Forestry directors face bankruptcy and loss of homes after losing appeal

Thursday, 2 July 2026

Three directors of Samnic Forest Management Ltd have lost their High Court appeal and will be personally liable for the costs of cleaning up the mess left behind by the company's failed operation near Gisborne.

Samnic Forest Management Ltd, and its three directors appealed an Environment Court enforcement order requiring them to clean-up the mess left after the harvest of a forest near Gisborne.

The directors - Richard Hayes, Scott Funnell and Gavin Fortune - claimed the cost of complying with the order could see them lose their family homes.

The High Court has dismissed their appeal, saying they had a responsibility to ensure that Samnic complied with the Resource Management Act.

Three forestry directors have lost their High Court appeal and will be personally liable for the costs of cleaning up the mess left behind by a failed operation near Gisborne.

Samnic Forest Management Ltd, and its directors - Richard Hayes, Scott Funnell and Gavin Fortune - are the subject of an enforcement order that requires them to address the threat posed by forestry slash and debris left on a 940-hectare block in the hills near Tolaga Bay.

Scenes at Samnic Forest observed by Gisborne District Council officers during an inspection on October 14, 2024.

The Environment Court order, made in July last year, also applies to the landowner Woodlett Investments Ltd, and its sole director, Duncan Woodhouse.

The order required the companies and directors to ensure woody debris and sediment would not enter water and land outside the forest boundary.

The order was appealed to the High Court by Hayes, Funnell, Fortune, and their company.

Samnic Forest Management Ltd was prosecuted and fined $91,000 in 2024 for failing to comply with resource consents.

The three men said the costs of complying with the order meant they faced bankruptcy.

Their appeal was heard by Justice Andrew Becroft in the High Court at Auckland late last year, and his decision was released this week.

Samnic and the directors appealed the Environment Court decision on nine grounds, claiming various errors in the court’s application of the Resource Management Act.

Samnic began operations in 1993 with a prospectus telling investors they’d get a return of more than $1 million on the $80,200 they put in. Instead, they got a return of $26,800, a loss of more than $50,000.

They told Justice Becroft that the Environment Court had acted wrongfully by imposing enforcement orders against the directors personally because there was no evidence of personal acts or omissions, and no justification for imposing the orders on them.

They also argued that the enforcement order was made two years after Samnic had left the forest. They said the current issues in the forest could be attributed to Woodlett’s failure to maintain the forest, but owing to the delay, Samnic was not in a position to establish this.

Their lawyer, Fletcher Pilditch, said they were paid very limited director’s fees and it was “completely unfair to impose enforcement orders against them in this context”.

Justice Andrew Becroft said the directors had the responsibility to ensure that Samnic complied with its resource consents and “there is nothing especially unreasonable about imposing personal liability on them”.

Pilditch said the directors may lose their family homes to pay for the clean-up of the forest.

In his ruling, Justice Becroft said it was clear when the directors gave evidence that the effects of the order on them had been palpable.

However, the law “quite clearly sets out that enforcement orders can be made against any ‘person’. Self-evidently, this includes directors,” he said.

He said the directors had the responsibility to ensure that Samnic complied with its resource consents and “there is nothing especially unreasonable about imposing personal liability on them”.

Manu Caddie, spokesperson for Mana Taiao Tairāwhiti welcomed the High Court decision.

“Whether the directors were paid minimally or handsomely, they had a responsibility to ensure that Samnic complied with the RMA. The consequences of their failure to do so in this case are the resulting enforcement orders against them,” the judge said.

Justice Becroft noted that the directors may have the ability to mount a civil claim against those who were employed to do front-line work in the forest, and possibly to claim contributions from others in the operation.

Woodlett and Woodhouse cross-appealed the Environment Court decision, claiming they were less culpable than Samnic, but the judge dismissed this as well.

Samnic began operations in 1993 with a prospectus telling investors they’d get a return of more than $1 million on the $80,200 they put in. Instead, they got a return of $26,800, meaning they lost more than $50,000.

Harvesting practices were poor, and the company was issued abatement notices from the Gisborne District Council in 2017, 2018 and 2022. It was prosecuted and fined $91,000 in 2024.

Manu Caddie, spokesman for environmental group Mana Taiao Tairāwhiti, welcomed the decision, saying it “confirms that company directors who oversee activities causing serious environmental harm cannot assume incorporation will shield them from personal accountability under environmental law”.

Caddie praised the council for its regulatory approach and said the decision “should be carefully read by every company director operating in New Zealand’s forestry sector”.

“Directors cannot simply point to contractors, ownership structures or commercial agreements. If they oversee activities that damage the environment and fail to ensure legal compliance, they themselves may face enforcement action,” he said.

The council would not comment while the decision could still be appealed.

Hayes, who was chair of the Samnic directors, said the directors “had not had time to formally review the decision at this stage”.