The settlement covered the redundancy. It didn't cover the $273K loan to his own company
A former managing director's bid to use his employment exit deal as a legal shield has fallen flat at New Zealand's Employment Relations Authority.
The executive joined Geneva Finance Limited as group chief financial officer in August 2006. By June 2007 he was a company director, and in May 2008 he was appointed managing director - a role he held until August 2023.
But it is what happened between those dates that has landed the matter in two separate courts.
Before joining the board, the executive set up his own private company. Through an agreement with Geneva Finance's holding company, that private company acquired shares in the holding company - funded by a $273,711 loan from Geneva Finance itself, repayable at eight percent interest per year.
Then came the amendment.
In October 2007, with the executive now sitting on Geneva Finance's board, the loan was renegotiated. The interest rate dropped from eight percent to zero. The Authority calculated the benefit to the executive at more than $100,000 in total.
The timing is hard to miss. Within weeks, Geneva Finance imposed a moratorium on investor repayments, owing more than $130 million at the time.
The loan fell due in October 2012. It was never repaid. The executive's private company was removed from the Companies Office register in April 2013. The $273,711 remains outstanding.
When the executive's employment ended in July 2023, the parties signed a record of settlement - a binding agreement under New Zealand employment law - covering "all problems, claims or complaints that either party may have against the other in relation to the employment relationship or its termination."
That looked comprehensive. Geneva Finance saw it differently.
In September 2024, the company filed proceedings in the District Court, alleging the executive breached his duties as a director by failing to act in good faith and in the company's best interests when he amended the loan in favour of a company he solely owned. The claim was brought under the Companies Act, not employment law.
The executive's response was to argue the exit settlement barred those proceedings. His counsel submitted the deal was "intentionally widely worded" to cover anything connected to his employment, and that the amended loan was effectively part of his "employment package." A founding shareholder of Geneva Finance's parent company backed that account, telling the Authority the loan was made at a time when the company faced receivership and that writing off a couple of hundred thousand dollars was nothing at the time.
The Authority was not persuaded.
In its ruling issued on October 5, 2026, it found no documentary support for the claim that the zero-interest loan formed part of the executive's employment package. His employment contract made no mention of it. Geneva Finance's consolidated financial statements for the year ending March 2009 did not account for the benefit in his salary, bonus, or other payments. A sum worth more than $100,000, the Authority observed, was "too significant" to go unformalised if it had truly been part of his remuneration.
The shareholders' agreement itself was between the holding company, the executive personally, and his private company. Geneva Finance - the actual employer - was not a party. The Authority found the arrangement bore "the characteristics of a straight commercial transaction" rather than an employment benefit.
Applying the Supreme Court's guidance on disputes where a person holds roles as both employee and company director, the Authority held that these two capacities cannot overlap - a claim relates to one hat or the other, never both at once. The settlement resolved the executive's redundancy problem and "went no further than this."
Geneva Finance is now free to continue its District Court action.
For HR teams negotiating exits with senior executives who also sit on the board, the practical lesson is that "full and final" language in an employment settlement does not automatically reach across to director duty claims - and the boundary between the two needs to be drawn deliberately on both sides of the table.
This is a preliminary ruling on jurisdiction. The substantive allegations of breach of director duties have not been tested and remain before the District Court.
