A decision by the High Court in Auckland has found West Drury Holding Limited (WDHL) breached the Overseas Investment Act rules when purchasing sensitive land in Drury in June 2017.
WDHL admitted that a shareholder who held 39 percent of its shares was an overseas person when the company purchased the $9.2 million property in Drury.
Therefore, the company is considered to be an overseas person and it should have sought consent to buy the property.
The company told the court it didn’t know it needed to apply for consent because the shareholder held a residence class visa. However, the shareholder did not meet the definition of ordinarily resident under the Overseas Investment Act as he was not residing in New Zealand with the intention of residing here indefinitely.
While the Court acknowledged there was a misunderstanding of the rules, Justice van Bohemen said “the mistake should have been avoided by undertaking appropriate enquiries.”
Overseas Investment Office Group Manager Anna Wilson-Farrell says “the case demonstrates the need for overseas investors to get specialist legal advice on the Overseas Investment Act. When we discover that someone has broken the rules, we take appropriate enforcement action.”
WDHL was ordered by the Court to pay a penalty of $125,000 and $15,000 in legal costs.
The court noted that over the last four years the company had benefited from owning the property.
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