In the courts

Supreme Court saves mobile phone company from refunding millions of dollars to customers
The Supreme Court has set aside an order made by the Court of Appeal requiring Telecom Mobile to inform its customers that they may be entitled to refunds for phones purchased through a telemarketing campaign involving breaches of the Door to Door Sales Act and the Fair Trading Act.

High Court awards record penalties for cartel behaviour and price fixing
The High Court has awarded record penalties after companies admitted participating in a cartel in the wood preservative chemicals industry between 1998 and 2002. The $3.6 million dollar penalty is more than double the previous highest penalty for cartel behaviour in New Zealand.

The days of sleeping directors are long gone: a wake-up call
Two recent cases involving insolvency matters highlight the fact that directors can not escape liability for inaction. In a High Court case, the court indicated that if a person is listed as a director of a company they will be deemed to be managing the company whether or not in practice they are carrying out this role. In another case, the Court of Appeal notes that "directors must take reasonable steps to put themselves in a position not only to guide but to monitor the management of a company."

When is a scheme of arrangement not caught by the takeover provisions?
The New Zealand Takeovers Panel's recent indication that it is going to take a more active role in schemes of arrangement before the High Court makes the facts of this Australian case particularly relevant. Here, the Court was satisfied that the complexity of the arrangement removed any suggestion that the arrangement had been proposed for the purpose of avoiding the takeover provisions.

A reminder that acquisition of a business does not mean all the business' contracts go with it
An Australian Federal Court case illustrates the difficulties associated with assigning rights of existing business contracts to the new owners. Here we are reminded that some terms of contracts are incapable of assignment because they are "personal" to the original contracting party.

The Court of Appeal indicates that exemplary damages will not be available for breach of contracts and one-year notice of termination would constitute reasonable notice in appropriate circumstances.
A contractual dispute in the wastepaper field has raised some interesting legal issues for the Court of Appeal.

First conviction under overseas investment regime
A United States businessman has become the first overseas investor to be convicted under New Zealand's overseas investment regime. The conviction results from closer monitoring by the Overseas Investment Office of foreign investors' compliance with the Overseas Investment Act and more convictions could follow.

The Da Vinci Code strikes again
The judgement clearing the author, Dan Brown, from copyright infringement in his successful novel "The Da Vinci Code", has been published with an odd series of italicisations and marked letters. It would seem that weeks of immersion in the thriller's plot has led to the judge coming up with a code of his own.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Diane Graham or call her on 64 9 916 8849.