Mortgagee Sale: Loan Investment Trustees v. Burrell & Porter

  

Owners of a distinctive Wellington ‘arts and crafts’ style property were still both liable for a one million dollar shortfall on mortgagee sale after part-owner, property developer Richard Burrell, bought in at the first of two mortgagee sales and then defaulted on his $3.55 million offer.

The Brougham Street property on Mount Victoria was subsequently sold by mortgagee Loan Investment Trustees Ltd for $3.26 million; a shortfall on the mortgage debt owed.

Diana Potter, Mr Burrell’s estranged spouse, claimed unsuccessfully she should be excused part of the shortfall that they both otherwise owed Investment Trustees because it had not exercised its right to claim nearly $300,000 damages from Mr Burrell for defaulting on his contract to buy, leading to a second sale at a lower price.

With land transactions, a defaulting buyer is generally liable to pay damages for any loss on resale. 

The High Court was told of the two defaulting on a short-term $3.6 million loan from Investment Trustees secured over their Brougham Street home due for repayment in early 2025.

Mr Burrell listed the property for sale before the loan fell due, though Ms Potter refused to sign the listing agreement.  No buyer was found.

One month after the Investment Trustees loan fell due, a Family Court order transferred full ownership of Brougham Street to Ms Potter.

Investment Trustees put Brougham Street up for tender in a mortgagee sale.  It accepted Mr Burrell’s $3.55 million tender; the highest of four on offer.

One month after Mr Burrell defaulted on this purchase, Investment Trustees sold to a third party.

Associate Judge Lester ruled any damages claim Investment Trustees may have against Mr Burrell under his now-cancelled purchase does not impact on its Property Law Act rights as mortgagee to recover from both Mr Burrell and Ms Potter for the shortfall on their loan.

They were held jointly liable to pay $1.01 million.

Another claim that Investment Trustees did not take reasonable care to get the best price on sale was dismissed.

The current market was properly tested, Judge Lester ruled.

Loan Investment Trustees Ltd v. Burrell & Potter – High Court (4.12.25)

26.034

Fraud: Thompson-Bell v. R.

  

Promoted to finance administrator on her mother’s recommendation, Ariana Thompson-Bell stole nearly half a million dollars from an un-named Waikato charitable trust in a two year false invoicing scam.

Her mother made partial reimbursement.

On appeal to the High Court, Justice Becroft confirmed Thompson-Bell’s two years three months term of imprisonment, with $100,000 reparations to be paid.

Trust members asked she be spared jail. While views of victims expressed at a restorative justice conference are relevant, they are not determinative, he said. 

The court was told Thompson-Bell has a commerce degree from Waikato University, working for a short time at KPMG.

Her mother subsequently offered her promotion to a finance role at the Trust, given Thompson-Bell’s qualifications and her desire for job flexibility while raising a family.

Thompson-Bell had been working for the Trust in lesser roles since 2014.

Over a two year period, Thompson-Bell stole nearly half a million dollars in over eighty separate transactions; creating false invoices, making payments into various accounts she controlled, plus an account set up in the name of her twelve year old child.

Evidence was given that money stolen was used to fund her lifestyle; travel, restaurant meals, plus supermarket shopping.

The thefts were noticed only after suppliers complained about non-payment of legitimate invoices they had sent to the Trust.

Thompson-Bell’s mother made partial reimbursement of some $66,000; described as advance payment on her daughter’s inheritance.  Thompson-Bell herself repaid about $12,000 before sentencing in the District Court.

On appeal, Thompson-Bell claimed insufficient credit had been given on sentencing for her good character, particularly her work within the community.

Prolonged offending limits any claim of good character, Justice Becroft said.

The name of the Trust was supressed on grounds of potential reputational damage.  The Trust relies on public funding.

Thompson-Bell v. R – High Court (3.12.25)

26.032

Treaty Settlement: Smith v. Te Ara Tipuna

  

Lady Smith did not get High Court support for a representative class action seeking to hive off $50 million dollars from Ngati Porou’s Treaty Settlement to be controlled by herself and other landowners claiming to be affected by iwi plans for a Gisborne-Opotiki tourist trail.

Ms Smith alleges power over Ngati Porou settlement assets is concentrated into hands of a few, making decisions without transparency or accountability.  Dissent has been marginalised, she claims.

Her primary complaint is that decisions to construct a five hundred kilometre round-trip tourist trail between Gisborne and Opotiki, linking marae across the region, have been made without consent of landowners such as herself.

She wants a detailed audit of iwi trust activities.

She asked the High Court to approve a representative action, automatically including in her claim all those of Ngati Porou descent supporting her view.  She claims to have over one thousand supporters asking to be included in a class action.

Trustee of Ngati Porou’s Treaty settlement alleges there is no such support; the unsigned list of supporters produced by Ms Smith is in fact a list of people who objected to the much-disputed Treaty Principles Bill, it suggested.

Justice McQueen ruled there is no practical benefit in progressing Ms Smith’s claim as a representative action.  Any successful action by Ms Smith, calling the Trustee to account, benefits all affected Ngati Porou.  Procedural complications of a class action are not needed, she said.

In any event, Ms Smith’s claim does not fit the requirements for a class action, Justice McQueen ruled.

Approval of a class action requires all those eligible for compensation within the named class to have the same interest; as seen with recent multi-million dollar class actions by customers seeking compensation following bank errors.

There is no evidence each of her supporters have the same interest in her specific complaint, Justice McQueen ruled.

Ms Smith is free to continue, in her own name, a legal challenge to decision-making by Ngati Porou’s post-settlement organisations.

Smith v. Te Ara Tipuna Charitable Trust – High Court (3.12.25)

25.033

Insurance: IAG v. Aubrey

  

The score sits at a one-all draw.  IAG Insurance said there is no insurance cover.  The Insurance Ombudsman said the Aubreys are covered for damage to the roof of their Twizel property.  The High Court ruled insurance contract wording is unclear.

Problems followed construction of a new house for the Aubreys at Twizel in Canterbury through 2022.  Contractors installing solar panels on the roof dented roofing sheets nearby, causing some $97,000 damage.

The Aubreys claimed on their NZI Contract Works policy, underwritten by IAG Insurance.

IAG declined cover.  Fixing faulty workmanship is excluded, it said.

Contract works policies commonly exclude liability for faulty workmanship, otherwise insurers would be underwriting the competence of contractors and the quality of their work.

The Aubreys said their claim was not about how well the solar panels were installed; it was a claim for damage the contractors did to another part of the roof.

Discussions with IAG were deadlocked.  The Aubreys took their claim to the Insurance Ombudsman: the Insurance and Financial Services Ombudsman Scheme.

The Ombudsman ruled in their favour.

As is its right, IAG asked the High Court to rule on the dispute.  It was obliged to pay the Aubrey’s legal fees; part of the rules insurance companies agree to when signing up to the Insurance Ombudsman scheme.

IAG asked for a definitive Declaratory Judgments Act ruling on its insurance contract wording.

In the High Court, Justice Gendall said no ruling could be made on key phrases in the contract; a declaratory ruling having general application could not be made when each insurance claim is heavily fact specific, he said.

Justice Gendall ruled there was a lack of clarity in IAG’s insurance policy holding IAG liable for contractor’s damage to ‘separate insured property’ and ‘other parts of the same insured property.’

Left hanging is resolution of the Insurance Ombudsman’s and IAG’s differing views of whether damaged roofing panels adjoining the Aubreys’ solar panel installation are separate from the installation, or one and the same.

IAG New Zealand Ltd v. Aubrey – High Court (28.11.25)

26.031

Fraud: Police v. Lambert

  

Exposed on Fair Go as a serial fraudster, Waikato landscaping and concrete contractor Jason Lambert was ordered to repay his victims at one hundred dollars a fortnight and put under supervision for twelve months, after which his repayment history will be reviewed.

The District Court accepted Jason Mark Lambert’s explanation that he simply got in over his head, unable to manage work as a self-employed contractor.  He now works as an employee, telling the court he had recently been acknowledged as ‘employee of the month.’

His failed attempt at self-employment started with Facebook advertisements.  Offers of work came mainly from elderly home-owners needing work done around their home.

The District Court was told he took up-front deposits at forty per cent of the contract price, frequently doing no work, or making minimal starts.

Customers were fobbed off with multiple excuses; Lambert always laying the blame elsewhere for delays.

Customers complaining about lack of progress were promised refunds, with nothing repaid.  One was threatened with a visit from the Mongrel Mob if continued demands were made for repayment.

Lambert was convicted on thirteen charges of deception.  Customer losses totalled some $21,000.

Judge Saunders said it was case of Lambert getting in way over his head, not knowing how to operate in business as a sole trader.

Whilst home detention would be considered the necessary sentence, that was not appropriate in this case, Judge Saunders ruled.

Supervision and a curfew enabled Lambert to continue in employment.

Police v. Lambert – District Court (28.11.25)

26.030

Estate: Firmin v. Porter

  

Their parents died six weeks apart.  Six years on, it was brothers pitted against sisters in a dispute over sale of their parents’ Bay of Plenty orchard.  In what boiled down to a dispute over price, estate lawyers resigned over the siblings failure to take a common-sense approach; getting an independent valuation and selling to the one brother living on the property.

The High Court was told Tony and Jutta Firmin purchased bare land at Awakeri, near Whakatane, in the 1970s, establishing a feijoa and berry orchard.

Jutta predeceased Tony by a matter of weeks.  He was the sole beneficiary of her estate.  On Tony’s death, his will divided his estate equally between their six children: sons Tim and Tom; daughters Cornelia, Abigail, Gisele and Petra.

Evidence was given of son Tim returning from Australia in 2015 to help his parents on the orchard.  He lived in a shed on site, described as being in poor condition and not rentable.

A below market wage was paid.  For a period, no wages were paid at all; ‘down payment’ on his deposit to buy the orchard, Tim was to later tell the High Court.

The extent of orchard work undertaken by Tim was later disputed by his sisters, claiming work was intermittent with Tim primarily focussed on breeding schnauzer dogs.

On death of their surviving parent, Tim offered to buy the orchard for $800,000.  Two sisters, acting as estate executors, declined the offer.  His purchase was conditional on finance, with Tim’s ability to obtain finance or service mortgage debt both in question.  The GST status of any deal also required clarification.

Daughter Petra subsequently offered to buy at $935,000.  In the late 1990s, she had a ‘lease-to-buy’ deal with her parents, planning to assume ownership of the orchard.  The High Court was told no sale eventuated, with the collapsed deal eventually costing Petra $40,000.  

Tim was given an opportunity to put a deal together at Petra’s now offer price of $935,000.

Meanwhile, he was asked to leave their family home, finding somewhere else to live.

Tim’s response was to file a Law Reform (Testamentary Promises) Act claim stating their father had earlier agreed that he would have first option to buy.  Brother Tom supported this claim.  They said their father’s discussions with his lawyer in the weeks prior to death indicated he wanted to change his will, recording Tim’s right of first refusal.

Tim claimed he was entitled to buy at $800,000; a valuation obtained years previously.

Justice McHerron ruled there had never been any agreement or understanding that Tim’s work on the orchard would lead to him having a right of first refusal.  No ‘testamentary promise’ existed.

Their father’s discussions with his lawyer merely canvassed the need to ensure he could remain living on the property, if he sold to Tim before he died.  Discussions did not extend to any possible change to his will, giving Tim a right of first refusal.

The lawyer said in evidence that their father’s discussions had focussed on the size of any specific bequest to Tim as compensation for unpaid wages, with $10,000 settled on as an appropriate figure.

This figure was an underestimation, Justice McHerron said.  He awarded Tim just under $25,000 for unpaid wages.  This is a debt owed by his late father’s estate.

Justice McHerron left estate lawyers to decide whether Tim should be charged for his rent free accommodation, living in their parents’ home since their deaths.

His sisters want the orchard sold, and their father’s estate finalised.

Firmin v. Porter – High Court (28.11.25)

26.029

Maori Land: Rau v. Stock

  

Granted occupation rights on very favourable terms over Maori land near Port Waikato, Gary Stock and Faith Rapana were described as acting in bad faith with their self-serving behaviour seeing their occupation rights subsequently invalidated by the Maori Land Court.

Mr Stock’s supposed licence to occupy was granted by trustees of neighbouring land, not owners of the land he came to occupy.  It gave him an eighty year right of occupation at a token rental of ten dollars per week, with his spouse given a life interest should he pre-decease her.

The Maori Land Court was told he has continued to use adjoining land for grazing, despite cancellation of his grazing lease.  The Court was further told his relocatable house shifted onto the site has been burnt down, allegedly as part of his ongoing dispute with current beneficiaries of the Maori customary land he occupies.

Ms Rapana’s licence to occupy was granted on supposed grounds of ancestry, with claims of whakapapa links to the land.  The Maori Land Court ruled she did not produce sufficient evidence of ancestral links; at best, she could identify an ancestor in common with current beneficiaries going back five generations; far too distant a whanau connection justifying rights as a current beneficiary, Judge Mullins ruled.

Her eighty year licence to occupy, coupled with annual rentals of $1040, was invalidated.

The Court was told she has been occupying a greater area of land than that specified by the now-invalidated licence to occupy.     

Judge Mullins was very critical of the manner in which each arranged for approval of their disputed licences to occupy.

She emphasised that trustees holding customary Maori land on behalf of beneficiaries must comply with Trusts Act rules: act honestly; avoid conflicts of interest; not exercise trustee powers for their own benefit; and importantly, act within terms of the trust.

Ms Rapana was a trustee of the Pakau Trust granting occupation rights to her.  There was a clear conflict of interest, Judge Mullins said.  She should never have taken part in Trust discussions.  Ms Rapana should have excused herself from the meeting and not be present when discussions took place, Judge Mullins said.

In any event, not being a Pakau Trust beneficiary, she had no rights to the land.

Mr Stock’s licence to occupy was over Pakau Maori Reservation Trust land.  Mr Stock is a trustee.

The Maori Land Court was told this Trust has been inoperative for years: trustees have died and not been replaced; other trustees dis-engaged.

Judge Mullins ruled that Mr Stock engineered a solution for his own benefit; having the separate Pakau Trust supposedly approve his licence to occupy, even though it was not Pakau Trust land.

She removed Mr Stock and Ms Rapana as Pakau Trust trustees, with immediate effect.

Other Pakau Trust trustees were left in office, remaining until a special Trust meeting is called to elect new trustees.

Rau v. Stock – Maori Land Court (27.11.25)

26.028

Consumer Credit: Commerce Commission v. Westpac

  

A $3.64 million penalty levied against Westpac for failure to make full credit contract disclosure on a small number of consumer accounts from one decade ago is a mere pin prick given its $1.05 billion net profit for the 2024 year, but highlights the Bank’s incompetence when seeking to integrate legacy software systems.

Westpac self-reported to the Commerce Commission its failures to comply with Credit Contracts and Consumer Finance Act disclosures to customers as far back as 2015.

Most affected were some 1200 customers not fully advised of their credit contract rights on changes to home loan interest rates and another 5000 customers paying floating rates.  

The High Court was told legacy IT systems were not properly adapted when new reporting systems were installed, leaving staff unaware that required credit contract disclosures were not automatically sent to some customers when interest rates changed; updated notice of consumer rights had to be triggered manually.

Westpac pro-actively compensated affected customers, reporting its errors to the Commerce Commission.

The High Court approved a negotiated settlement, with Westpac ordered to pay a $3.64 penalty.

Commerce Commission website subsequently announced somewhat ingeniously that ‘Westpac consented to Commission seeking the order.’

Breaches of the Act did not become public because of any pro-active investigation by the Commission; Westpac ‘fessed up to its mistakes.

Commerce Commission v. Westpac – High Court (27.11.25)

26.027

Asset Forfeiture: R. v. Harmer-Elers

  

Police are looking to seize a Mongrel Mob pad in Southland, not as proceeds of crime, but as an ‘instrument’ used to facilitate a kidnapping, part of an internal gang dispute.

This use of the Sentencing Act is under challenge.

In 2025, Turoirangi Atarea Harmer-Elers was convicted, with others, on charges of assault and kidnapping following an altercation during a Mongrel Mob disciplinary session at their gang headquarters on Albion Street, in Matuara.

Application for a forced sale of Albion Street was made by Police after he was sentenced.

At a preliminary hearing, Harmer-Elders said the court could not impose a Sentencing Act ‘instrument’ seizure when final sentence had been pronounced at an earlier hearing.

Sentencing was ‘done and dusted.’

Justice Gordon ruled there is no wording in the Act stopping an ‘instrument’ forfeiture order being made after sentencing.  An earlier sentence can be recalled and modified in light of any subsequent asset forfeiture, she said.   

Sentencing Act asset forfeiture orders are possible on conviction of any offence punishable by five years’ imprisonment or more.  Property used to facilitate the offence can be seized.

R. v. Harmer-Elers – High Court (26.11.25)

26.024

FX Losses: Zero Markets v. Konnectivity

  

Jinwoo Kim’s Konnectivity Ltd failed to offload foreign exchange losses, claiming unsuccessfully these were ‘expenses’ incurred acting as a conduit for customers placing funds with online trading platform Zero Markets LLC.

Konnectivity could not set off its USD $80,200 foreign exchange losses against admin fees it owed Zero.

The plain commercial interpretation of ‘expenses’ in its contract with Zero did not include foreign exchange losses incurred on client accounts, the High Court ruled.

Auckland-based Konnectivity is a payment service provider allowing clients to set up personal accounts for onward investment.

Foreign exchange losses arose when converting Korean won to cryptocurrency.

Mr Kim denied Konnectivity’s claimed losses had arisen from speculative trading on its own account using funds held collectively on behalf of clients.

He said substantial losses arose on one client transaction during the conversion of client funds from Korean won to US dollar-equivalent ‘coins;’ part of a client investment with Zero Markets.

There could be up to twenty four hours between this conversion and Zero Market’s daily ‘sweep’ updating client cryptocurrency accounts.

Konnectivity said its USD denominated exchange loss was the cost of making good the client’s loss for the difference in value between the time of conversion and the time the client’s cryptocurrency account was later credited with Zero Markets.

Konnectivity said this loss was a ‘settlement expense.’  Zero Markets had agreed to accept liability for settlement expenses under their contract, it said.

In the High Court, Justice Harvey ruled a plain meaning of the word ‘expense’ did not include foreign exchange losses.

Konnectivity had complete control over how it backed its client reserves, he said.  It could have hedged against adverse currency movements.

Zero Markets was in no position to monitor Konnectivity’s potential exposure.

Sophisticated commercial parties are unlikely to have contracted for foreign exchange losses (but not gains) to lie with Zero Markets, he said.

Konnectivity was ordered to pay the USD $80,200 still owed Zero Markets.

Zero Markets LLC v. Konnectivity Ltd – High Court (26.11.25)

26.026

 

Loan: Chen v. Goodmore Investments

  

Having deceived multiple financiers by having each believe they had first ranking security in an Auckland property development, Liyun Chen then unsuccessfully sought court intervention claiming loan contracts were ‘oppressive,’ with consumer credit legislation applying because loans in part were used to refinance her prior private borrowing.

The Court of Appeal ruled Credit Contracts and Consumer Finance Act rules did not apply.  The loans were business transactions for business purposes.  Mandatory consumer protection disclosures were not required.

As guarantor of the loans, Ms Chen was ordered to pay shortfalls owed second-tier property financiers: $766,000 owed Goodmore Investments; $1.1 million owed Tawa Trade Finance.  In addition, there is default interest at between twenty-five per cent and twenty-eight per cent running on unpaid balances.

Goodmore’s loan was the first, in early 2021: a short-term loan of $4.54 million to refinance then current borrowings and to complete a property development on Umbria Lane in Manukau.

Multiple properties across Auckland owned by Ms Chen or her family trust were provided as collateral security, plus Ms Chen’s guarantee.

The court was told interest payments were often late.  The loan was not repaid on due date.

Sale of mortgaged properties enabled partial repayment.  The eventual $766,000 shortfall followed a forced sale of the incomplete Umbria Road project.

The Court of Appeal ruled the Goodmore loan was not a personal loan.  Its predominate purpose was business; property development.

It was artificial for Ms Chen to subdivide this loan into two purposes: business and personal.

Using some of Goodmore’s money to repay a personal loan was in effect the refinancing of prior personal business borrowing, given Ms Chen’s extensive programme of property developments in both New Zealand and China.

A second loan, for $1.7 million from Tawa Trade Finance, was made mid-2022.

Tawa was unaware that security offered for the loan were properties already pledged earlier to another financier: General Finance Ltd.  Ms Chen did not disclose that General had been given priority, with an agreement to mortgage signed several months previously.

On default, Tawa was left with $1.1 million unpaid.

The Court of Appeal dismissed claims by Ms Chen that the Tawa loan was also a consumer credit loan and could be challenged under consumer finance legislation.

The fact one of the borrowers was a Chen family trust did not make a business loan a personal loan.

Similarly, a term of the Tawa loan prohibiting GST registration by Ms Chen did not affect the status of the loan as a business loan.  Some of the properties supposedly offered to Tawa as collateral security were owned by Ms Chen personally, or her family trust.  Tawa was concerned about ‘loan to value’ ratios in its lending.  It did not want to see Ms Chen or her family trust registering for GST as property developers.  This would result in fifteen per cent of any later sale payable as GST, reducing Tawa’s recovery on sale.

Chen v. Goodmore Investments (NZ) Ltd & Chen v. Tawa Trade Finance Ltd – Court of Appeal (26.11.25)

26.025

Professional Standards: Woodroffe v. Auckland Standards Committee

  

With seven previous disciplinary findings against her for unsatisfactory professional conduct, Auckland lawyer Olinda Woodroffe now has been fined $10,000 and ordered to repay client fees after a Law Society Standards Committee found she improperly identified and criticised a client in an Auckland radio broadcast having previously acted in a rude and threatening manner towards him.

On appeal, the High Court upheld both the Standards Committee ruling of professional misconduct and the penalty imposed.  The client was not named.

Ms Woodroffe practises law in both New Zealand and Samoa.

The client dispute had its origins in a New Zealand-based Samoan’s request that Ms Woodroffe challenge a transaction in Samoa where land in family customary ownership had been leased to a church.

Mediation was unsuccessful.  After legal proceedings were filed in Samoa, Ms Woodroffe’s client received a court order demanding he pay about NZ$35,000 into court as security for defendant’s costs, should he lose.

Unable to bear these costs, the client wrote to Ms Woodroffe expressing dismay that she had not warned him of this potential added financial burden.  He later abandoned his intended Samoa litigation.

The High Court was told Ms Woodroffe replied to her client stating she had advised him ‘many times’ of a possible court order requiring security for costs, stating his comments to the contrary were defamatory and false.  Legal action was threatened.

Letters from clients to their solicitors are private and privileged communications.  There was no basis on which the client’s letter to her could amount to defamation, Justice MacGillivray said.  It was both highly unprofessional and misleading to respond to her client in such a fashion, he said.

Separately, the client wrote to the Supreme Court in Samoa asking for a concession, repeating that Ms Woodroffe had not told him about potential liability to provide security for costs upfront.  Learning of this, Ms Woodroffe wrote to her client demanding he retract comments made to the court, or she would sue.  This was described in the High Court as oppressive behaviour, amounting to a demand her client lie in order to protect her reputation.         

Speaking on an Auckland Samoan-language radio station she broadcast a supposedly hypothetical narrative for listeners drawing a distinction between security for costs prior to any court hearing and liability to pay costs after an unsuccessful hearing, indirectly identifying her client when disclosing the fact of her threats to sue an unnamed client.  Extended family familiar with the litigation in Samoa recognised her client immediately from this broadcast.

It was dishonourable for Ms Woodroffe to have publicly criticised her client and breached client confidentiality in her radio broadcast, Justice MacGillivray said.

Neither the Standards Committee nor the High Court accepted Ms Woodroffe’s claim to have previously advised her client about potential pre-trial personal liability over security for costs.  

Ms Woodroffe’s claim the Standards Committee has no jurisdiction over conduct of litigation in Samoa was dismissed.  Her client lives in New Zealand.  Agreement to act for the client was made in New Zealand.  A local Standards Committee had jurisdiction to review her conduct.

In addition to a $10,000 fine and repayment of $10,000 fees received in advance, Ms Woodroffe was ordered to pay some $46,000 for costs of the Law Society investigation and disciplinary hearing.

Woodroffe v. Auckland Standards Committee 3 – High Court (24.11.25)

26.020

Current Account: Culturesafe NZ v. Halse

  

High profile employee advocate Allan Halse has been ordered to repay $165,000 drawn down from his company Culturesafe NZ Ltd, now in liquidation insolvent.

Culturesafe was ordered into liquidation by the High Court in August 2022 following failure to pay a $67,000 costs order imposed by the Employment Court. 

Mr Halse was ordered jointly liable to pay these costs.  In October 2022, he personally paid the $67,000 debt to avoid being bankrupted.

Meanwhile, he had lost control of his Hamilton-based company; now in the hands of liquidators.

They identified that the company’s major asset is a loan to Mr Halse, in the form of current account drawings where Mr Halse had used company cash to meet personal expenses.

He disputed owing his company any money.  He claimed to be unpaid for holiday pay and overtime, plus hours worked, given that he had never drawn a salary.  Personal drawings from the company bank account were payment for work done on behalf of his company, he claimed.

Companies Act rules governing ‘one-man’ companies require payment for work done on behalf of their company be confirmed, with a formal resolution approving a shareholder salary or director remuneration plus a supporting certificate stating that this payment is ‘fair and reasonable.’

The High Court was told Mr Halse failed to arrange this paperwork whilst in control of his company.  Payments he received were unsecured borrowings, repayable on demand.

To prove the amount due, liquidators relied on the dollar amount of shareholder drawings, marked as a debt owed to Culturesafe, in financial statements approved by Mr Halse and filed with Inland Revenue for tax purposes.  Adjustments were made for subsequent drawings, post-balance date.

Justice Andrew ordered Mr Halse pay Culturesafe liquidators $165,200 in repayment of his overdrawn shareholder current account.

Separately, Mr Halse claimed a set-off; being given credit for the $67,000 adverse costs order he paid personally, for which Culturesafe was also liable.

For a set-off to apply, Companies Act insolvency rules required Mr Halse as director to prove his company was not insolvent in the two years prior to payment he made on Culturesafe’s behalf.  Clearly, Culturesafe was insolvent when payment was made, Justice Andrew said.

Culturesafe NZ Ltd v. Halse – High Court (24.11.25)

26.022

Name Supression: Commissioner of Police v. Chandra & Prasad

  

Name suppression was refused for Girish Chandra and Rameet Prasad who negotiated a $986,000 proceeds of crime settlement for their part in a social welfare fraud, cashing out benefit payments disbursed as payment for essential furniture.

Police forensic accounting staff looked at two million dollars worth of social welfare benefits processed over a six year period by Auckland-based company, ABC Furniture & Appliances Ltd.  The 2019 investigation uncovered a fraudulent ‘cash-back’ scheme with social welfare beneficiaries receiving cash instead of furniture as required by ABC Furniture’s then contract with Social Development.

Messrs Chandra and Prasad controlled ABC Furniture.

In a court-approved Criminal Proceeds (Recovery) Act settlement, they agreed to surrender $986,000 as proceeds of crime.  The agreed settlement specifically stated there was no admission as to criminal liability.

The two sought name suppression, arguing their names and their business would be improperly painted as being party to criminal activity when no crime had been proved or admitted.

Police said the effect of a court-approved out of court settlement is to judicially recognise that named individuals have unlawfully benefitted from significant criminal activity.

In the High Court, Justice Gardiner said Criminal Proceeds (Recovery) Act settlements are civil proceedings.  Normal rules for name suppression apply.  There is a presumption in favour of publication; a principle of open justice.

Name suppression requires evidence of specific adverse consequences likely to follow publication.

In this case, claims of potential social stigma and reputational damage are insufficient, Justice Gardiner said.  These are an ordinary consequence of their court proceedings being published.

Messrs Chandra and Prasad had not met the high standard required for proof of adverse consequences, she ruled.

It is in the public interest for customers of ABC Furniture to be aware of the company’s past role in misappropriation of public funds, she said.

Commissioner of Police v. Chandra & Prasad – High Court (24.11.25)

26.021

Bankruptcy: Coupe v. R

  

With a cavalier disregard for rules prohibiting undischarged bankrupts operating a business, twice bankrupt Aaron Coupe (also known as Aaron McGregor) was described as a very active and glib salesman of ridiculous business schemes.  He misled creditors by using an alias and hid from Insolvency Service money owed bankruptcy creditors.

Over a fifteen year period, he ignored rules prohibiting him from running a business or acting as a company director.

Creditors went unpaid, while he hid money in his mother’s bank account.

He is currently appealing a Companies Act sentence of four years five months imprisonment for acting as a company director when disqualified. 

Disqualification as a company director was automatic after his earlier 2016 Insolvency Act conviction for running a business whilst bankrupt.

This Companies Act conviction followed a failed project to build a luxury hotel in Auckland to be called The Liberte, and a further failed project to develop a chain of hotels under the brand Tomorrow Hotels.

Company creditors were left owed some three million dollars.

After being found guilty of Companies Act breaches following a jury trial, he failed to show up for sentencing.  Arrested and brought before the court, he was sentenced in 2025 to the four year five month’s imprisonment, now under appeal.

Separately, he appealed a different 2025 conviction: a three year nine month’s sentence, convicted of Insolvency Act offences for running a business and concealing assets whilst bankrupt for a second time.

These convictions arose from construction projects Coupe managed during the period of his second bankruptcy; projects left unfinished, and owners left stranded.

Two of his customers lost their life savings, left living in a caravan on their property with a botched home renovation leaving their home uninhabitable.

Evidence was given of Coupe taking some $1.7 million from customers whilst bankrupt, money both spent on living expenses and hidden from Insolvency Services.

At this point, he had paid only $25,000 of a $75,100 reparations order negotiated as part of sentencing for Insolvency Act convictions following his first bankruptcy.  A reparations agreement which at that time saw him receiving a more lenient sentence of home detention, the court was told.

Back in the High Court, Justice Gardiner reduced his most recent Insolvency Act sentence by forty per cent.

His two separate sentences in 2025 for breaches respectively of the Companies Act and the Insolvency Act must be served cumulatively, not concurrently.

Taking a wider picture, Justice Gardiner ruled current combined sentences of over eight year’s imprisonment for the accumulated offences was too severe, even given the seriousness of Coupe’s fifteen years offending.

Coupe v. R – High Court (24.11.25)

26.023