Team NZ and NZME go head-to-head in court over report

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A stoush over whether a report into the financial management of the America’s Cup should be publicised has been heard in the High Court.

Team New Zealand AC75 Te Aihe sailing off Auckland.

Team New Zealand’s AC75, Te Aihe, sailing off Auckland. Photo: Richard Gladwell/Sail World/Photosport

It marks the latest chapter in a saga that has evolved since allegations of spying and misappropriated funds surfaced last week.

Media company NZME has obtained a copy of a report into Emirates Team New Zealand (ETNZ) and America’s Cup Events (ACE) by forensic accountancy firm Beattie Varley.

It was prevented from publishing the report’s contents after ETNZ and ACE sought an interim injunction last week.

Arguments over an application to lift the temporary non-publication order were heard by Justice Moore in the High Court at Auckland this afternoon.

NZME’s managing editor Shayne Currie and NZ Herald editor Murray Kirkness were both in court to watch the proceedings.

What Team NZ’s lawyer said

Acting for ETNZ, Davey Salmon told the court that while there was public interest to see the America’s Cup hosted in Auckland, this did not equate to the public’s right to know details about a private company.

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Salmon said Beattie Varley’s report contained highly-confidential information canvassing commercially sensitive information, details protected by the Privacy Act and potentially defamatory allegations.

He said it was the plaintiff’s position the allegations were false and ETNZ and ACE’s had acted properly at all times.

“It can’t be said the public will be properly informed. Certainly not for long because all that is being held is an allegation, a damaging allegation; it’s not a fact. Those allegations should be cautiously repeated by anyone who is told they are false.”

Salmon said the yachting industry was highly competitive and ETNZ’s competitors getting a hold of its financial strategies would be “dynamite”.

So far, almost $250 million in taxpayer and ratepayer money has already been invested in preparing for the 2021 competition.

The government has suspended any further payments from a $40m hosting fund, of which $29m has already been paid.

NZME’s argument

NZME’s lawyer Robert Stewart told the court the fact the report related to public funds meant it was of significant public interest.

He told the court it was the media’s job to hold those in power to account and publishing the report, even if it was an interim document, would ensure the allegations could not be swept under the carpet.

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“There is an element of ‘trust us we know what we’re doing here, this is the America’s Cup, you’re not understanding us as to why it’s so important we don’t give this information away’.

“I’m sure I’m right when I say [NZME] doesn’t want to jeopardise Team New Zealand’s [competitive advantage] but at the same time it wants accountability for public funds, and on the face of it at the moment that hasn’t happened.”

If there were to be a delay in the report being publicised it should be “extremely tightly-reigned” because it raised serious questions about the management of public money, he said.

Representing the Crown (the Ministry of Business, Innovation and Employment, or MBIE) and the Auckland Council, Michael Heron QC confirmed Beattie Varley’s interim report was confidential and it was intended a final version would be available to the public at a later date.

RNZ was formally notified of the High Court injunction by lawyers acting for ETNZ and ACE Limited on 2 July 2020.

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In a letter, Salmon wrote that NZME was now subject to an order prohibiting NZME from publishing the Beattie Varley report or any of its contents or referenced recordings.

The development followed a shocking revelation that ETNZ fired a number of employees they believed to be informants for competitors.

MBIE is currently investigating financial misuse allegations ETNZ have categorically denied.

Central to the allegations made by former event contractors is an alleged fraud involving money being deposited into a Hungarian bank account.

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