Dargaville farmers Donald and Clare Fisher resisted attempts to have them self-certify as ‘wholesale investors’ before investing $200,000 in Air Hull Technologies, later getting a High Court order requiring Air Hull and former director Mark Goodhew repay the $200,000 plus interest following failure to provide a ‘product disclosure statement’ prior to investment, as required by Financial Markets Conduct Act.
Justice Becroft ruled Air Hull should have disclosed in advance with a product disclosure statement that Mr Goodhew and his spouse as majority shareholders were at war and at risk of separating. He accepted the Fishers’ claim that they would never have invested if aware of these matrimonial difficulties.
The Goodhews did subsequently separate.
Auckland-based Air Hull Technologies Ltd was not a commercial success. It was established to manufacture inflatable rubber-hulled boats.
The High Court was told Mr and Mrs Fisher were approached in 2017 by John Paine, owner of investment advisory company TBK Capital Ltd, sounding them out about an investment in Air Hull. Mr Fisher had previously contacted TBK Capital seeking investment possibilities.
They were provided with financial information about Air Hull, together with an indicative valuation.
Evidence was given that Mr Paine encouraged them on multiple occasions to sign declarations that they were ‘wholesale investors.’ They did not sign, with Mr Fisher telling Mr Paine from the outset they did not qualify for that status.
Wholesale investors are considered sufficiently knowledgeable to not require full Financial Markets product information disclosure when investing; they can look after themselves.
Justice Becroft ruled both Air Hull and Mr Goodhew as director were aware that a Financial Markets Conduct Act product disclosure statement should have been supplied to the Fishers, setting out potential risks of their investment.
The fact husband and wife are majority shareholders of a company seeking investment is not, by itself, a business risk requiring disclosure, he said.
But the fact Mr Goodhew and his spouse were in this case at loggerheads at a time Air Hull was seeking new investment and that this disharmony was likely to disrupt company operations should have been disclosed as a business risk, he ruled.
Both Air Hull and Mr Goodhew were ordered to refund the investment made.
Mr Goodhew did not file a statement of defence, or attend the court hearing.
The Fishers also sued another Air Hull director: Harvinder Singh.
Mr Singh did file a statement of defence.
A full court hearing is required in respect of their claim against Mr Singh.
Clarendon Ltd v. Air Hull Technologies Ltd – High Court (16.06.26)
26.180