PRESLEY V CALLPLUS LTD HC AK CIV 2007-404-4098

PRESLEY V CALLPLUS LTD HC AK CIV 2007-404-4098

Leave under s165 granted because on the evidence the derivative claim is strongly arguable, the matter is strategically important to the company, likely litigation costs are modest relative to CallPlus' size, and the existing commercial alternative (Option Deed and draft licences) is an inadequate substitute; accordingly a prudent business person would pursue the claim and the applicant is authorised to control the litigation and the company must meet reasonable costs.

Citation
openlaw-c70500eb_0102_463a_8c82_420607e2fb01.pdf
Parties
Applicant (shareholder/director): Annette Sylvia Presley; Respondent (company): CallPlus Limited; Defendant (director/shareholder): Malcolm Stuart Dick; Defendant (director/shareholder/ceo): Martin Edward Wylie; Defendant (shareholder): Mark John Callander; Defendant (shareholder/trustee): Adrian Jeffrey Dick; Defendant (shareholder): Geoffrey Peter Phillip Crone; Defendant (company): 2Talk Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 November 2007
Procedural Posture
Derivative Action Under S165 Companies Act 1993 / Application for Leave to Bring Derivative Proceedings (high Court Leave Hearing)
Outcome
Leave granted to applicant to bring derivative proceedings on behalf of CallPlus; applicant authorised to control proceedings; CallPlus to meet reasonable costs of intended proceedings; confidentiality orders (interim) made; further procedural directions issued.
Legal Topics
Derivative Action, Breach of Fiduciary Duty, Conflict of Interest, Account of Profits, Injunctions, Costs Allocation, Section 165 Companies Act 1993, Confidentiality Orders Under Evidence Act 2006
Companies Law Directors' Duties Equity Confidentiality Law Derivative Action Breach of Fiduciary Duty Conflict of Interest Account of Profits +4 more

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Parties

Annette Sylvia Presley

Applicant (shareholder/director)

CallPlus Limited

Respondent (company)

Malcolm Stuart Dick

Defendant (director/shareholder)

Martin Edward Wylie

Defendant (director/shareholder/ceo)

Mark John Callander

Defendant (shareholder)

Adrian Jeffrey Dick

Defendant (shareholder/trustee)

Geoffrey Peter Phillip Crone

Defendant (shareholder)

2Talk Ltd

Defendant (company)

Procedural Posture

Derivative Action Under S165 Companies Act 1993 / Application for Leave to Bring Derivative Proceedings (high Court Leave Hearing)

Legal Issues

  1. 1 Whether leave under s165 should be granted to bring derivative proceedings on behalf of CallPlus
  2. 2 Whether Mr Dick and Mr Wylie breached fiduciary duties by diverting a corporate opportunity and using CallPlus assets, IP or employees to develop 2Talk
  3. 3 Whether 2Talk Ltd and its shareholders knowingly assisted breaches and hold assets on constructive trust for CallPlus

Ratio Decidendi

Leave under s165 granted because on the evidence the derivative claim is strongly arguable, the matter is strategically important to the company, likely litigation costs are modest relative to CallPlus' size, and the existing commercial alternative (Option Deed and draft licences) is an inadequate substitute; accordingly a prudent business person would pursue the claim and the applicant is authorised to control the litigation and the company must meet reasonable costs.

Court Disposition

Leave granted to applicant to bring derivative proceedings on behalf of CallPlus; applicant authorised to control proceedings; CallPlus to meet reasonable costs of intended proceedings; confidentiality orders (interim) made; further procedural directions issued.

Orders

  • Leave granted under s165 of the Companies Act 1993 for the applicant to bring proceedings in the name and on behalf of CallPlus Limited against Malcolm Stuart Dick, Martin Edward Wylie, Mark John Callander, Adrian Jeffrey Dick, Geoffrey Peter Phillip Crone and 2Talk Ltd, subject to settlement of the precise form of...
  • Order under s167 Companies Act 1993 authorising the applicant to control the conduct of the intended proceedings