New Zealand Case Law: Decisions & Judgments

Topic

Ponzi scheme

Legal area

Court

17 Dec 2020

KLOOGH v SERIOUS FRAUD OFFICE [2020] NZHC 3397

Citation

[2020] NZHC 3397
Court

High Court

The High Court upheld the District Court's sentence of eight years and ten months' imprisonment with an MPI of 60% as within range and not manifestly excessive given the scale, vulnerability of victims, breach of trust and sophistication of the Ponzi scheme, but quashed the $5,000,000 reparation order as inappropriate because there was no realistic prospect the offender could pay while serving the imposed MPI.
11 Mar 2020

WOOD v R [2020] NZCA 48

Citation

[2020] NZCA 48
Court

Court of Appeal

Given prolonged, premeditated Ponzi-style offending causing substantial losses to many vulnerable investors and serious breach of trust, the Court found the Judge's starting point of eight years nine months was within range but increased global mitigation to reflect good character, cooperation, remorse and an early guilty plea, resulting in substituted concurrent sentences of five years six months and a minimum term of two years six months before parole eligibility.
14 Dec 2018

RYAN v R [2018] NZCA 586

Citation

[2018] NZCA 586
Court

Court of Appeal

The Court allowed the appeal because the sentencing Judge, after fixing a high starting point for sophisticated Ponzi-style fraud, failed to stand back and assess totality with the existing unrelated sentence; recalculating totality produced a lower starting point and after the same discounts the appropriate sentence for the BlackfortFX offending is six years' imprisonment, cumulative on the existing sentence, with a three year minimum period of imprisonment.
13 Oct 2017

R v SCOTT [2017] NZHC 2510

Citation

[2017] NZHC 2510
Court

High Court

Offender ran a 13‑year Ponzi scheme obtaining $5.425M and causing $2.16482M loss to 13 victims; culpability is serious though reduced because offender was not a professional fiduciary; appropriate starting point for totality is seven years imprisonment; apply discounts of 25% for early guilty plea, 5% for demonstrated remorse/assistance, and 5% for significant ill health, resulting in a global sentence of four years and eight months imprisonment to be served concurrently on 27 charges; charges 17, 18 and 20 discharged under s147 Criminal Procedure Act 2011.
31 Aug 2017

HAMISH MCINTOSH v JOHN HOWARD ROSS FISK AND DAVID JOHN BRIDGMAN [2017] NZSC 129

Citation

[2017] NZSC 129
Court

Supreme Court

Court ordered interest at the prescribed Judicature Act rate of 5% per annum on $454,047.62 from the date of the liquidators' appointment (17 December 2012) because interest is compensatory for loss of use of company funds, jurisdiction exists under s87(1) and by parity under s295(c)/s348(2)(b), and no principled or case-specific reason existed to deny or defer interest.
22 Aug 2017

HANSA LIMITED (IN LIQ) v HIBBS [2017] NZHC 2014

Citation

[2017] NZHC 2014
Court

High Court

The sole director, Paul Hibbs, knowingly misapplied investor funds and operated a Ponzi scheme such that he breached s136 (and ss131,133,135,137); causation and high culpability established; accordingly under s301 he must contribute the full creditors' claims of $7,062,597.67, pay liquidators' fees of $396,002.90 and plaintiffs' costs on a full indemnity basis.
26 May 2017

HAMISH MCINTOSH v JOHN HOWARD ROSS FISK AND DAVID JOHN BRIDGMAN [2017] NZSC 78 [26 May 2017]

Citation

[2017] 1 NZLR 863
Court

Supreme Court

The respondents (liquidators) were entitled to set aside and recover the fictitious profit component of payments made by the insolvent Ponzi operator; the statutory clawback provisions of the Companies Act and Property Law Act apply to dispositions/payments made from co-mingled trust funds held and misapplied by the company; an innocent recipient acted in good faith and had a defence for value only to the extent of the real and substantial antecedent capital provided ($500,000), but not for the fictitious profits ($454,047); the change of position defence did not apply on the facts.
5 Aug 2016

PRIEST v ROSS ASSET MANAGEMENT LIMITED (IN LIQUIDATION) [2016] NZHC 1803

Citation

(2016) NZCLC 98
Court

High Court

The Court held the Priests were the equitable owners of the Priest Holdings held by RAM and Dagger as bare trustees; the Other Investors could not trace their funds into the Priest Holdings and therefore had no proprietary claim to those shares; Clayton's Case and collective tracing theories did not displace the Priests' beneficial title over shares (intangible, fungible assets) and the Nessock transfers effected by the Priests were valid; declaratory relief and transfer orders in favour of the Priests were granted.