Directors' Liabilities 2025 - On Demand

Package includes:

On Demand Module  l  Electronic booklet  l  PowerPoint Presentation

Package Fee (incl GST)

• $149 - Law Society members and Associate members
• $215 - 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

How can directors execute their core role of adding value to shareholders’ investments while protecting themselves from potential personal liability (whether civil or criminal)? This module will consider some of the key issues in light of the rapidly evolving landscape in this area and enable you to provide your clients, whether directors, shareholders or insolvency practitioners, with practical advice.

The presentation will include an overview of:

• The current legal framework in relation to directors’ duties and potential liability
• The impact of recent Supreme Court decisions in Debut Homes and Mainzeal on director decision making and liability under the Companies Act 1993
• Anticipated legislative changes in relation to directors’ duties
• Key practical themes for directors when considering their role and how best to mitigate potential liability.

Learning objectives

By completing this module you will:

• Gain practical tips on how to advise clients around liability issues.
• Have an understanding of director indemnities and insurance, and their limitations.
• Be up to date with recent Court decisions and proposed legislative changes in this area.

Electronic paper 

Authors: Josh Blackmore, Tom Jemson
Published: 5 March 2025
Pages: 35

Introduction

Directors face a growing breadth and depth of potential personal liability. This booklet broadly (though non-exhaustively) canvases directors’ duties in New Zealand, associated civil and criminal liability, and the practical steps that can be taken to mitigate these risks.

This booklet has the following structure:

• Part one: an overview of the common sources of directors’ duties and liabilities in New Zealand:
– directors’ duties in the Companies Act 1993 (and at common law and equity, which continue to exist in parallel with these statutory duties); and
– a catalogue of other regularly encountered statutory duties and associated civil and criminal consequences.

• Part two: an analysis of the recent decisions of the Supreme Court in Madsen-Ries v Cooper (Debut Homes) and Yan v Mainzeal Property and Construction Limited (in liq) (Mainzeal) and the light they shed, and do not shed, on directors’ duties when trading in the “twilight zone” of near insolvency.

• Part three: key themes for directors emerging from the recent caselaw and statutory duties.

The key takeaway of this booklet is that, while in recent years the legislature and courts have taken an expansive approach to directors’ duties and liabilities, courts generally remain hesitant to exercise judgement with the benefit of hindsight where the director(s) has acted in good faith and has taken reasonable steps in the exercise of their duties.

It is also worth noting at the outset that the Minister of Justice has asked the Law Commission to undertake a review of directors’ duties and liabilities, which is scheduled to begin in the first half of 2025. This is a developing area of the law which requires ongoing and close observation.

PowerPoint Presentation

These are the slides included in the presentation.