BNZ vs. Gloriavale: A Story of Ethics, Banking, and Consequences

Opinion piece: Liz Gregory.

(Thoughts, opinions and views expressed here belong to Liz Gregory and may or may not represent the views of all leavers, current members or the Trust).

After years of court battles, appeals, and injunctions, the Court of Appeal has given BNZ the green light to close Gloriavale’s bank accounts within three months. This week’s decision (read it here) is a landmark moment, not just for the financial and legal worlds but for anyone paying attention to the ripple effects of accountability.

Let’s rewind and break this down.

How Did Gloriavale Get Here?

Gloriavale had been banking with BNZ since 1999, maintaining 83 accounts across 16 entities. In May 2022 the Courage Employment Court judgment found forced child labor within the community and the BNZ sought to sever ties.

In July 2022 BNZ sent Gloriavale a termination letter citing serious concerns that Gloriavale’s leadership, under the Servants and Shepherds, oversaw practices amounting to human rights abuses. Gloriavale was given three months to find alternative banking services but failed to achieve.

The Legal Tug-of-War

In November 2022 Gloriavale sought an interim injunction forcing the BNZ to continue providing services until they had time to have the issue heard at trial. They were granted this, and a further extension was granted in May 2023. But BNZ was determined to not continue doing business with Gloriavale and they sought to appeal the judgements and end the interim injunction.

For over two years Gloriavale argued that BNZ acted unreasonably stating that they:

• Relied on incorrect and unverified information (media articles and Wikipedia information).
• Failed to consult or engage with Gloriavale entities.
• Ignored distinctions between Gloriavale’s diverse accounts, including its charitable trust, school, and midwifery services.
• Neglected the impact on the community’s vulnerable members.

BNZ stood firm, asserting they had:

• Acted reasonably and aligned with its human rights policy.
• Its decision reflected a standard of objective reasonableness.
• They had every right to terminate the accounts

They also pointed to the systemic nature of the human rights abuses described in the Courage Employment judgment, stating it wasn’t just one entity at fault—it was the culture of the community.

The Final Judgment

On December 9, 2024, the Court of Appeal ruled in BNZ’s favour, setting aside the injunction and paving the way for BNZ to close Gloriavale’s accounts. Judges Goddard, Katz, and Mallon concluded that BNZ’s decision was neither irrational, unreasonable nor arbitrary. The court acknowledged that no other banks were willing to serve Gloriavale, but stated this was not BNZ’s responsibility:

“If no other bank is willing to accept the Gloriavale entities as customers, that reluctance cannot be laid at the door of BNZ.”

The Bigger Picture

This case has peeled back the layers of Gloriavale’s operations and exposed the tension between financial institutions’ ethical policies and the realities of their implementation. The judge made an interesting and illuminating point that Gloriavale’s own evidence highlighted that no other bank was willing to work with them stating,

“If no other bank is willing to accept the Gloriavale entities as customers, that reluctance cannot be laid at the door of BNZ… And it would be in precisely those circumstances that the prejudice to BNZ of being required to provide services to customers that no other bank wishes to deal with would be most apparent, and would weigh most strongly against granting an injunction.”

What’s Next for Gloriavale?

Gloriavale’s lawyer, Richard Raymond, had argued in court that the bank closed the accounts “[Gloriavale’s] companies will fail — schools, food, living as required will not be able to eventuate, and it will effectively end the community.”

But is that a little too dramatic? Gloriavale have been adept at surviving and it’s a bit premature to say how it will all play out. Many leavers believe that Gloriavale will already have a plan in place that might include a third-party ally who will set up banking services in different names. They have done similar things before with the help of professionals (lawyers and accountants) relating to loans and mortgages (as evidenced in the Courage/Pilgrim Employment cases – Anameadle ring any bells?)  

Bankruptcy & Accountability Evasion?

Another example of Gloriavale’s ability to “adapt” is the recent bankruptcy of Gloriavale’s Forest Gold Honey. It was put into voluntary liquidation with the largest creditor (themselves aka Christian Partners!) being owed $1.1 million.

One report from Business Desk said, “
“According to the report, Forest Gold owed $1.1 million to unsecured creditors.
Hunt said “99%” of the unsecured debt is tied to loans from Christian Partners, adding that the secured
creditors cited in the report – Rapid Labels Ltd, NZ Sugar Company, Palletmakers South Island and
Mountain Gold Honey – are likely not owed anything.
“According to the company records, they’re actually not owed anything but because they’ve got listed
securities, I still have to contact them up to when they say they’re not owed anything,” Hunt said.
Total assets, comprising funds in bank accounts and inventory, were $650,000, making the total shortfall
owed to creditors $450,000.”

Yes Gloriavale’s own Christian Partners lent Forest Gold money (that’s Forest Gold who is also owned by Christian Partners). In a crude form, Christian Partners is just one of the beautiful money-go-rounds that exist in Gloriavale. It’s the device used to share the business Partnership profits to create the less tax payable and a maximization of Working for Families possible. Among other things they also “contract out labour” to other Gloriavale businesses. The irony being that the labour units being contracted out were not allowed to receive the due wages for their work – according to the group’s doctrines… Back to the point.

So it appears that $650,000 will be moving sideways into Christian Partners and Forest Gold will close. But perhaps we need to be reminded that Forest Gold was listed as a Defendant in the Courage Employment Court proceedings and has not yet been ruled out as one of the joint employers of the plaintiffs. There may have been an order to pay compensation in the future, but I guess they’ll have to find that money from some other pocket….

It’s worth asking the question whether bankruptcy seems to be a get-out-of-jail card for Gloriavale and enables them to avoid accountability? At the minimum it highlights Gloriavale’s less than excellent business practices and backs up BNZ’s concerns that they are a “commercially unattractive customer”.

(Update 12/12/2024: I have been informed by the CEO of the CCCT Trust (Gloriavale’s Charitable Trust) that the decision was made for purely commercial reasons and they object to any suggestion it was to avoid accountability. I have included this update in order to provide a balance to this opinion piece).

My response is that for whatever reason they did it, it certainly enabled Gloriavale to avoid accountability – especially as it relates to another Forest Gold Saga that finally came into the public eye this week. The MPI fraud charges are serious and came with a whopping fine and possible imprisonment for those involved. I’ll deal with that in a separate blog post.)

I have learnt a lot about the tricks and devices that groups use to evade accountability. But what concerns me about this approach is that they seem to be spending a lot of time fighting battles in various courts – instead of holding themselves to account for their wrong-doing over the past 50 years. That speaks volumes. In particular I have concerns about a group that claims to be Christian and seeks to avoid accountability. That bothers me as a person of faith.

If Gloriavale’s leadership wants to demonstrate real change, it’s time for less courtroom drama and more meaningful action. Financial exclusion may be the consequence they face today, but the real cost lies in their refusal to confront their past with honesty and humility. The victims of their past practices deserve that at the least.

Final Thoughts

I am sure the loss of banking services could disrupt community operations and escalate financial isolation. But this legal saga isn’t just about banking; it’s about the accountability of institutions and the ripple effects of their decisions on vulnerable communities.

We are here to assist and support any family who wants to leave Gloriavale to ensure they and their children can survive – and thrive.