In the courts

Reckless trading - company directors found guilty
In two recent cases, the High Court has found company directors guilty of reckless trading.

"New Zealand Made" is not necessarily "made" in New Zealand
When marketing a product as "New Zealand Made" and deciding if the product merits such a label, where is the dividing line to be drawn amongst products not wholly manufactured and sourced in New Zealand, but that are substantially connected with New Zealand?

Possession is nine-tenths of the law: court finds that possession can override ownership
In the first decision under the Personal Property Securities Act, the High Court has found that a lessor of goods can lose ownership of those goods if a third party holding a registered security interest over the lessee's property enforces that security interest.
A summary of the timing and information requirements for registering security interests of lessors at the PPSR is set out at the end of this case summary.

Duty to take reasonable care to perform a contract
The Court of Appeal considered whether New Zealand law recognises a duty in tort to take reasonable care to perform a contract and decided that it does not.

What constitutes an "offer to the public" for the purposes of the Securities Act?
The court has rejected an argument that an offer of a debt security was not an offer to the public because the investors were all participants in a joint venture.

Change of trustees triggers pre-emptive rights
The High Court has decided that a change of shareholder trustees constituted a change in legal ownership of the shares, which triggered rights of pre-emption for other shareholders.

Pre-incorporation contracts, ratification and OIC consent
This case concerned a dispute about the cancellation of a contract, claimed by the plaintiff to have been justified on the basis that Overseas Investment Commission (OIC) consent was not obtained. The defendant argued that OIC consent was not required after a New Zealand incorporated company was nominated as purchaser.

Misuse of confidential information in a contractual context
The Court of Appeal has decided that "there is no legal or evidential onus on a person in possession of confidential information as a result of a contractual relationship to satisfy the court that it has not misused that confidential information".

When is a transaction not in the ordinary course of business?
The High Court at Hamilton has decided that because the relevant payment was only made by the company in response to the abnormal financial difficulties it found itself in, it was voidable on application of the liquidator and was ordered to be returned.

Court of Appeal confirms existence of tort of breach of privacy
In Hosking v Runting, a majority in the Court of Appeal has confirmed the existence of the tort of breach of privacy in New Zealand.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Rachel Gowing or call on 64 9 916 8825.