Back in January, IRD arrested Ngatokotoru Puna at Auckland Airport for supposedly failing to meet his student loan repayment obligations, then extorted $5,000 from him to be allowed to return to his family. Now, it looks like that is turning into an expensive mistake:
Mr Puna lives and works in the Cook Islands. The Cook Islands along with Niue and Tokelau are dependent territories. This means that those who are citizens of these countries are also citizens of New Zealand, and that MrPuna was never an overseas based borrower to start with.
IRD have belatedly acknowledged this – his alleged $120,000 loan was reduced to $30,000, now further less the $5000 he was forced to borrow from his family in order to be released from his imprisonment at the airport.
Higgins is appalled at the complete lack of due diligence in this case “If MrPuna was living within New Zealand territory why was he being charged interest? This is a massive failing from IRD. They have failed to do their job properly.”
"It's clear that MrPuna was not an Overseas-Based Borrower, it's not clear that he had not actually met his full obligation under the student loan scheme since New Zealand-based borrowers pay through the PAYE scheme. He may in fact have been arrested despite not being in default at all – even ignoring that IRD were sending reminder letters to an incorrect address."
Which looks like a pretty solid case for violation of freedom of movement and the right to liberty. I wonder how much that will cost IRD? But sadly, given the way this usually works, the incompetent staff who made this mistake will face no sanctions whatsoever, despite being responsible for a false arrest, $90,000 of student loan writedowns, and yet-to-be determined legal costs.
And OTOH, IRD won't care, because they've apparently gained an extra $7 million in repayments since the arrest as fearful borrowers pony up to avoid the same fate. Which looks an awful lot like proceeds of crime from where I'm standing...