Justice rejects fraud case
A long-running legal battle to establish a multi-million dollar claim against a government department accused of fraud has failed.
Mark Wayne Ford of the nowliquidated Heli-Logging Ltd alleged the Civil Aviation Authority of New Zealand had wrongfully refused him permission to use ex-military Wessex Mk2 helicopters for his logging operation in Taranaki in 2005.
Ford claimed if his suit were successful he would be seeking $90 million compensation from the CAA to cover the loss of earnings, the cost of 10 helicopters and spare parts, and legal bills.
His case was initially struck out in the High Court in 2015, but in May a Court of Appeal decision gave life to the 12-year battle to again return to the court room.
Ford’s claims included that the director of the CAA acted fraudulently and in bad faith when deciding against granting exemptions for the use of the aircraft; the CAA led the company to believe the exemptions would be granted but then changed its mind, and the CAA acted fraudulently and without honest belief when declining the exemptions on safety grounds because it was aware of a report saying they were safe.
A report prepared by experienced and respected helicopter pilot Bernie Lewis in 1999 stated the choppers were well proven and had operated successfully around the world but the CAA fraudulently withheld its disclosure, he said.
Then, in 2005, Lewis, on behalf of the CAA, wrote another report about the helicopters which said they were not safe.
Justice Cooke’s decision, released last week, found while the plaintiffs were unfairly treated they had not established any relevant dishonesty, or conduct in bad faith by the CAA.
Cooke said the plaintiffs committed substantial resources to the project on an understanding of the requirements outlined to them by the CAA in early 2003.
‘‘By the time CAA advised that the requirements were actually more extensive the plaintiffs were financially committed.’’
He said declining the applications ultimately led to the demise of the company.
‘‘The treatment of the plaintiffs was far from ideal. But that does not mean the defendant is liable in tort.’’
Cooke said Ford had advanced a comprehensive case but the key questions centred on the honesty of the decision makers and he concluded they all acted honestly.
He said while Lewis’ views in his 2005 report could be criticised for being based on out-of-date information he did not accept the advice was dishonest.
Ford said the judgement was not what he expected and he planned to appeal the decision.
During the drawn-out legal stoush the CAA maintained HeliLogging’s claims were merely challenges to the director’s opinion dressed up as allegations of fraud and had no credible basis.