Other unquantifiable contingent liabilities
Abuse claims
There is ongoing legal action against the Crown in relation to historical abuse claims. At this stage the number of claimants and outcome of these cases are uncertain.
ACC litigations
There are several legal actions against ACC in existence, arising in the main from challenges to operational decisions made by ACC. ACC will be defending these claims.
Air New Zealand litigation
Air New Zealand has been named in five class actions. One (in Australia) claims travel agents' commission on fuel surcharges and two (one in Australia and the other in the United States) make allegations against more than 30 airlines, of anti-competitive conduct in relation to pricing in the air cargo business. The other two class actions (in the United States and in Canada) allege that Air New Zealand together with many other airlines conspired in respect of fares and surcharges on trans-Pacific routes.
Air New Zealand is defending each of these proceedings. In the event that a court determined, or it was agreed with a regulator, that Air New Zealand had breached relevant laws, the company would have potential liability for pecuniary penalties and to third party damages under the laws of the relevant jurisdictions.
Environmental liabilities
Under common law and various statutes, the Crown may have responsibility to remedy adverse effects on the environment arising from Crown activities.
Departments managing significant Crown properties have implemented systems to identify, monitor and assess potential contaminated sites.
In accordance with NZ IAS 37: Provisions, Contingent Liabilities and Contingent Assets, any contaminated sites for which the Crown has accepted liability, and for which costs can be reliably measured, were included as a provision.
Maui contracts
Contracts in respect of which the Crown purchases gas from Maui mining companies and sells gas downstream to Contact Energy Limited, Vector Gas Limited and Methanex Waitara Valley Limited provide for invoices to be re-opened in certain circumstances within two years of their issue date as a result of revisions to indices. These revisions may result in the Crown refunding monies or receiving monies from those parties.
Television New Zealand
Television New Zealand is subject to a number of legal claims. Given the stage of proceedings and uncertainty as to outcomes of the cases, no estimate of the financial effect can be made and no provision for any potential liability has been made in the financial statements.
The Government has announced that analogue television transmission will cease by November 2013. The Company has an obligation to decommission its analogue transmitters which are located on Kordia Limited's transmission sites. The decommissioning of analogue transmitters will be undertaken as a broadcasting industry initiative and the Company's share of the cost of decommissioning, net of any amounts recovered from disposal, cannot be reliably estimated.
Treaty of Waitangi claims
Under the Treaty of Waitangi Act 1975, any Māori may lodge claims relating to land or actions counter to the principles of the Treaty with the Waitangi Tribunal. Where the Tribunal finds a claim is well founded, it may recommend to the Crown that action be taken to compensate those affected. The Tribunal can make recommendations that are binding on the Crown with respect to land which has been transferred by the Crown to an SOE or tertiary institution, or is subject to the Crown Forest Assets Act 1989.
On occasion, Māori claimants pursue the resolution of particular claims against the Crown through higher courts. There is currently one such action against the Crown being heard at the High Court. Failure to successfully defend such actions may result in a liability for historical Treaty grievances in excess of that currently anticipated.
Westpac New Zealand Limited
Under the Domestic Transaction Banking Services Master Agreement with Westpac Banking Corporation (Westpac's rights and obligations under this agreement were vested in Westpac New Zealand Limited under the Westpac New Zealand Act 2006), dated 30 November 2004, the Crown has indemnified Westpac:
- in relation to letters of credit issued on behalf of the Crown, and
- for costs and expenses incurred by reason of third party claims against Westpac relating to indirect instructions, direct debits, third party cheques, departmental credit card merchant agreements, use of online banking products and Inland Revenue processing arrangements.
Under the Supplier Payments Service - New Zealand Government Master Agreement dated 23 June 2010, the Crown indemnified Westpac New Zealand Limited against certain costs, damages and losses to third parties resulting from unauthorised, forged or fraudulent payment instructions (excluding costs, damages and losses arising from Westpac's wilful default, negligence or breach of the agreement or other applicable legal obligation).
