Package includes:

On Demand Module  l  Electronic booklet  l  PowerPoint Presentation

Package Fee (incl GST)

• $185 - NZLS members and Associate members
• $240 - Non-members

Note: Access to the online files is via your "My CPD" page. If you would like to purchase multiple packages, please contact us here.

On Demand Module

Practitioners in firms of all sizes who are advising companies of all types need to ensure that they remain abreast of current legal issues and developments in company law and what they mean on a practical level for their clients. This module will consider key recent case law on directors’ duties, shareholder claims and company contracting.

Topics covered will include:

• Directors’ duties in an insolvency context after the United Kingdom Supreme Court (UKSC) decision in Sequana and New Zealand Supreme Court decision in Mainzeal
• How the duty to act in the best interests of the company will apply in New Zealand after Sequana and the addition of s 131(5) (in force since 4 August 2023)
• The impact on company contracts of a breach of the duty to act in the best interests of the company
• Recent case law developments in relation to shareholder oppression
• Recent case law developments in relation to company contracting
• “Piercing” the corporate veil and the UKSC decision in Rossendale
• Reckless trading liability after Mainzeal.

Learning objectives

By completing this module you will be up-to-date on current issues in directors’ liability, company contracting and shareholder disputes.

Electronic paper 

Authors: John Land, Peter Watts KC FRSNZ
Published: 29 February 2024
Pages: 45

Introduction

Lady Arden described the decision in Sequana as a “momentous” decision for company law.

But is it momentous for New Zealand company law, and how should it be applied in New Zealand?

The UK Supreme Court in Sequana confirmed that where a company is insolvent or is faced with imminent insolvency, the directors’ duty to act in the best interests of the company requires directors to take into account the interests of creditors. In doing so the UK Supreme Court followed a line of authority that started (at least in the UK) with West Mercia Safetywear Ltd (in liq) v Dodd in 1988.

It is first useful to understand the status of the s 131 duty as a fiduciary duty, and the remedial consequences of that.

A breach of fiduciary duty has important remedial consequences. It gives rise to a number of equitable remedies that are not normally available for breach of an ordinary contractual or tortious obligation. That in itself is a reason for restraint in expanding the situations which attract fiduciary obligations.

Merely taking a risk when a company’s solvency is doubtful might be considered reckless trading (in potential breach of ss 135 and 136 of the Companies Act) and might be negligent (in potential breach of s 137 of the Companies Act) but it is not disloyal. In the absence of true disloyalty, the draconian remedies that only apply on a breach of fiduciary duty should not apply.

PowerPoint Presentation

These are the slides included in the presentation.