Caveat: Zhao v. Wang

  

Family members were not wholly transparent about their financial affairs Associate Judge Gellert said when ruling that caveats remain over three Auckland properties.  Son, Xinlei Wang, says the properties were purchased out of his own money.  His parents say they contributed and are entitled to a part share.

This dispute over source of funds is clouded by money transfers from China to New Zealand through use of intermediaries, a tactic designed to circumvent foreign exchange controls in China.

The High Court was told family wealth is derived from construction and management of commercial properties in the Zhangzhou district, near Taiwan Strait.

Shareholding in their family company is split across family members.

In 2014, it was decided to invest company profits in New Zealand real estate.

Lease income dried up when Zhangzhou local government compulsory purchased company leases in 2018, paying some $4.6 million compensation.

In New Zealand, Xinlei is registered as the owner of real estate purchased in Auckland during 2015 and 2016.

He claims to have funded these purchases out of capital generated by Zhangzhou commercial leases he previously held in his own name.

His parents claim these leases were family company assets and that the capital is family money, not Xinlei’s alone.

In the High Court, Judge Gellert commented that details of leases Xinlei claims were his own closely match leases his parents claim belonged to their family company.

For these leases, Xinlei’s signature is the only signatory as lessor.

His parents say it is common in China for a company director to sign company documents without any notation that the document is signed on behalf of a company.

Judge Gellert ruled that the parents’ caveat remain temporarily on title to the disputed Auckland properties, blocking their son from further dealings with the land.  They are required to file court action immediately, to prove the source of funds used to purchase these properties.

The High Court was told Xinlei and his parents are also involved with litigation in China.

Zhao v. Wang – High Court (19.12.25)

26.058

Fraud: Shi v. Hebei Huaneng Industrial

  

Allegations that a $23 million judgment from a court in China was obtained by fraud led the New Zealand Court of Appeal to order a review before allowing enforcement in New Zealand.

Deming Shi has assets in New Zealand but lives in the Peoples Republic of China.

The Higher People’s Court of Hebei Province held him liable on a guarantee of debts owed a China state-owned enterprise by coal supplier Qinhuangdao Boen Trading Co Ltd.

These debts arose from the state-owned enterprise making advance payments for future coal deliveries; working capital for Boen Trading, enabling it to purchase coal stocks for later supply.

China has no reciprocal treaty with New Zealand for the enforcement of each country’s court judgments.  Enforcement in New Zealand of the Hebei court judgment first required a New Zealand court to ‘recognise’ the validity of the overseas court ruling.

In 2021, the New Zealand High Court decided the China ruling was valid and enforceable in New Zealand.  This followed a review of the manner and circumstances in which the Hebei court reached its decision.

Mr Shi appealed, claiming new evidence has come to light which shows he did not receive a fair hearing in China.

At the China hearing, the same legal counsel represented both Boen Trading as the debtor and himself as supposed guarantor.

Mr Shi claims the Hubei court was misled.

He did not guarantee payments due under a 2016 contract in dispute at the court hearing, Mr Shi says.  He did guarantee payments due under previous contracts, but this personal guarantee was not rolled over into the disputed 2016 contract, he claims.

Mr Shi says has only recently been able to get a copy of the 2016 contract.

The Court of Appeal put on hold any enforcement of the $23 million judgment.

Mr Shi’s complaint was referred back to the High Court for an inquiry into whether the Hebei court was deceived.

Shi v. Hebei Huaneng Industrial Development Company Ltd – Court of Appeal (17.12.25)

26.057

Litigation: Exceda Finance v. Huka Ridge

  

It is back to square one for financier Exceda after the High Court ruled a $4.7 million default judgment against entrepreneurs David Wigmore and Paul Bublitz be re-litigated; emailing its claim to a lawyer previously acting for one of Mr Wigmore’s companies did not amount to proper notice of Exceda’s High Court action.

Both Mr Wigmore and Mr Bublitz say lack of notice means they had no chance to defend Exceda’s claim, brought against them as guarantors of a loan to Mr Wigmore’s Huka Ridge Bre Ltd.

Each told the High Court they were not aware of the September 2024 court hearing, decided in their absence, until facing notice of bankruptcy for failing to pay the court’s $4.7 million default judgment.

Xceda Finance Ltd claimed they did have knowledge; legal papers were served with their agreement on Auckland lawyer Richard Beca, then acting for them.

In dispute was the extent of authority Mr Beca had to accept service of legal proceedings.

Mr Wigmore said authority for Mr Beca to accept service related only to legal action taken against another of his companies, Black Robin Equity Ltd.  It did not extend to legal claims against him as guarantor of loans to Huka Ridge.

Mr Bublitz told the High Court he had never given Mr Beca authority to accept service on his behalf.

Setting aside the default judgment, Associate Judge Taylor said Exceda failed to identify whether Mr Beca had authority to accept service of its claim before emailing the documents to him.

After what was an easy win by default, Exceda now has to go the long way round, restarting and proving its alleged claim against Mr Wigmore and Mr Bublitz.

Exceda said in the High Court it is not credible that Mr Beca failed to tell the two that Exceda was claiming against them.

Regardless of this, proper service of legal proceedings is a fundamental requirement, Judge Taylor ruled.

Exceda Finance Ltd v. Huka Ridge Bre Ltd – High Court (16.12.25)

26.056

Profit Margin: Knight Investments v. Hawkins Group

  

Any suggestion Auckland volume home builders are creaming it took a knock when the High Court reduced the profit margin Hawkins Homes could recover as damages after a customer defaulted, down from a claimed fifteen per cent profit margin to 7.5 per cent.

Litigation followed Hawkins Homes troubled involvement in a Clarks Beach subdivision on southern shores of Auckland’s Manukau Harbour.

Hawkins Homes settled out of court its argument over an agreed purchase of ten sections in the Clarks Beach Waterfront Estate from developer Knight Investments Ltd, controlled by Daniel Nahkle.

This left Hawkins committed to a home and land package deal on what was described as lot 114.

In early 2022, Gregory and Michelle Nefdt agreed to buy lot 114 from Hawkins for $490,000 and agreed in a separate contract to have Hawkins build a home for them on site.

The Nefdts were relocating from Thames.

The High Court was told the Nefdts later refused to settle, cancelling both the land purchase and home build contracts.

Hawkins Homes in turn defaulted on its purchase of lot 114 from Knight Investments, becoming liable for damages when Knight Investments resold at a lower price.

The Nefdts denied they were liable to pay damages to Hawkins Homes.  Misrepresentations about a time line to completion of their new home justified cancellation, they said.

The Nefdts said they made it clear from the outset that the build had to be completed by end of 2022 so they could shift in.

Justice Downs ruled there had been no misrepresentation by Hawkins Homes.

In his initial telephone inquiry to Scott Hawkins, Mr Nefdt did not emphasise that a 2022 completion would be an essential term of the build contract, Justice Downs ruled.

A follow-up email by Mr Hawkins made it clear that progress was dependent upon subdivision titles being issued to Knight Investments.

Subsequent communications by Mr Hawkins talked of ‘expected’ deadlines.

In addition, the Nefdts’ agreement for sale and purchase specifically excluded liability for delays beyond Hawkins Homes’ control.

Hawkins claimed $158,800 damages for its loss of profit on the two contracts wrongly cancelled by the Nefdts.  This loss amounted to a fifteen per cent profit margin.

Justice Downs said this figure was based on a single similar instance where a customer defaulted.

A more modest profit margin might be expected for a builder operating a volume-oriented business model, he said.

Damages were ordered at a court-imposed profit margin of 7.5 per cent.

Amount to pay was reduced by the Nefdts’ forfeited deposit.

In total, they were ordered to pay $75,245.

Knight Investments Ltd v. Hawkins Group Ltd – High Court (15.12.25)

26.054

Champerty: Ingenious Asset Mgmt v. McConnon

  

The High Court dismissed as champertous and ‘trafficking in litigation’ a scheme seeing investors buying up unsecured creditors’ rights, after they were left partly-paid in an insolvent liquidation, and then seeking to sue directors of the insolvent company. 

If successful, the ploy by Gautam Jindal’s Ingenious Asset Management Ltd could have seen unsecured creditor payouts from Global Dairy Ltd’s liquidation together with damages from its directors exceeding one hundred cents in the dollar.

Global Dairy wholesaled dairy products.  Controlled by Auckland-based Simon McConnon, it went into liquidation insolvent in March 2020.

The High Court was told liquidators PKF Corporate Recovery reached a $250,000 out of court settlement against present and past directors of Global Dairy alleging breaches of Companies Act directors’ duties.  This settlement was described as being in full and final settlement.

It was sufficient to pay unsecured creditors 48 cents in the dollar.

Two months later, Ingenious Asset sued Global Dairy directors, also alleging breaches of Companies Act directors’ duties.

Ingenious Asset said it was exercising ongoing legal rights of partly-paid unsecured creditors, having taken an assignment of their rights at the cost of one dollar.

Justice Walker ruled the assignments valid, but in context of Global Dairy’s liquidation not enforceable.

The one dollar purchases were an assignment of a ‘bare cause of action:’ being each unpaid creditor’s Companies Act right to seek compensation from directors for reckless trading; a right seldom exercised in practice since it is usually impracticable and uneconomic.

Courts generally refuse to enforce any assignment of a bare legal right on public policy grounds, as trafficking in litigation; leading to speculative litigation and potentially misuse.

Litigation is not a commodity to be bought and sold.  In legal jargon, it is champertous and illegal to buy someone else’s legal rights without first having a collateral prior interest in the dispute.

Ingenious Management had no prior trading relationship with Global Dairy to justify its interest in pursuing a claim against the company or its directors, Justice Walker ruled.

Ingenious Asset’s separate argument that the assignments gave it trust law claims against the directors also failed.  This required evidence that deposits paid in advance by Global Dairy customers should have been held in trust.

No trust relationship existed, Justice Walker ruled.

In 2023, control of Ingenious Asset was transferred from Gautam Jindal to his spouse, Dr Deepika Jindal.

Ingenious Asset Management Ltd v. McConnon – High Court (15.12.25)

26.053

Conversion: D&E Buses v. Anuj & Pallavi Family Trust

  

It began with a $65,000 loan, ending with creditor Gary Sword claiming damages of two million dollars for supposed conversion of furniture at an Auckland motel which the High Court later ruled he had no rights over.  Stuck in the middle was motel operator Anuj Gupta, not involved with the original $65,000 loan and needing police assistance to evict Mr Sword from his motel unit.

Ten years after the event, the High Court was asked to unravel events which took place in 2015.

The Newmarket motel sits on land leased from Dilworth Trust, across the road from Dilworth School, itself funded from lease revenue.

In 2014, the then motel lessee was kicked off site for non-payment of lease rentals.

As is common, sundry chattels on site were abandoned and left behind.

A new lease was taken up by Neville Bright’s Newmarket International Motor Inn Ltd.  He guaranteed lease payments.

At this time, Mr Sword was a long-term resident at the motel.

The High Court was told Mr Sword and his company D&E Buses Ltd are in the business of making loans to ‘companies and individuals in difficult circumstances.’

Mr Bright proved to be one of those individuals.  His Newmarket Inn struggled to keep up with lease payments to Dilworth Trust.

He borrowed from Mr Sword, who drew up a loan agreement stating that Mr Bright gave security over all chattels at Newmarket Inn in return for a short-term $65,000 loan.

Overlooked was the fact that Mr Bright did not own the chattels. Newmarket Inn might, and that was an issue later disputed.  This was supposedly tidied up two months later, to Mr Sword’s satisfaction, with extra documentation signed by Newmarket Inn.

Meanwhile, Dilworth Trust was looking to remove Newmarket Inn as lessee for failing to pay rent.  At the same time, Mr Sword was negotiating with Dilworth, unsuccessfully, to take over as new lessee.

Dilworth Trust seized the initiative, having Mr Gupta’s family trust take possession as the new lessee running the motel.

For Mr Gupta, Mr Sword and his claim to have security over motel chattels proved to be long-running problem.

Mr Gupta’s family trust set about replacing much of the motel chattels: fridges, television sets, bedding and some furniture.

Mr Sword was trespassed and evicted from his motel unit, the Tenancy Tribunal later ruling he was not a tenant.

The High Court was told Mr Gupta offered to retain and hand over any chattels Mr Sword could prove rights to.

Looking at terms of the Dilworth Trust lease, Justice Campbell later ruled Newmarket Inn, and by extension Mr Sword as supposed secured creditor, did not own any of the chattels left behind after Newmarket Inn’s lease was cancelled.

Mr Sword’s claim to damages for conversion was dismissed.

At best, Mr Sword had rights to a number of leased fridges having produced a receipt showing he had purchased the fridges from a company hiring them to Newmarket Inn.

The High Court was told these fridges had been held in storage next to the motel restaurant after being replaced by Mr Gupta.

Mr Sword delayed making arrangements to uplift these chattels, Justice Campbell said.

Instead, he left them on site for months, choosing instead to bill Mr Gupta for supposed use of the fridges; invoices never paid.  He later sued for conversion.

No damages were payable for conversion.  Mr Sword chose not to take back the fridges promptly, Justice Campbell ruled.

D&E Buses Ltd v. Anuj & Pallavi Family Trust – High Court (15.12.25)

26.052

Partnership: re Estate Peter Webb

  

Partnership law has business partnerships end automatically on death of any one partner, unless agreed otherwise, a rule that made a nonsense of the late Peter Webb’s will.  The High Court rewrote his will, achieving his intended plan, allowing both his widow and extended family to inherit partnership assets.

Mr Webb farmed in partnership with his two brothers on a property at Hikurangi in Northland, as Webb Brothers Partnership.

His will, signed two months prior to his death, supposedly intended that his continuing share of annual farm income go to his spouse Nazreem and that she later receive one-quarter of his assets, the balance going to their nieces and nephews.

One major legal complication arose on his death.

There was no continuing partnership.  Terms of his will were predicated on the assumption that the farming partnership would continue, with his estate slotting in as replacement partner on his death.

In the case of Webb Brothers Partnership, this was a legal impossibility.  Their partnership dissolved automatically on his death in March 2023.

Partnership Law Act states that death of one partner brings a business partnership to an end; a rule necessary because partnership law holds each and every partner fully liable for all partnership debts.

Partners may agree otherwise, but this must be spelt out in their partnership agreement.

Written terms of Webb Brothers Partnership explicitly stated their partnership ended on death of any of the three brothers.    

In the High Court, Justice Isac was told the will as signed did not achieve Mr Webb’s intentions.

Using Wills Act powers, the will was corrected by Justice Isac to ensure both Mr Webb’s widow and their nieces and nephews inherit.

Without this correction, a three-quarter share of Mr Webb’s assets would go to his brothers, rather than his nieces and nephews as intended.

The court was told all three brothers, each aged in their eighties, died within three months of each other; Peter being the first.

re Estate of Peter Webb – High Court (15.12.25)

26.051

Family Trust: Terry v. Hadwin

  

Family trust changes making it mandatory for assets in two Manawatu farming trusts to be divided equally between four adult children on death of their widowed mother were given Trusts Act ‘blessing’ by the High Court.  Trustees took this action to block acrimonious litigation following the 2017 death of patriarch Dennis Terry.

Two family trusts established three decades ago in the names of the now deceased Dennis Terry and now widowed Christine Terry each own one of two farms near Palmerston North.  One is farmed by son Nigel; the other by son Simon.

Their siblings are Lynda and Paula.

The High Court was told of multiple disputes between family members after Dennis’ death about the distribution of assets held by his estate and assets held by the two family trusts.

Writs flew, with Family Protection Act and Law Reform (Testamentary Promises) Act claims filed.  Primary complaint is the level of compensation Lynda and Paula might receive after ownership of the two farms later passes from the family trusts to their brothers.

Independent trustees were appointed, taking control of trust assets.

They arranged an August 2025 mediation, attempting to resolve family differences.  All four children participated; daughter Paula by Zoom from her New York home.

Agreement was reached between three of the children and their mother, but not Paula.

Put to the High Court for approval was a scheme which would see all farming assets come back under direct ownership of their respective family trusts, with Nigel and Simon given rights of first refusal to buy back ‘their’ farm at market price on death of their mother.

This does not preclude them from leasing each of the farm properties in the interim.

When trust assets are cashed up on their mother’s death, net proceeds are to be split equally between all four siblings.

This proposal required removal from each trust deed an existing trustees’ discretionary power to allocate trust assets between beneficiaries, otherwise trustees might later depart from the equal-shares mediation agreement.

In the High Court, Justice Gendall approved the proposed changes.  These changes remove ongoing litigation costs and reduce further cost and complexity in trust operations, he said.

The changes are also binding on Paula as beneficiary, despite her not agreeing to terms of the mediation agreement.

Terms are fair to Paula, Justice Gendall said.  She is expected to get a more substantial payout on death of their mother than if current disputes drift on.

Bringing all farming assets back under complete control of current trustees saw Nigel’s current one quarter share in one farm bought back for $1.05 million and Simon’s interest in the second taken back at a price of $250,000.

It was further agreed that their mother, in her lifetime, would not make annual gifts out of trust assets to her children and grandchildren exceeding $20,000 each.

Terry v. Hadwin – High Court (15.12.25)

26.055

Relationship Property: 'Cooper' v. 'Smithie'

  

It was at times a tempestuous relationship.  He served a four year prison term for a serious criminal offence.  At one point, she had a protection order taken out against him.  The High Court ruled he was entitled to a relationship property half share of their home that she paid for, overturning a Family Court ruling awarding him a fifteen per cent share only.

Both names were anonymised in the publicly released court judgment.

The High Court was told they started dating in late 2001.  She kept in contact whilst he was in prison.

In 2005, she purchased a residential property in Auckland suburb Panmure with $150,000 cash and a $130,000 bank loan.

The High Court was told that the two came to live together full-time from early 2009.  Three children were born over the next five years.

When their relationship ended in 2022, she said it would be ‘repugnant to justice’ if her former partner were to receive half the value of her Panmure home under the Property (Relationships) Act.

The Family Court agreed, highlighting his lack of financial contribution to their relationship, his history of periodic violence and her clear expressions from the outset of their relationship that the Panmure house was hers alone.  They lived apart for various periods during their relationship.  They had always kept their finances separate.

In the High Court, Justice Johnstone ruled a wider view must be taken.

The fact only one spouse funded purchase of a family home does not mean it ‘is repugnant to justice’ to have this asset split equally on separation, he said.

The Family Court did not place sufficient weight on shared responsibility for their children, he said.  Whilst she claimed to be the primary caregiver, both worked in paid employment outside the home and both were actively involved in childcare.      

His role in caregiving was recognised with Family Court orders subsequent to separation having him responsible for full-time care of two of their children.

While their relationship was punctuated by instances of physical violence, ‘no fault’ rules underpinning the Property (Relationships) Act meant misconduct was not relevant to questions of relationship property division, Justice Johnstone said.

As their relationship deteriorated, each partners’ disinclination to provide the other with love, companionship, loyalty and support became mutual, he said.

‘Cooper’ v. ‘Smithie’ – High Court (15.12.25)

26.049

Maori Land: Smith v. Thompson

  

It took an arrest in 2019 for contempt of court to remove Bruce Smith and his family from land north of Wairoa in a wider whanau dispute over his rights to occupy part of a remote 1760 hectare farming block: Rautawhiri Station.  Six years later, the Maori Land Court was asked for a definitive ruling on who owns a house and farm buildings at Rautawhiri on leased Maori land.

Mr Smith’s father Francis died in 1997.  Their family home burned down two years later.  It was re-built in 2001with proceeds of insurance, plus a $30,000 cash contribution put in by widow Winnie.        

Son Bruce subsequently claimed ancestral rights to the home.

Legal dispute in the Maori Land Court centred on leasehold rights over Maori freehold land described as Waipaoa 5A2.

In a property lease, buildings constructed on land are ‘fixtures,’ forming part of the real estate.  Leaseholders are entitled to occupy the building, but ownership of any building work done passes to the lessor and remains in the lessors’ ownership when the lease ends.

Lease terms may specify if any compensation is payable to the lessee for improvements made during a lease. 

The court was given detail of successive leases over the disputed Rautawhiri land stretching back to 1925.

At time of the 2001 rebuild, Maori Trustee as lessor held title on behalf of multiple beneficial owners, including the estate of Francis Smith.

Terms of the then existing lease stated there was no compensation for improvements, but annual rent could be adjusted downwards to part-compensate the lessee for improvements made which benefit the Maori Trustee as lessor.

Mr Smith argued the lease could be ignored; facts on the ground were different.

Insurance cover used to rebuild the family home came from an insurance policy taken out in the name of his late father’s estate with the premium paid for by his estate, he said.

The Maori Trustee did not value the rebuilt home, offering a reduced rental for the improvements made.

Judge Doogan said that under terms of the lease the Estate was required to insure the building in the name of the Maori Trustee and to pay the insurance premium.  It was an oversight that the policy did not note the interest of the Maori Trustee as lessor, he said. 

After the fire, the Maori Trustee took control of the insurance payout.  The Trustee approved rebuilding plans.  The Trustee made clear at the time that the rebuild ‘belonged’ to all customary owners as lessors, Judge Doogan said.

While no reduced rental was offered for the value of the rebuilt home, a rent concession had been applied consistently over decades for there being a family home constructed on the leased land.

Judge Doogan ruled Bruce Smith and his immediate whanau had no equitable right to sole occupation of the rebuilt home; beneficial ownership lies with the many customary Maori owners represented by the Maori Trustee as lessor, he ruled.

Control of the disputed property is now in hands of an ahu whenua trust with six elected trustees.

The court was told the home has been occupied only occasionally since 2003.  Farmers holding a grazing licence over the land do not live on the property.

Smith v. Thompson – Maori Land Court (12.12.25)

26.049

Income Projections: Freedom Digital v. Moore

  

Former real estate agent Stuart Pope fronted a test case for multiple investors seeking compensation for their failed investment in digital billboards promoter iSEE Digital.  Profit projections in a pre-investment information memorandum proved wildly overstated.  The claim failed.  An extensive disclaimer excused liability for inaccuracies.  

In 2017, Mr Pope and his spouse invested in a billboard purchase and leaseback deal put together by iSEE Digital (2012) Ltd. He had recently sold his Mike Pero real estate franchise.

On offer was the chance to buy a share in specific electronic billboards yet to be installed throughout New Zealand, this share in each billboard to be leased back to iSEE who would manage and sell advertising space.

The promised beauty of this system was that billboards were to be monitored centrally, with digital advertisements readily updated remotely.

It was later to come out in evidence in the High Court that revenue came to be impacted both by software glitches affecting remote operation of individual billboards and what turned out to be a limited number of customers placing advertisements.

Buy-in prices depended on size and location of proposed billboards.

Returns promised to investors included a return on the leaseback plus a share of net profits on advertising revenue earned on the billboard purchased.

Mr Pope invested in two Auckland billboards at a cost of $370,000.  His all-up return was dismal: $3650.     

Attempts to restructure the business in 2019, by merging with rival Lighthouse Digital, only saw their merged operations going into liquidation.

Through their family investment company, Freedom Digital Marketing Ltd, the Popes sued iSEE’s John Moore alleging negligence.

Freedom alleged profit projections contained in the investor information memorandum were negligently compiled.

Before investing, Mr Pope had questioned projections indicating a sixty per cent return on investment in year one; 180 per cent in year two.

He contacted Mr Moore who said that even if projected income in year one was reduced by 75 per cent, a return on investment of nearly fifteen per cent was possible.

Employed by iSEE as chief financial officer, Mr Moore himself invested in iSEE’s billboard purchase and leaseback scheme.

For investors, returns proved to be close to zero.

In the High Court, Justice Blanchard ruled that disclaimer wording featuring prominently at the front of the investors’ information memorandum made it clear there was no liability falling on iSEE or its staff and directors for any inaccuracy in financial information provided either in the memorandum or by subsequent enquiry.

This wording barred any claim for negligence.

Investors did not succeed with their argument that projections were so inaccurate that there was no reasonable basis for them.

iSEE’s business was a new one.  It had a very limited track record.

Freedom Digital as an investor knew there was risk that the investment could be a total failure, Justice Blanchard said.

Freedom Digital Marketing Ltd v. Moore – High Court (11.12.25)

26.048

Reparations: Rajah v. Police

  

Three months after a sentence discount on grounds he would repay $420,000 stolen from his employer, Thirusivan Perumal Rajah was back in court having the reparations order cancelled.  The rest of his sentence, nearly thirty months imprisonment for fraud, remains unaltered.

The High Court was told Rajah stole just under $420,000 from his employer in a long running false-invoicing fraud.  Name of his employer was suppressed.

He created false invoices over an eight year period for work never done, channelling payments into bank accounts he controlled.

At trial, Rajah told the court this money was used to pay credit card debt.

He offered his $100,000 Kiwisaver balance as compensation.

Sentencing Act makes it mandatory for judges to take into account any offer of reparations.

When imposing the reparations order, the trial judge made a slight reduction in Rajah’s term of imprisonment: five per cent.

Three months on from this September 2025 sentencing, Rajah appealed the reparations order stating his full financial circumstances were not known at time of sentencing.

An early payout of his Kiwisaver balance is unlikely; a reparations order probably will not qualify as ‘financial hardship’ justifying release of the money.

He claimed bankruptcy looms, with other creditors pressing him for payment; debts he cannot meet whilst in prison, unable to work.

In the High Court, Justice Jagose said this fresh evidence indicates Rajah has no means to pay a $420,000 reparations order.  Reparations were cancelled.

Reparation orders operate as a short cut for victims, saving them the time and expense suing to recover money stolen.

It is still open for Rajah’s former employer to take civil action, seeking to recover losses caused by Rajah’s fraud, Justice Jagose said.

Rajah v. Police – High Court (11.12.25)

26.047

Comparative Advertising: Zuru v. Lego

  

When Zuru’s negotiations with Lego came to naught over description on packaging for its ‘Max Build’ toy bricks as being Lego-compatible, Zuru went to court, getting a Court of Appeal ruling that there was no misuse of Lego’s trade mark.

Trademark lawyers will be parsing the court’s legalese for hints on where comparative advertising is heading.

The court was told Lego pounced on New Zealand based Zuru in 2019 when it first marketed its toy bricks as being compatible with Lego’s well-known product.

Zuru then changed its packaging to state its product was compatible with major bands.

Ongoing negotiations with Lego over what might be acceptable wording on Zuru’s Max Build packaging came to nothing.

Zuru took its commercial problem to the courts, seeking a ruling on whether its proposed packaging breached the Trade Marks Act or the Fair Trading Act.

After losing in the High Court, Zuru won round two in the Court of Appeal.  

Two of the three Court of Appeal judges ruled Zuru’s descriptive wording on Max Build packaging stating its product was ‘Lego Brick Compatible’ did not amount to use of the word Lego as a trademark.  End of story.

In lonely isolation on the Court of Appeal bench, Justice Cooke decided otherwise; ruling Zuru is using the Lego trademark to associate Lego with its Zuru product.

Trade Marks Act permits use of a rival trademark in comparative advertising if it is ‘honest use.’

There was honest use by Zuru, Justice Cooke ruled.

There was no attempt to co-opt business goodwill attached to the Lego brand.

Statements on Max Build packaging were factually true.  Zuru’s product is functionally equivalent to Lego’s product.  The comparison is fair.  Zuru’s product is a substitute.

All three judges agreed Zuru’s packaging did not breach the Fair Trading Act.

Quoting comments in a comparable English case, the court said ‘a touch of reality is needed here, consumers are not stupid.’

Customers are brand aware.  They are not easily fooled and would not reasonably think that Zuru’s toy bricks are made by or associated with Lego, the court said.

Zuru New Zealand Ltd v. Lego Holding A/S – Court of Appeal (10.12.25)

26.046

Arbitration: Garcha Brothers v. St Heliers 88 Ltd

  

Legal manoeuvring by investors Nicole and Victor Armani was described by the High Court as ‘smacking of tactical conduct’ when ordering their company St Heliers 88 Ltd pay $630,000 into court while they dispute an arbitrator’s ruling that their company pay damages for misrepresentation on lease of an Auckland motel.

The court was told Sandip Singh’s Garcha Brothers Ltd walked away from its lease of a St Heliers property on St Johns Road operating as a sixteen-unit motel, alleging misrepresentations by the Armanis and their company.

In dispute were an allegation of unconsented alterations to the building by St Heliers 88 and an argument whether the motel units were allowed to be tenanted.      

A 2025 arbitration found in favour of Garcha Brothers.  It was entitled to cancel its lease and recover damages for wasted costs; primarily its borrowing costs, incurred funding its now-cancelled purchase of the lease.

Unhelpfully, St Heliers 88 refused to pay its previously agreed half share of arbitration costs.  This forced Garcha Brothers to pay the full amount in order to uplift the arbitrator’s award, to learn it was successful.

St Heliers 88 then challenged the arbitrator’s ruling, claiming variously: Mr Armani had no authority to go to arbitration on St Heliers 88’s behalf; the arbitrator exceeded her authority; the process was in breach of natural justice; and the outcome was contrary to public policy.

Justice MacGillivray indicated there has been little evidence of substance to support these claims.  St Helier 88’s High Court application to set aside the arbitration is weak and appears to be tactical, he said.

There is yet to be a full court hearing.

In the interim, St Heliers 88 was given six weeks to pay into court the $630,000 arbitration award in favour of Garcha Brothers.

Alternatively, St Heliers 88 may provide mortgage security acceptable to Garcha Brothers.

The court was told mortgage debt currently secured over St Johns Road exceeds the property’s value.

Should it fail to comply with these interim orders, Garcha Brothers can immediately register the unpaid $630,000 arbitration award as a default court judgment against St Heliers 88 Ltd, Justice MacGillivray said. 

Garcha Brothers Ltd v. St Heliers 88 Ltd – High Court (9.12.25)

26.045