu hapu have been occupying nearby Maori reserve land, living in make-shift dwellings, a house bus, re-purposed containers and tents.

They ignored pleas from trustees of the reserve land that they leave.

Judge Warren issued a permanent injunction banning named individuals from the site.

Staying on site without trustees’ approval amounted to trespass.

Hapu members rights to occupy the reserved land extended to occasional customary use only.

Trustees were authorised to remove all structures left on the land.

Puketapu E Maori Reservation v. Knuckey – Maori Land Court (25.05.26)

26.164

Constructive Trust: Wharewhiti-Tuffery v. Kairama Ahu Whenua Trust

  

It came down to a question of who funded home loan repayments in a dispute over rights to a Dannevirke house sitting on Maori land.

The quick legal answer was that the house belongs to the multiple beneficiaries of Kairama Ahu Whenua Trust; any building affixed to land forms part of the land and is owned by the landowner, in this case the 99 living descendants of Ngahuia Tamehana.

In the Maori Land Court, Judge Stone ruled descendants of one family who had occupied the Dannevirke house for seventy five years were entitled to a five year right of occupation on basis of a constructive trust, with further occupation rights beyond this time a matter of negotiation with Kairama Ahu trustees.

Evidence was given of Ngahuia Rohe building the house in the 1950s, with finance from a Maori Affairs loan.  She never lived in the house, dying unexpectedly one week before she planned to shift in.

Daughter Muriel moved in, living there for over fifty years.

During that time she paid off her mother’s Maori affairs loan, raising seven children with her only income when widowed being a widow’s pension and casual earnings as cook for shearing gangs.

On Muriel’s death, her eldest daughter Mida assumed control as executor of her mother’s estate.

Complications arose after a 2018 decision to have Kairama Trust take receipt of rentals paid by Mida’s sister, now occupying the property.

Trustees later argued the 2018 deal saw ‘ownership’ of the property pass to the Trust.

Mida’s sister argued ‘ownership’ remained with their whanau; the 2018 arrangement was set up simply for administrative convenience, to have the Trust to manage tax filings arising from the rental and to apply rental payments in upkeep and maintenance.

A ‘rent strike’ by Mida’s sister following allegations the Trust was not properly maintaining the property saw their dispute move to the Maori Land Court.

Judge Stone said there was no clear evidence of the source of funds used to pay off the Maori Affairs loan.

Trustees said there was no way that a widow in Muriel’s position could have paid off the loan eighteen years early using only her own financial resources; rent misapplied from lease of adjoining trust land must have been used to pay down the loan, they claimed.

Muriel’s children said she was a careful and frugal woman; as a family they were raised with no luxuries.

Judge Stone ruled it was likely Muriel did fund repayments.

As a result, her whanau had an equitable interest in the house, he ruled.

Whanau could not claim ownership; that lies with Kairama Ahu Whenua Trust as owner of the land.  Whanau were granted a limited right of occupation.

Wharewhiti-Tuffery v. Kairama Ahu Whenua Trust – Maori Land Court (25.05.26)

26.166

Share Issue: Keats v. Finch

  

A universally ignored Companies Act rule requiring detailed disclosure of value provided in return for issue of shares and options was pounced on by Nigel Keats in his long running dispute with management of Connectworks Ltd, forcing public disclosure of circumstances in which his shareholding was diluted after his October 2022 resignation as director.

Connectworks provides software used by accounting and law firms.

Mr Keats was a founding shareholder and director.  He held a 5.05 per cent shareholding as at late 2025 when his latest round of litigation against the company and its management got underway, with his complaint that continuing management had improperly increased its shareholding in Connectworks from 33 per cent to 54 per cent over an eighteen month period, severely diluting his shareholding.

Registration of newly issued shares were supported by directors’ certificates baldly stating the commonly-used mantra: ‘directors are of the opinion that that the consideration and terms of issue are fair and reasonable to the company and all existing shareholders.’

Similarly worded certificates were signed on issue of share options.

In the High Court, Mr Keats argued this was insufficient detail.

In response, management provided updated information: itemising cash paid into the company in return for shares issued and disclosing that share options were issued at an exercise price of one cent per share.  Terms on which options would vest were not disclosed. 

Associate Judge Gambrill was unwilling to rule whether this was sufficient compliance in what was a fast-track summary judgment hearing.  A full court hearing is required.

Keats v. Finch – High Court (22.05.26)

26.163

Farm Mediation: McNamara Farms v. Vermaak

  

Blocked from taking immediate action by sharemilker Marthinus Vermaak’s demand that his sharemilking dispute go to mediation, Waiuku farm owner McNamara Farms had the High Court appoint receivers to take control of his mortgaged dairy herd ahead of concerns Mr Vermaak was likely to sell the herd on the sly, in what is the first instance of court intervention to override effect of the Farm Debt Mediation Act.     

The Farm Debt Mediation Act 2019 prohibits creditors from seizing farm stock without first engaging in mediation.

The High Court was told the McNamaras agreed a 50/50 sharemilking agreement with Mr Vermaak’s farming partnership for the 2025/26 season.

Sharemilkers in a 50/50 agreement are expected to own their own herd.

Not having sufficient capital to buy his own herd, Mr Vermaak was lent $600,000 by the McNamaras who then took security over his livestock.

The High Court was told the McNamaras became concerned about Mr Vermaak’s erratic behaviour.  There were allegations of meth use by Mr Vermaak.

Their sharemilking agreement required farm workers to be drug-free.  He refused to undertake drug tests.

Notice was given terminating their sharemilking agreement three months ahead of what would be season end in May 2026.

The McNamaras became anxious about enforcement of their security over Mr Vermaak’s dairy herd.

Mr Vermaak was described as being uncooperative, difficult, evasive and abusive.

Out of Mr Vermaak’s herd of some 80 cows, at least eleven had been sold already, without permission from the McNamaras as secured creditors.

Local stock and station agents were alerted; one agreeing to hold proceeds of this initial sale while the legal niceties were sorted out.

In the High Court, Justice Becroft appointed receivers to take control of the balance of the herd with authority to sell the stock and account to the McNamaras for money owed.

This was necessary as a matter of urgency, he said.

Mr Vermaak was ignoring the McNamaras rights as secured creditors.

There were fears Mr Vermaak would truck the remaining stock out of the area for sale elsewhere, or sell the animals to an abattoir.

Plus, a new sharemilker was due to move onto the farm in a little over a week.

McNamara Farms Ltd v. Vermaak – High Court (22.05.26)

26.162