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Full & Final Settlement is Full & Final

In November 2016, Steve and Maria purchased land in the central North Island, intending to build their family home there shortly afterwards.  They paid a deposit of $5,000 to secure the purchase and intended to pay the balance of $75,000 using funds from Steve’s superannuation fund and a loan from the bank.

In December 2016, Steve and Maria’s lawyer applied to the superannuation fund’s trustees for a full withdrawal from their fund.

Steve’s application was successful, and he received $118,052.40.

Trustees discovers their error

In early 2017 the trustees discovered they had made an error and said that their staff had wrongly approved the release of funds over and above the purchase price of the land.  They should have only released $27,000 (the difference between the purchase price, the deposit, and the loan of $48,000 already obtained) and requested the excess funds be returned, as was required by the trust deed.

Steve and Maria acknowledged that they needed to return some of the funds, but were reluctant to do so.

Complaint referred to FSCL

In February 2017, Steve and Maria complained about the trustee to FSCL.  However, as the trustee had not had the opportunity to resolve the complaint directly with Steve and Maria, we referred the complaint to the trustees’ internal complaints process.

The trustees investigated the complaint and told Steve and Maria that they had to repay $91,052.40, the difference between the amount erroneously released less the amount of $27,000 which should have been used to complete the purchase of the land.

Lawyer gets involved

Upon receiving the trustees’ response, Steve and Maria went to their lawyer, who emailed the trustee asking them to make an exception and to allow Steve and Maria to keep the total released funds.


Shortly after, the trustees replied to the lawyer offering a full and final settlement of all matters.  They offered Steve and Maria $80,000 towards the purchase of the land, with the surplus monies of approximately $38,000 to be repaid immediately.

Steve and Maria then paid the trustees $38,000 and the trustees wrote to Steve and Maria acknowledging that the matter had been satisfactorily resolved by way of the agreement reached through the lawyer.

FSCL’s review

Steve and Maria came back to FSCL explaining that they were under the impression that if the money was not returned, there would be no further discussion as to what they could or could not keep.  They did not know returning the $38,000 was a full and final settlement. Steve and Maria were still troubled by the wrong advice the trustees had given them about being able to use all of Steve’s fund for their home build, which had seriously inconvenienced them, and meant they were now short on funds to complete the new home build.

However, we were concerned that Steve and Maria’s apparent acceptance of the trustees’ full and final settlement offer may have put the complaint outside our terms of reference, as we cannot investigate complaints where the complainant has already accepted a final proposal for resolution of the complaint.


Once Steve and Maria engaged a lawyer, the trustees were entitled to communicate with the lawyer.  We agreed with the trustees that the lawyer should have explained the terms of the trustees’ offer.  When $38,000 was transferred without any conditions from the lawyer, it was reasonable for the trustees to understand the return of the funds was in full and final resolution of the complaint.

Unfortunately, we had to find that Steve and Maria’s complaint fell outside our terms of reference because they had accepted a resolution in full and final settlement of their complaint. 


FSCL can only investigate complaints that fall within our terms of reference. Before we begin an investigation, we must give the party complained about the opportunity to respond to the complaint and be satisfied that ‘deadlock’ has been reached. It was unfortunate that Steve and Maria’s lawyer did not refer the complaint back to FSCL before agreeing to a full and final settlement.