Peer-to-peer Lending: Commerce Commission v. Harmoney Ltd

Harmoney’s peer-to-peer lending is under investigation by the Commerce Commission for potential breaches of credit contracts legislation.

Harmoney challenged Commerce Commission requests for a High Court ruling over legal interpretation of peer-to-peer lending saying this was a disguised substitute for a potential prosecution.  Harmoney was prejudiced because any court hearing would not cover the full facts, it said.  Justice Courtney ruled the High Court enquiry could look at who were the parties to any peer-to-peer credit contract and whether the “platform fee” received by Harmoney is a credit fee governed by the Credit Contracts and Consumer Finance Act.   

Peer-to-peer lending is currently regulated by the Financial Markets Conduct Act.  This serves to protect investors putting up the cash; not borrowers receiving peer-to-peer loans.  Investors register online and deposit cash into a trust account controlled by Harmoney.  Borrowers also register online.  They are assigned an interest rate after an assessment of their individual risk profile.  Investors nominate which borrowers they will support.  When an order is filled, investor funds are packaged together and transferred to a trustee for delivery to the borrower.  A “platform fee” is deducted by the trustee and paid to Harmoney before handing over the balance to the borrower.

The Commerce Commission is seeking to identify, as a matter of law, who is the creditor making the loan in peer-to-peer lending.  Creditors must comply with credit contracts legislation.

Commerce Commission v. Harmoney Ltd – High Court (31.05.17)

17.059

Asset Forfeiture: Commissioner of Police v. Taylor & Cox

Cash and motor vehicles valued at $221,000 owned by Clinton Kelvin Taylor and Jackie Ann Cox have been forfeited to the Crown as proceeds of crime.

The High Court was told Taylor had been involved in the manufacture and supply of methamphetamine between 2014 and 2016.  Two trials were aborted after crucial evidence was ruled inadmissible. He pleaded guilty to possession of methamphetamine after a September 2014 drug bust at an Auckland inner city hotel.  His partner Cox was convicted in May 2014 of cultivating and supplying cannabis.  She was also party to benefit fraud.  Both were involved in tax evasion.  At a time when his only declared income was social welfare benefits, Taylor acquired motor vehicles worth at least $105,650. 

In 2014, High Court restraining orders were imposed on cash and seven vehicles linked to Taylor and Cox: three motor bikes, three motor vehicles and a jet ski.  Two of these vehicles:  a high-performance Aprilia motorcycle and a Holden Crewman ute could not be found.  Taylor said the Aprilia was seized by its former owner because money was still owing.  Taylor could not explain what had happened to the Holden Crewman.

Justice Wylie approved a negotiated settlement under the Proceeds of Crime Act.  Cash totalling $109,400 found at the scene of two drug busts plus the five remaining motor vehicles were forfeited to the Crown as being proceeds of crime.

Commissioner of Police v. Taylor & Cox – High Court (30.05.17)

17.058

Media: Lowes v. MediaWorks

No surprise that television news ratings are falling and revenue plummeting when the Broadcasting Standards Authority allows media to prioritise entertainment over factual accuracy. The Authority had no concerns over TV3’s gross misrepresentation of the United Kingdom’s constitutional position in a July 2016 Paul Henry broadcast.

Commentator Paul Henry embellished his 2016 Independence Day interview with Mark Gilbert, the then United States ambassador to New Zealand, by referencing US independence from “England” in 1776, coupling this with comments from Margaret Thatcher as former prime minister of “England”.  One viewer made a formal complaint to MediaWorks TV Ltd, owner of TV3.  The US obtained independence from Great Britain, not England.  Mrs Thatcher was prime minister of the United Kingdom, not England.

Media Works excused the inaccuracies as being immaterial in the context of an item about expatriate US citizens celebrating their national day.  TV3 describes Paul Henry as being light-hearted and irreverent.  An appeal to the Broadcasting Standards Authority was no more successful.  The broadcasting code requires media to make all reasonable efforts to ensure news and current affairs is “accurate in relation to all material points of fact.”  The Authority ruled that accuracy is not required for unimportant points unlikely to affect the audience’s understanding of a broadcast as a whole.

An appeal to the High Court failed.  Appeals are on grounds of process only; did the Authority follow the right procedures in reaching its decision?  Justice Thomas said it is clear the Authority considered all relevant evidence put before it.  There was no indication that the Authority has considered any media guidelines for phrases commonly used in a factually incorrect manner.  Without such guidelines or statements of principle it could not be said the Authority had departed from them.

The court was told MediaWorks has issued new guidelines to journalists over correct reference to the United Kingdom and to Great Britain.     

Lowes v. Mediaworks TV – High Court (29.05.17)

17.056