Fraud: R. v. Harris & McQueen

  

Carefully staged around the Christmas holiday break, Brendon Karl Dean Harris and Tipa McQueen exploited the fact that junior less experienced staff were likely to be on duty to extract personal details from Inland Revenue, Internal Affairs and Spark about a high-net worth individual sufficient to then gain access to his bank account, stealing $397,000 before suspicious bank staff blocked further transactions.  Both were convicted of dishonestly accessing a computer system and jailed.

The District Court was told Harris set the fraud in motion with a late afternoon call to Inland Revenue on 23 December 2025 providing enough personal information about their victim to be told his IRD number.

One hour later, McQueen made a fictitous police report in their victim’s name claiming his car had been broken into with cellphones, a laptop, bank cards and driver’s licence stolen.  This false report generated a numbered online police report.

Next day on Christmas Eve morning, Dean phoned Internal Affairs, providing enough personal information to get the victim’s passport number.

Same day, using the police report number, Harris succeeded only after several failed efforts in having Spark block their victim’s cellphone numbers, with their own number then recorded as a temporary contact number.

After gaining access to the victim’s bank account, they changed the password to block further access by the victim, changed the contact phone number on account records, and proceeded to transfer $397,000 across to accounts controlled by themselves and their associates.

Bank concerns about suspicious activity on the account were allayed when a staff phone call went straight to the fraudsters’ phone, where a plausible explanation was provided.

Further funds were then extracted from the compromised account before the bank acted to freeze the account.

The court was told the bank has compensated its customer for his losses.

Sentencing Harris to three years and two months’ imprisonment, Judge Kellar described him as a recidivist offender.  A psychologists report says Harris is anti-social and narcissistic.

McQueen was sentenced to two years and three months.

He has 35 prior convictions, primarily for violence and drug offences; few for dishonesty.

R. v. Harris & McQueen – District Court (30.06.26)

26.195

Managed Fund: Funeral Directors Assoc v. Funeral Trust Services

  

Pre-paid funeral managed funds, now holding assets totalling sixty million dollars on behalf of some 7000 customers with many having differing contractual rights on death, have been consolidated by High Court order into one fund, with leeway given for individual customers to get their money back now if they do not like the new scheme. 

This consolidation follows ongoing corporisation of the funeral industry as family-owned businesses sell up.

For funeral directors, pre-paid funerals locked in future business, discouraging estate executors from going elsewhere on death of a customer.  Pre-pay plans sold to customers as protection against future cost increases could see estate beneficiaries later disappointed, as further costs were added in for extras like live-streaming of funeral services, a facility which never existed when signing up.

Having to hold pre-payments in trust led to substantial administration costs for providers.

Pre-paid funerals were first offered en masse in the mid-1980s, backed by insurance cover taken out through nominated life assurers; cover no longer offered by life assurers since 2009.

The High Court was told there are still over 600 customers with live polices operating under this old scheme.

Since 2010, a Funeral Trust created by the Funeral Directors Association of New Zealand has managed funds held for pre-paid funerals, paying out to member funeral directors when a claim is made.  Many different funeral plan versions are in existence, adding to administration costs.

To reduce costs, and to potentially improve returns for pre-paid customers, Funeral Directors Association got Trusts Act approval to transfer all customers to a new trust: Funeral Trust Services Ltd, which now has administrative responsibility for investing customers’ funds and payment of claims.

Terms of the High Court ruling see any surplus generated by Funeral Trust Services transferred to a charitable trust: The Charitable Funeral Trust.  It was suggested to the High Court that discretionary grants from this charitable trust could be used to top-up funeral costs where there was a shortfall, to assist customer families in financial distress, and to improve public education about funeral traditions.   

High Court approval was given for post-2010 pre-paid customers to be transferred across under terms and conditions of what was described as the ‘Now for Them’ plan.

Rights of pre-2010 old scheme pre-paid customers remain unchanged.

All pre-paid customers are given a grace period to back out.

Almost two per cent of pre-paid customers could not be traced; either moving without leaving a forwarding address, or deceased with no claim made.

Funeral Directors Association of New Zealand v. Funeral Trust Services Ltd – High Court (30.06.26)

26.194

Fraud: Gillies v. R.

  

Colin Hugh Gillies two years six months imprisonment for defrauding his employer of $125,800 was confirmed by the Court of Appeal following his failure to provide any receipts to support a claim he diverted company money to his own bank account as reimbursement for what he personally had spent on behalf of the company.  

The court was told Gillies worked for a small family-owned concreting company for a three year period ending October 2020.

Whilst employed, he diverted payment from five separate company contracts: in some cases keeping payments made in cash; in others diverting payment into his own bank account by altering invoices issued on the company letterhead.

At trial, the jury did not accept his explanation that payment was taken because money was owed to him by the company.  He claimed to be owed some $180,000.

The trial judge said the fraud was motivated by a sense of entitlement.

A folder of expenses presented to the court was not supported by evidence that these expenses had in fact been paid by him.

The fact Gillies had taken no formal steps to recover from his employer money he claimed was owed counted against him, the trial judge said.

The Court of Appeal dismissed Gillies appeal against sentence.

Gillies v. R – Court of Appeal (29.06.26)

26.193

Family Trust: re Chatsworth Trust

  

Australian tax law forced trustees of an Auckland family trust to get court approval extending life of their trust to avoid imminent sale of a Gold Coast apartment.

Chatsworth Trust was established by businessman Garry Melville-Smith in 1983.  Family members are beneficiaries.

The High Court was told this Trust has a 2028 expiry date.  Its only remaining asset is shares in a company owning the Gold Coast apartment.

Family members use this apartment for holidays.  They want to have it continue as a trust asset beyond 2028.  Effect of the Trust’s fixed expiry date will be to force a transfer of the apartment to a new family trust, triggering an Australian tax liability.

Using Trust Act powers, Justice Tahana approved a new expiry date calculated as 125 years from the Trust’s creation in 1983, enabling the Trust to run on beyond its current expiry date, deferring any potential tax liability arising on sale.

Trusts Act 2019 now permits family trusts to exist for up to 125 years, amending previous rules known to lawyers as rules ‘against perpetuities,’ which prohibit non-charitable trusts from running on forever.    

In addition, Justice Tahana approved changes to the Chatsworth Trust deed removing spouses of family members as potential beneficiaries.

Having spouses listed as beneficiaries increases the risk of Trust assets being subject to relationship property disputes, she said.

re Chatsworth Trust – High Court (24.06.26)

26.191

Pedigree: Jhanzi Afghan Hound v. NZ Kennel Club

  

Wellington dog breeder Jhanzi Afghan Hound operated by Will Hansen and Mary Phillips claimed their business suffered one million dollars damage after NZ Kennel Club reversed pedigree registration of three puppies on learning they were born from breeding a son with mother, in breach of Kennel Club pedigree rules.

Justice Radich ruled Kennel Club acted correctly when it cancelled registration within a week.

Jhanzi Afghan Hound failed to mitigate its supposed losses by instead selling the puppies on the open market, without pedigree registration, he said.

The High Court was told three Kennel Club members laid complaints with Club staff within days of the puppies’ registration being processed.

After confirming dam and sire were mother and son, the Club director/secretary cancelled registration.

Jhanzi Afghan Hound sued, alleging a loss of potential awards and prizes from showing the dogs together with loss of breeding potential.

It claimed NZ Kennel was in breach of contract.  Kennel Club rules required the Club’s executive committee first hold a hearing before de-registration and that Jhanzi Afghan Hound was entitled to give evidence, it said.

There was no breach of contract, Justice Radich ruled.

Registration was simply an administrative error.  The error was corrected.

Jhanzi Afghan Hound Kennels v. NZ Kennel Club Inc – High Court (24.06.26)

26.192

Company: Martin Roofing Ltd v. Martin

  

Ann Martin unilaterally transferred $620,000 into her own bank account from their Hawkes Bay family roofing company Martin Roofing Co Ltd in the middle of a relationship property dispute, setting off a cascade of legal claims with High Court application needed to sort out who pays litigation costs.

Ms Martin took the money in mid-2022, later explaining she was ‘reviewing Martin Roofing’s expense coding and current accounts.’  It was repaid after Martin Roofing, at the behest of her husband, got a High Court freezing order over her assets.

Martin Roofing’s majority shareholder is their family trust.  Ms Martin and Mr Martin are each sixteen per cent shareholders.  Both are directors. 

After repaying the money, Ms Martin filed a statement of defence claiming in essence that she was justified in paying the money across to her own bank account.

Mr Martin in turn sued Ms Martin, supposedly on behalf of their company, alleging her behaviour was disrupting company business.

With none of these claims and counterclaims yet getting to court, attempts to reach agreement resulted in a November 2023 settlement agreement intended to see Martin Roofing’s business sold and proceeds distributed to shareholders.

Evidence was given that there had been no sale by time both were back in court arguing over legal costs to date.

Ms Martin alleges her spouse has used $293,400 of company money to advance legal claims in the company’s name which she says are in fact claims intended to benefit him personally.

Wording in their 2023 settlement agreement stating who bears what share of legal costs across the multiplicity of legal actions currently underway is conditional on their business first being sold.

Associate Judge Gambrill set out a formula for allocating Martin Roofing’s litigation costs to date, depending upon when the costs were incurred; some costs to be borne by Martin Roofing alone, other costs shared 50/50 between Martin Roofing and Mr Martin.

One legal complication was that the Martins’ 2023 agreement is seeking to settle out of court ongoing legal action which involves their company, where Mr Martin as a shareholder is suing with a derivative action in their company’s name.  Such out of court agreements require High Court approval, according to Companies Act legislation.

Martin Roofing Co Ltd v. Martin – High Court (22.06.26)

26.190

Company Director: Loumaile Construction v. Tatafu

  

Auckland labour-only construction company Loumaile Construction Ltd filed financial statements with Inland Revenue reporting a net profit but was wound up insolvent after failing to pay taxes due because directors Viliami Tatafu and Penisimani Tatafu drained cash from their company to pay personal expenses, leaving their company’s Inland Revenue debts unpaid.  They were jointly ordered to repay $481,500 to Loumaile Construction and Viliami separately ordered to repay a further $380,000 covering the period he was sole director.

In the High Court, Justice Gardiner ruled the two were in breach of Companies Act directors’ duties putting their own personal interests ahead of an obligation to ensure company creditors were paid first.

Neither of them defended action taken by the liquidator.  

Loumaile Construction was incorporated in 2015, operating from the home of one of its directors.

Seven years later, Inland Revenue forced their company into liquidation after multiple years of failing to pay income tax, PAYE and GST.

Directors kept no proper accounting records.  Liquidator had to reconstruct the company’s financial position by analysis of its banking records and Xero records.

The court was told up to $2.2 million may have been withdrawn from the company for personal expenses.

There was clear evidence that the two had withdrawn at least $481,500 for personal use up to March 2021.  Judge held both Viliami and Penisimani personally liable to return this amount to their company, having failed to act in good faith and in the best interests of their company.

Penisimani resigned as a director in June 2021.

Viliami as sole director from this date was held personally liable to repay $380,000 used for personal expenses in the remaining eighteen months before their company’s liquidation.

At time of liquidation, Loumaile Construction owed Inland Revenue $417,500 in total.

Loumaile Construction Ltd v. Tatafu – High Court (22.06.26)

26.189

Leaky Home: Jacobsen v. Wilkie

  

Trustees of a family trust could not be sued for building defects following sale of an Auckland apartment.  The trust has no assets; legitimately distributed to a beneficiary following sale of the apartment.  Trustees themselves were not personally liable.

Paula Jacobsen sued trustees of the AT & MA Wilkie Family Trust five years after her $990,000 purchase alleging the Trust as vendor failed to disclose building defects, causing her to overpay by some $835,000 she claims.

This apartment is part of a 92 unit building on New North Road in Kingsland; a mixture of residential, commercial and retail units.

Her claim against the Trust was struck out after a preliminary High Court hearing.

The sale agreement excused any trustees signing the contract on behalf of the Trust from personal liability for any breach of contract.

The contract used wording commonly found in real estate contracts limiting trustee’s exposure ‘to the actual amount recoverable from assets of the trust.’

There was no evidence that trustees had acted in breach of trust, which would otherwise have seen potential personal liability arise, Associate Judge Taylor said.  

Even if the Wilkie Family Trust were held liable, it no longer has any assets.

The High Court was told the Trust had been in existence for many years, set up to insulate Wilkie family assets from potential claims against the late Mr Wilkie’s then architecture practice.

Ten months after the Trust’s sale of its Kingsland apartment to Ms Jacobsen, the Trust was wound up and all assets distributed to Mr Wilkie’s widow as trust beneficiary.

There was no evidence that the Trust was wound up prematurely to defeat any claim against the Trust by Ms Jacobsen, Judge Taylor said.

Any claim Ms Jacobsen may have against the Wilkie Family Trust as vendor cannot succeed since the Trust has no assets Judge Taylor said.

Separately, Ms Jacobsen has ongoing legal claims against her former lawyer and a real estate agent acting for the Trust.

Jacobsen v. Wilkie – High Court (19.06.26)

26.187

Will: re Estate Lynette Mary Williams

  

Lynette Mary Williams’ children challenged her final will signed eight years prior to her death in 2024 leaving all to charities, nothing to her five surviving children with an explanatory note stating they had barely any contact with her for an extended period other than to ask for money and had offered no help during the 2011 Christchurch earthquake, despite all living in Christchurch themselves.

Her children provided a different picture in the Family Court.

They described a childhood in which their mother was physical and psychologically abusive, requiring them to be taken into care for extended periods.  Her use of alcohol and drugs meant there was no stability or security for them at home, they said.

They disputed her statement that they provided no support to her following the Christchurch earthquake.

In the Family Court, Judge Hambleton ruled seventy-five per cent of Ms Williams $605,500 estate is to be divided equally between her five children, the balance to her four nominated charities; terms of her will rearranged using powers in the Family Protection Act.

This Act enforces parents’ moral obligation to ensure they provide adequately in their will for family members in need.

Evidence was given that only one of her surviving children is in employment, the other four are on government benefits.  None own their own home.  Each are in poor health.

Even if Ms Williams was not as poor a parent as portrayed by her children’s evidence, a wise and just person knowing circumstances of her children would have made some provision in her will for their financial support, Judge Hambleton said.

The court was told Ms Williams was specifically warned at time she signed her will that her dis-inherited children had the right to later challenge its terms under the Family Protection Act.

re Estate of Lynette Mary Williams – Family Court (19.06.26)

26.188

Fraud: McDonald v. Toko

  

Leah McDonald’s past relationship with Jerry Toko left her with no home and only the right to recover $106,800 surplus from a mortgagee sale after he inveigled himself into her life, stealing her major asset. 

Jerry Toko, also known as Jerry Ngatai, is now bankrupt having dissipated most of the equity he extracted from what was formerly Ms McDonald’s Kaikoura home.

The High Court was told that Ms McDonald began her relationship with Mr Toko around 2018, shortly after her widowed mother transferred her debt-free Athelney Road earthquake-damaged house to Ms McDonald.

Ms McDonald was persuaded to transfer ownership into Mr Toko’s name, supposedly to allow Mr Toko to release Kiwisaver funds which would be used to repair Athelney Road.

On taking ownership, the deal saw him sign a mortgage back in favour of Ms McDonald securing a loan of $185,000 coupled with his promise to pay her a further $40,000 cash.  Only about $2000 was paid, the High Court was told.

There was no Kiwisaver funding.

Mr Toko then arranged to sell Athelney Road for a price never disclosed to Ms McDonald, but believed to be in excess of $500,000.

He lied to lawyers that Ms McDonald had been repaid her $185,000 loan and she unwittingly signed a discharge of mortgage, unaware of the fraud being perpetrated.

Mr Toko used proceeds from sale of Athelney Road to buy a further property in Kaikoura, on Ludstone Road, registered in his name alone.

While Ms McDonald and her mother lived at Ludstone Road, Mr Toko departed their lives, spending most of his time in Christchurch.

They later learnt Mr Toko had mortgaged Ludstone Road, borrowing $235,000 from financier Secure Funding Ltd.  They were forced to move out when Ludstone Road was sold in a mortgagee sale.

In the High Court, Justice Mander said Mr Toko was liable for breach of trust, having registered Ms McDonald’s home into his own name, dishonestly doing the same on purchase of a new home and then borrowing against this asset while not accounting for the proceeds.

A constructive trust existed, he ruled, with Ms McDonald entitled to a $106,800 net surplus from the Ludstone Road mortgagee sale; all that now remained following his fraud.

Mr Toko did not challenge Ms McDonald’s claim in the High Court.

McDonald v. Toko – High Court (18.06.26)

26.185

Tax: Jia v. Inland Revenue

  

With a tax bill of $3.3 million and climbing, Xiaoquan Jia failed in his challenge to Inland Revenue’s assessment of taxable income arising from property development.  An earlier Taxation Review Authority ruling was conclusive and Inland Revenue’s refusal to reopen his tax assessment could not be challenged by judicial review, the High Court ruled.

Tax law provides a statutory disputes process headed by the Taxation Review Authority, a specialist tribunal dealing with tax disputes.

Mr Jia could not re-argue his case beyond an earlier Taxation Review Authority ruling by claiming Inland Review wrongly refused to consider new evidence, the High Court ruled.

The High Court was told a 2018 tax investigation into Mr Jia’s business activities resulted in a $1.7 million tax assessment for profits from the sale of five properties Mr Jia had purchased in the name of Chinese nationals.  A penalty of $407,250 was added as an ‘evasion shortfall penalty.’

Mr Jia has made no payments.

This tax debt has escalated to $3.3 million with addition of ‘use of money’ interest and late payment penalties.

He now argues the supposed taxable profit made from property dealings was miscalculated.

When Inland Revenue refused to consider what he said is new specialist evidence as to construction costs for the period over which the five properties were built, Mr Jia challenged this refusal in the High Court.

Justice Blanchard ruled the earlier Taxation Review Authority ruling is conclusive.

At the three day Authority hearing, Inland Revenue relied on evidence from industry sources about contemporary construction costs.  The Authority did not accept Mr Jia’s evidence as to construction costs he actually incurred.

Inland Revenue was justified in refusing to consider Mr Jia’s later further evidence, Justice Blanchard said.

Jia v. Commissioner of Inland Revenue – High Court (18.06.26)

26.186

Constructive Trust: Henry v. Henry

  

Adamant that he was the sole owner of a Ponsonby property purchased at auction over fifteen years ago, Karl Henry was told by the High Court that his purchase was just another in a family history of collectively buying properties across Auckland and that he held title as trustee for himself and three other family members, including his mother.

Dispute over ownership of seven Brown Street, Ponsonby, was raised straight after the auction with Karl as successful bidder signing the auction purchase in name of himself or nominee.

He then claimed to be the sole owner of Brown Street, since he alone signed the contract.

Brother Frank, who was also present at the auction, told the High Court that auction staff had been told there were multiple purchasers.  Since not all were present at the auction, staff said having Karl sign on their behalf ‘as nominee’ would suffice.   

Siblings Frank and Nicole and their mother Jeanette subsequently protected their claim by registering a caveat over Brown Street, a caveat which sat on the title for over a decade before legal action was taken to clarify ownership.

The High Court was told of multiple purchases of real estate in and around Auckland over many years by members of the Henry family, title being taken in various combinations of family members.  Most purchases were in the inner city Herne Bay/Ponsonby area.

News in 2010 that seven Brown Street was on the market proved significant; it bounded land already owned by family interests.

Karl registered for the auction, making the winning bid at $785,000.

Brother Frank was at his side.  Sister Nicole and their mother listened in by conference call.

Karl paid the $78,500 deposit, filling out a blank cheque signed by their mother drawn on her bank account.

Evidence was given of email exchanges between family members prior to the auction suggesting ways in which ownership could be structured and confirming payments to their mother’s bank account, required to cover her payment of the deposit.

After the auction, Karl took title in his own name.

He subsequently paid for Brown Street with his own funds, plus a bank loan.

Other supposed family purchasers were mollified by a comment from Karls’ lawyer that while title was taken in his client’s name alone, this was just a precursor to later sorting out the issue of family ownership.

Buoyed by this advice, their mother paid some $70,000 for renovations, getting Brown Street up to tenantable standard.

Ownership was never settled.  A history of dissension between Karl and Frank deepened.  Diplomatic intervention by both Nicole and their mother came to nothing.

Eventually in the High Court, Justice MacGillivray ruled Karl held title to Brown Street on trust for all four family members.

By time of the auction there was a common understanding there would be joint ownership, with each contributing to the purchase, he said.

Karl’s claim that he only was to be owner lacked credibility, he ruled.

Karl’s use of money from his mother and his siblings to pay the deposit at auction was not explained.  His failure to challenge pre-auction suggestions of how joint ownership might be structured counted against his claim that it was intended all along that he would be sole owner.   

At the family’s request, Justice MacGillivray went no further than ruling on ownership.

It was left to negotiation between the four family members to decide how Brown Street expenses incurred over the last fifteen years are to be allocated.

Henry v. Henry – High Court (17.06.26)

26.184

Relationship Property: Porter v. Mulock-Houwer

  

Family trust funds lost their status as separate property and became relationship property when used to buy a family home prior to separation where the family trust made a minimal cash contribution in return for a purchased half share.

Craig Porter was ordered to surrender as relationship property the half share of an Auckland Matakana property owned by his family trust after a four year relationship with Claire-Erica Mulock-Houwer came to an end in 2019.

The High Court was told Mr Porter set up a family trust to hold selected assets after an earlier relationship came to an end.  This included a home at Waiuku where the two lived together as a couple.

Their subsequent purchase of a home at Matakana was funded by sale of Mr Porter’s family trust’s Waiuku property plus Ms Mulock-Houwer’s sale of other property she owned in Waiuku, together with mortgage finance of some $663,000.

Title to Matakana was registered as equal shares between Ms Mulock-Houwer and Mr Porter’s family trust.

In cash terms: Mr Porter’s family trust put in eight per cent of the Matakana purchase price; Ms Mulock-Houwer, just over twice that percentage.

Each were personally liable for mortgage repayments.

In economic terms, subsequent mortgage payments by both had the effect of enriching the asset base of Mr Porter’s family trust.

Justice Jagose upheld a Family Court ruling that Mr Porter’s family trust’s half share of Matakana was to be treated as relationship property.

Manner of Mr Porter’s family trust purchase had the effect of ‘defeating’ Ms Mulock-Houwers’ claim that the entire Matakana home was relationship property, he ruled.

Porter v. Mulock-Houwer – High Court (17.06.26)

26.183

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

Will: Baldwin v. Sullivan

  

Dean Baldwin’s unsuccessful complaint about Rochelle Sullivan to the Real Estate Institute helped sink his later High Court claim to greater share of his Christchurch uncle’s $610,000 estate.

Telling the Institute prior to his uncle’s death in July 2023, as part of his complaint about her behaviour, that his uncle Bernie Pope was still unsure about how his estate should be divided, called into question the finality of a telephone call ten days earlier by Mr Pope to his lawyer about re-writing his will.

In this earlier telephone call, Mr Pope had told his lawyer he wanted to remove Ms Sullivan as a beneficiary, instead dividing his entire estate between relatives, increasing Mr Baldwin’s share to sixty per cent.

As executor of Mr Pope’s estate, Mr Baldwin asked the High Court to accept the lawyer’s file note recording this phone conversation as a valid Wills Act alteration to Mr Pope’s earlier will.

If accepted, the primary effect would be to leave Ms Sullivan with nothing, removing her as fifty per cent beneficiary of his estate, while increasing Mr Baldwin’s share from forty per cent to sixty per cent. 

The High Court refused, Justice Mander ruling there was insufficient evidence this phone call represented Mr Pope’s settled ‘testamentary intentions;’ a Wills Act requirement.     

Evidence was given of Mr Pope signing no less than six wills in the last five years of his life.  He frequently changed solicitors.

Unmarried and with no children, he had lived alone in his New Brighton home seldom receiving visitors.  His house was a health hazard.  Mr Pope was a hoarder.

Evidence was given of real estate agent Ms Sullivan being his neighbour for two years in the five year period prior to his death.  She kept in casual contact after shifting to live elsewhere.

Mr Pope described her as his only contact when hospitalised, failing to advise that nephew Dean Baldwin held an enduring power of attorney on his behalf.

Ms Sullivan organised a cleanout of Mr Pope’s home prior to an unsuccessful attempt at discharging him from hospital.

It was only after Mr Pope’s later admission to full time care that Mr Baldwin’s potential involvement came to light.  There had been no contact between him and his uncle ‘for years.’

Evidence was given of a steadily deteriorating relationship developing between Ms Sullivan and Mr Baldwin, leading to Mr Baldwin making complaints to Age Concern, the Real Estate Institute and Police; none of which were substantiated. 

While Mr Baldwin alleged Ms Sullivan put undue pressure on his uncle to become a primary beneficiary of his estate, Ms Sullivan alleged Mr Baldwin was the prime mover behind Mr Pope’s phone call six week prior to his death which sought to disinherit her.

Justice Mander reviewed the manner in which Mr Pope had revised his previous wills, with evidence of Mr Pope’s initial instructions often being amended on lawyers’ advice.  Typically, his lawyers advised it was not wise that relatives be excluded entirely from any bequests.

Following discussions before signing his final will, Mr Pope increased the amount left to relatives on his lawyer’s advice, leaving a reduced fifty per cent share to Ms Sullivan.

Against this background, Justice Mander ruled the lawyer’s May 2023 file note recording Mr Pope’s telephone message advising plans to disinherit Ms Sullivan could not be accepted as Mr Pope’s final testamentary views.  Any resulting new will could well have differed, after further discussion with his lawyer.

Mr Pope’s March 2023 will remains unaltered, with fifty per cent of his estate bequeathed to Ms Sullivan

Baldwin v. Sullivan – High Court (16.06.26)

26.182