The settlement ends five years of legal action, with both sides suing the other, after financial allegations were made public in mid-2020 during final preparations for the 36th America’s Cup in Auckland.
Mayo and Calder used whistleblower provisions under the Protected Disclosures Act, to make allegations to the MBIE, which was managing the taxpayers’ $40 million contribution to the cup event, sparking a bitter rift between the team and the ministry.
The MBIE, unbeknownst to Team New Zealand, hired a forensic accountant to investigate ACE’s and the team’s finances, and considerable detail of the claims was published by local media giants NZME.
ACE went to the High Court in August 2020 and successfully blocked NZME from publishing the interim report by forensic accountants Beattie Varley, arguing that it pre-dated responses and information given by the team to the investigation.
At one point, the MBIE suspended progress payments toward the cup event costs, but in August, after more work by the forensic accountants, “found that there was no evidence of financial impropriety or misappropriation of funds”.
The allegations revealed that the team had lost $2.8 million after a payment meant for a European television contractor had ended up in a scam, paid to a bank account in Hungary.
ETNZ blamed that loss on the event contractor, and it formed a large part of a lawsuit against Mayo and Calder.
“Mayo and Calder Limited and Michael Choy acknowledge and accept that they failed to act with reasonable care in managing supplier bank account details and in transacting a payment that caused ACE to suffer a loss in excess of NZ$2,000,000,” the settlement statement said.
Mayo and Calder had counter-sued ETNZ and ACE after being sacked from the event in July 2020, claiming $1.15m and an unspecified sum for damage to their reputation and loss of future business.
As part of the settlement, “Mayo and Calder Limited accepted that ACE had good cause to terminate its contract with it, and to terminate the contract in the way, and on the basis, that it did”.
“As part of the settlement, Mayo and Calder Limited, Tom Mayo and Michael Choy have each agreed to pay a confidential sum of money to each ACE and ETNZ.”
Further, “Tom Mayo and Michael Choy unreservedly apologise to ACE, ETNZ, their teams and their officers for their conduct and for the harm that it caused”.
The settlement was agreed in March, before an expected hearing in the High Court but had not been made public until now.
Mayo and Calder had been running a high-profile event company whose work had included running stopovers for the Volvo Ocean race, before they were hired to join ACE in 2018.
One of the firm’s founders, Grant Calder, died following a heart attack in January 2023.
Team New Zealand successfully defended the America’s Cup in Auckland in 2021 and went on to achieve a third consecutive cup win in Barcelona in 2024. The 38th cup is to be staged in Naples, Italy in 2027.
This story was originally published at Newsroom.co.nz and is republished with permission.
