Ink Patch Money Transfer Limited v Reserve Bank of New Zealand
[2022] NZHC 1340
•8 June 2022
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2021-485-000573
[2022] NZHC 1340
UNDER THE JUDICIAL REVIEW PROCEDURE ACT 2016 IN THE MATTER OF
THE RESERVE BANK OF NEW ZEALAND ACT 1989
AND
THE ANTI-MONEY LAUNDERING AND COUNTERING FINANCING OF
TERRORISM ACT 2009
BETWEEN
THE INK PATCH MONEY TRANSFER LIMITED
First Applicant
AND
SAMOA MONEY TRANSFER LIMITED
Second Applicant
AND
SAMOA FINANCE MONEY TRANSFER LIMITED
Third Applicant
AND
CLICKEX PACIFIC LIMITED
Fourth Applicant
AND
THE RESERVE BANK OF NEW ZEALAND
Reserve Bank
AND
THE MINISTER OF FINANCE
Second Respondent
Hearing: 11 April 2022 Appearances:
M T Lennard for Applicants
H Ebersohn and E Cameron for Respondents
Judgment:
8 June 2022
THE INK PATCH MONEY TRANSFER LIMITED v THE RESERVE BANK OF NEW ZEALAND [2022] NZHC 1340 [8 June 2022]
JUDGMENT OF GENDALL J
Introduction
[1] In this judicial review proceeding the applicants (as private companies operating money remittance services from New Zealand to the Pacific Islands) are essentially seeking declarations that, amongst other things, the Reserve Bank in particular direct trading banks to provide them with bank accounts for remittance purposes. The Reserve Bank position from the outset is that fundamentally it cannot do this.
[2] The applicants claim that, since 1 July 2013, registered banks1 have acted wrongly first, in refusing to open new bank accounts for companies operating money remittance services such as themselves (money remitters), and secondly, in closing the bank accounts of such companies. The applicants maintain this is because the banks are undertaking blanket de-risking by refusing to take money remitters as customers. They say the trading banks do this because they have a lower risk appetite in relation to such services due to an “overly zealous view” of their obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act).
[3] The first respondent, the Reserve Bank of New Zealand (the Reserve Bank) is responsible for the registration and supervision of registered banks in New Zealand and is the AML/CFT supervisor for registered banks. The applicants claim that though the Reserve Bank has a supervisory and guidance role with respect to trading banks, and knows the impact of de-risking on the applicants and others like them, it has failed to do anything to correct that wrong view outlined in [2] above and to require the trading banks to provide banking services to money remitters, despite its ability to do so.
Background — the parties
[4] The applicants are New Zealand-registered companies.2 They provide cross-border money remittance services (money remittance), primarily to the Pacific
1 As provided in s 187 of the Reserve Bank of New Zealand Act 1989, I refer to the registered banks in this proceeding as “the banks”, “the trading banks” and “the registered banks”.
2 The third applicant withdrew from the proceedings in March 2022.
Islands. The applicants say these money remittance services amount to a substantial part of the Pacific Islands’ economies and that these services enable seasonable workers in New Zealand to send their wages home more easily and cost-effectively than trading banks’ money transfer services through SWIFT. The applicants maintain that money remittances are a crucial driver for prosperity and development in the Pacific.
[5] Since the introduction of requirements under the AML/CFT Act, the applicants say that trading banks have increasingly stopped accepting money remitters as customers and closed their existing accounts. This is known as “de-risking”. The applicants contend this has meant they cannot get bank accounts necessary to conduct their respective businesses. Essentially, the applicants submit that this de-risking is due to an “overly zealous view” held by trading banks of their obligations under the AML/CFT Act, an interpretation which the Reserve Bank has fostered and supported and failed to do anything to correct.
[6] The Reserve Bank3 is the central bank of New Zealand. It is responsible for the registration of registered banks under s 69 and/or s 76 of the Reserve Bank of New Zealand Act 1989 (the RBNZ Act). It is the relevant AML/CFT supervisor for registered banks, life insurers and non-bank deposit takers under s 130(1) of the AML/CFT Act. The Reserve Bank has a number of powers, including most relevantly the power under s 113 of the RBNZ Act, with the second respondent’s consent to issue directions to a bank in certain circumstances, including if the Reserve Bank has reasonable grounds to believe that the business of a bank has not been, or is not being, conducted in a prudent manner. The second respondent, the Minister of Finance is charged with consenting to or otherwise the Reserve Bank’s exercise of its powers under s 113.
3 The first respondent, the Reserve Bank, is the primary respondent in these proceedings. The second respondent is the Minister of Finance and I will refer to the Minister throughout as “the second respondent”.
Applicants’ business
[7] The business conducted by the various applicants here primarily involves undertaking inbound and outbound remittance transactions. By way of explanation, outbound remittance transactions for example are undertaken in the following manner:
(a)an outbound remittance transaction is initiated by a customer in New Zealand who holds an account with one of the applicants;
(b)the outbound remittance customer arranges for the contracted sum to be credited to the outbound remittance company’s bank account;
(c)the outbound remittance company confirms receipt of that sum and then instructs an overseas remittance company that has a business connection with the outbound remittance company to credit that amount to the customer’s designated off-shore account.
[8] The applicants say the outbound remittance company does not charge any commission or fee on outbound remittance transactions, other than through the agreed exchange rate and any remittance cost. They maintain all profit derived from the transaction is for the benefit of the outbound remittance company.
[9] In order to conduct their business, the applicants contend they need a New Zealand bank account. This is necessary for a number of reasons, including being able to pay or receive New Zealand dollars, to accept funds through electronic payment systems, to conduct electronic payroll services, to comply with tax and GST obligations, and to operate in a secure manner (as otherwise large amounts of cash would have to be stored on premises and transported).
The applicants’ case
[10] The applicants maintain they cannot get bank accounts because trading banks “de-risk” by refusing to take money remitters as customers. They complain the trading banks are not required under the AML/CFT Act to undertake blanket de-risking but do so because they have an “overly zealous view” of their obligations under the
AML/CFT Act. The applicants say trading banks have wrongly undertaken blanket de-risking as, relying on the Reserve Bank’s guidance, they perceive money remittance as a high-risk activity in terms of AML/CFT compliance. The applicants argue the Reserve Bank “fosters and supports” that view of the law, which is wrong, and it has failed to do anything to correct that view and to require the trading banks to provide banking services to money remitters.
[11] The applicants acknowledge the Reserve Bank has a supervisory and guidance role with respect to trading banks, but that it does know the detrimental impact of de-risking on the applicants and others in the sector, which arises directly from an apprehension held by the trading banks that they must be satisfied the applicants’ activities with their customers satisfy that applicants’ AML/CFT obligations.
[12] The applicants argue this apprehension is wrong at law. The Reserve Bank according to the applicants has reinforced that error of law in its guidance and supervision, it has failed to take steps under s 113 to correct that error of law, and therefore, it has been complicit in that error.
[13] The applicants contend there are provisions under the RBNZ Act empowering the Reserve Bank to correct this wrong perception of the law, to direct trading banks to provide services to money remitters, and, in the event of the failure of the trading banks to do so, to provide banking services to money remitters itself. The Reserve Bank, they maintain, has unlawfully failed to do so.
Grounds of review
[14]The applicants raise seven grounds of review.
[15] The first ground of review is that the respondents failed to exercise their powers to address blanket de-risking. The applicants say that they asked the respondents separately to use their powers under s 113 of the Act to direct the trading banks to provide banking services to companies whose business included money remittance. The respondents declined to do so. The applicants say that in failing to do so the respondents erred in law in misinterpreting their powers under s 113 and
acting inconsistently with the purpose of the Act. The applicants also say that the respondents erred in failing to take into account relevant considerations in this respect.
[16] The second ground of review is that the Reserve Bank has failed to provide banking services to the applicants. The applicants say also that at all material times the Reserve Bank has itself failed or neglected to provide banking services to the applicants when the trading banks failed to do so.
[17] The third ground of review is that the Reserve Bank has failed to exercise its statutory duty to provide guidance. The applicants say that the Reserve Bank has failed to provide adequate or any guidance, codes of practice or feedback to trading banks on the provision of essential banking services to companies engaged in money remittance, or to undertake any other activities necessary for assisting trading banks to do so. The applicants also contend that the Reserve Bank failed in its statutory duty by failing to raise blanket de-risking as a topic for the Co-ordination Committee while a member of that Committee. The applicants say that in so acting the Reserve Bank committed an error of law in misinterpreting its powers and obligations under the AML/CFT Act and failed to take into account relevant considerations.
[18] The fourth ground of review is that the Reserve Bank erred in law in interpreting its role as AML/CFT supervisor too narrowly and/or interpreting the scope of the due diligence required of trading banks in relation to money remittance companies too broadly.
[19] The fifth ground of review is that the second respondent erred in law in forming the view that it is necessary for money remittance companies to obtain and provide to trading banks an audit report or an AML/CFT supervisor’s report before trading banks can provide bank accounts.
[20] The sixth ground of review is that the Reserve Bank erred in law by failing to raise blanket de-risking as a topic for the Co-ordination Committee while a member of that Committee.
[21] The seventh ground of review is that the Reserve Bank committed an error of law in wrongly classifying the regulated New Zealand money remittance companies such as the applicants as high AML/CFT risk businesses.
Relief sought
[22]The applicants seek declarations against the Reserve Bank that:
(a)the Reserve Bank has erred in law in classifying New Zealand money remittance companies such as the first to fourth applicants as high AML/CFT risk businesses;
(b)the Reserve Bank has erred in law in advising that it is necessary for money remittance companies, including the first to fourth applicants, to obtain and provide to trading banks an audit report or an AML/CFT supervisor’s report, before trading banks can provide bank accounts;
(c)the Reserve Bank has erred in refusing to direct the trading banks under s 113 that they supply essential banking services to the applicants;
(d)the Reserve Bank has erred in law in failing to provide a code of practice in accordance with s 63 forbidding blanket de-risking;
(e)the Reserve Bank has erred in law in failing to supply banking services to the applicants when the trading banks have not done so;
(f)the Reserve Bank has erred in law in failing to raise blanket de-risking as a topic for the Co-ordination Committee; and
(g)costs.
[23]The applicants also seek declarations against the second respondent that:
(a)the second respondent has erred in law in advising that it is necessary for money remittance companies, including the applicants, to obtain
and provide to trading banks an audit report or an AML/CFT supervisor’s report, before trading banks can provide bank accounts;
(b)the second respondent has erred in refusing to consent to the Reserve Bank directing the trading banks under s 113 to supply essential banking services to the applicants; and
(c)costs.
Respondents’ submissions
[24] The respondents say that as a result of international efforts to combat money laundering and the financing of terrorism, the banking system has become risk-averse when dealing with cross-border fund transfers involving money remittance companies. The respondents admit a real or perceived perception of the lesser capacity of less- developed countries to comply with international AML/CFT standards. The respondents say this is a world-wide phenomenon and is not limited to New Zealand and the Pacific region. The respondents accept that the AML/CFT legislation and similar legislation in foreign jurisdictions can accordingly have unintended consequences that negatively impact services to less-developed regions of the world.
[25] The respondents further accept that some money remitters, such as the applicants, have therefore had difficulty obtaining and maintaining bank accounts. The Reserve Bank says that it is understandable that the applicants would like the Reserve Bank to direct registered banks to provide them with bank accounts. However, the Reserve Bank says it cannot do so.
[26] The Reserve Bank says that the power contained in s 113 of the RBNZ Act to give directions to registered banks is a power that in this context must be exercised for the purpose of promoting and maintaining a sound and efficient financial system, in accordance with s 68 of the Act. The respondents say that decisions by certain registered banks to not provide bank accounts to some money remitters do not affect either the soundness or the efficiency of the financial system.
[27] The respondents say a blanket direction for banks to provide banking services to certain customers without regard to the risk assessment and CDD frameworks under the AML/CFT Act would cut across the AML/CFT Act. They say this could damage New Zealand’s international reputation as a reliable and consistent actor in meeting its AML/CFT commitments, which could have flow-on effects on the financial sector. They say this would in fact undermine, rather than promote and maintain, the soundness and efficiency of the financial system.
[28] The respondents reject the applicants’ submission that it is at fault for not providing further guidance to registered banks, who are said by the applicants to have an incorrect apprehension of the effect of Schedule Part 6 of the AML/CFT (Class Exemptions) Notice 2018 (the Class Exemptions Notice). The respondents also say that de-risking behaviour is complex, multi-faceted and not solved by such a narrow exemption as contained in the Class Exemptions Notice, and that as such there is no basis to suggest that the provision of further information to registered banks would have any effect on de-risking behaviour.
[29] The respondents also challenge the need to provide any further guidance to the registered banks. The respondents say they have already provided significant guidance to the registered banks and that there is no basis to suggest that a reasonable decision-maker could only have provided further guidance.
Other matters raised by the respondents
[30] Finally, the respondents point to the Pacific Remittance Project (the PRP) commenced by the Reserve Bank in 2019 as addressing issues relating to the increasing isolation of Pacific Island nations from the banking system. The applicants, for their part, however, argue that the PRP is no adequate solution.
[31] The respondents also say it is unclear why the applicants have included the second respondent in these proceedings as the second respondent has not exercised any statutory power or made any decision that is amenable to judicial review.
Judicial review principles
[32] Grice J noted in New Zealand Forest Owners Association Inc v Wairoa District Council, the courts have approached judicial review in New Zealand “bearing in mind that it is a supervisory jurisdiction to ensure that powers are exercised in accordance with law.”4 As Cooke J said in Patterson v District Court, Hutt Valley:5
… In every judicial review case the Court’s role is to review whether a decision is made in accordance with law. In all cases it does so in the same dispassionate way …
[33] In Coromandel Watchdog of Hauraki (Inc) v Minister of Finance, Simon France J said judicial review was intended to be a comparatively simple process of “testing that public powers have been exercised after a fair process, and in a manner, which is both lawful and reasonable.”6 The limitations of those powers are then to be ascertained from the statute or other regulation which bestows them, which also gives the extent of the decision-making freedom provided.7
Error of law
[34] The applicants bring these proceedings in large part on the basis that the Reserve Bank has erred in law in a number of respects.
[35]The Supreme Court has described an error of law in the following way:8
[26] An ultimate conclusion of a fact-finding body can sometimes be so insupportable — so clearly untenable — as to amount to an error of law: proper application of the law requires a different answer. That will be the position only in the rare case in which there has been, in the well-known words of Lord Radcliffe in Edwards v Bairstow, a state of affairs “in which there is no evidence to support the determination” or “one in which the evidence is inconsistent with and contradictory of the determination” or “one in which the true and only reasonable conclusion contradicts the determination”.9
4 New Zealand Forest Owners Association Inc v Wairoa District Council [2022] NZHC 761 at [19].
5 Patterson v District Court, Hutt Valley [2020] NZHC 259 at [16].
6 Coromandel Watchdog of Hauraki (Inc) v Minister of Finance [2020] NZHC 1012 at [13], citing BNZ Investments Ltd v Commissioner of Inland Revenue HC Te Whanganui-a-Tara | Wellington CIV-2006-485-697, 7 December 2006 at [15].
7 Patterson v District Court, Hutt Valley, above n 5, at [14]–[15].
8 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721.
9 Edwards v Bairstow [1956] AC 14 at 36.
[36] Later, in Vodafone New Zealand Ltd v Telecom New Zealand Ltd, the Supreme Court accepted that if a decision maker has misunderstood the meaning of a term, “and has thereby misdirected itself, it will have committed an error of law which can be corrected on appeal.”10 However, the Court went on to note, if the decision maker has correctly understood the term for the purposes in question “and has then proceeded to apply that understanding to the facts before it, its conclusion is a matter for the [decision maker] weighing up the relevant facts.”11 The decision maker’s conclusion could not be disturbed on appeal, provided it had not overlooked any relevant matter or taken account of an irrelevant matter, unless it was “insupportable even on a correct understanding” of the term.12
[37] Case law also puts the test of an error of law as whether the finding was “open” to the authority,13 or otherwise in terms of unreasonableness. Palmer J in Hu v Immigration and Protection Tribunal, highlighting the linkage between error of law and unreasonableness, endorsed in a judicial review context the Supreme Court’s reformulation of the Edwards v Bairstow test as a “better account of unreasonableness in judicial review than the tautologous words used in Wednesbury.”14 There, Palmer J stated:15
Where a decision is so insupportable or untenable that proper application of the law requires a different answer, it is unlawful because it is unreasonable. That may involve the adequacy of the evidential foundation of a decision or the chain of logical reasoning in the application of the law to the facts. Unremarkably, unreasonableness, also termed irrationality, is to be found in the reasoning supporting a public decision.
Unreasonableness
[38] Unreasonableness itself arises only where a decision maker comes to a decision that no reasonable decision maker could have reached, a decision which lies “outside the limits of reason”.16 It is clearly a high threshold to meet.
10 Vodafone New Zealand Ltd v Telecom New Zealand Ltd [2011] NZSC 138, [2012] 3 NZLR 153 at [51].
11 At [51].
12 At [51].
13 Lewis v Wilson and Horton Ltd [2000] 3 NZLR 546 (CA).
14 Hu v Immigration and Protection Tribunal [2017] NZHC 41, [2017] NZAR 508 at [2].
15 At [2].
16 Criminal Bar Association of NZ Inc v Attorney-General [2013] NZCA 176 at [136].
[39] The question in this case is whether the Reserve Bank’s alleged failures were so unreasonable that no reasonable authority could have done anything other than avoid such failures.17 To make out a ground of unreasonableness the impugned decision must be “unreasonable”, “perverse”, “absurd” or “so outrageous in its defiance of logic … that no sensible person who had applied [their] mind to the question to be decided could have arrived at it.”18
Failure to take into account relevant considerations
[40] The applicants also allege a failure on the part of the Bank to take into account relevant considerations.
[41]In Secretary for Justice v Simes, the Court of Appeal stated:19
… if the statute conferring the relevant discretion expressly or by implication identifies considerations required to be taken into account by the decision maker as a matter of legal obligation, then regard must be had to those matters.20
[42] However, as Cooke J described in CREEDNZ Inc v Governor-General, a court will hold a decision invalid on the basis of a failure to take into account relevant considerations “only when the statute expressly or impliedly identifies considerations required to be taken into account by the authority as a matter of legal obligation”.21 As Cooke J went on to note:22
… It is not enough that a consideration is one that may properly be taken into account, nor even that it is one which many people, including the Court itself, would have taken into account if they had to make the decision.
Questions of degree here can arise … [b]ut it is safe to say that the more general and the more obviously important the consideration, the readier the Court must be to hold that Parliament must have meant it to be taken into account.
17 The classic case for unreasonableness is Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 228, [1947] 2 All ER 680 (CA).
18 See Wellington City Council v Woolworths New Zealand Ltd (No 2) [1996] 2 NZLR 537 at 545 and 552; and Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374 (HL) at 410.
19 Secretary for Justice v Simes [2012] NZCA 459, [2012] NZAR 1044 at [48].
20 Associated Provincial Picture Houses Ltd v Wednesbury Corporation, above n 17, at 682 per Lord Greene MR.
21 CREEDNZ Inc v Governor-General [1981] 1 NZLR 172 (CA) at 182–183.
22 At 182–183.
[43] Ultimately, however, as the Court of Appeal in Secretary for Justice v Simes emphasised, though decision makers “must approach mandatory relevant considerations with due deliberation and an open mind … the weight to be given to mandatory considerations is a matter for the decision maker.”23
Background to the AML/CFT Act regime
[44] The purpose of the AML/CFT legislation and regime is described in s 3 of the AML/CFT Act as follows:
3 Purpose
(1)The purposes of this Act are—
(a) to detect and deter money laundering and the financing of terrorism; and
(b) to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force; and
(c) to contribute to public confidence in the financial system.
…
[45] The AML/CFT regime is New Zealand’s effort to comply with the recommendations of the Financial Action Task Force (the FATF). The FATF is an international agency which combats money laundering and the financing of terrorism. The FATF makes recommendations to guide countries on the most desirable framework to combat threats of money laundering and financing of terrorism with the aim of ensuring a co-ordinated global response to these threats. Countries are expected to follow these recommendations and the FATF monitors compliance. Failure to follow these recommendations can damage a country’s international reputation and have flow-on effects on the ability of the financial sector of that country to transact with international financial institutions.
[46] The respondents therefore emphasise the importance of complying with international AML/CFT standards. A weak or deficient AML/CFT regime can cause significant issues for New Zealand’s financial sector and the respondents argue that
23 Secretary for Justice v Simes, above n 19, at [50].
non-compliance with international standards could damage New Zealand’s reputation, highlighting it as a weak link in combatting money laundering and terrorism financing internationally and potentially making New Zealand more attractive to money launderers and financers of terrorism. In turn, this could affect the financial sector’s ability to transact with international financial institutions, increase costs of doing business internationally, lead to increased due diligence on New Zealand financial institutions, negatively impact access to and the cost of credit, and increase the risk of money laundering and terrorist financing occurring. The respondents say these issues would have significant implications for the soundness and efficiency of New Zealand’s financial system.
The scheme and application of the AML/CFT Act
[47] Trading banks and money remitters are both “reporting entities” under the AML/CFT Act.24 The Reserve Bank is the AML/CFT supervisor for trading banks.25 The Department of Internal Affairs is the AML/CFT supervisor for money remitters.26 Reporting entities have a number of requirements and obligations under the AML/CFT Act. A reporting entity must:
(a)carry out an assessment of the risk of money laundering and the financing of terrorism (risk assessment) it may reasonably expect to face in the course of its business;27
(b)have an AML/CFT compliance programme;28
(c)carry out customer due diligence (CDD) on their customers;29
(d)review their risk assessment and AML/CFT programme and have them audited every two years;30
24 Anti-Money Laundering and Countering Financial Terrorism Act 2009 [AML/CFT Act], s 5(1) definition of “reporting entity”.
25 Section 5(1) definition of “AML/CFT supervisor”; and s 130(1)(a).
26 Section 5(1) definition of “AML/CFT supervisor”; and s 130(1)(d).
27 Section 58(1).
28 Section 56.
29 Section 11.
30 Section 59.
(e)report to the Commissioner of Police (through the Financial Intelligence Unit) any “suspicious activity” and cash transactions that are $10,000 and over and international wire transfers that are $1,000 and over.31
Risk assessment and AML/CFT programme requirements
[48] A compliance programme has certain minimum requirements, which are set out in s 57 of the AML/CFT Act. A compliance programme must include internal procedures, policies and controls to detect, and manage and mitigate the risk of, money laundering and financing of terrorism.32 In carrying out a risk assessment, a reporting entity must have regard to:33
(a)the nature, size and complexity of its business; and
(b)the products and services it offers; and
(c)the methods by which it delivers products and services to its customers; and
(d)the types of customers it deals with; and
(e)the countries it deals with; and
(f)the institutions it deals with; and
(g)any applicable guidance material produced by AML/CFT supervisors or the Commissioner of Police relating to risk assessments; and
(h)any other factors that may be provided for in regulations.
[49]The risk assessment must be in writing and:34
31 Section 40.
32 Section 56(1).
33 Section 58(2).
34 Section 58(3).
(a)identify the risks faced by the reporting entity in the course of its business; and
(b)describe how the reporting entity will ensure that the assessment remains current; and
(c)enable the reporting entity to determine the level of risk involved in relation to relevant obligations under the AML/CFT Act and regulations.
CDD (Customer Due Diligence) requirements
[50] CDD is the process by which a reporting entity ensures its customers are who they say they are.35 As Mr Damian Henry, the Acting Manager of AML/CFT Supervision at the Reserve Bank, says, it is through CDD that a reporting entity obtains confidence that their financial transactions will be legitimate.36
[51] The CML/AFT Act includes three levels of CDD — standard, simplified and enhanced — depending on the type of customer, the nature or circumstances of the transaction, and the level of risk involved.37 Standard CDD requires a reporting entity to obtain certain information in relation to the identity of its customers and to take reasonable steps to ensure the information is correct,38 as well as to obtain information on the nature and purpose of the proposed business relationship between customer and reporting entity and to decide whether the customer should be subject to enhanced CDD.39 Simplified CDD generally applies when the customer is something in the nature of a government entity, registered bank or a licensed insurer.40 Enhanced CDD applies when the customer is a customer from a country with insufficient AML/CFT measures in place or is a trust or other vehicle for holding personal assets or a company with nominee shareholders.41 The applicants say that enhanced CDD is simply CDD with additional information about the source of the funds or wealth that will be used.
35 Affidavit of Mr Damian Henry, 25 February 2022, at [15].
36 At [15].
37 At [15].
38 AML/CFT Act, ss 15–16.
39 Section 17.
40 Section 18.
41 Section 22(1)(b).
[52] A reporting entity must carry out ongoing reviews of the information obtained under CDD to ensure that the business relationship, and the transactions relating to that business relationship, are consistent with the reporting entity’s knowledge about the customer and the customer’s business and risk profile.42
[53] The requirements in the AML/CFT Act are minimum standards. Reporting entities may also add additional due diligence requirements as guided by their own risk assessments in deciding whether to accept a new customer or maintain a business relationship. The respondents say the ultimate approach to a given potential customer is a question of commercial judgment by a bank in the context of the risks it faces.
On whom a reporting entity must carry out CDD
[54] A reporting entity must carry out CDD on a customer, the beneficial owner of a customer and a person acting on a customer’s behalf.43
[55] The applicants describe a “customer” as the person dealing with the reporting entity. In this case, the money remitters would be classified as customers of the trading banks, and the clients of the money remitters would be customers of the money remitters.
[56]The definition of “beneficial owner” in the AML/CFT Act is:44
… the individual who—
(a)has effective control of a customer or person on whose behalf a transaction is conducted; or
(b)owns a prescribed threshold of the customer or person on whose behalf a transaction is conducted
[57] The applicants say there is some uncertainty as to what exactly is meant by the term “person on whose behalf a transaction is conducted” (Powbatic). They accept that the addition of Powbatics to the definition of “beneficial owner” may extend the ambit of people in respect of whom a reporting entity is required to undertake CDD, as the reporting entities regard the phrase as extending the class of people in respect
42 Section 31.
43 Section 11.
44 Section 5 definition of “beneficial owner”.
of whom CDD must be undertaken to include all Powbatics. I address this, as well as the Class Exemptions Notice, next.
Powbatics and the Class Exemptions Notice
[58]The impact of Schedule Part 6 of the Class Exemptions Notice (Schedule Part
6) on the obligations of trading banks is at the heart of this dispute. The separate contentions of the parties are analysed under the third ground of review below. For present purposes to simply provide background context, however, the following is generally agreed.
[59] Schedule Part 6 exempts reporting entities from conducting CDD on beneficial owners of specified managing intermediaries. This partially exempts these reporting entities from the requirement to undertake enhanced CDD on these customers, requiring CDD only on the entity itself and not on the entity’s underlying customers.
[60] It is accepted that money remitters are “specified managing intermediaries” in the terms of Schedule Part 6 as they are financial institutions. Without the application of Schedule Part 6, a registered bank would need to complete CDD on the customers of the money remitter when the money remitter wanted to use its bank account to facilitate the transfer of funds for those customers. The money remitter would therefore need to ensure that its bank was aware of the customers on whose behalf transactions are being conducted, that is, Powbatics. The effect of the exemption is that the trading banks are exempt from carrying out any CDD on any beneficial owner of its money remitter customers, as noted including Powbatics.
[61] Neither “Powbatic”, nor the full term it stands for, is defined in the AML/CFT Act. Powell J in Department of Internal Affairs v Qian Duoduo Ltd noted that since the AML/CFT Act came into force, and as early as 2013, there has been confusion about what “Powbatic” means.45 In that case, one of the issues was a “genuine uncertainty in the AML/CFT regime with regard to who bears the obligation to complete CDD in transactions where other reporting entities have the direct contact
45 Department of Internal Affairs v Qian Duoduo Ltd [2018] NZHC 1887 at [48] and [50].
with the end customer.”46 As Powell J noted, Te Mana Tātai Hokohoko | Financial Markets Authority in 2013 published an initial consultation paper outlining the practical implications of the definition of “beneficial owner” in the managing intermediaries’ context.47 This paper was later referred to in a 2015 information sheet, which noted, referring to Powbatics as well as the 2013 document:48
The phrase ‘person on whose behalf a transaction is conducted’ (‘Powbatic’) is a concept from the Financial Action Task Force (FATF) Recommendations. It is intended to ensure reporting entities can identify who is behind a transaction, when that person is someone other than the person(s) with actual or legal ownership or control of the customer. Paragraph 16 of the FATF Guidance on Transparency and Beneficial Ownership (October 2014) provides that:
“This element of the FATF definition of beneficial owner focuses on individuals that are central to a transaction being conducted even where the transaction has been deliberately structured to avoid control or ownership of the customer but to retain the benefit of the transaction.”
From this commentary, it is clear the concept of a ‘person on whose behalf a transaction is conducted’ is not intended to impose obligations on every possible natural person who may receive some benefit from a transaction occurring, but only to people who are ‘central to a transaction being conducted’.
In 2013, the Financial Markets Authority (FMA) published an initial consultation paper outlining the practical implications of this definition of ‘beneficial owner’ in the managing intermediaries’ context. This paper highlighted that where there is a chain of financial institutions/schemes involved in providing a service to an underlying client (the customers of a customer and/or the natural persons who are the end customers), an underlying client may be the ‘natural person on whose behalf a transaction is conducted’ and therefore a ‘beneficial owner’. This means that all reporting entities in a chain of managing intermediaries will be obliged to determine whether such beneficial owners (who could be ‘central to a transaction’) exist and do CDD on those people, despite not meeting the threshold for actual or legal control or ownership.
[62] The applicants recognise that the inclusion of Powbatics into the definition of “customer” could justify the respondent’s understanding that trading banks are required to go beyond their immediate CDD obligations in relation to money remitters to look at the money remitters’ dealings with the money remitters’ clients.
46 At [46].
47 At [50].
48 Te Mana Tātai Hokohoko | Financial Markets Authority Class exemptions for managing intermediaries (Information sheet, July 2015) at 1 (emphasis in original).
[63] However, as the applicants highlight, there are “obvious inefficiencies” with a system whereby one reporting entity looks through a second reporting entity with whom it is transacting and second-guesses the second reporting entity’s job in complying with its own CDD obligations, an inefficiency which gets worse the more reporting entities are added into the chain of intermediaries involved in the same transaction. The applicants say Schedule Part 6 responds to and remedies those potential inefficiencies. They point to the comments of Powell J that the class exemption for managing intermediaries “represents an acknowledgment of the inefficiency of this scheme”, the primary purpose of which is to “reduce the compliance burden from multiple reporting entities in a chain of transactions having the same CDD obligations”.49 As Powell J went on to state, the exemption therefore ensures that the CDD obligations then fall “on the reporting entity best placed to identify the customers’ beneficial owners in any situation.”50
[64] Thus it is accepted that the effect of the Schedule Part 6 exemption is that the trading banks are exempt from carrying out CDD on any beneficial owner of money remitter customers, that is to say the money remitter’s clients. As noted, the parties’ contention raises the question as to what this means in terms of the trading banks’ practices said to give rise to blanket de-risking. This is covered further below under the third ground of review.
The role, obligations and powers of the Reserve Bank
[65] The Reserve Bank is the central bank for New Zealand. The purpose of its statute, the RBNZ Act, is to promote the prosperity and well-being of New Zealanders, and contribute to a sustainable and productive economy.51 To achieve this purpose, the Bank is responsible for promoting the maintenance of a sound and efficient financial system.52 The Bank is responsible for the registration and prudential supervision of banks.53 The Bank is also the relevant AML/CFT supervisor for
49 Department of Internal Affairs v Qian Duoduo Ltd, above n 45, at [52].
50 At [52].
51 Reserve Bank of New Zealand Act 1989 [RBNZ Act], s 1A.
52 Section 1A.
53 Sections 67–68.
registered banks, life insurers and non-bank deposit takers under s 130(1) of the AML/CFT Act.
[66] The respondents say in their submissions that banking regulation and supervision aims to provide a prudential framework within which banks are required to operate, with which failure to comply could have “substantial and negative real economy effects”.54
[67] Part 5 of the RBNZ Act accordingly confers on the Bank a number of powers in relation to the registration and prudential supervision of registered banks (then to be exercised in accordance with its purpose for the maintenance of a sound and efficient financial system), including conditions of registration which place regulatory constraints on risk-taking behaviour and encourage sound and prudent practices by banks. Amongst these is the power contained in s 113 to give directions to banks, key to this dispute:
113 Bank may give directions
(1)The Bank may give a registered bank or an associated person of a registered bank a direction, in writing, if it has reasonable grounds to believe that—
(a) the registered bank or associated person is insolvent or is likely to become insolvent; or
(b) the registered bank or associated person is about to suspend payment or is unable to meet its obligations as and when they fall due; or
(c) the affairs of the registered bank or associated person are being conducted in a manner prejudicial to the soundness of the financial system; or
(d) the circumstances of the registered bank or associated person are such as to be prejudicial to the soundness of the financial system; or
(e) the business of the registered bank has not been, or is not being, conducted in a prudent manner; or
(f) any of the following persons has failed to comply with any requirement imposed by or under this Act or regulations made under this Act:
(i)the registered bank:
54 Affidavit of Mr Scott McKinnon, 24 February 2022, at [7]–[8].
(ii)a director of the registered bank:
(iii)in the case of an overseas incorporated registered bank, its New Zealand chief executive officer; or
(g) any of the following persons has been convicted of an offence against this Act:
(i) the registered bank:
(ii) a director of the registered bank:
(iii) in the case of an overseas incorporated registered bank, its New Zealand chief executive officer; or
(h) the registered bank has failed to comply with a condition of its registration.
(2)The Bank must obtain the consent of the Minister before giving a direction under this section.
…
[68] Mr McKinnon for the Reserve Bank in his affidavit says the power to give directions under this section is an important tool for the Bank. “If things go significantly wrong at a bank,” he says, “the direction power under section 113 can be used to require a bank to undertake corrective actions to address the problems.”55 Mr McKinnon notes that the direction power under s 113 “allows the Bank to intervene in a timely way to minimise the impact that problems at a bank may have on the financial system.”56
[69] In considering whether a registered bank has not carried on its business in a prudent manner, the Reserve Bank must confine its consideration to the following prescribed matters only:57
(a)capital in relation to the size and nature of the business or proposed business;
(b)loan concentration or proposed loan concentration and risk exposures or proposed risk exposures;
55 At [14].
56 At [14].
57 Section 78.
(c)separation of the business or proposed business from other business and from other interests of any person owning or controlling the applicant or registered bank;
(d)internal controls and accounting systems or proposed internal controls and accounting systems;
(e)risk management systems and policies or proposed risk management systems and policies;
(f)arrangements for any business, or functions relating to any business, of the applicant or registered bank to be carried on by any person other than the applicant or the registered bank; and
(g)such other matters as may from time to time be prescribed in regulations.
[70] In 2008, reg 3 of the Reserve Bank of New Zealand (Registration and Supervision of Banks) Regulations 2008 prescribed the last item in the list above to include “the policies, systems, and procedures, or proposed policies, systems, and procedures, to detect and deter money laundering and the financing of terrorism.”
[71] In respect to money laundering and the financing of terrorism, the Reserve Bank also has obligations as an AML/CFT supervisor in respect of trading banks under s 131 of the AML/CFT Act. Under that section, in this respect, the Reserve Bank’s functions are to:
(a)monitor and assess the level of risk of money laundering and the financing of terrorism across all of the reporting entities that it supervises;
(b)monitor the reporting entities that it supervises for compliance with the AML/CFT Act and regulations, and develop and implement a supervisory programme to this end;
(c)provide guidance to the reporting entities it supervises to assist those entities to comply with the AML/CFT Act and regulations;
(d)investigate the reporting entities it supervises and enforce compliance with the AML/CFT Act and regulations; and
(e)co-operate through the AML/CFT co-ordination committee (or any other mechanism that may be appropriate) with domestic and international counterparts to ensure the consistent, effective, and efficient implementation of the AML/CFT Act.
[72] As an AML/CFT supervisor, the Reserve Bank has “all the powers necessary to carry out its functions” as an AML/CFT supervisor.58 Under s 132(2)(c), the Reserve Bank has power, specifically, to provide guidance to trading banks by producing guidelines, preparing codes of practice in accordance with s 63, providing feedback on the banks’ compliance with its AML/CFT obligations, and undertaking any other activities necessary for assisting banks to understand their AML/CFT obligations, including how best to achieve compliance with them.
[73] More globally, in exercising its powers under the RBNZ Act, it is an objective of the Reserve Bank “to exhibit a sense of social responsibility”.59 The Reserve Bank must also, if it “considers it necessary for the purpose of maintaining the soundness of the financial system”, act as the lender of last resort for the financial system.60 The Reserve Bank has the power to carry on the business of banking, including issuing financial products, entering into agreements necessary or desirable for carrying out its functions and exercising its powers, and carrying on any business or exercising any powers in conjunction with its functions and powers.61 And as noted, the Reserve Bank may exercise its part 5 powers (including determining whether a bank should be registered or have its registration cancelled, and issuing directions) for the purposes of promoting the maintenance of a sound and efficient financial system.62
58 AML/CFT Act, s 132(1).
59 RBNZ Act, s 169.
60 Section 31.
61 Section 39.
62 Section 68.
AML/CFT Co-ordination Committee
[74] Under ss 149–150 of the AML/CFT Act, the AML/CFT Co-ordination Committee (the Co-ordination Committee) must be established and maintained. The Co-ordination Committee consists of:
(a)a representative from the Ministry of Justice;
(b)a representative from the New Zealand Customs Service;
(c)every AML/CFT supervisor (including, relevantly, the Reserve Bank);
(d)a representative of the Commissioner of Police; and
(e)such other persons as are invited by the Chief Executive of the Ministry of Justice.
[75] The role of the Co-ordination Committee is to ensure that the necessary connections are made between its members “in order to ensure the consistent, effective, and efficient operation of the AML/CFT regulatory system.”63
[76] Section 152 of the AML/CFT Act lists the functions of the Co-ordination Committee, which are to:
…
(c)facilitate co-operation amongst AML/CFT supervisors and consultation with other agencies in the development of AML/CFT policies and legislation:
(d)facilitate consistent and co-ordinated approaches to the development and dissemination of AML/CFT guidance materials and training initiatives by AML/CFT supervisors and the Commissioner [of Police]:
(e)facilitate good practice and consistent approaches to AML/CFT supervision between the AML/CFT supervisors and the Commissioner [of Police]:
63 AML/CFT Act, s 151.
(f)provide a forum for examining any operational or policy issues that have implications for the effectiveness or efficiency of the AML/CFT regulatory system.
Whether the Pacific Remittance Project (the PRP) is a “panacea”
[77] It is pertinent at this stage to address one final related issue raised by the parties. That is whether the PRP is a “panacea” to the broader issue on which the applicants are bringing their judicial review.
[78] The Reserve Bank recognises that remittances are a “crucial driver for prosperity and development in the Pacific” and are larger for regions like the South Pacific than official development assistance and foreign direct investment combined.64 The respondents acknowledge that some money remitters such as the applicants have had difficulty obtaining and maintaining bank accounts due to a real or perceived risk of less-developed countries not being able to comply with international AML/CFT standards, which leads to de-risking.
[79] The Reserve Bank says it is accordingly concerned that Pacific Island nations may be becoming increasingly isolated from the banking system. In 2019, the Reserve Bank, along with the Ministry of Foreign Affairs and Trade (MFAT), commenced the PRP to address this issue. It is an ongoing project as the Reserve Bank says the issue is “immensely complex” and cannot be resolved by New Zealand alone. The work requires extensive consultation and includes liaising with several international partners.65 Mr Howells, who was engaged in the establishment of the PRP in 2019, describes a number of outcomes which the PRP is designed to achieve. These include of relevance here, increasing the capability of money remitters in implementing risk- based AML/CFT regimes; increasing the likelihood of money remitters retaining their banking services and helping to maintain service provision to the Pacific; and increasing the stability and security of the regional financial system, to provide banks with increased confidence in compliance tools used by money remitters.66 Mr Howells deposes the PRP has engaged both with banks and money remitters to try to achieve these outcomes.
64 Affidavit of Mr Darren Howells, 25 February 2022, at [11].
65 At [23] and [25].
66 At [24].
[80] The PRP is scheduled to continue until July 2022, at which point the Reserve Bank and MFAT will discuss the evolution of the project.67 Mr Howells says the PRP will continue actions until then, such as contributing to the current statutory review of the AML/CTF Act, which will have a number of potential impacts on the PRP,68 as well as exploring the feasibility and scope of a code of practice designed to provide a liability “safe harbour” for banks who provide banking services to lower-risk Pacific-focused money remitters that are able to adequately demonstrate compliance with AML/CFT obligations.69
[81] The applicants contend however that this is not an adequate solution. They say it does not address the root cause of the problem, which is the apprehension of the registered banks that they must supervise their money remitter clients’ AML/CFT compliance. At best, they say, it simply makes the money remitter’s AML/CFT compliance more easily verified, but that is the job of the AML/CFT supervisors, not the registered banks themselves.
Summary of trading banks’ obligations
[82] The applicants essentially maintain that the trading banks are operating under a misapprehension of their AML/CFT obligations and that blanket de-risking followed as a result of this misapprehension and the failure of the Reserve Bank to remedy that misapprehension. It is therefore useful at this stage, having traversed the relevant background, to set out what the applicants contend is a summary of the relevant obligations of the trading banks under the AML/CFT Act in transacting with money remitters when the Class Exemption Notice exemption applies.
[83] According to the applicants, in that event when the trading banks are transacting with money remitters when the Schedule Part 6 exemption applies, the banks must:
(a)undertake CDD on the money remitter, which amounts to:
67 At [52].
68 At [53].
69 At [55].
(i)obtaining and verifying the money remitter’s identity;
(ii)identifying the beneficial owner of the money remitter if that owner has effective control of or owns more than 25 per cent of the money remitter, and undertaking CDD on any such beneficial owner;
(iii)obtaining information on the nature and purpose of the proposed business relationship between the money remitter and the trading bank;
(b)monitor the money remitter’s accounts to determine if the transactions align with the nature and purpose of the business relationship;
(c)undertake ongoing CDD; and
(d)report suspicious transactions to the Police.
[84] The applicants allege that the CDD, and the ongoing CDD and account monitoring obligations do not and cannot enable a trading bank to know whether or not customers are likely to be engaged in criminal activity. They argue these obligations are manifestly designed only to help a reporting entity know the customer, to identify if the transaction is consistent with the reporting entity’s knowledge about the customer’s business and to identify any grounds for reporting a suspicious transaction.
[85] The applicants argue that any understanding of their AML/CFT obligations beyond these, extending to an obligation to supervise money remitters and ensure that the money remitters comply with their AML/CFT obligations in relation to their clients, is a misapprehension of their obligations under the AML/CFT regime. The applicants then say further — this being the basis of the judicial review itself — the Reserve Bank as reporting AML/CFT supervisor for the trading banks has erred in failing to correct this misapprehension, with blanket de-risking resulting.
[86] I now turn to the pleaded grounds of review. It is useful to address first the applicants’ third pleaded cause of action as their submissions before me relied significantly on the allegation contained in that cause of action, that the Reserve Bank should have provided more guidance to the trading banks.
Third ground of review — failure to provide guidance
[87] The third ground of review is that the Reserve Bank failed to exercise its statutory duty to provide guidance to trading banks, in particular with respect to companies engaged in money remittance. The applicants argue the Reserve Bank failed to provide adequate or any guidance, codes of practice or feedback to trading banks on the provision of essential banking services to companies engaged in money remittance, or to undertake any other activities necessary for assisting trading banks to do so. They say that in failing to do so, the Reserve Bank misinterpreted its powers and obligations under ss 131(c), 132(2)(c) and/or 152(d) of the AML/CFT Act and failed to take account of relevant considerations.
[88] The basis for the applicants’ submission in this respect is that the trading banks have misinterpreted the effect of Schedule Part 6 of the Class Exemptions Notice. The applicants contend Schedule Part 6 exempts trading banks from conducting any CDD in respect of the clients of money remitters, yet trading banks mistakenly consider they “need to see demonstrably effective AML/CFT compliance from customers who are themselves reporting entities under the AML/CFT Act (such as money remitters)”.70 The applicants say that trading banks think they must be satisfied that money remitters’ AML/CFT processes comply with the money remitters’ obligations before they will open bank accounts for them.
[89] The applicants suggest too that these decisions made by trading banks refusing to provide services to money remitters may be based on the Reserve Bank’s 2017 Sector Risk Assessment.71 That document said that money remitters72 are “recognised internationally as presenting TF risk and RBNZ reporting entities should be aware of
70 Affidavit of Mr Howells at [27].
71 Te Pūtea Matua | Reserve Bank of New Zealand Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT): Sector Risk Assessment for Registered Banks, Non-Bank Deposit Takers and Life Insurers (April 2017) [the 2017 SRA].
72 Referred to in the document as “money service businesses”.
the risks associated with them”.73 The applicants say that when a trading bank takes on a money remitter as a customer, it consequently undertakes, under a mistaken apprehension of its obligations, what is effectively an audit of the money remitter’s compliance, thus having to replicate, at no fee, the work already done by the money remitter’s AML/CFT supervisor. The applicants say it is therefore unsurprising that trading banks refuse to take on money remitters as customers when this is the amount of work the banks are under the impression they have to undertake each time and on a continuing basis. When done on a wider scale this then results in blanket de-risking.
[90] The applicants allege that the Reserve Bank knows the trading banks operate under such a misapprehension and it has not provided to the trading banks sufficient guidance to dispel this misapprehension.
[91] The Reserve Bank however denies these allegations. It denies that the Reserve Bank has failed to provide adequate guidance in its role as statutory supervisor, and it further denies it had an obligation to do anything more than it did.
[92]In particular, the Reserve Bank says:
(a)There is no error of law on the part of the Reserve Bank. Schedule Part 6 applies only to a narrow obligation to carry out CDD on the beneficial owners of “specified managing intermediaries” and in any case, trading banks must still make an assessment as to whether they ought to accept any written confirmations provided by money remitters that they comply with their AML/CFT obligations.
(b)The difficulties experienced by money remitters in obtaining bank accounts is a complex, multi-faceted issue and it is naïve to think that the Reserve Bank providing further guidance on the Class Exemptions Notice would make any difference.
(c)The question of whether the Reserve Bank should have provided more guidance to the trading banks is one of Wednesbury unreasonableness
73 At [126].
— that is to say, the failure to provide further guidance needs to be so unreasonable that no reasonable authority could have done anything other than provide further guidance. The Reserve Bank says it has provided significant guidance to the trading banks and that there is no basis on which it could be said that no reasonable authority could have done anything else than provide further guidance.
Error of law — Schedule Part 6 of the Class Exemptions Notice
[93] The accepted effect of Schedule Part 6 was canvassed above. Essentially, the effect of the exemption is that the trading banks are exempt from carrying out CDD on any beneficial owner of its money remitter customers. As to what this may mean in relation to decisions by the trading banks refusing to take on money remitters as customers is a matter on which the parties diverge.
As evident from the third ground of review, I do not consider the Reserve Bank made any error of law in its interpretation of its role as AML/CFT supervisor or as to the scope of due diligence required of trading banks in relation to money remitters. In particular, the Reserve Bank was entitled to leave any assessment as to whether or not to accept any written confirmations in relation to AML/CFT compliance — and to refuse to provide banking services according to their internal procedures, policies and controls — to the registered banks themselves.
(e)Fifth ground of review — advising the need for an audit or supervisor’s report:
In the absence of any particular power or decision pleaded, I accept that the second respondent did not exercise any statutory power or make any decision amenable to judicial review.
(f)Sixth ground of review — failure to raise blanket de-risking as a topic for the Co-ordination Committee:
I am satisfied that, while at one level it might be considered the Reserve Bank could have done more to raise blanket de-risking as a topic for the attention of the Co-ordination Committee, there was no obligation on it to do so. I am also satisfied that the Reserve Bank has undertaken other work to address the issue of blanket de-risking, notably through the PRP, and that in any case blanket de-risking was raised before the Committee on a number of occasions.
(g)Seventh ground of review — classifying money remittance companies as high AML/CFT risk:
I am satisfied that the 2017 SRA was a guidance document which, on the basis of extensive material and in line with international assessments, classified MSBs as a vulnerability as a typology but not necessarily as an indication of the industry as a whole. Indeed, the Reserve Bank explicitly stated that banks should adopt a risk-based approach to evaluating the AML/CFT risk of money remitters on the basis that different remitters will present different levels of risk and money laundering and the financing of terrorism typologies. I am satisfied that the Reserve Bank made no error of law in this respect.
Conclusion
[162] It will be apparent now that none of the grounds for review raised in these proceedings has been made out. The application for judicial review is therefore dismissed.
Costs
[163] I reserve costs at this stage. The parties are urged to liaise with a view to agreeing costs between themselves if they are in issue. In the event that the parties are unable to agree upon costs between themselves, they may file a memoranda (sequentially) on the question of costs, which are to be passed to me and I will decide the issue of costs based upon the memoranda filed and all the other material before the
Court at that point. I note that each memorandum as to costs from counsel is to be no longer than five pages.
Gendall J
Solicitor:
Crown Law Office, Wellington Barrister:
Michael Lennard Barrister, Wellington
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