JOHNSON V SNEYD HC WN CIV-2004-435-84

JOHNSON V SNEYD HC WN CIV-2004-435-84

The Court found forgery of the plaintiff's signature and unauthorised payments proved to the requisite high standard, concluding the defendant acted in bad faith and self-interest such that the company's affairs were conducted oppressively and unfairly prejudicially under s174, and that the just and equitable remedy was to order the defendant to sell his shareholding to the plaintiff at fair market value with consequential removal as director; disqualification under s383 was unnecessary given relief under s174.

Citation
openlaw-f7ff1143_9d5b_472a_bae7_ba68c69a25e2.pdf
Parties
Plaintiff: Lance Edward Johnson; Defendant: Paul Robert Sneyd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
7 December 2005
Procedural Posture
Company/shareholder Oppression (companies Act S174) / Judgment
Outcome
Order that defendant sell his shareholding to plaintiff at fair market value assessed by a chartered accountant within three months; defendant removed as director effective on date of judgment; no order as to costs; leave to apply for further directions if sale not completed within timeframe.
Legal Topics
Oppression Under S174, Director Disqualification S383, Forgery, Misappropriation of Company Funds, Buyout Remedy
Company Law Directors' Duties Shareholder Remedies Criminal Law (forgery and Misappropriation) Oppression Under S174 Director Disqualification S383 Forgery Misappropriation of Company Funds +1 more

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Parties

Lance Edward Johnson

Plaintiff

Paul Robert Sneyd

Defendant

Procedural Posture

Company/shareholder Oppression (companies Act S174) / Judgment

Legal Issues

  1. 1 Whether defendant's conduct amounted to oppressive, unfairly discriminatory or unfairly prejudicial conduct under s174
  2. 2 Whether defendant forged the plaintiff's signature on finance documents
  3. 3 Whether defendant made unauthorised payments/misappropriations of company funds

Ratio Decidendi

The Court found forgery of the plaintiff's signature and unauthorised payments proved to the requisite high standard, concluding the defendant acted in bad faith and self-interest such that the company's affairs were conducted oppressively and unfairly prejudicially under s174, and that the just and equitable remedy was to order the defendant to sell his shareholding to the plaintiff at fair market value with consequential removal as director; disqualification under s383 was unnecessary given relief under s174.

Court Disposition

Order that defendant sell his shareholding to plaintiff at fair market value assessed by a chartered accountant within three months; defendant removed as director effective on date of judgment; no order as to costs; leave to apply for further directions if sale not completed within timeframe.

Orders

  • Defendant to sell his shareholding in Printcraft 81 Ltd to the plaintiff at fair market value to be assessed by a chartered accountant and sale to be completed within three months of judgment
  • If parties cannot achieve sale within three months they have leave to apply to the Court for further directions as to implementation