Despite fine, reparation and sentence police restrain all company’s assets for ‘proceeds of crime’ over a Health and Safety offence

A workplace accident and employee death in 2015 resulted in a costing a company nearly $400,000 in fines and reparations, and the company owner, who accepted responsibility, being  sentenced to four and a half months home detention in 2017.

But that wasn’t the end of the matter. Two years later, late in 2019, police restrained all of the company owner’s assets under the proceeds of crime legislation.

… it was in relation to the same health and safety prosecution in which Ron and Salters Cartage had already pleaded guilty and been sentenced.  Having already secured a criminal conviction, the police had decided to take the extraordinary step of pursuing a business owner through the civil courts for the alleged “proceeds” of a health and safety offence.

It looks like a fairly ordinary Kiwi family bloke and business owner could lose everything he had built up over 38 years.

This is an extraordinary story, and quite alarming, unless there is something else to this story not yet revealed by the police.


The police want to take every dollar Ron Salter has ever made

A South Auckland businessman is under siege by police who are using laws designed to target gangs and drug dealers to come after his family business, his home, and even his children’s assets. At a time when we’ve handed police extraordinary powers to deal with a health pandemic, Matt Blomfield argues that trust is being betrayed.

Over the last five years I have carved out a role for myself as a person you turn to when things go bad. And when I say bad I have seen some pretty spectacular f*ck ups. When you are in the business of fixing life’s little mistakes, you find that your work comes from all walks of life and try as I might I like to think I don’t discriminate when it comes to my clients.

During that time, I have worked for some amazing people and also some infamous individuals. Often the balance between what is morally correct and my own personal view that everyone deserves help is something I struggle with.

When I discuss it with friends and family, I often reference the obligations that lawyers have when representing a client. Everyone has a right to justice and should have an opportunity to have their side of the story heard.

The slight difference is that I like to  think that my role includes an added bonus in that I can attempt to get things back on track and show my clients that life is just that little bit simpler if you play by the rules and remove some of the complication that comes with pushing boundaries.

In saying that sometimes I have clients where a clear cut injustice has occurred, and there is zero moral ambiguity. Where bad luck has combined with an extraordinary set of circumstances to result in an unjust outcome. These are the ones I enjoy the most.

So with the blessing of my client I would like to ask you to listen to a story not about Covid-19, but about an unfortunate sequence of events which has left my client fighting for their very survival.

In late 2015 I was introduced to Ron Salter who is the owner and founder of Salters Cartage, a South Auckland waste collection and recycling company.

A few months earlier, on September 15, 2015, Jamey Lee Bowring, an employee of a contractor to Salters Cartage, called Raceworks, working at the Salters Cartage business, was killed after the 100,000-litre fuel tank he was welding exploded.

It was a tragedy, a young man losing his life at just 24 years old. There were no winners in this story. I recall thinking about Jamie’s mother and how she would have reacted when she got the news. I have two daughters and in my mind I’m not sure if I could think of a worse situation than me outliving one of them.

Like all of the cases I work on, the first thing I try to do is understand the client. What am I dealing with and what is really going on here?

Ron Salter is by trade a truck driver, who over several decades built up a very successful business. He is a hard man and initially that was all I saw. It wasn’t until I had spent a couple of months working with Ron that I actually found out who he is.

Ron is first and foremost a family man, and Salters Cartage is a family business.  The kind of business that is the backbone of New Zealand’s economy.

The more time I spent with the Salter family the more I came to understand that this was the quintessential Kiwi family running their own business and Ron was that hard arse dad who secretly was a big softy and loved his family unconditionally.

Just prior to lockdown I noticed a picture of Ron on his daughter’s Facebook page. He was in the swimming pool with his granddaughter. His daughter commented: “As a kid growing up I don’t remember my dad getting in the pool/water but little miss says “pop pop come in water” and he’s in”.

That side of Ron is why, at the earliest opportunity, he said sorry for the accident and accepted he made a mistake. This was something Ron insisted on.

Just over two years on from Jamie’s death, on November 23, 2017, Ron was sentenced to four and a half months’ home detention and he and his company were ordered to pay nearly $400,000 in fines and reparations, which they did.

The same day a story was published in the New Zealand Herald entitled “Auckland business owner sentenced for fuel tank explosion which killed worker”. The story includes a video interview of Ron which captures the man I know and the hurt that he and his family went through.

That’s not to say what happened to the Salter family could ever compete with losing a child. Jamie’s mother Sarah Ferguson has said she does not accept Ron’s remorse and I don’t think I could if I was her.

My role with Salters Cartage finished up in early 2018. It was an interesting project, it touched on so many aspects of life, a mother losing a child, a business owner dealing with the guilt and responsibility for the part they played, the all-encompassing litigation process, something that I understand all too well, the toll that can take on individuals, and the support of wider friends and family unit that rallied around during this awful time. There were no winners in this story, but it was finally over. Justice was done.

Moving forward, I would check in with Ron and the family on occasion. They had a job to get on with and didn’t need my help. They were rebuilding their lives and getting their Salters Cartage family back on track. I heard through a mutual acquaintance that Ron was looking at selling the business and retiring and I recall thinking that it was not surprising. Ron had done it hard over the past few years.

Then in December last year I heard that the police had restrained all of Ron’s assets under the proceeds of crime legislation.

At the time I had limited knowledge of proceeds of crime laws and my immediate reaction was ‘what have I missed’? My mind conjured up images of drug dealing and gangs. It just made no sense.

After further clarification I realised that it was in relation to the same health and safety prosecution in which Ron and Salters Cartage had already pleaded guilty and been sentenced.  Having already secured a criminal conviction, the police had decided to take the extraordinary step of pursuing a business owner through the civil courts for the alleged “proceeds” of a health and safety offence.

I called Ron and he explained in a slightly panicked fashion, “they are wanting to take my house, my daughter’s house, the bach, the business, everything”. His life’s work and his legacy. I was lost for words. It just didn’t make any sense to me.

I recall thinking about double jeopardy – the principle that a person should not be subject to two prosecutions or punishments for the same offence. And then wondering whether a claim to forfeit assets constitutes a second punishment or a severely harsh punishment when viewed together with the original sentence.

It was a major, the Salter family stood to lose a lifetime of effort. This was not just Ron’s business, it’s the Salter family business which includes the families of their 30 employees, who are essentially an extension of the family.

Police have sought restraints over more than $8 million of the Salters’ personal assets as well as business assets over and above this.  An application to forfeit those same assets will inevitably follow.

To be clear, this legislation was brought in to go after drug dealers, gang members, money launderers and other sophisticated criminal enterprises that break the law for commercial gain. It operates on a simple philosophy: the police say ‘we think you’ve obtained this by nefarious means, prove us wrong’.

The reach of the legislation extends to anything that the police believe is “tainted”. The example I use is if a drug dealer owns a house and pays for a new roof with drug money, the police can take the house. The police can also take untainted assets to the value of the benefit they say you have received as a result of criminal activity.  It’s hard for me to draw a parallel between a gang member selling methamphetamine and Salters Cartage collecting and recycling waste oil.   As bizarre as it sounds, the police are saying the income that Salters Cartage received is like drug money. If it is, so too is the income of the hundreds of businesses convicted of health and safety offences in New Zealand every year, let alone other regulatory offences.  What’s next – resource management breaches?

In the five years to July 2014, police restrained nearly half a billion dollars worth of cash, property, cars, boats, motorcycles with gold-plate rims and every other trapping of a drug dealer’s lifestyle you can imagine. Police estimated half of that came from methamphetamine.

The recovered money goes into a contestable fund that has provided millions to drug and alcohol rehabilitation services, mental health services and crime reduction initiatives. Proper Robin Hood stuff.

However, in the Salters Cartage case the police are using the proceeds of crime legislation for the first time in the aftermath of a health and safety case.

In an exit interview with the Herald just a few weeks ago, the former commissioner of police Mike Bush summed up one of the key tenets of his six year tenure as follows: “How we apply our discretion is critical to building trust and confidence.”

“The one thing people look for is the consistent application. And that’s what we’ve been driving hard.”

If that’s the case, why didn’t the police attempt to seize Watercare’s assets, after the 2011 explosion that killed one of its workers and left another a double amputee? Or Canadian Piping, the firm convicted of failing to protect employees in the same blast. Should the directors of Watercare have feared that their family homes were at risk?

There have been around 700 workplace deaths in New Zealand since 2011, and more than two dozen firms have been prosecuted for breaching the health and safety legislation where death occurred.

Where is the consistent application of the law that Bush is so proud of?

It is no secret that New Zealand’s small to medium enterprises are the backbone of this country. Right now, as we emerge from Level 4 lockdown, they are at once under unprecedented strain while being needed more than ever to jumpstart our post-COVID 19 economy.

According to one Government estimate, they make up 97 per cent of all New Zealand businesses, employ more than 630,000 people or 29 per cent of all New Zealand workers.

It’s tough enough running your own business, as a business owner you take responsibility for the livelihoods of all of your staff, you take responsibility for the risks that come with owning your business from loans to compliance to tax.

If it goes badly you can’t just walk away. These business owners are brave and they should be respected, they should be looked after, and they should be supported.  Without them, the economic landscape in New Zealand would be very different.

We spend plenty of time making sure that employees are looked after and that they have the support of their employers.  And rightly so.  But less time is spent thinking about the brave directors that take on the responsibilities and risks that create employment. I can imagine that many will say that with risk comes reward and I accept that but, in this case, we are talking about a family that could lose everything they have earned in the past 38 years.  There are many, many other businesses out there just like Salters Cartage.

This will have an effect on three generations of this family. Putting aside the inevitable closure of Salters Cartage as we know it if the police are successful, we are talking about Ron and his wife Natalie’s daughter’s home, the family bach, the home in which Ron and Natalie planned to live out their retirement, and finally the livelihoods of all of the staff and their families.

So, most of my lockdown was spent trying to find a way through for the Salter family. That now includes dealing with Covid-19 and the fact they have all but closed the doors over the lockdown.  They have lost hundreds of thousands of dollars but, unlike many other businesses, all of their staff still have their jobs.

The Salter family is doing it hard.  Ron and his family accepted responsibility for what happened;  Ron and Salters Cartage performed the sentence imposed.  In addition to funding this litigation, which will could take years to resolve, now they have the added complication of Covid-19.  In my mind it’s just not fair. I really wish the police would use their resources, budget and energy to take down gangs and drug dealers because isn’t that what the proceeds of crime legislation was intended for? I can’t rationalise in my mind why the police have put the Salters family, and family businesses just like theirs, at the top of their to-do list, while many who have clearly profited from crime flaunt their wealth on Instagram. It just does not make sense!

Salters Cartage is truly a family owned and operated New Zealand business. It is an example of what makes New Zealand great and what we need to focus on to get through this Covid-19 debacle. I am confident that the police will be unsuccessful in their case but my hope is that the fight doesn’t destroy this amazing family and the New Zealand-owned family business that was almost 40 years in the making. That’s not justice and not what New Zealand wants or deserves from the New Zealand police.

Matt Blomfield is a business consultant and the subject of Whale Oil, a book about standing up to bullies and his quest for justice. It was nominated in the best general non-fiction category at the 2020 Ockham Awards.

Stupid National policy: fining parents of school leavers

My disappointment with the direction National is going in has increased even more.

Stuff: Fines for parents of school drop-outs considered for National Party policy

Fines for parents of school drop-outs are among several tough welfare policies the National Party is floating ahead of the 2020 election.

National leader Simon Bridges says New Zealanders know there’s deep-set poverty and welfare dependence problems, and is promising to take Labour on with policies that show “backbone”.

While Bridges wouldn’t speak directly to the policies being considered, it’s understood they include fines of up to $3000 for parents of children who leave high school and don’t enter further education and training.

That’s even worse than fining parents if students leave early. If an 18 year old left school and didn’t enter enter further education and training would National really consider fining their parents for not forcing them to do something they obviously don’t want to do?

There’s more:

National is considering are: more obligations and sanctions for beneficiaries, cutting the number receiving welfare by 25 per cent, and requiring gang members to prove they don’t have illegally-sourced income before receiving the benefit.

Beneficiary bashing is not new, but seems to be a swing back to pandering to people who are unlikely to switch votes anyway.

Bridges said: “It’s no secret. We hate gangs … We are thinking about how we can crack down on gangs.”

Why stop at gangs? It’ would be hard to legally define ‘gang’ anyway. Why not make everyone prove they don’t have illegally-sourced income? And include illegally sourced political donations.

RNZ: Will National propose fines for parents of truant teens? (with audio):

Should parents of teenagers who leave school early and don’t go into education or training be fined?

It’s one of the policies the National Party is reportedly looking into as part of its social policy review.

Other policies under consideration are requiring gang members to prove they don’t have illegal income before getting a benefit, and reassessing the obligations of people who are on the benefit.

Leader Simon Bridges is being coy about the specifics – but says these are priority issues for National.

Priority issues for National? I think a higher priority issue for National is leadership – or more specifically, a lack of decent leadership. Bridges seems to the best chance of getting Labour and Greens in power next year.

I have a better proposal – fine MPs who waste time and (taxpayer) money on stupid policies. Especially party leaders.

 

 

NZ First’s $300k clause is old news

It’s surprising to suddenly see that NZ First have a clause in their constitution that seeks to impose a $300,000 dollar cost on and MP who resigns or is expelled from the party.

Surprising because it is not news – I posted on this four years ago


May 2014

NZ First’s $300,000 fine threat

NZ First have a clause in their party constitution that tries to enable the party to fine any list or electorate MP who resigns or is expelled  $300,000 at the discretion of the Board.

NEW ZEALAND FIRST PARTY CONSTITUTION 2013

57 Parliamentary Division

(g) Upon a member of the Parliamentary Division ceasing to be a member of the Parliamentary Division because he/she has resigned from or has been expelled from the New Zealand First parliamentary caucus, or has ceased to be a member of the Party, then whether the member is a constituency member of parliament or a list member of parliament, he/she must resign his/her parliamentary seat as soon as practicable and in any event not later than 3 days after the date of cessation.

(h) In order to provide the means for enforcement of the preceding article 57(g) concerning the obligation of a member or former member to resign his/her parliamentary seat, and as a condition precedent to selection as a New Zealand First parliamentary candidate, and in consideration of selection as such, every member who agrees to become a candidate, and every member who stands as a candidate, and every member who is elected as a New Zealand First list member of parliament or as a New Zealand First constituency member of parliament, before being selected as a candidate, before standing as a candidate, before election as a New Zealand First member of parliament, and before accepting his/her seat in parliament and before being sworn in as such, and at any other time when required by the Board to do so whether before or after election and whether before or after being sworn in as a member of parliament, shall agree to give and shall sign a written undertaking, intended to be a legally enforceable contract (the resignation obligation contract) , under which he/she agrees to uphold observe and perform all of the provisions of this article 57 of this constitution and its amendments, and in particular to a fundamental term of the contract which will be the essence of  the contract, and which will impose a liability for liquidated damages in the sum of $300,000 (three hundred thousand dollars) for any breach of article 57(g) of this constitution and its amendments, concerning the obligation of a member or former member to resign his/her parliamentary seat, if he/she ceases by any means and for any reason and in any circumstances whatsoever to be a member of the Parliamentary Division during the term for which he/she has been elected. The Board may however compromise the amount of liquidated damages payable or waive the imposition of liability for liquidated damages in its sole and unfettered discretion without having to have any reason for doing so, without having to give any reason for doing so, and without being under a any obligation to do so or to consider fairness, natural justice, or any other consideration whatsoever;
and the Board shall not enforce the resignation obligation contract under this article 57(h) at any time that legislation exists which requires or determines that a member of Parliament to resign or relinquish his/her parliamentary seat upon the grounds contained in or similar to those specified in article 57(g).

NZ First  Party rules:  nz_first_constitution_nov_2013.pdf

Law professor Andrew Geddis takes it apart: I’m right, Winston’s not, so there

The $300,000 figure here clearly is designed to present an MP who leaves NZ First with Hobson’s choice. Either quit as an MP, or face ruinous financial consequences. And because the rule has this effect – it is designed to force an MP from Parliament – I don’t think it will be enforceable in court. And a rule of this nature only has teeth if there is a court that is prepared to, as a matter of law, make someone actually pay up the penalty figure.


But it has become a thing today for some reason. National call it Revelations, which it clearly isn’t. It’s a rehashed story four years later.


NZ First MPs signed $300k good behaviour bond

Revelations that Government MPs are required to sign a legally enforceable contract meaning they must pay $300,000 if they do not follow their Leader’s instruction is an affront to our parliamentary democracy, National’s Electoral Law spokesperson Nick Smith says.

“The 2016 amendment to NZ First’s constitution states its MPs must pay damages of $300,000 if they personally disagree with Winston Peters, turning them into indentured workers with an extraordinary price tag hanging over their heads.

“It means every time an NZ First MP votes or comments on an issue, they have 300,000 reasons why they should just parrot Winston Peters and not to speak out even if doing so would be in the public’s best interests.

“This is abhorrent. These types of contracts are illegal in other workplaces and would be unconstitutional in most democratic countries, so why are they at the core of our current Government? They turn elected representatives into puppets of a party leader who is now attempting to impose the same restrictions on free speech on Parliament’s other MPs, in spite of universal opposition to the Waka Jumping Bill.

“It is a sad commentary on the NZ First Party and Mr Peters that such draconian contracts are required to maintain caucus discipline – and now to keep the Government together.

“It also contradicts Mr Peters’ previous hollow position that MPs ‘have to be free to follow their conscience. They were elected to represent their constituents, not to swear an oath of blind allegiance to a political party’.

“The contracts were revealed after I was contacted by a concerned NZ First source who advised that all NZ First MPs had signed them except Mr Peters.

“NZ First must publicly release the full details of these contracts, outlined in article 57 (h) of its constitution, so the public can see the restrictions imposed on its elected MPs. This is even more important with NZ First playing such a pivotal role in the current Government.

“Disclosure is also required to be consistent with the Government’s pledge to be the most open and transparent ever, a claim looking increasingly ridiculous when even the Minister responsible for Mr Peters’ Waka Jumping Bill, Andrew Little, had no idea about the clause.

“That’s despite his legislation increasing the legal weight given to party rules and his acknowledgement that MPs should be able to do their job with being subjected to such restrictions.

“New Zealand needs MPs who are not bound by orders or instructions but whose responsibility is to act as representatives of the people.

“The existence of these contracts opens the question as to whether New Zealand needs additional protection to prevent its parliamentary democracy from being manipulated by these sorts of oppressive contracts.”

 

Fine only for growing cannabis for personal use

The Christchurch High Court has ruled that growing cannabis for personal use normally warrants just a fine, with a community sentence being quashed on appeal.

This reinforces court precedents of a fine being appropriate if the cannabis was being grown for personal use.

Note that growing cannabis for supply is dealt with much more severely.

Also note that an example of a case involving repeat offender found that, while the prison sentence imposed was inappropriate and was quashed, a community sentence was justified (see below).

Judgment of Nation J – Riches v Police [2017] NZHC 2035 – 24 August 2017

[1] Is a fine the normally appropriate penalty for cultivating a small number of cannabis plants for personal use using hydroponic facilities? That is the issue raised by this appeal.

[2] The summary of facts described how the Police visited the appellant, Mr Riches, at his home in Christchurch. He told the Police that someone they were asking about had come over to his place to smoke cannabis. A warrantless search power was invoked. The summary then recorded:

Located in the garage was a grow room fitted out with lamps, heat sources
and ventilation. The garage contained 6 mature Cannabis plants
approximately 1 metre in height with 2 smaller plants approximately 20
centimetres in height.

[3] Mr Riches pleaded guilty quite promptly on a third Court appearance. He was then remanded for a pre-sentence report and was sentenced on 12 July 2017.

[4] The District Court Judge referred to the number and description of the eight plants. He noted that Mr Riches had told the Police the cannabis was for his personal use and said “[t]his cultivation appears to have been accepted by the prosecution as being non-commercial”.

[5] The Judge noted Mr Riches was appearing before the Court at aged 29, for all intents and purposes as a first offender.

[6] The Judge also noted the submission for Mr Riches that the offending was a category 1 offence in terms of the guidelines in R v Terewi. He referred to the probation officer’s opinion that there was a minimal or low risk of reoffending but also the probation officer’s opinion that Mr Riches had issues with cannabis use.

[7] The Judge noted that community work was not recommended because Mr Riches’ employment could make completing that work difficult. He did not consider imprisonment was required and said he was therefore “prepared to accept the recommendation of the probation officer as appropriate”. He convicted Mr Riches and sentenced him to four months’ community detention, to be served by way of a curfew at his home from 7.00 pm to 6.00 am Monday to Sunday inclusive. He also sentenced Mr Riches to 12 months’ supervision with a special condition that he attend and complete any recommended intervention for drug use to the satisfaction of the probation officer. On his appeal, Mr Riches did not challenge that latter aspect of his sentence.

Conclusion

[38] I am satisfied that there was an error in the sentencing through the District Court Judge failing to adequately consider whether the offending could be dealt with by way of a fine, as is required by s 13 Sentencing Act 2002. Section 15 states that, when a court can consider imposing a community-based sentence, such as community detention, it may do so only if it does not regard a fine as the appropriate sentence or because of other specified circumstances, which do not apply in this case. In all the circumstances of this case, I consider the Court had to regard a fine, together with supervision, as the appropriate sentence.

[39] The appeal is accordingly allowed. The sentence of four months’ community detention is quashed. The appellant is fined $1,700 and sentenced to 12 months’ supervision with a special condition that he attend and complete any recommended intervention for drug use to the satisfaction of the probation officer

So a fine has been found appropriate for a first time offender growing cannabis for personal use who shows contrition.

Note though this example of an unrepentant repeat offender:

[34] In Hartley v Police, Mr Hartley was sentenced on one charge of possession of cannabis, which related to 736 grams of cannabis head found drying on a newspaper in a room inside his house. He was also sentenced for the associated cultivation of cannabis. Seven cannabis plants, ranging in height from 0.75 to 1.7 metres were found. When confronted by the Police with what they had found, Mr Hartley was unrepentant about both his use of cannabis and cultivation, and indicated he did not consider he had done anything wrong. He had previous convictions for cannabis offending. He was sentenced to nine months’ imprisonment in the District Court.

[35] On appeal, Dobson J considered the issue was whether the Judge had erred in imposing a sentence of imprisonment rather than a sentence of home detention or community detention. His Honour held that the decision not to impose a community-based sentence or a sentence of home detention was plainly wrong. In reaching that conclusion, the Judge held that insufficient weight was placed on Mr Hartley’s personal circumstances “and the distinction between cultivation for personal use and cultivation for supply of others”. He also noted that “community detention combined with intensive supervision has been imposed on comparable occasions where the motivation for change is strong and the offender has secure employment and family support”. Dobson J also said:

I also consider that the need for denunciation and deterrence is lower in cases of cultivation than in cases of supply. The seriousness of cultivation for personal use should not be minimised, but the harm caused by such offending is more to the offender and his or her family, than to the community

[36] Dobson J concluded that a community-based sentence should have been imposed. Home detention was not appropriate because it would require Mr Hartley to forego employment. His Honour took into account the two months’ imprisonment already served, quashed the sentence of imprisonment and imposed a sentence of four months’ community detention, together with 18 months’ intensive supervision.

[37] There was no issue in Hartley as to whether a fine should have been imposed as distinct from a sentence of community detention. The appellant’s previous convictions distinguish it from Mr Riches’ situation.

A prison sentence was overturned (after the offender had served two months) but a community sentence deemed appropriate.

NZ First’s $300,000 fine threat

NZ First have a clause in their party constitution that tries to enable the party to fine any list or electorate MP who resigns or is expelled  $300,000 at the discretion of the Board.

NEW ZEALAND FIRST PARTY CONSTITUTION 2013

57 Parliamentary Division

(g) Upon a member of the Parliamentary Division ceasing to be a member of the Parliamentary Division because he/she has resigned from or has been expelled from the New Zealand First parliamentary caucus, or has ceased to be a member of the Party, then whether the member is a constituency member of parliament or a list member of parliament, he/she must resign his/her parliamentary seat as soon as practicable and in any event not later than 3 days after the date of cessation.

(h) In order to provide the means for enforcement of the preceding article 57(g) concerning the obligation of a member or former member to resign his/her parliamentary seat, and as a condition precedent to selection as a New Zealand First parliamentary candidate, and in consideration of selection as such, every member who agrees to become a candidate, and every member who stands as a candidate, and every member who is elected as a New Zealand First list member of parliament or as a New Zealand First constituency member of parliament, before being selected as a candidate, before standing as a candidate, before election as a New Zealand First member of parliament, and before accepting his/her seat in parliament and before being sworn in as such, and at any other time when required by the Board to do so whether before or after election and whether before or after being sworn in as a member of parliament, shall agree to give and shall sign a written undertaking, intended to be a legally enforceable contract (the resignation obligation contract) , under which he/she agrees to uphold observe and perform all of the provisions of this article 57 of this constitution and its amendments, and in particular to a fundamental term of the contract which will be the essence of  the contract, and which will impose a liability for liquidated damages in the sum of $300,000 (three hundred thousand dollars) for any breach of article 57(g) of this constitution and its amendments, concerning the obligation of a member or former member to resign his/her parliamentary seat, if he/she ceases by any means and for any reason and in any circumstances whatsoever to be a member of the Parliamentary Division during the term for which he/she has been elected. The Board may however compromise the amount of liquidated damages payable or waive the imposition of liability for liquidated damages in its sole and unfettered discretion without having to have any reason for doing so, without having to give any reason for doing so, and without being under a any obligation to do so or to consider fairness, natural justice, or any other consideration whatsoever;
and the Board shall not enforce the resignation obligation contract under this article 57(h) at any time that legislation exists which requires or determines that a member of Parliament to resign or relinquish his/her parliamentary seat upon the grounds contained in or similar to those specified in article 57(g).

NZ First  Party rules:  nz_first_constitution_nov_2013.pdf

Law professor Andrew Geddis takes it apart: I’m right, Winston’s not, so there

The $300,000 figure here clearly is designed to present an MP who leaves NZ First with Hobson’s choice. Either quit as an MP, or face ruinous financial consequences. And because the rule has this effect – it is designed to force an MP from Parliament – I don’t think it will be enforceable in court. And a rule of this nature only has teeth if there is a court that is prepared to, as a matter of law, make someone actually pay up the penalty figure.