New Zealand Case Law: Decisions & Judgments | LexChat

New Zealand Case Law

Derivative action (s165 companies act 1993)

  • 12 Apr 2019

    BOOTH v POPLAR ROAD FARMS LIMITED [2019] NZHC 807

    Citation
    [2019] NZHC 807
    Court
    High Court

    The plaintiff proved the requisite common continuing intention that the deed record the residuary purchase-price debt owed to Ray Booth, that both parties relied on the accountant's calculation which was mistaken, and independent expert evidence established the true amount; accordingly the deed of debt was rectified to record $1,579,134.94 and a declaration was granted that PRF owes that sum on the deed's terms.

    • Rectification
    • Deed of debt
    • Mistake
    • Admissibility of evidence from related proceedings
    • Derivative action (s165 companies act 1993)
    • Costs

  • 10 Mar 2015

    NOBILO v NOBILO CA198/2014 [2015] NZCA 54

    Citation
    [2015] NZAR 450
    Court
    Court of Appeal

    Although the alleged breach of fiduciary duty was arguable, leave was refused because a prudent businessperson would not commence litigation where likely recoverable losses are modest and uncertain (estimated $70,000–$130,000 per year, realistically limited by the company's imminent collapse), litigation costs would likely exceed $50,000, the company had taken no action, and practical considerations including overlapping beneficiary interests of the controlling trust and family/family court processes made the action not in the company's interests.

    • Derivative action (s165 companies act 1993)
    • Breach of fiduciary duty by director
    • Leave to sue on behalf of company
    • Jurisdictional overlap with family court
    • Costs-benefit analysis in derivative claims

  • 17 Jun 2014

    NOBILO v NOBILO CA198/2014 [2014] NZCA 250

    Citation
    [2014] NZCA 250
    Court
    Court of Appeal

    Because the notice of appeal arrived one working day late through no fault of the appellant, caused no prejudice to the respondent and the interests of justice require permitting the appeal, the Court grants an extension of time under r 29A and directs the appellant to progress the appeal expeditiously.

    • Derivative action (s165 companies act 1993)
    • Extension of time (r 29a court of appeal (civil) rules 2005)
    • Prejudice and merits of appeal
    • Procedural discretion

  • 29 Nov 2013

    WANG PEI YU v WHITFORD PROPERTIES LTD [2013] NZHC 3162

    Citation
    [2013] NZHC 3162
    Court
    High Court

    The notices of opposition filed on 25 October and 15 November 2013 were struck out because they were filed without proper authority of the company; a sole director does not have authority to represent the company in litigation in the absence of a board resolution or other lawful delegation, and the appropriate remedy is for the interested director to seek leave under s165 to act on the company's behalf and for the derivative action and substantive caveat application to be heard together.

    • Director authority to bind company
    • Derivative action (s165 companies act 1993)
    • Caveat maintenance
    • Resulting trust
    • Overseas investment act 2005

  • 2 Mar 2012

    GREYMOUTH HOLDINGS LIMITED V JET TRUSTEES LIMITED HC AK CIV-2011-404-5309

    Citation
    openlaw-b4d7daae_ea52_405f_aba3_c6872649b8c3.pdf
    Court
    High Court

    Leave to appeal was declined because the issues raised did not disclose questions of law or public importance warranting appeal, the High Court correctly applied the established "prudent business person" test across the s165 factors, the derivative claim was not merely duplicative of the s174 shareholder claim and s165 is workable in deadlock situations where the company cannot act so formal notice under s165(5) may be understood in context.

    • Derivative action (s165 companies act 1993)
    • Unfair prejudice/shareholder oppression (s174)
    • Directors' duties
    • Leave to appeal from commercial list interlocutory orders
    • Deadlock in corporate decision-making