Kirby v Tekplas Limited - [2025] NZHC 345

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-284

[2025] NZHC 345

UNDER

AND
the Companies Act 1993 and part 18 of the High Court Rules 2016

IN THE MATTER

of an application under section 174

BETWEEN

CORRENA FAY KIRBY

Plaintiff

AND

TEKPLAS LIMITED

First Defendant

IAN MCDOUGAL

Second Defendant

TONY SCHRAMM

Third Defendant

Hearing: 7 November 2024

Appearances:

DJ Cooper KC and HL Quinlan for the Plaintiff WC Pyke for the Defendants

Judgment:

13 March 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

(Leave to Appeal)

This judgment was delivered by me on 13 March 2025 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Anthony Harper, Auckland

KIRBY v TEKPLAS LIMITED [2025] NZHC 345 [13 March 2025]

Introduction

[1] The defendants have applied for leave to appeal my decision dated 9 August 2024 declining their application for summary judgment (Judgment).1

[2] The plaintiff, Correna Fay Kirby, is a former director and shareholder of the first defendant, Tekplas Limited (Tekplas). Ms Kirby has brought a claim pursuant to s 174 of the Companies Act 1993 alleging that both Tekplas and the remaining directors and shareholders, Messrs McDougal and Schramm, treated her oppressively and unfairly.

[3] Ms Kirby says that this included failing to comply with standards of good governance and denying her access to information to which she was entitled. In addition, Ms Kirby alleges Tekplas entered into a lease with a related party (as Mr Schramm has an interest in the lessor) on terms providing for above market rent. Ms Kirby pleads that this was a major transaction for Tekplas and was entered into without the required shareholder approval and without obtaining independent advice.

[4] The defendants applied for summary judgment on the grounds that Ms Kirby’s claim cannot succeed because:

(a)Tekplas is a trustee company that holds its assets and business on trust for the Tekplas trust (Trust) so the shares in Tekplas have no value; and

(b)Ms Kirby sold the entirety of her beneficial interest in Tekplas’ business for $4 million by deed executed on 3 February 2022 (Deed of Revocation) pursuant to which Ms Kirby disclaimed and renounced any future beneficial interest in the Trust.

[5] There is no issue between the parties as to the nature of a trading trust or that this was the role of the first defendant.2 In the Judgment I therefore held that there were three issues to be determined:

1 Kirby v Tekplas Ltd & Ors [2024] NZHC 2320.
2 At [24].

(a)If the Tekplas shares have no value, does that preclude a s 174 claim?

(b)Does the Deed of Revocation prevent Ms Kirby’s s 174 claim?

(c)Is Ms Kirby otherwise estopped from bringing the s 174 claim?

[6] I answered each of these questions in the negative and so declined summary judgment.

[7] The defendants submit that the nature of the beneficial interests of a shareholder in a trading trust such as Tekplas leaves…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kirby v Tekplas Limited

Details

AGLC: Kirby v Tekplas Limited [2025] NZHC 345
Case: [2025] NZHC 345
Decision Date: 13 March 2025

CaseChat Overview and Summary

Correna Fay Kirby, a former director and shareholder of Tekplas Limited, has brought a claim against the company and its remaining directors and shareholders, alleging oppressive and unfair treatment under s 174 of the Companies Act 1993. The defendants have applied for leave to appeal the Associate Judge’s decision declining their application for summary judgment. The legal issues before the court were whether the shares in Tekplas having no value precludes a s 174 claim, whether the Deed of Revocation prevents Ms Kirby’s s 174 claim, and whether Ms Kirby is estopped from bringing the s 174 claim. The court declined to grant leave to appeal, holding that the defendants had not identified any relevant error of law or fact and that the circumstances did not warrant further delay or serve the interests of justice. The court emphasised that the facts and context of the case, including the interpretation of the Deed of Revocation, need to be fully considered in a substantive hearing. The plaintiff is entitled to costs, which the parties are asked to agree on or file memoranda on by specified dates.

Orders