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This book is only available in PDF format

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.

Content outline

  • Part one: Sources of director liability
  • Part two: Recent Supreme Court decisions: Debut Homes and Mainzeal
  • Part three: Key themes for directors
  • Schedule: At a glance: directors' duties arising from the Companies Act 1993
View contents page
BLACKMORE Josh JEMSON Tom  
Josh Blackmore
Chapman Tripp
Wellington		 Tom Jemson
Chapman Tripp
Wellington		  

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