Ethical Investing: Nazzal v. Guardians of NZ Superannuation

  

The sins of the world are being levied against New Zealand’s $86 billion Superannuation Fund with the High Court ruling it acted ‘unreasonably and unlawfully’ in failing to clearly delineate investment policies necessary to avoid prejudice to New Zealand’s reputation as a responsible world member.

The somewhat Orwellian-named Guardians of New Zealand Superannuation Fund have been engaged in a long-running dialogue with lobby group Palestinian Solidarity Network as it seeks to block any Fund investments in businesses considered complicit in human rights abuses across occupied Palestinian territories.  

Set up in 2001 by then Minster of Finance Sir Michael Cullen, the Fund is intended to smooth costs of future superannuation commitments.

Investment policy is left to Fund Guardians, but the New Zealand Superannuation and Retirement Income Act requires that investments avoid prejudice to the nation’s reputation.

In the High Court, activists successfully claimed the Fund failed to give proper consideration to their demand that specific named investments be sold.

The court was told lobbying by Palestinian Solidarity saw the Guardians previously exclude five Israeli banks from its investment portfolio in 2021.

In 2024, the Fund refused further requests by Palestinian Solidarity that it divest investments in Airbnb (an $18.2 million investment), Booking.com ($48.5 million), Expedia ($467,000) and Motorola ($123.3 million).

Solidarity said these companies are listed on a database compiled by the UN Commissioner of Human Rights as businesses connected to the Israeli occupation of Palestinian territories.

It applied to the High Court for judicial review of Fund investment policies.

Judicial review does not investigate the merits of a decision; it looks at the process by which the decision was made.  

Justice Mount ruled the Fund’s existing investment policies did not set ascertainable benchmarks or standards against which New Zealand’s reputation could be measured.  Standards need not be prescriptive, but they should not imply unconstrained discretion, he said.

There was also a lack of clarity about who will make investment decisions and how and when they will do so, Justice Mount said.

There was evidence of the Guardians progressively re-writing internal policy documents over time, making them less prescriptive, in the face of on-going lobbying by Palestinian Solidarity.   

Justice Mount said Palestinian Solidarity had standing to challenge the Fund’s investment process, ensuring public money is not invested in a way that harms New Zealand’s reputation.

He recommended, as a matter of natural justice, that companies named in future be given an opportunity to respond before any decision to remove them from the Fund’s investment portfolio.

Nazzal v. Guardians of New Zealand Superannuation – High Court (13.04.26)

26.133

Billboard Lease: Go Media v. Wright Barry

  

The economic dispute is about market rent for a billboard sited in a prominent position beside the Mount Maunganui bridge flyover in Tauranga on a lease running to 2038, with Go Media currently charged annual rent of $20,000.  The legal dispute is about alleged chicanery by landowner Wright Barry Family Trust cancelling the current billboard lease to force a new lease with increased annual rental at $100,000.

In the High Court, Justice Andrew imposed an interim injunction allowing rentals to continue temporarily at $20,000.  A full court hearing is needed to resolve Go Media’s claims of misrepresentation by Wright Barry.

The High Court was told Go Media first took up lease rights for the digital billboard in 2018.  The site on Newton Road then operated as a car sales yard.

In 2023, the then owner sold the site to Wright Barry Family Trust, taking ownership subject to Go Media’s existing billboard lease.

Within weeks of assuming ownership, Wright Barry gave notice the billboard lease was cancelled, pointing to a ‘redevelopment’ clause in the billboard lease allowing cancellation should it be in the way of any proposed redevelopment.

Within a month, Go Media was offered a new two year ‘temporary’ lease at $100,000 per annum on grounds there would be a short delay with redevelopment plans.

Go Media stood its ground, claiming there was no genuine redevelopment underway.

Nearly eighteen months later, Wright Barry again gave notice of cancellation; supported this time with notice of planning consent sought for a new building on site and copy of a lease to Hireace as new tenant.

Go Media surrendered rights to its current billboard site following an agreement allowing it rights of first refusal should Wright Barry later have space available for a new billboard.

Evidence was given of Go Media subsequently negotiating directly with Hireace for a slight variation to its planned build, enabling the existing billboard to remain.  Go Media offered Hireace free advertising, part of a ‘contra deal,’ encouraging Hireace’s approval for changes accommodating the existing billboard.

Go Media claims Wright Barry Family Trust is in breach of the Contract and Commercial Law Act and the Fair Trading Act.  It alleges Wright Barry misrepresented, at the time Go Media surrendered its lease, the possibility of Go Media’s existing billboard site remaining available despite Hireace’s site redevelopment.

Go Media says it was told by Shaun Barry that after Hireace’s rebuild ‘there won’t be a metre to spare on the property.’

It alleges Wright Barry trustees deliberately engineered a redevelopment triggering cancellation while knowing the existing billboard could be accommodated.

Go Media is suing to have the original billboard lease reinstated.

Go Media Bacbou Ltd v. Wright Barry Family Trust – High Court (13.04.26)

26.132

Life Interest: Bevin v. Winders

  

Descendants of David Te Au were removed from the record as part of owners of land in Southland and related mutton-bird customary rights after identifying errors on the Maori Land Court record from 1965; as a whangai adoption, son Thomas had no right to inherit and his adoptive father’s will specifically restricted his inheritance to lifetime use of a family holiday home at Colac Bay.

By Maori custom, land held in customary ownership passes to blood descendants.  The Maori Land Court holds records for ownership shares in Maori land.  On death of each part-owner, descendants apply to the Court for recognition as added part owners on proof of their whakapapa links.

A Maori Land Court hearing in February 1965, on death of David Te Au, was told he left five children: four his natural children; the other, Thomas, a son adopted in an informal whangai adoption.

As the law then stood, whangai adoptions were not recognised for land succession.  Despite this rule, Thomas was added to the record as a part-owner, with apparent consent of the other four children.

Sixty years on, this process was challenged.

The Maori Land Court removed Thomas as part-owner.

Confusion in 1965 apparently flowed from wording in their father’s will describing Thomas as ‘adopted.’  The word was used in a colloquial sense; it was an informal whangai adoption, not a formal Adoption Act adoption.

Chief Judge Fox amended the land records using powers in the Te Ture Whenua Maori Act.

The only customary rights inherited by Thomas was a life interest in the Colac Bay dwelling.

Bevin v. Winders – Maori Land Court (8.04.26)

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Relationship Property: 'Darwin v. Garner'

  

By any measure it was an unusual relationship: a 26 year marriage in which the two lived apart for 21 years, coming together as a family most weekends and for holidays.  A later relationship property spat over assets valued at some four million dollars saw a nine year difference between the two as to the date their relationship ended, leading to a disputed variance in value of assets to be divided.

The two met as law students in Auckland during the 1980s.

Names were supressed in the publicly issued Family Court judgment.

The court was told they worked overseas for three years before returning to Auckland in 1995.

He subsequently got a job with a law firm outside Auckland; she preferred to remain.

Over the next two decades, he worked as a law firm partner away from Auckland, visiting Auckland most weekends where their two children stayed with their mother.  She did not return to legal practice.

Assets accumulated from his income included houses at each of their locations, plus a share in a holiday home.  They holidayed as a family, both in New Zealand and overseas.

Evidence was given of the husband paying expenses for both houses, household expenses for his spouse and family in Auckland including education expenses for their children.

She was paid a monthly $800 allowance, stopped when he later learnt through a mutual friend that she was now in paid employment at a business owned by one of her relatives.

Their marriage was dissolved in 2024.

Valuation of relationship property was hampered by differing views as to when their relationship ended.

She said it was 2021; the date her lawyers wrote to her husband formally announcing their marriage was over.

He said it was 2012; when he was firmly committed to living out of Auckland with partnership at a new law firm he shifted to.  Alternatively, it was 2017/18 he said; a time when emails between the two arguing over payment of family expenses saw his spouse signalling that she was looking to finalise their arrangement with a relationship property claim. 

Judge von Keisenberg ruled it was 2018.

Living separately for extended periods, by itself is not evidence of legal ‘separation;’ couples can still be committed to each other and their relationship.

But by 2018, increasingly angry emails containing phrases such as ‘I want you out of my life’ and ‘How do you wish to proceed with the divorce?’ signalled their relationship was over.

The nature of their relationship and continuing financial contributions made by the husband after their 2018 separation complicated relationship property calculations. 

The wife was entitled to a Property (Relationship) Act payment for ‘economic disparity;’ her loss of otherwise potential income arising from her role in primarily caring for their children.  The monetary value of this opportunity cost was assessed at $384,000 after deduction of an allowance for post-separation relationship expenses paid by the husband.

It was agreed property held in family trusts would be treated as if it were relationship property; these assets had been funded from the husband’s earnings: relationship property.

Relationship assets and trust assets were split 50/50; each given full ownership of the property they occupied, with cash adjustments to equalise values.

The husband has to bear any tax consequences of their two family trusts being unravelled, Judge von Keisenberg ruled.

‘Darwin v. Garner’ – Family Court (7.04.26)

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Insurance: McConnachie v. BOP Regional Council

  

Competing law suits against Bay of Plenty Regional Council claiming damages in excess of seventy million dollars for damage to Edgecumbe homes following flooding in 2017 saw the High Court allow insurers’ subrogated claims led by IAG go to trial, a proposed class action promoted by Australasian litigators Shine Lawyers disallowed.

There is no love lost between the insurance industry and class action litigators.

BOP Region had already signalled which of the two adversaries it prefers to face; allowing multiple insurers to join IAG’s litigation against BOP Region even though they were technically out of time.

The High Court was told IAG Insurance, Vero Insurance, AA Insurance, Tower and QBE Insurance (Australia) have collectively paid out some 490 policyholders for damage to their Edgecumbe properties after a Rangitaiki River stopbank was breached in April 2017 following cyclone Debbie.

Exercising rights of subrogation, these insurers are suing BOP Regional Council seeking to recover their losses.  Subrogation is the legal rule allowing insurers to ‘stand in the shoes’ of customers paid out on an insurance policy, enforcing whatever legal rights the customer may have in order to recover what are now the insurer’s losses.

BOP Region is responsible for flood management, charging property owners a differential levy.  Insurers allege negligence, nuisance and breach of statutory duty by BOP Region.  It denies liability.

Separate from insurers’ claim for compensation, Shine Lawyers has signed up 550 prospective plaintiffs in a class action similarly seeking compensation from BOP Region.  There is considerable double-counting, with about three-quarters of Shine Lawyers’ clients being property owners who have previously received insurance payouts.    

At its simplest: a successful claim by affected insurers against BOP Region sees these insurers recovering part or all of insurance claims paid out; a successful claim by Shine Lawyers sees its clients getting a share of whatever financial payout is recovered.

A win for either of these two plaintiffs requires either a favourable court ruling or successful negotiations with BOP Region and its insurer.

As part of pre-trial procedures, the High Court was asked to rule how each claim could continue, or whether they should be combined.  This pre-trial hearing descended into a slanging match with rival plaintiffs denigrating the other’s case.

The insurers claim does no more than recover their claim costs, with no further benefit for either insured or uninsured property owners, Shine Lawyers said.

Shine Lawyers claim is riddled with conflicts of interest, insurers said.  In particular, Shine has an incentive to settle out of court in circumstances and at a time which best ensure Shine maximises its fees on time spent plus its agreed twenty per cent share of any payout.  Plus, Shine’s clients could be facing up-front costs even if there were never any payout, insurers claim.

Associate Judge Taylor allowed the insurers’ claim to continue.

It is arguable that these insurers could additionally claim for property owners uninsured losses, providing further compensation for insured property owners, he said.

Shine Lawyers strongly dispute whether it is legally possible for insurers exercising their rights of subrogation to recover more than the amount paid out on a claim.

Shine argued insurers have conjured up a non-existent right labelled equitable subrogation to bolster their argument that more than claim costs can be recovered.

Judge Taylor dismissed Shine Lawyers proposed class action application.

Most of the property owners affected will likely best benefit from their claims for uninsured losses being advanced by their insurers with legal costs carried by these insurers, he ruled.

McConnachie v. Bay of Plenty Regional Council and IAG New Zealand Ltd v. Bay of Plenty Regional Council – High Court (2.04.26)

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Asset Forfeiture: Commissioner of Police v. Linton

  

Part payment of a $761,800 criminal profit confiscation imposed on convicted Christchurch Tribesmen gang member Matthew John Linton was met with cash seized on his arrest; the $566,000 balance sits as a suspended penalty, potentially able to be called in at a later date after conclusion of his 2025 three years and one month prison sentence for money laundering.

The High Court was told Linton acted as bag man, holding cash generated by Tribesmen affiliates dealing in methamphetamine and cocaine.  He is a patched member of the gang.

At time of his arrest, police seized cash stored at his New Brighton home, in two of his vehicles and at a Riccarton storage unit rented in name of his then partner.  She disavowed any claim to the $133,800 cash at the storage unit.

Linton pleaded guilty to charges of money-laundering.

Most of the money has disappeared, untraceable, into off-shore gambling accounts.

He did not contest the Criminal Proceeds (Recovery) Act profit forfeiture order.

For Police, the tactical benefit of seeking a profit forfeiture order against Linton is that future recovery can be made against any assets he comes to later own, not just assets proved to be tainted by purchase with criminally obtained funds.

Commissioner of Police v. Linton – High Court (2.04.26)

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Fraud: Worksafe v. Mansfield

  

A series of cleverly forged compliance certificates were discovered only by accident, traced back to a fraudulent 2017 sign-off for installation of a diesel storage tank at a South Auckland police station.  Police estimate work across five different affected police stations will cost $300,000 to remediate; Philip John Mansfield was convicted of fraud, sentenced to five months community detention requiring him to remain at home 7.00 pm to 7.00 am seven days a week.  

The District Court was told Mansfield had a good reputation within the industry prior to his offending, primarily for construction and installation of storage tanks at petrol stations through his Palmerston North based company, Mansfield Installations Ltd.

He later concentrated on commercial installation of smaller diesel tanks.

Evidence was given of his taking shortcuts in certification sign-offs when disputing application of new rules imposed on the industry.

When one certifier refused to sign off, Mansfield created a forged certificate.

Over the next six years he forged eight compliance certificates with false signatures fraudulently certifying work as compliant.

The fraud was discovered only after his work on a job for the National Library in Whanganui was later queried and the supposed certifier disavowed all knowledge.  Mansfield had fraudulently altered a compliance certificate for another job, this other certificate itself being a forgery.

With Mansfield now aged 65, Judge Warburton ruled community detention was the most appropriate sentence.

Worksafe New Zealand v. Mansfield – District Court (2.04.26)

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Kainga Ora: Albert v. Kainga Ora

  

Determined to stay living at Kainga Ora accommodation in Auckland following death of his mother, Jonathan Albert’s claim that the property had become Maori customary land he was entitled to inherit was dismissed by the Maori Land Court.

Ellen Albert died in October 2025, while a residential tenant at a Kainga Ora property on Beatrix Street in Avondale.  Family members, including son Jonathon, lived with her.

Jonathan refused to leave.

Tenancy Tribunal ruled the tenancy came to an end on Ellen’s death; Jonathon had to leave.

In the Maori Land Court, Jonathon argued that his mother’s Beatrix Street tenancy had evolved into a customary right protected by the Treaty of Waitangi Act.  As a blood relative, he had inherited these rights of occupation, Jonathon claimed.  He was entitled to an occupation licence in his name recording his rights of occupation, he told the court.

Evidence was given that Land Information title to Beatrix Street has been registered in name of the Crown since 1942 and specifically Housing New Zealand since 1981.

Land Transfer Act principles make it clear that Housing New Zealand has absolute rights of ownership by reason of title registration, Judge Williams ruled.

There was no evidence of any trust over the Beatrix Street property in favour of the Albert family, he said.

Jonathon’s application for an occupation licence was dismissed.

Albert v. Kainga Ora Homes and Communities – Maori Land Court (2.04.26)

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Estate: Garrity v. Hall

  

After matriarch Maria Te Kaha Morgan was stabbed and killed in her Ngaruawahia home by a mentally-ill grandson, strained family relationships hampered attempts to resolve her estate.  It took legal proceedings to force action, but not resolution.

Maria’s death at age 72 in tragic circumstances left her children with divided loyalties, their emotions immediately after the event described in court as ‘still raw, still vulnerable, still hurt and angry.’

Maria left four children: Nancy, Leroy, Francis and Lillian.

Francis’ son killed their mother.

At an emotional family gathering after their mother’s tangi it was agreed Nancy would take the lead, being appointed under the Administration Act to take control of their mother’s estate.  Nancy is not a biological daughter; adopted in a Maori customary whangai adoption.   

A wish to keep their Cavan Street family home within the family resulted in Nancy suggesting the property be offered to the four siblings on a ‘first come first served’ basis at $450,000; a market valuation obtained the previous year.

Daughter Lillian agreed to buy.

She later asked that title be taken jointly with brother Francis.

Estate lawyers became frustrated with failures by both to sign the necessary paperwork.     

The High Court was told Francis shifted into the property mid-2024.  He has not been paying rent.

As administrator, Nancy asked for a High Court order removing Francis from the property so it could be sold, with net proceeds divided between the four children.

Francis attended the court hearing.

He agreed to leave Cavan Street.

Associate Judge Sussock formally recorded that Nancy as administrator was entitled to vacant possession.

Judge Sussock did not immediately allow an estate demand that Francis pay rent for the period he was in occupation plus legal costs to date of some $19,000 incurred to force him out.

These issues require a full defended hearing, she said.

Judge Sussock offered to assist with an out-of-court judicial settlement conference with family members to avoid the legal expense of a full trial.

Garrity v. Hati – High Court (1.04.26)

26.125

Lease Renewal: Creative Edge Food v. Hunza Corporate

  

Hunza’s Andrew Cunningham seized on a tenant’s delay in requesting a lease renewal as grounds to clear the tenancy; a move blocked by the High Court allowing a lease renewal, ruling past niggles between landlord and tenant were in part Hunza Corporate’s fault as landlord.

The High Court was told Hunza Corporate Trustee Ltd in 2023 bought out the then landlord’s interest over a commercial property on Elizabeth Knox Place in Auckland suburb St Johns.

This purchase included a sitting tenant: Creative Edge Food Company Ltd controlled by Farhan Sittar, with a long-term lease potentially running to 2031.

Creative Edge operates a commercial bakery.      

Evidence was given of Hunza Corporate offering Creative Edge $80,000 to surrender its lease and leave; an offer later withdrawn.

Hunza instead looked to push Creative Edge out.

Threats to cancel the lease on grounds that the site was not being kept tidy and that one invoiced payment was late came to nothing after Creative Edge promptly complied.

A rent increase imposed by Hunza was challenged, with an arbitrator later reducing the claimed increased rent to an assessed market rate some five per cent below what Hunza was claiming. 

Creative Edge’s lease has three-year rolling rights of renewal expiring in 2031.

The High Court was told Mr Sittar inadvertently failed to give formal notice before July 2025 seeking a further three year rollover.  Hunza immediately claimed the lease was at an end, suing for possession when Creative Edge refused to leave.

Justice O’Gorman allowed Creative Edge’s Property Law Act application, requiring Hunza Corporate to allow a renewal.

There was no evidence that Creative Edge would be unable to meet continuing lease commitments on a lease renewal, she ruled.

To date, monthly rent had been paid on time.  Late payments had centred on sundry disputes over Creative Edge’s contribution to landlord’s costs for general rates, water rates and body corporate expenses.

Hunza also owns the neighbouring property.

Creative Edge claims allocation of landlord expenses between the two properties is being wrongly allocated.  It also disputes liability on some billed invoices with evidence Hunza was wrongly billing extra GST to Creative Edge on what were GST inclusive landlord costs.     

Hunza Corporate was ordered to allow Creative Edge a new three year lease on same terms as the previous lease.

Creative Edge Food Company Ltd v. Hunza Corporate Trustee Ltd – High Court (1.04.26)

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Franchise Renewal: Cleanco Truck Wash v. Waikato Truck Wash

  

With no agreement on renewal of a franchise agreement, franchisor Cleanco Truck Wash failed in attempts to stop former franchise holder Waikato Truck Wash carrying on business in Hamilton as an independent operator, contrary to their agreed restraint of trade.  If it is proved Waikato Truck is in the wrong, damages are an adequate remedy Justice Robinson ruled in the High Court.

Their 2014 ten-year franchise agreement required Waikato Truck Wash pay royalties calculated at five per cent of gross sales.  For the period 2021-23 royalty payments had been between $58,000 and $69,000 the High Court was told.

Evidence was given of a falling out when the franchise came up for renewal in 2024.

Richard Vincent is sole director and his family trust shareholder of franchisor Cleanco Truck Wash Systems Ltd.

In 2024, Gregory McQuaid’s Waikato Truck Wash Ltd gave written notice renewing its Cleanco franchise for a further ten years.

Nothing was finalised.  Waikato Truck claims renewal terms are unacceptable; in breach of their original franchise agreement stating that any renewal would not make any fundamental changes, Mr McQuaid claims.

After fruitless negotiations, the franchise was terminated.  Cleanco sued to enforce a restraint of trade prohibiting Waikato Trust from continuing in business from its Hamilton site for a two year period.

Gloves came off in the High Court.  

Mr McQuaid argued the franchise agreement was no more than a licensing arrangement allowing use of Cleanco’s name and logo.  Waikato Truck is free to operate as an independent business on removal of the signage, he argues.

Cleanco claims the 110 page contract signed by Waikato Truck sets out in detail the business system owned by Cleanco and used by Waikato Truck.  The two year restraint of trade is a reasonable protection of its intellectual property rights, it claims.

In the High Court, Justice Robinson declined to immediately enforce the restraint.

Yet to be resolved is their legal dispute over validity of terms offered for a further renewal of the Cleanco franchise; a legal question of whether Cleanco or Waikato Truck were in the wrong.

If there is a final ruling against Waikato Truck, damages are an adequate remedy Justice Robinson ruled.  Calculation is not difficult; five per cent of ongoing gross revenue.

Separately, Cleanco sued to block Waikato Truck’s Crawford Street site being used as a truck wash.

This was dismissed.

The site is owned by G-Field Properties Ltd, also controlled by Waikato Truck’s Mr McQuaid.

G-Field did not sign any franchise agreement.

Evidence was given of Mr McQuaid’s G-Field buying Crawford Street from interests associated with Mr Vincent back in 2014 when their franchise agreement was first signed.

This contract gave Mr Vincent right of first refusal to buy back Crawford Street from G-Field during the next ten years.

The court was told Mr McQuaid offered to sell the site back to Mr Vincent some three months before making his written request to renew the franchise.

Mr Vincent did not take up the offer.  The option has since lapsed.

Cleanco Truck Wash Systems Ltd v. Waikato Truck Wash Ltd – High Court (1.04.26)

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Mortgage Fraud: Song v. Merchant Finance

  

An Auckland $1.8 million mortgage fraud was blocked at the last moment with Westpac freezing funds.  Since the fraudster had vanished without a trace, a High Court order was needed to return funds to Merchant Finance Ltd as the rightful owner.

The High Court was told Merchant Finance approved a $1.8 million dollar loan in May 2025 to be secured over Shenquing Song’s property in Auckland suburb Glendowie.

Ms Song had never applied for a loan.

A fraudster claiming to be Ms Song used a forged passport to fox a mortgage broker, Merchant Finance and sundry lawyers into thinking they were dealing with the real Shenquin Song.

The fraud almost succeeded.  Funds were advanced by Merchant Finance, lawyers innocently acting for the fraudster registered a mortgage in favour of Merchant Finance over the Glendowie property and the funds passed through the lawyers’ trust account into a Westpac account nominated by the supposed Ms Song.

Only then did suspicions of fraud surface.

Westpac froze the funds.

The Registrar-General of Land registered a caveat on title to the Glendowie property, to block further fraudulent activity.

Westpac subsequently transferred the money back into the trust account of lawyers Chan & Co Legal Ltd.  It was now the lawyers’ problem.

It was more than a legal problem for Chan & Co; it was also a practical problem.

Lawyers owe ethical and contractual duties to their clients.

Chan & Co did not where their client was or who she is, other than her not being the real Shenquin Song.

As things stood, Chan & Co were holding funds on behalf of an unknown client as an unsecured $1.8 million loan from Merchant Finance.

To break the impasse, Chan & Co supported a High Court application under Contract and Commercial Law Act declaring the original loan and subsequent mortgage be set aside on grounds of mistake: Merchant Finance thought it was dealing with the real Shenquin Song; the fraudster knew this was untrue and took advantage of this mistake.

Cancellation of the loan contract allowed Chan & Co to return stolen funds to Merchant Finance.

The court was told Merchant Finance said it would release its mortgage after receiving repayment, with the Registrar-General of Land agreeing to then remove the caveat over Ms Song’s Glendowie property.

Song v. Merchant Finance Ltd – High Court (1.04.26)

26.122

Bank Fees: Commerce Commission v. Co-operative Bank

  

Co-operative Bank’s $2.48 million penalty for charging excessive bank fees amounts to seven per cent of net profits during the period 2019-21 when inadequate bank costings saw customers wrongly charged fees in excess of bank actual costs.

Some 28,200 customers were affected, with per-customer over-charges ranging from $45 to $70 on fees charged in excess of bank actual costs for loan establishment fees and also for fees on loan variations and mortgage discharges.

The High Court was told the Bank breached consumer credit requirements in the Credit Contracts and Consumer Finance Act, setting ‘unreasonable’ bank fees; in some cases undertaking no modelling as to bank costs before setting fees, in other cases setting fees in excess of known costs.

The Bank self-reported its errors to the Commerce Commission.

A negotiated penalty of $2.48 million was approved by the High Court.

The court was told the Bank has also directly compensated affected customers.

Consumer credit ‘responsible lender’ rules applying since 2019, designed to control predatory lending by so-called mobile traders, also apply to fees charged by retail banks.

Commerce Commission v. Co-operative Bank Ltd – High Court (31.03.26)

26.120

Estate: Sutherland v. Milne

  

Ownership of a holiday home at Omaha north of Auckland was centre of a family dispute following death of patriarch Laurie Evans; did his widow Doreen have a life interest only in the property?

Children Susan and Owen were pitted against their brother-in-law David Milne.

The High Court was told David Milne was widowed prior to death of his father-in-law Laurie Evans, but Laurie did provide in his will for both David and David’s children; they were collectively entitled to three-thirteens of his residual estate.

There was no immediate payout on Laurie’s 1999 death.

Terms of Laurie’s will gave to his widow Doreen ‘the free use, income, occupation and enjoyment’ of estate assets, with the ‘then balance’ on her death to be divided between his descendants.

Doreen died more than twenty years after husband Laurie.

Estate money was used in the year after Laurie’s death to buy an Omaha Beach property at a then cost of some $410,000.  Title was registered in Doreen’s name.

On her death, David Milne said the Omaha property remained an asset in Laurie’s estate; claiming his family was entitled to a three-thirteens share of the value.

Justice Johnstone ruled Doreen’s right to ‘use’ estate assets meant any assets transferred into her name became her own property; they were not held on trust by her for final beneficiaries named in her late husband’s will.

Estate distribution of the ‘then balance’ of Laurie’s estate on Doreen’s death in 2022 did not include the Omaha property; it was no longer part of his estate.

The court was told siblings Susan and Owen inherit Omaha.

David and his children did receive a cash payout in the final wash-up of Laurie’s estate, but no share in the value of Omaha.

Value of their cash payout was not disclosed in the court judgment.

Sutherland v. Milne – High Court (31.03.26)

26.119

Incorporated Society: Theosophical Society of NZ v. Hamilton Lodge

  

Hamilton Lodge of the New Zealand Theosophical Society has been ordered to surrender all assets to its Auckland-based parent after failed legal argument that new rules governing incorporated societies gave separately-incorporated local branches full autonomy.  

Hamilton Lodge was given five weeks to hand over all funds in its bank accounts and transfer ownership of its central city site on Anglesea Street.

The High Court was told of a 2024 decision by Theosophical Society NZ stripping its Hamilton Lodge of its charter and use of the Society name, stating Hamilton members had brought the Society into disrepute; through ‘many breaches of the Society’s rules concerning its values and standards of conduct,’ it claims. 

Relationships between Hamilton and Auckland had been strained since 2018.

Operating from India, the theophilosophical movement encourages study of comparative religions and philosophy, with a strong emphasis on spirituality.

A New Zealand branch received its charter in 1896; its Hamilton Lodge in 1908.

Both the New Zealand branch and its Hamilton lodge are established as separate incorporated societies.  Continuing legal existence for both was ensured by re-registration under the Incorporated Societies Act 2022, which now governs their ongoing legal dispute.

Hamilton Lodge claimed it is being ‘robbed’ by New Zealand branch’s claim to its assets.

Hamilton Lodge is structured as an incorporated society; a legal person in its own right.  New Zealand branch, as a separate incorporated society, has no right to Hamilton’s assets, Hamilton Lodge claimed.

A 2013 Law Commission report reviewing incorporated societies identified legal links between national organisations and their local regions is best dealt with by either or both of contractual links or constitutional wording.

In this case, the link is constitutional wording, Associate Judge Sussock ruled.

Wording in Hamilton Lodge’s constitution as at the 2024 date when its charter was cancelled stated that all Lodge assets were to be handed over to New Zealand branch should its charter be cancelled.

It was irrelevant that Hamilton Lodge later filed an updated constitution stating that on dissolution of the Lodge all assets are to go to ‘a like-minded charity in the Waikato region.’

Cancellation of Hamilton Lodge’s charter and subsequent demand it hand over its assets did not amount to dissolution of the Hamilton Lodge as an incorporated society, Judge Sussock ruled.

Hamilton Lodge as an incorporated society remains in existence, albeit now with no assets and forbidden from using the Society’s name.

The most recent financial statements filed by the Hamilton Lodge of the Theosophical Society are dated November 2007, with its major asset being land and buildings then valued at $330,000.

The court was told New Zealand branch’s constitution states assets received from any lodge is to be ‘ring-fenced,’ held for any future theosophical centre or centres in that geographic area.

Theosophical Society of New Zealand Inc v. Hamilton Lodge of the Theosophical Society Inc – High Court (31.03.26)

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