Adam is a solicitor at Franks Ogilvie. He joined the firm in September 2023 and completed an LLB/BA in 2024, majoring in History and Public Policy. He was admitted as a barrister and solicitor of the High Court in June 2025.
Prior to working at Franks Ogilvie, Adam was part of the team at the New Zealand Free Speech Union, running much of the back-end work of the organisation. He also interned for a Member of Parliament in 2020.
Adam is passionate about liberal democratic values and the importance of a robust civil society. Outside his work and studies, he enjoys getting out into the various tracks and DOC huts in the Wellington region.
The Court of Appeal upheld a High Court decision to decline a property developer’s application for summary judgment that it was the “Controlling Member” of a residents’ society, formed for the purpose of a development. The Court upheld a summary judgment that the “Controlling Member” position had been disestablished when the developer had sold all its land in the development.
Property development company Mangawhai Developments Ltd (“MDL”) was incorporated in 2005 alongside the Lake View Estate Residents Society Inc. (“Society”) for the purpose of developing and managing the Lakes View Estate (“Estate”). The Society’s responsibilities were the management of the Estate’s development and community facilities, with each residential property bound by a covenant to the Society. The Society’s rules had a position of “Controlling Member”, held by MDL as the developer. The “Controlling Member” was required to be present for the Society’s general meetings be quorate, at which it had a controlling vote. The Society’s rules (“Rules”) provided that MDL had the position of “Controlling Member” until the development was complete.
In 2009, MDL went into receivership. Shortly before this MDL had sold its remaining undeveloped land (“Land”), which was on-sold to a couple, the Ruitermans, and financiers Vermont Street Partners Ltd (“New Owners”). In 2017, the New Owners attempted to subdivide the Land and tried to claim the “Controlling Member” status for themselves. They got into a dispute with the existing residents, which was not settled until 2021. In 2019, during this dispute the Society resolved at a general meeting to remove the “Controlling Member” status from the Rules. MDL remained in receivership during this time, and its receiver did not attend the meeting which proceeded nonetheless.
In 2022, with the support of a few residents opposed to the New Owner’s development, MDL came out of receivership and attempted to assert its status as “Controlling Member”. MDL stated that as neither MDL nor its receiver had been present at the Society’s general meeting that removed the “Controlling Member” from the Rules, the meetings were not quorate and the rule changes were invalid. The New Owners rejected this claim, and the dispute went to litigation.
The High Court declined an application from MDL for summary judgment that it retained its status as “Controlling Member”. It gave summary judgment in favour of the New Owners that after MDL sold off the last of its land in the Estate, its role in the development was over, so the whole premise for the “Controlling Member” had fallen away and MDL no longer had that status. The Court also declined an application for summary judgment from the New Owners that MDL was estopped (precluded) from asserting “Controlling Member” status and that MDL’s action was an abuse of process.
MDL appealed against the High Court’s declaration that it was no longer the controlling member.
Clause 4.3 of the Rules stated that the “Developer” would be the “Controlling Member” of the Society until development of the Estate was completed. After this, they would be deemed to have resigned from the position, which would also be disestablished. “Developer” was specifically defined as MDL.
The Court of Appeal held that this prevented anyone but MDL from holding the position of “Controlling Member” as there was no provision for assignment or succession. This precluded the New Owners from taking on the “Controlling Member” status. Had MDL been contracted by a third party to develop the land, or was purchased outright, this position may have been maintained, but instead the Land was simply sold.
The Court of Appeal agreed with the High Court that the sale of the Land meant that MDL had lost the position of “Controlling Member”. Without any land to develop, MDL could no longer proceed as the developer, so for MDL the development was complete. Under the Rules this deemed MDL as having resigned from the position of “Controlling Member”.
The Court also dismissed the New Owner’s appeal against the declined application for summary judgment that MDL was estopped from asserting “Controlling Member” status due to MDL’s silence on its status during its receivership. There was no identified duty for MDL’s director to speak; there was no clear ascertainable loss to the New Owners. It was also not clear whether their reliance on this silence was reasonable, as the New Owners never attempted to contact MDL’s director about the “Controlling Member” status until several years after they had purchased the land. The Court also dismissed their appeal against the declined application to strike out proceedings on the grounds of an abuse of process. The Court held that MDL was entitled to have the matter of its status determined at trial.
The Court of Appeal dismissed MDL’s appeal, upholding the High Court’s summary judgment that MDL was no longer the “Controlling Member” of the Society. The New Owners would not require MDL’s permission to undertake any development, but would still be subject to the Rules of the Society, under the control of the residents.
This case underscores how important it is for incorporated societies to have a well-drafted constitution, and for their members to pay close attention to its provisions as decisions are made and events unfold. The effort to keep on top of a society’s rules may seem burdensome, but can save a lot of time and money should disputes later arise.
This case was determined under the Incorporated Societies Act 1908. The new Incorporated Societies Act 2022 is more prescriptive in its requirements for society constitutions and is intended to provide for more democratic governance of societies. The courts also have more extensive powers to alter society constitutions if their provisions are oppressive, or it is otherwise just and equitable to do so.
For further information on this or similar cases contact Director, Brigitte Morten.
The Restructuring Insolvency and Turnaround Association of New Zealand (“RITANZ”) declined Mr Kamal’s application for membership on character grounds. The High Court dismissed his application to quash that decision, but issued a declaratory judgement in his favour. The Court of Appeal upheld RITANZ’s decision to decline his membership application and allowed a cross-appeal by RITANZ against the declaratory judgement, which relaxed the procedural standards the High Court set for RITANZ when determining applications.
Mr Kamal was a former accountant who was subject to disciplinary sanctions by the New Zealand Institute of Chartered Accountants (“NZICA”) in 2009, 2010, and 2011. He was also convicted of six criminal tax offences in 2013, and sentenced to three months’ home detention and 150 hours of community service.
He resigned his membership with the NZICA before he could be removed, and began practicing as a liquidator. In 2015 he was found personally liable for a mishandled liquidation, and in 2018 was falsely holding himself out as a chartered accountant to prospective clients.
The Insolvency Practitioners Regulation Act 2019 (“Act”) required liquidators to become members of either NZICA or RITANZ. In 2020, the NZICA declined Mr Kamal’s application for readmission. In 2021, RITANZ also declined his application for membership, on the basis that he was not of good character.
Mr Kamal sought a judicial review of RITANZ’s decision to decline his membership. The High Court found that RITANZ had erred in its decision-making but only granted declaratory relief, giving a statement that RITANZ had been mistaken in the process it took to determine Mr Kamal’s application, but declining to overturn the decision itself. Mr Kamal appealed the High Court’s decision to uphold RITANZ’s refusal of membership, while RITANZ cross-appealed the High Court’s declaratory relief.
Fit and proper person test
The Act requires NZICA and RITANZ to issue insolvency practicing licences only if they are satisfied that the applicant is a “fit and proper” person. The Court of Appeal held that the standard was not perfection, but that RITANZ had ample evidence to show they were entitled to decline Mr Kamal’s application on the grounds that he was not “fit and proper”.
Mr Kamal submitted that the “fit and proper” test is forward looking, and that the Act contemplated that applicants who would not meet the test unconditionally may do so if they were given extra requirements, such as mentoring and supervision. The Court of Appeal agreed that the test was forward looking, but disagreed that he might be eligible for a conditional licence. The Court considered that conditional approvals would erode the “fit and proper” test so much that it would undermine the purpose of the licensing regime. It declined to quash RITANZ’s decision.
Cross-Appeal: the High Court declarations
The High Court identified four errors in how RITANZ’s declined Mr Kamal’s application for members and gave declaratory relief, without quashing the decision. These included not referring to and assessing three separate mitigating matters in a forward-looking way, and breaching the principles of natural justice by not putting an adverse finding against Mr Kamal to him.
On the mitigating factors, the Court of Appeal found that RITANZ was not required to dwell significantly on them, nor refer to them explicitly in its decision. RITANZ’s characterisation of Mr Kamal’s previous offending was accurate and relevant nonetheless, and the mitigating factors did not impact the overall outcome. This fact was acknowledged by the High Court’s refusal to quash the decision. The Court of Appeal found that omitting reference to those mitigating factors was not an error of law.
On the alleged breach of natural justice, the High Court found that RITANZ had put four adverse inferences to Mr Kamal, but not the adverse conclusion they had drawn from it, which was a breach of natural justice. The Court of Appeal held that despite not putting the conclusion to Mr Kamal, it had given him several opportunities to speak to the issues at hand before RITANZ drew its conclusions, and they were not required to adopt a more rigorous approach. Again, RITANZ had not made an error in law and the Court of Appeal quashed the High Court’s declaratory judgement.
The Court of Appeal dismissed Mr Kamal’s appeal and upheld RITANZ’s decision to decline his application for membership. The Court also upheld RITANZ’s cross-appeal and quashed the High Court’s declaratory judgement. Mr Kamal would not be allowed to practice as a liquidator.
By declining Mr Kamal the ability to meet the “fit and proper” test with a conditional licence, the Court showed how the test is a minimum standard that all insolvency practitioners must meet. This case also shows how professional bodies retain some leeway on how they decide membership applications. This is particularly so in circumstances where, despite minor procedural irregularities, the outcome would have remained the same.
For further information on this case or similar issues contact Director, Brigitte Morten.
SUMMARY
The Supreme Court overturned the Minister for Oceans and Fisheries’ decision on Total Allowable Catch (“TAC”) for the East Coast tarakihi fishery (“East Coast Fishery”), despite Seafood New Zealand succeeding on one ground of appeal. The key issues were whether the Minister’s decision could consider social, cultural, and economic factors (“SCE factors”), and what probability of rebuild success the Minister could choose.
BACKGROUND
Under the Fisheries Act 1996, the Minister for Oceans and Fisheries has a duty to review the TAC of New Zealand’s various fisheries to enable sustainable utilization. In 2019, the then-Minister Stuart Nash, reviewed the TAC of the East Coast Fishery. The stock had fallen below a level that could produce the maximum sustainable yield (“MSY”) and so the Minister was obliged to set a TAC that would allow the stock to recover.
The Minister had already reduced the TAC for the East Coast Fishery a few times and indicated he would revisit it in another year’s time, with further reductions if the fishing industry did not meet their own plan to rebuild fishing stocks within a 20 year timeframe. In his decision on the TAC he recorded that it reflected the economic impact on fishers, their families, and regional communities.
Under section 13(2)(b), the Minister must set a TAC that enables recovery in a “way and rate” that “will” result in the stock being restored, and within a “period appropriate to the stock”, having regard to the biological characteristics of the stock and environmental conditions (“scientific factors”). A mandatory part of this decision is the probability of success of rebuilding the stock. Section13(3) also requires the Minister to have regard to SCE factors when determining the way and rate of the TAC.
The Royal Forest & Bird Protection Society of New Zealand (“Forest & Bird”) challenged the Minister’s decision on the TAC on the grounds that he should only have regard to the scientific considerations based on the best available information, and should not have considered SCE factors. The best available information (the Harvest Strategy Guidelines (“HSS”) and Operating Guidelines (“OG”)) recommended a probability of success of 70%, which Forest & Bird claimed was a mandatory relevant consideration. The Minister adopted an implicit probability of 50%, and had not considered a 70% probability of success.
The High Court determined that SCE factors can only influence the Minister’s decision-making after an “appropriate” period is fixed according to scientific considerations only. It held that the Minister therefore erred by considering SCE factors while determining an “appropriate” period. The High Court agreed with Forest & Bird that the HSS and OG was the best available information and a 70% probability was a mandatory relevant consideration.
The Court of Appeal, by majority, dismissed an appeal by Seafood NZ against the High Court’s decision. It found that the “period appropriate to the stock” set a maximum period that must be fixed by reference to scientific considerations, and only insofar as the HSS included SCE factors in its scientific consideration, could the Minister consider them. It also held by majority that the HSS did specify a default 70% probability of success, and that the Minister was required to consider it.
Seafood NZ further appealed to the Supreme Court.
THECASE
What could the Minister consider when setting a “period appropriate to the stock”?
Seafood NZ submitted that the “appropriate” period for the stock rebuild was to be determined alongside the “way and rate” as a single decision, incorporating scientific and SCE factors. Seafood NZ’s counsel accepted there would be an evaluative step where the Minister assessed the appropriateness of the period with sole regard to the scientific factors, but maintained that this was only a relevant consideration and not a control on the TAC.
The Minister submitted that section13(2)(b)(ii) was a cross-check on the period that results from the “way and rate” analysis. They submitted that the legislation does not compel adoption of the “most appropriate” period to the stock, but that there could be a range of “appropriate” periods with regard to the scientific factors. Where the range of periods are “appropriate to the stock”, the Minister may take the SCE factors into account when choosing among them.
Forest & Bird submitted that the Minister erred by doubling a previous period he had considered “appropriate”, by reference to SCE factors, which they said were legally irrelevant. Rather, they claimed the Minister should have determined the “appropriate” period only by reference to the scientific factors affecting the stock. They accepted that there may be a range of periods that the Minister could then choose from.
The Supreme Court held both subsections (i) and (ii), providing for the “way and rate” and the “period appropriate to the stock”, were intended to constrain the TAC that the Minister could adopt. They acted as a sustainability check. In determining the “appropriate” periods, the Minister’s decision concerns the stock of the East Coast Fishery, not those who have an interest in the stock. Only scientific factors could be considered in determining an “appropriate” period for the East Coast Fishery stock.
The Court held that the Minister does get discretion insofar as the TAC is set within an “appropriate” period as determined by scientific factors. Section 13(2)(b)(ii) uses the indefinite article “a” in “a period appropriate to the stock”. As long as the TAC is determined with a scientifically “appropriate” period, the Minister could then consider SCE factors in setting the way and rate.
An implied default 70% chance of success?
The Supreme Court found that to satisfy the Act’s requirement for the stock to be restored, the Minister was only required to set a TAC that had at least a 50% chance of success. The 70% probability of success was not a mandatory relevant consideration beyond the required minimum. The HSS and OG, which had the recommended 70% probability of success, also had the assumption that the TAC would not be revisited before the expiry of their build period. The Minister had already adopted a policy in 2018 of reviewing progress and adjusting the TAC as necessary, and so the HSS and OG were outdated at the time of his 2019 decision. They were therefore not the “best available information” and not mandatory relevant considerations for the Minister. On this point Seafood NZ succeeded.
Conclusion
Seafood NZ did not succeed in relegating the “appropriate” recovery period to a “mere mandatory relevant consideration” for the Minister in setting the TAC. Section 13(2)(b)(ii) is a limit on the Minister’s discretion. What periods are “appropriate to the stock” can also only be determined by reference solely to the scientific factors relating to the fish stock; on this Forest & Bird succeeded. However, so long as the Minister sets a TAC within an “appropriate” period, they may take social, cultural, and economic considerations into account when setting the way and rate of the TAC.
Finally, the Minister was not required to consider a default probability of success of 70%, as the information containing this assumption was out of date and therefore not the “best available information”.
RESULT
While the Supreme Court partially allowed Seafood NZ’s appeal, the Minister’s decision was still unlawful as he had considered SCE factors when assessing a rebuild period “appropriate to the stock”. The Minister was required to remake the decision.
The Minister must separate the assessment of the “appropriate” period (and only consider scientific factors) and the “way and rate” analysis (which can include the SCE factors). Owing to the partial success of Seafood NZ’s appeal, the Minister also need only set a TAC with at least a 50% chance for a successful stock rebuild.
For further information on this case or related issues please contact Director Brigitte Morten
