The High Court has imposed a penalty of $68,000 on overseas investor Heidi Mitchell Sustainable Ltd (HMSL). This is the final stage of legal action taken by Toitū Te Whenua Land Information New Zealand (LINZ) after investigating forestry purchases made without the required consents under the Overseas Investment Act.
The penalty ensures that the investor involved does not make any profit from the illegal purchases.
This brings the total penalties imposed by the Courts against the parties to these investments to over $2 million.
The series of actions LINZ has taken in the High Court follow two overseas individuals purchasing forestry blocks in Tairāwhiti and Auckland without overseas investment consent in 2011 and 2014.
The overseas investors set up company structures (HMSL and AJN Land Ltd) and used local associates to hide their ownership of the forestry blocks. An Auckland lawyer, acting for the investors, structured the transactions and gave legal advice that resulted in the investors acquiring interests in sensitive land without consent.
“These were serious breaches of the Overseas Investment Act, and I am pleased that this matter has now been successfully concluded,” said LINZ Compliance Leader Susan Smith.
“The Overseas Investment Act is clear about the requirement to get consent,” said Ms Smith.
“The vast majority of overseas investors do the right thing and follow the correct processes,” she said. “However, if investors do not meet their obligations and try to circumvent the law, LINZ will take appropriate enforcement action.”
As a result of the legal actions LINZ has brought against the parties in this case, civil pecuniary penalties of $2,028,765.45 have been awarded along with costs of $45,000.
The following penalties have been imposed by the High Court in relation to these proceedings:
- $972,805.99 – HMSL (including the latest penalty)
- $82,500 – William Mitchell, British citizen and Singapore resident
- $630,459.46 – AJN Land Ltd
- $100,000 – Andrew Jarvis, lawyer (for HMSL transaction)
- $175,000 – Andrew Jarvis, lawyer (for AJN transaction)
- $45,000 costs.
The judgment is available on the LINZ website
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