In the courts

Directors take note thinking you are acting in good faith and in the best interests of the company may not be enough
Two recent High Court decisions provide guidance on the statutory duty of directors to act in good faith and in the best interests of the company, including consideration of whether that duty should extend to contingent creditors.

High Court finds a vendor liable as a party to a breach of the Commerce Act in a M&A transaction
This judgment has materially increased the risks for a vendor in adopting an "it's the buyer's problem, not mine" approach to the competition law aspects of merger and acquisitions.

Practical lessons from an English Court of Appeal case on using outside experts in due diligence exercises
Although this decision turned on the specific wording used in a sale and purchase agreement, it provides a good example of the risks for a purchaser accepting widely drafted general disclosures against warranties given by a vendor.

Tesco case highlights the peril of using words in a domain name similar to trade marks
A successful claim by the English hypermarket and online shopping store, Tesco, against defendants who had registered various internet domain names incorporating the word "tesco" illustrates how the use of domain names that are similar to trade marks of another business could constitute trade mark infringement.

Liquidator not a third party for the purposes of the PPSA
A liquidator has been held to be an agent of the debtor company and not a third party, meaning that an unsigned retention of title document can be enforceable against a liquidator if it creates a security interest, even though it does not meet the requirements of the Personal Property Securities Act.

Electronic funds transfer good payment
The Court of Appeal has determined that a payment by electronic funds transfer is equivalent to payment by bank cheque.

Debate continues over eight year vs one year notice period in contractual dispute
The Supreme Court has granted leave to appeal aspects of the decision in Paper Reclaim Limited v Aotearoa International Limited.

Substantial fines for failing to file financial statements at the Companies Office
A recent case illustrates how one offence can become a substantial fine when applied against all the directors of a company.

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.