The High Court in Auckland has ordered overseas investors to pay penalties totalling NZ$1.38 million and legal costs for breaching the Overseas Investment Act. The significant penalty follows a family purchasing five forestry blocks totalling 3600 hectares for $12.8 million. Source: Timberbiz
The land at Awakino, Ngāruawāhia, Awaroa, Paranui and Manganui was acquired under the names of several companies. Those companies were Smith Road Farm Ltd, Paranui Forest Ltd and 488 Manganui Road Farm Ltd.
The family used relatives based in New Zealand to invest on their behalf. The investors knew permission was required to buy the forestry blocks but did not seek Overseas Investment Office approval.
While the family’s lawyer provided poor legal advice, the Court found that the investors’ breaches were negligent.
Justice Downs said that “the breaches are serious because the properties are large” and were “acquired for commercial gain.”
Justice Downs accepted that discounts to the penalty were appropriate because the family admitted the breaches and co-operated by disposing of the properties.
Overseas Investment Office Group Manager Anna Wilson-Farrell said: “Investors in New Zealand need to be careful when participating in or acting jointly with an overseas person to buy sensitive New Zealand assets. Breaches of the Act can come with serious consequences, including being required to sell property and pay civil penalties.”
