On Thursday, Gloriavale lawyer Richard Raymond urged the Court of Appeal to keep an injunction in place preventing BNZ from closing the community’s accounts until the issue is properly dealt with at trial.
“The fact that we are here, and I’m trying as hard as I can to protect the interests of this community is evidence of the fact there are no options for these people,” Raymond told the court.
“[Gloriavale’s] companies will fail — schools, food, living as required will not be able to eventuate, and it will effectively end the community.
“Some might say that’s not a bad thing. That’s an entirely irrelevant point. We’re certainly not here to decide that.”
Justice David Goddard said the panel of justices aimed to decide before the end of the year whether or not to keep the injunction.
If disposed of, BNZ agreed to give Gloriavale three months to sort its affairs before terminating its relationship with the group’s entities. It would continue to bank some individuals.
If the injunction is kept in place, the matter will go to trial, likely drawing things out another couple of years.
BNZ’s lawyer Stephen Hunter argued the bank had a contractual right to terminate the accounts “for any reason”.
Hunter said this wording was in BNZ’s contracts to avoid the exact situation it was in — ending up in costly litigation for simply acting in its own interests.
If it had to provide an explanation, Hunter said the community’s use of child labour was surely sufficient.
He also quipped the very person BNZ dealt with as it decided to terminate the relationship was the group’s leader Howard Temple, who faces a raft of sexual offending charges involving girls as young as 9.
Raymond accused BNZ of tarring the entire community, about 600 people, with the same brush.
He noted the accounts BNZ wanted to shut involved entities unrelated to the child labour case the bank pointed to.
Justice Goddard put it to Raymond that a bank could write to a company it banks, saying it wants to terminate its relationship because of its carbon emissions, for example.
If that company could not get anyone else to bank it, one could assume the bank was acting correctly.
Raymond responded, what if the company had not emitted for some time?
He said Gloriavale had gone to great lengths to improve itself.
“It’s the most reviewed organisation in the country, quite frankly,” he said.
Raymond also made the case that Gloriavale had a well-established relationship with BNZ when it came to money matters. It wasn’t until BNZ appointed a “sustainability officer” that everything changed.
Hunter said BNZ had long-standing relationships with a number of its customers and did not want to have to do big investigations every time it wanted to terminate a relationship.
He also made the point there was no statutory obligation for banks to provide services to all-comers.
While Raymond tried to keep the focus on how a bank treats existing customers, there was recognition the debate around whether a bank can choose who it does business with isn’t new.
Justice Goddard noted money remitters had previously battled banks that wanted to ditch them, because banks could not be sure the money transacted wasn’t the proceeds of crime.
In other words, banks feared that doing business with remitters could see them in breach of strict anti-money laundering legislation.
In 2016, a landmark High Court ruling favoured Kiwibank, which had been taken to court by E-Trans International Finance for closing its accounts.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
