Money Laundering: R. v. Sharma

  

Sentenced to three years nine months imprisonment for money laundering, Suren Sharma laundered $1.8 million over a twelve month period, money paid online by investment scam victims, shifting his activities from bank to bank after warnings the transactions appeared to be fraudulent.

The District Court dismissed his claim to be an innocent bystander, merely acting as a conduit for a supposedly legitimate bitcoin investment scheme.

A common pattern for all twelve victims saw Sharma transfer their funds deposited into his bank accounts across to his son’s bank account in Australia, retaining a ten per cent commission; this commission then filtered through multiple bank accounts he controlled, with some withdrawn in cash at Sky City casino in Auckland.

This took place through 2022-2023.  

The largest sum lost by any one victim was one million dollars, money supposedly invested through an entity called Worldinitiative AG Alliance.

Another victim, investing $100,000 through an entity called Argus International, had a private investigator chase up where his money had gone.  Mr Sharma, pressed to explain how the money came to pass through a bank account he controlled, produced a forged document supposedly signed by the victim giving Sharma authority to deal with the money.

The District Court was told of Sharma switching to a BNZ account after being warned by Westpac of suspected fraudulent activity in respect of funds passing through his Westpac account.

When BNZ closed Sharma’s account on suspicion of fraudulent activity, he switched to ASB, then ANZ, then turned full circle and reactivated use of his Westpac account.

Four banks warned him of suspicious transactions passing through his bank accounts.  At best, his behaviour was grossly reckless, Judge Bell ruled.

The court was told Sharma was a Justice of the Peace at time of offending, having in the past sat as a judge in court hearing minor offences.

Now aged 74, he holds qualifications in accountancy and filed client tax returns with Inland Revenue as a tax agent.

The court was told the High Court found Sharma liable in 2011 for acting fraudulently in breach of Companies Act director duties.

No reduction in sentence was made for Sharma’s offer to pay reparations at twenty dollars per week.  Full reimbursement for victims would take over 1600 years.

R. v. Sharma – District Court (29.01.26)

26.068

Trust: Bryers v. Broughton

  

Before his death at Whanganui in 2012, Toherangi Broughton transferred his substantial block of shares in customary Maori land to daughter Morania.  Her siblings were dismayed; their rights to inherit by descent were lost.  They were doubly dismayed when she in turn gifted this share to her son Perry Bryers.  They were appeased when he transferred his shares to a Toherangi Broughton Family Trust for the benefit of wider whanau, subsequently challenging his later efforts to get back these shares from the Trust.

In what was a departure from normal practice, the Maori Land Court refused recovery, ordering his shares remain within the Trust. 

The Maori Land Court was told of long-standing tensions between Toherangi Broughton’s descendants over circumstances in which Perry Bryers came to control their forebear’s landholdings.

Perry came to control this land prior to Toherangi’s death.

Some four years before Toherangi died, Perry transferred his shareholding, giving control over substantial blocks of Maori land, to a whanau trust named in Toherangi’s honour.

Years later, he wanted to reverse the process; taking the shares back out of Trust ownership, holding the land for the sole benefit of his immediate family.

In the Maori Land Court, Judge Warren commented the general rule is that termination of trust status for Maori land is normally approved, unless there are compelling reasons not to.

Commonly, all trust beneficiaries will have agreed to termination.  Or trust board dysfunction coupled with wider whanau issues justify termination.

There was no evidence of trust board dysfunction in this case.

Judge Warren ruled collective whanau benefit is to take priority over Perry family individual autonomy.

The size of shareholding previously gifted by Perry to the Trust is such that its return would imperil the Trust’s economic viability, compromising benefits wider whanau would otherwise enjoy, he said.

Principles of the Te Ture Whenua Maori Act are best served by maintaining the status quo, leaving the shareholding within the Trust under control of trustees, ensuring the land is retained and available for the benefit of wider whanau, he ruled.

Bryers v. Broughton – Maori Land Court (28.01.26)

26.067

Pastoral Lease: Glenthorne Station v. Commissioner of Crown Lands

  

With rent renewals still disputed for Crown land forming part of his South Island high country Glenthorne Station, investment banker John Shrimpton claims his offer to buy out the leasehold interest using legal rules still on the books since the late 1800s must be honoured.  His ingenious legal move was thwarted in the High Court; whilst the rules still exist, his offer comes 130 years too late.  Operation of ‘first come, first served’ land sales lapsed in 1892.  

The High Court was taken through a detailed survey of South Island land acquisitions made by early colonial governments.

Through what are now recognised as a series of grossly unfair purchases compounded by subsequent government failures to honour promises made, Ngai Tahu were systematically dispossessed of nearly all their land.

Prior to 1876, New Zealand operated with a quasi-federal system of government, having nine provincial legislatures.

Canterbury Province decided to parcel out huge swathes of pristine land now under its control by what became known as ‘open selection.’  Purchasing settlers need only write their name in a book next to section of land, pay the better of forty shillings or two pounds per acre, and the land was theirs: first come, first served.

High country land did not sell; pastoral farming is always marginally economic in rough mountainous country.

In 1873, Canterbury’s Provincial Council transferred on trust more than 300,000 acres of unsold high country land (121,000 hectares in today’s measurement) to Canterbury University.

Terms of trust require the University to hold this land available for ‘open selection,’ leasing it out in the interim, with rental income forming part of the University’s endowment.  

With Glenthorne Station, near Lake Coleridge, unable to reach agreement in its currently disputed rent review for that 36 per cent of its farm currently leased from Canterbury University, Mr Shrimpton set about making an ‘open selection’ offer to buy the freehold.

In the High Court, he conceded two pounds an acre is not an appropriate price; he is willing to pay market price.

The High Court ruled ‘open selection’ is no longer available.

Dissolution of provincial governments meant control over sale of pastoral leasehold land now lies with central government, specifically with the Commissioner of Crown Lands.

Sale to Glenthorne Station requires agreement of University of Canterbury, the Secretary of Education and the Commissioner of Crown Lands, Justice Boldt ruled.

Further complication is that the Ngai Tahu Claims Settlement Act gives Ngai Tahu right of first refusal should the freehold be offered for sale.

Glenthorne Station’s lease has been running on with lease payments disputed since 2009.

Glenthorne Station Ltd v. Commissioner of Crown Lands – High Court (27.01.26)

26.066

Corporate Governance: Lawless v. Ellis

  

Applying well-recognised accountancy rules defining what amounts to ‘control,’ compared with having ‘influence,’ may have helped squabbles over potential conflicts of interest within Tuwharetoa trust activities; a governance issue now common to many iwi as kinship relationships can overwhelm commercial realities.

What to outsiders looks to be an arcane judicial debate in the Maori Land Court about corporate governance was a tricky question over how many hats one person should wear, given that commercial activities for major iwi groups now operate under business structures similarly seen with large corporates: one central holding company with separate activities and interests hived off into a multitude of subsidiary companies, partnerships and trusts.

All these separate entities need policy direction of their own, coupled with general ‘head office’ oversight.

Add to this complexity the overlay of Maori culture; the common kinship shared by those both running and benefitting from iwi commercial operations.

Close family ties, compounded by historical cross-family disputes and jealousies, can led to what might be delicately called sub-optimal decision making.

Seeking to minimise such problems, trust deed for Ngati Tuwharetoa’s Lake Taupo Forest Trust restricts the circumstances in which any trustee can be involved in activities of any subsidiary.

Trust beneficiary Tane Lawless questioned whether a trustee should be allowed to continue with contract work for a Trust subsidiary: New Zealand Forest Managers (2022) Limited Partnership.

His Maori Land Court application continued as a test case after the trustee’s death.

The legal issue boiled down to whether Forest Managers was a ‘trust entity’ as defined by the trust deed.  If so, contracting work was disallowed as a conflict of interest.

Forest Managers exists as a partnership, but differs from the norm.

As a limited partnership it is made up of limited partners (who are not involved in management, are not liable for partnership debts, and do share in profits) and a general partner (who makes management decisions, is liable for partnership debts, and shares in profits).

For Forest Managers, decisions made by its general partner lie ultimately with Lake Taupo Forest Trust and a separate trust, Lake Rotoaira Forest Trust.  They each get to appoint two of the general partner’s four directors.

Forest Managers is not a ‘trust entity,’ Judge Warren ruled.

Lake Taupo Forest Trust does not have ‘control’ of Forest Managers; it does not appoint a majority of directors.

Neither does it have ‘indirect control’ through appointment of half the directors, he ruled.  This ‘limited’ or ‘shared’ control cannot be considered operative control.

It would be more intelligible to utilise accounting terminology: Lake Taupo Forest Trust’s right to appoint half Forest Managers’ board amounts to ‘influence,’ not ‘control.’

Lawless v. Ellis – Maori Land Court (22.01.26)

26.065

Taonga: Sixtus v. Hokotehi Moriori Trust

  

Remains of an ancient waka found by chance in 2024 on the north coast of Rekohu in Chatham Islands led Catherine Sixtus to claim an ancestral interest on the basis that it was constructed in what is now modern day Germany and brought to New Zealand by her ancestors.  Ruling the waka to be Maori taonga, with ownership is to be decided under the Protected Objects Act, the Maori Appellate Court dismissed any suggestion of German historical links.

This Act gives special statutory protection to what are classified as taonga tuturu: objects more than fifty years old relating to Maori culture or history which have been manufactured in New Zealand by Maori or brought to New Zealand by Maori.

Ms Sixtus has no standing to bring any claim in respect of the waka, the Maori Appellate Court ruled.  The word Maori does not include people solely of pakeha or European descent.

Ms Sixtus argued, unsuccessfully, that since the designation Maori did not exist in early European colonisation of New Zealand, later adoption of the generic word can be taken to include all who have come to settle in New Zealand, including her German forebears.

The Appellate Court said the word Maori now has a defined statutory meaning, which does not include those having only European descent.

Even if it did, Ms Sixtus faces a difficult scientific obstacle; preliminary testing of the waka identifies that it is made of New Zealand sourced wood.

Mr Sixtus’ response is that the wood may have been taken to Europe on HMS Endeavour after Captain Cook’s first visit to New Zealand in 1769, fashioned into a waka in the Hanseatic States, later coming into possession of Moriori living on Rekohu.

Protected Objects Act ownership of the waka is yet to be resolved.

Ownership lies with the Crown, unless specific Maori ownership can be proved.

Two separate Chatham Island Moriori trusts are jointly seeking to resolve questions of ownership.

Sixtus v. Hokotehi Moriori Trust – Maori Appellate Court (21.01.26)

26.064

Freezing Order: Tianjin Junyuan Technology v. Cheng

  

Enforcing a China court order for repayment of a RMB fifty million loan, the High Court in New Zealand was suspicious of claims the debt had been repaid with Weihong Cheng rapidly reorganised her financial affairs on learning of steps taken to enforce the overseas judgment against her New Zealand assets.

In 2018, Ms Cheng and her husband Shiping Tong guaranteed their company’s RMB 50 million borrowing from Tianjin Junyuan Technology; approximately NZD 10.8 million at the time.

Junyuan Technology is incorporated in China.

When the one year loan was uplifted, Mr Tong transferred 83.8 million shares in Hong Kong listed company Lisi Group to Junyuan Technology.

Ms Cheng was to later argue Junyuan had sold-down these shares; the debt has been repaid, she claims.

Junyuan Technology says the shares were transferred as security for repayment and that the loan remains unpaid, despite two rescheduled payment dates. 

The High Court was told of both a trial and later retrial in the Tianjin People’s Court over the disputed debt.  In both trials, Mr Tong and Ms Chen were held liable for repayment; the second reducing the amount due on account of real estate transferred to Junyuan Technology in part payment.

In 2024, Junyuan Technology attempted multiple times to serve legal notice on Ms Cheng at her Christchurch home of its intention to have the China court judgment enforced through the New Zealand courts.

Evidence was given of Ms Cheng’s daughter being the only one to answer the door.  She refused to provide contact details for her mother, saying her mother was overseas.  

Legal service was achieved by court-approved substituted service on her daughter.

Appearing in court, Ms Cheng said her only New Zealand assets were some $12,700 in sundry bank accounts.

Evidence was given of Ms Cheng being trustee of, or having control over, two family trusts owning five Christchurch properties.

Learning that these properties might be seized, Ms Cheng arranged for discharge of a $3.8 million debt owed to her by these trusts and further arranged for her daughter and an independent nominee company take control of trust assets.

In the High Court, Justice Robinson dismissed her application to have charging orders removed from the Christchurch properties, allowing Junyuan to potentially recover the debt still owed with a forced sale.

With accrued interest also unpaid, the total due is close to double the initial ten million dollar loan.

Ms Cheng provided no concrete evidence that Junyuan has sold down the Lisi Group shares in reduction of the debt, he said.

Tianjin Junyuan Technology Development Co Ltd v. Cheng – High Court (19.01.26)

26.063

Class Action: Simons v. ASB

  

Class action does not come cheap.  Of the $135.6 million out-of-court settlement LPF Group negotiated for ASB customers claiming breaches of consumer credit disclosure rules, $28.9 million comes out for LPF’s fee plus another $3.5 million for its direct legal costs.

With some 276,000 Bank customers potentially entitled to various levels of compensation, a notional equal split would see each receiving about $375.

In 2021, ASB admitted to breaches of the Credit Contracts and Consumer Finance Act, failing to make full statutory disclosures required for customers following changes to their home and personal loans.

It agreed with the Commerce Commission to pay $8.1 million compensation to affected customers.  This agreement specifically left open customer rights to sue ASB.

In June 2021, litigation funders LPF Group Ltd and CASL Management Pty Ltd set the ball rolling with a joint class action seeking compensation for ASB customers and also for ANZ Bank customers with allegations of a similar failure by ANZ to make proper disclosures.

ASB settled out of court in late 2025; this agreement requiring court approval.

ANZ refused to settle.  It is going head to head in court against the litigation funders’ claim.  

Giving High Court approval to ASB’s $135.6 million settlement, Justice Venning said the agreed settlement was in the interests of affected bank customers given three months’ extensive negotiations between the parties, the cost of going to trial, and present uncertainty as to the outcome.

Independent legal advice supported the out-of-court settlement.

ANZ Bank said all legal costs to date of $4.7 million should be charged to the ASB settlement.

ANZ said only 17,000 ANZ customers were part of the class action claim against it.

By contrast, the ASB class action involved nearly 276,000 customers and covered a wider range of disputed issues, ANZ said.

Justice Venning ruled 65 per cent of legal costs to date are to be charged against the ASB settlement.

Simons v. ASB Bank Ltd – High Court (14.01.26)

26.062

Court Costs: Far North Community Group v. Far North District

  

Established as a lobby group to hold Far North District Council to account over its establishment of heritage areas, forty-four members of Far North Community Group were ordered jointly to contribute $10,000 towards Council legal costs after failure of an ill-fated Environment Court challenge. 

Belatedly recognising the prospect of potential personal liability, the group later formed an incorporated society to progress their legal challenge.  They were still liable for costs up to the point their incorporated society was substituted as applicant in their Environment Court litigation.

Property owners from around Mangonui challenged Far North District rules seeking to preserve examples of early colonial architecture and to allow archeological digs over private property in areas considered to be of heritage status.

In the Environment Court, a ginger group challenged operation of these rules.

It did not go well.

The Environment Court was critical of filed documents as being unclear, unstructured and convoluted.   

It was suggested to the applicants that they might reconsider their proposed challenge.

The court signalled part of their application lacked merit; in other instances, they were asking for court orders the Environment Court has no power to make.

After they pressed on, it became clear the Environment Court would not rule in their favour, with the possibility of costs awarded against them.

Unlike the High Court, it is not normal practice for the Environment Court to award costs in favour of a successful litigant; costs paid by the losing side.

But costs may be awarded against Environment Court litigants who fail to follow mandated court practice; wasting court time, imposing extra costs on other litigants.

Judge Smith ordered forty-four named members of the original ginger group pay $10,000 to Far North District; just under half Council’s legal costs up to the point this group exited the litigation, replaced, as approved by the Court, with their newly registered Far North Community Group Incorporated.

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

This incorporated society is now their vehicle for any further litigation and is itself liable for any further costs order.

Later substitution by the Far North Community Group Inc did not absolve individual members from their liability incurred prior to incorporation, Judge Smith ruled.

Far North Community Group Inc v. Far North District Council – Environment Court (12.01.26)

26.061

Guarantee: Hudson v. Hobsonville Consulting

  

Where one guarantor enjoys the whole financial benefit of a guaranteed loan, fellow guarantors should stand second in line and not be liable to initially front up with any contribution the High Court ruled, requiring Auckland property developer Brian Hudson pay first on a $593,000 guaranteed debt, ahead of his former partner and fellow guarantor.

A September 2022 refinancing of funding from Kensington Finance Limited Partnership saw a three-way guarantee of repayment made by Mr Hudson, his then partner Sarah Clarke, and their company Hobsonville Consulting Ltd.

Funds were needed to complete a property redevelopment on St Vincent Avenue in Remuera, one of Mr Hudson’s projects.

With a mortgagee sale threatened, Hobsonville Consulting paid off the $550,000 owed Kensington Finance.

Left unresolved was the question of how this liability should be split between the three guarantors.

The general rule is that liability between multiple guarantors is shared equally.

Justice Becroft adopted a principle established in Australian litigation: a guarantor who obtains the whole benefit of a loan may be required to accept the whole burden, with co-guarantors having a right to recover their otherwise equal liability out of the prime guarantor’s assets should they be called to pay.

Mr Hudson was ordered to pay fifty per cent of the guaranteed $550,000 debt, with Hobsonville Consulting agreeing it would pay the other fifty per cent.

The loan was primarily for Mr Hudson’s benefit, to complete his St Vincent Ave project.

Ms Clarke is excused payment, to the extent that the other two guarantors make full payment.

Separately, Mr Hudson argued he should pay nothing.  Transfer of his fifty per cent shareholding in Hobsonville Consulting to Ms Clarke extinguished his liability on the guarantee, he claimed.  The remaining co-guarantors assumed all liability.

There was no such agreement, Justice Becroft ruled.

Even if there were, Mr Hudson provided nothing of benefit in return for the supposed agreement.  Shares in Hobsonville Consulting were essentially worthless.

Hudson v. Hobsonville Consulting Ltd – High Court (22.12.25)

26.060

House Sale: Smallbridge v. Singh

  

After failing to find a buyer for a quick on-sale of an Auckland residential property ripe for development, Paljeet Singh was ordered to pay $753,000 damages for the owners’ loss on resale.  A claim he was refused access prior to settlement, blighting chances of quickly flipping the property, was dismissed by the High Court; no access was requested.  Potential buyers had evaporated in a falling market. 

The High Court was told of a bidding war between at least five property developers and speculators at a November 2021 auction of the Smallridge family home in Avondale.  Sitting on a 930 square metre site, the property has considerable potential for re-development.

Mr Singh’s winning bid at $1.95 million left Robert and Margaret Smallbridge ecstatic; their real estate agent surprised.

As events transpired, this sale was at peak of the market.

At Mr Singh’s request, contract terms gave him twelve months to settle his purchase with rights of access prior to settlement, allowing him to have prospective buyers view the property.

The Smallridges agreed Mr Singh could use marketing material and photos prepared for their auction sale to assist his sale efforts.

They objected to Mr Singh putting a ‘for sale’ sign back up in front of their property.

It was removed, with Mr Singh later arguing in the High Court this was one example of the Smallbridges’ failure to allow access.

One year on from the auction, Mr Singh failed to settle.

He claimed the contract was cancelled, alleging the Smallbridges were in breach of contract terms over access.

Justice Walker ruled there was no evidence of access being denied.  There were no buyers in the market requiring access at the price Mr Singh wanted.

Mr Singh’s request for access by a valuer was readily given, but no valuer turned up.

His claim one purchaser backed out because of an inability to access the property was dismissed by Justice Walker.  The deal fell over because no agreement could be reached on price.

Mr Singh had no grounds for cancellation, she ruled.

He was ordered to pay $753,000 damages for the Smallridges loss on resale after they put their property back on the market in 2023.

The Smallridges then offered to accept a lesser sum from Mr Singh in order to finalise the litigation, avoiding further stress and delay.  This offer was not taken up, the court was told.

Smallridge v. Singh – High Court (19.12.25)

26.059

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