G'day James. What part of Oz do you come from?
Spoke to the phone company today. Negotiated the bill down to $600 which I thought was not a bad outcome.
Next time they'll just buy a local pre paid sim card for the phone when they get to NZ. No more hassles.
eta: It's amazing the pitfalls you can fall into just because you don't know about them, and assume you're doing the right thing.