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Directors' duties and insolvency
The Supreme Court's decision in Madsen-Ries v Cooper  NZSC 100 provides timely clarity about the duties of directors when a company is approaching insolvency. In dealing with the economic fallout of COVID-19, many directors will unfortunately be required to assess their company's financial position and whether to implement informal or formal mechanisms to address insolvency concerns. The detail of this case will require careful consideration, including the degree to which creditors must be considered and consulted if a compromise is necessary to salvage the company.
Court oversight of unfairness in insolvencies
Lehman Bros Australia Ltd (in liq) v MacNamara  EWCA Civ 321,  3 WLR 147 (CA) contains a comprehensive discussion of situations where the UK courts have been prepared to intervene on the grounds of unfairness in an insolvency context. The Court of Appeal overturned the High Court, finding it unfair for the administrators to rely on a full and final settlement contract when there had been a mistake in calculating the settlement amount.
In-house legal advice privilege
- 5 propositions
Corporates often assume that internal emails will not be discoverable if one of the recipients is an in-house lawyer. Such a generalisation is unsafe. In Civil Aviation Authority v R (Jet2.Com Limited)  EWCA Civ 35,  2 WLR 1215 the English Court of Appeal considered 5 propositions about in-house legal advice privilege. Given that two are controversial [as discussed here], this case may be influential if the issues are examined in New Zealand.
Fraud, bank liability and attribution
The UK Supreme Court's decision in Singularis Holdings Ltd v Daiwa Capital Markets Ltd illustrates severe liability consequences for banks that carry out payment instructions when there are warning signs of fraud or misappropriation. The Court reiterated that the availability of attribution as a defence depends on the context and purpose, even for a sole shareholder/director company.
Vodafone v Ofcom - Restitution for unlawfully set charges
In Vodafone Ltd v Office of Communications  EWCA Civ 183,  QB 857,  2 WLR 1108 the Court of Appeal in England upheld the High Court's order by way of restitution of £218 million (plus interest), following the quashing of 2015 regulations that set new fees for spectrum licences. Like the High Court, it rejected an argument that the court could assess what charges would have been set had Ofcom acted lawfully. Rather, in a Woolwich restitution claim, the legality principle means that a court cannot hypothesise different secondary legislation.
Conflict of laws - Gray v Hurley: Battle of jurisdictions
The jurisdictional battle in Gray v Hurley has now been referred to the European Court of Justice: see Gray v Hurley  EWCA Civ 2222. The decisions to date illustrate the complexities of determining an appropriate forum. When two different jurisdictions are grappling with that issue, parallel proceedings are undesirable but may be unavoidable.
Insolvency - Trading trusts and statutory priorities
The High Court of Australia has released its decision in Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth  HCA 20 (concerning Amerind Pty Ltd, "Amerind"). This clarifies the priority position for distributing assets of an insolvent trading trust.
Conflict of laws - submission, agency and protests
Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV  EWCA Civ 10,  1 WLR 3398: Court of Appeal (UK) considers the evidential threshold to be met in a protest about whether the defendants were bound, as undisclosed principals, by a submission to jurisdiction clause.
Contract - penalties
127 Hobson Street Ltd v Honey Bees Preschool Ltd  NZSC 53: Supreme Court confirms New Zealand's modern approach to the penalties doctrine in contract law, based on a proportionality test. However, it did not see a cross-check about punitive purpose as being necessary or desirable.
Intellectual Property - user principle
The New Zealand National Party v Eight Mile Style, LLC  NZCA 596: Court of Appeal clarifies the "user principle" for assessing damages in intellectual property cases.
Contract - NOM clauses
Rock Advertising Ltd v MWB Business Exchange Centres Ltd  UKSC 24,  AC 119,  2 WLR 1603: Supreme Court (UK) gives effect to "no oral modification" clause, so an oral agreement to vary was inoperative.
Contract - negotiating damages
One Step (Support) Ltd v Morris-Garner  UKSC 20,  2 WLR 1353,  3 All ER 659: Analysis by the Supreme Court (UK) of when "negotiating damages" (Wrotham Park damages) are available.
Conflict of Laws - territorial reach of statutes
Brown v New Zealand Basing Limited  NZSC 139,  1 NZLR 245: Supreme Court adopts a sui genesis statutory interpretation approach to the jurisdictional reach of employment law, rather than a traditional conflict of laws analysis.
© Copyright Laura O'Gorman