BIAN v ELIM PROPERTIES LTD [2021] NZHC 3302

BIAN v ELIM PROPERTIES LTD [2021] NZHC 3302

There is a serious question to be tried on the applicant's s 174 claim, but the balance of convenience strongly favours the respondents because an interim injunction would likely cause significant prejudice to the company by preventing urgent capital-raising and the court can provide effective remedial relief at trial (including buy-out or compensation), so damages are an adequate and practicable remedy; accordingly the interim injunction is refused.

Citation
[2021] NZHC 3302
Parties
Plaintiff/applicant: QIANGZHONG BIAN; First Respondent/first Defendant: ELIM PROPERTIES LIMITED; Second Respondent/second Defendant: YANG ZHANG; Third Respondent/third Defendant: ZUOMING JIANG
Court
High Court
Jurisdiction
New Zealand
Judgment Date
3 December 2021
Procedural Posture
Proceeding Under S 174 Companies Act 1993 (oppressive Conduct/unfairly Prejudicial Conduct) / Interlocutory Application for an Interim Injunction (part 18 High Court Rules)
Outcome
Application for interim injunction refused
Legal Topics
Shareholder Oppression, Share Dilution, Assignment and Set Off, Capital Raising, Adequacy of Damages, Balance of Convenience
Company Law Civil Procedure Injunctions Equity Shareholder Oppression Share Dilution Assignment and Set Off Capital Raising +2 more

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Parties

QIANGZHONG BIAN

Plaintiff/applicant

ELIM PROPERTIES LIMITED

First Respondent/first Defendant

YANG ZHANG

Second Respondent/second Defendant

ZUOMING JIANG

Third Respondent/third Defendant

Procedural Posture

Proceeding Under S 174 Companies Act 1993 (oppressive Conduct/unfairly Prejudicial Conduct) / Interlocutory Application for an Interim Injunction (part 18 High Court Rules)

Legal Issues

  1. 1 Whether there is a serious question to be tried under s 174 Companies Act 1993
  2. 2 Whether assignment of debt and subsequent share offer/set-off amounted to oppressive, unfairly discriminatory or unfairly prejudicial conduct
  3. 3 Whether damages would be an adequate remedy

Ratio Decidendi

There is a serious question to be tried on the applicant's s 174 claim, but the balance of convenience strongly favours the respondents because an interim injunction would likely cause significant prejudice to the company by preventing urgent capital-raising and the court can provide effective remedial relief at trial (including buy-out or compensation), so damages are an adequate and practicable remedy; accordingly the interim injunction is refused.

Court Disposition

Application for interim injunction refused

Orders

  • Application for interim injunction refused
  • Question of costs adjourned to the trial Judge