Roberts v Davis - [2025] NZHC 1734

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2025-409-177

[2025] NZHC 1734

UNDER the Companies Act 1993

IN THE MATTER

of a shareholder’s application under section 174 of the Act

BETWEEN

CHRISTOPHER ANDREW ROBERTS

Plaintiff

AND

AND

MICHAEL DAVIS

First Defendant

DUNCAN MEADOWS TREVELLA

Second Defendant

Hearing: 18 June 2025

Counsel:

C A Roberts – self-represented Plaintiff O D Peers and C F Olds for Defendants

Judgment:

27 June 2025

JUDGMENT OF ASSOCIATE JUDGE LESTER

ROBERTS v DAVIS [2025] NZHC 1734 [27 June 2025]

[1] Christopher Roberts (Chris), Michael Davis (Michael) and Duncan Trevella (Duncan), each hold 40 shares in Third Space Fitness Limited (Third Space). Chris, Michael and Duncan are also the directors of Third Space. The relationship between the parties has broken down.

[2] Third Space was incorporated on 22 August 2023. Chris says at the time of incorporation he was the only director and shareholder, although this is disputed by Michael and Duncan. There is evidence it was contemplated that Michael and Duncan would be directors and shareholders in Third Space from the outset, but they were not registered as shareholders and directors with the Companies Office until April 2024.

[3] The significance of this is that Chris says while he had sole charge of Third Space, the company entered into contracts with a company called Koha Fitness Ltd (Koha) which he wholly owns and is the sole director of. In plain terms, Michael and Duncan say those contracts were unknown to them, disadvantaged Third Space and result in the diversion of profits from Third Space to Koha or to Chris.

[4] On 23 April 2025, the board of Third Space, which is controlled by Michael and Duncan being two of its three directors, resolved to avoid the transactions contemplated by the 22 August 2023 agreements between Third Space and Koha, a step disputed by Chris.

[5] That step led Chris to commence this proceeding on the basis that Michael and Duncan’s actions entitled him to relief under s 174 of the Companies Act 1993 (the Act). Chris sought an injunction preventing Michael and Duncan actioning the steps they passed as directors of Third Space. The statement of claim was filed on 28 April 2025 and was dealt with on a Pickwick basis. The injunction was resolved by undertakings not to action the 23 April 2025 disputed board resolutions.

[6] On 2 May 2025, the solicitors acting for Michael and Duncan made an open offer to purchase Chris’ shares in Third Space. The offer was intended to set out a process by which an independent expert experienced in business valuations, with full access the records of Third Space, and the benefit of any submissions the parties

wish to make, would arrive at a valuation for Chris’ shares. There would be no minority discount.

[7] The offer was not accepted but has been renewed by Michael and…

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.

Keep reading for free

Create a free CaseChat account to read Roberts v Davis and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2025] NZHC 1734
Decision Date: 27 June 2025

CaseChat Overview and Summary

In the High Court of New Zealand, Christchurch Registry, the case of Roberts v Davis involved a dispute among shareholders of Third Space Fitness Limited (Third Space), a fitness company. The plaintiff, Christopher Roberts (Chris), and the defendants, Michael Davis and Duncan Trevella, each hold shares in Third Space. The relationship between the parties deteriorated, leading to the plaintiff initiating proceedings under section 174 of the Companies Act 1993. The plaintiff alleged that the defendants’ actions, particularly concerning contracts between Third Space and Koha Fitness Ltd, which Chris owns, were unfairly prejudicial and resulted in a diversion of profits. The defendants sought summary judgment, offering to buy out the plaintiff’s shares at a fair value.

The primary legal issues were whether the defendants' offer to purchase the plaintiff’s shares at fair value could cure the alleged unfair prejudice under section 174 of the Act, and if the offer was a genuine attempt to resolve the dispute. The court considered whether the offer, made before the summary judgment application, addressed the concerns of unfair prejudice and if there were any factual disputes that prevented a fair valuation. The court also examined whether the offer adequately covered the costs of the proceeding and any other concerns raised by the plaintiff.

The court reasoned that the defendants’ offer to buy out the plaintiff’s shares at fair value, with the valuation determined by an independent expert, was a legitimate attempt to resolve the dispute. The court noted that the plaintiff was prepared to sell his shares and did not work in the business, which meant exclusion from the business was not a concern. The court accepted that the valuation date of 31 March 2025 addressed the plaintiff's concerns about events post that date. The court also noted that the plaintiff’s concerns about exclusion from certain systems and the impact on his reputation were not relevant to the share valuation. The court concluded that the offer was capable of fully addressing the plaintiff's claims of unfair prejudice and that if the plaintiff did not accept the offer, the proceeding would be dismissed.

The court granted the defendants' application for summary judgment, subject to the plaintiff accepting the offer within 20 working days. If accepted, a Tomlin Order would be issued to stay the proceeding for the purpose of completing the sale of shares. If not accepted, the proceeding would be dismissed. Costs were reserved pending the outcome of the offer.

Orders