HLH EQUITY TRADING LIMITED AND ORS V LESLIE RAYMOND WHITE AND ORS HC TAU CIV-2009-470-40

HLH EQUITY TRADING LIMITED AND ORS V LESLIE RAYMOND WHITE AND ORS HC TAU CIV-2009-470-40

The investments were securities offered to the public and, absent a registered prospectus, the allotments were void under s37(4); directors of the issuer are liable under s37(6) where subscriptions cannot be repaid; Ms Arabella was a director of Progressive Concepts Limited and liable for Henderson and Timaru...

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Citation
openlaw-8c501ccd_448f_45a7_a994_474b7480760d.pdf
Parties
First Plaintiff: HLH Equity Trading Limited; Second Plaintiff: The Good Works Company Limited; Third Plaintiff: Elizabeth Marie van den Berg; Fourth Plaintiffs: Theo Bosch and Theresa Bosch; Fifth Plaintiff: Elizabeth Schubert; Sixth Plaintiff: Sharon Yvonne Adams; First Defendant: Leslie Raymond White; Second Defendant: Janine Arabella (prev White); Third Defendant: Progressive Concepts Limited (in liquidation); Fourth Defendant: Gisborne Sunrise Apartment Trustee Limited (in liquidation)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
19 May 2010
Procedural Posture
Civil Securities (securities Act 1978) / Judgment Following Trial
Outcome
Judgment entered for plaintiffs in respect of investments in the Henderson and Timaru projects; judgment entered for defendant Janine Arabella in respect of Gisborne project claims.
Legal Topics
Prospectus Requirements, Void Irregular Allotments S37, De Facto Director, Director Liability, Proviso to S37(6)
Securities Law Company Law Civil Litigation Prospectus Requirements Void Irregular Allotments S37 De Facto Director Director Liability Proviso to S37(6)

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Parties

HLH Equity Trading Limited

First Plaintiff

The Good Works Company Limited

Second Plaintiff

Elizabeth Marie van den Berg

Third Plaintiff

Theo Bosch and Theresa Bosch

Fourth Plaintiffs

Elizabeth Schubert

Fifth Plaintiff

Sharon Yvonne Adams

Sixth Plaintiff

Leslie Raymond White

First Defendant

Janine Arabella (prev White)

Second Defendant

Progressive Concepts Limited (in liquidation)

Third Defendant

Gisborne Sunrise Apartment Trustee Limited (in liquidation)

Fourth Defendant

Procedural Posture

Civil Securities (securities Act 1978) / Judgment Following Trial

Legal Issues

  1. 1 Whether the investments were 'securities' under the Securities Act 1978
  2. 2 Whether the offers were offers to the public
  3. 3 Whether non-compliance with prospectus requirements rendered allotments void under s37(4)

Ratio Decidendi

The investments were securities offered to the public and, absent a registered prospectus, the allotments were void under s37(4); directors of the issuer are liable under s37(6) where subscriptions cannot be repaid; Ms Arabella was a director of Progressive Concepts Limited and liable for Henderson and Timaru investments and failed to discharge the onus under the proviso to s37(6) (no negligence), but she was not a de facto director of Gisborne Sunrise Apartment Trustee Limited and so not liable for Gisborne investors.

Court Disposition

Judgment entered for plaintiffs in respect of investments in the Henderson and Timaru projects; judgment entered for defendant Janine Arabella in respect of Gisborne project claims.

Orders

  • Judgment for plaintiffs who invested in Henderson and Timaru for repayment of sums invested with interest at the rate provided in the Act and Regulations
  • Judgment for defendant Janine Arabella dismissing claims by plaintiffs who invested in the Gisborne project