NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
under the Companies Act or the company’s con - stitution. In any of the above-mentioned proceedings, the court may appoint a shareholder to represent all other shareholders where the shareholders have the same or substantially the same inter- est (Section 173). The purpose of this provision is to avoid numerous proceedings in which the dispute in each case is essentially the same. A present or former shareholder (or any other person on whom the constitution confers the rights of a shareholder) is also entitled to take action against the company in situations where the shareholder or person considers that the “affairs of the company” have been or are being or are likely to be conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial to them in that capacity or in any other capacity (Section 174). The reference to conduct of the “affairs” of a company has been interpreted broadly, encompassing any conduct that generally concerns the company. Howev - er, this does not include actions of directors or shareholders in a purely personal capacity (Van der Fluit v O’Neill [2021] NZHC 1651). Non-com - pliance by the company or directors with speci - fied provisions of the Companies Act is deemed to be conduct of that kind, as is the provision of a certificate by a director without reasonable grounds for an opinion set out in that certificate. (Directors are required to certify prescribed mat - ters in respect of decisions to, for example, issue shares or pay dividends or other distributions or so that the company can acquire its own shares.) The court may grant a wide range of remedies in response to a successful application under this provision. What constitutes oppressive, unfairly discrimina - tory and unfairly prejudicial conduct was con -
sidered by the Court of Appeal in Thomas v HW Thomas Limited [1984] 1 NZLR 686 at [694]. It was said in this case that the three terms were not to be read as distinct but, rather, as over - lapping terms that help to explain one another. The Court of Appeal in Latimer Holdings Lim - ited v Sea Holdings NZ Limited [2005] 2 NZLR 328 at [138] further elaborated that “unfairness requires a visible departure from the standard of fair dealing, assessed in light of the history and structure of the company and the expectations of its members” . In Wilding v Te Mania Livestock [2017] NZHC 717, the High Court held that: • conduct need not be unlawful to be oppres - sive; • the inquiry concerns the effect of the con - duct, not the intention of the parties; • the “just and equitable” aspect means plain - tiffs should not have acted wrongly; and • remedies afforded under the section should be designed to best advantage shareholders as a whole. A fairly calculated buyout offer made by the other parties involved may be viewed as curing unfair or prejudicial conduct (Birchfield v Birch - field Holdings Ltd [2021] NZCA 428). Company Enforcement The company may bring an action against one or more of its directors or former directors for breach of a duty owed by that director to the company. As the business and affairs of the company must be managed by – or under the direction or supervision of – its board, it falls to the board to decide whether such an action should be brought. If the directors do not resolve to do so (eg, if the majority of the board was complicit in the breach), a shareholder or direc -
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