New Zealand Case Law: Decisions & Judgments | LexChat

New Zealand Case Law

Prudent business person test

  • 2 Oct 2023

    ROE v WELLINGTON COMBINED TAXIS LIMITED [2023] NZHC 2756

    Citation
    [2023] NZHC 2756
    Court
    High Court

    Leave to bring derivative proceedings granted because threshold s165(3)(a) satisfied (WCT does not intend to litigate), the proposed causes of action (breaches of ss117,134,131,133,137) are arguable on the evidence, the cost/benefit analysis favors pursuit (foregone revenue and other corporate harm outweigh litigation costs), and it is in WCT's interests to have the claims determined; accordingly applicants authorized to conduct proceedings and WCT ordered to meet reasonable costs.

    • Companies act 1993 s165 leave test
    • Alteration of shareholder rights s117
    • Directors' statutory duties s131 s133 s137
    • Costs order s166
    • Prudent business person test

  • 28 Feb 2013

    N M TOBIN ORTHODONTICS LIMITED V SADIE TOBIN HC PMN CIV 2012-454-000440

    Citation
    openlaw-65670860_e9fc_4d1a_ab11_ba25e7cb3dad.pdf
    Court
    High Court

    Applying the factors in s165(2) and the prudent business person test, the Court exercised its discretion to grant leave because, on the facts presented, a prudent business person would bring the claim in the name of the companies; the applicant will fund the proceedings initially.

    • Derivative action
    • S165 companies act 1993
    • Prudent business person test
    • Relationship property impact on corporate claims