In our September legal update on banking and commercial law, available here, we reported on the Court of Appeal's decision in the long-running Crafar Farms case. The Court of Appeal determined that the Overseas Investment Act is broad and flexible. The requirement that the relevant overseas persons have business experience and acumen relevant to the overseas investment could be satisfied in the circumstances by reference to generic business experience and acumen.
On 17 October the Supreme Court affirmed the Court of Appeal decision stating that it saw "no obvious error in the careful uncommon factual assessments made by the High Court and Court of Appeal". Accordingly, the appeal brought by two Maori trusts (competing bidders for Crafar farms) to overturn the sale of the Crafar farms to Chinese buyer Shanghai Pengxin (Tairoa E and Te Hape B Trusts v. Chief Executive of Land Information ( NZSC 85, 17/10/2012, McGrath, William, Young and Glaisbrook JJ) was dismissed. The decision clears the way for Shanghai Pengxin to complete its purchase of the Crafar farms.
The implication of the Crafar farms saga for other potential overseas investors is that the OIO business experience test (clearly dependent on the circumstances of each application) may be satisfied by generic business experience and acumen relevant to the proposed investment, and specific sector experience will not be required.