Taxis Palmerston North Limited v TaxiCharge New Zealand Limited
[2025] NZHC 2219
•7 August 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-002058
[2025] NZHC 2219
UNDER Part 7 of the High Court Rules 2016 and the Companies Act 1993 IN THE MATTER OF
an application for orders to prevent a share transfer
BETWEEN
TAXIS PALMERSTON NORTH LIMITED
Applicant
AND
TAXICHARGE NEW ZEALAND LIMITED
Respondent
Hearing: 6 August 2025 Appearances:
S Connolly and T O’Regan for the Applicant T Fitzgerald and J Ruddell for the Respondent
Judgment:
7 August 2025
JUDGMENT OF WALKER J
This judgment was delivered by me on 07 August 2025 at 1.45 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
Shaun Connolly, Barrister, Wellington Macalister Mazengarb, Wellington
TAXIS PALMERSTON NORTH LIMITED v TAXICHARGE NEW ZEALAND LIMITED [2025] NZHC 2219
[7 August 2025]
[1] The applicant, Taxis Palmerston North Limited (TPNL) seeks an urgent interlocutory injunction without notice to restrain the respondent, Taxicharge New Zealand Limited (Taxicharge) from:
(a)“reclassifying” Class A shares held by Wellington Combined Taxis Limited (WCT) as Class B shares; and
(b)registering or otherwise taking steps to give effect to the transfer of those shares from WCT to Wellington Combined Taxis 2025 Limited (WCT2025).
[2] The application was referred to me as Duty Judge. I convened a telephone hearing at 3 pm on the day of receipt of the application attended by counsel for the applicant and the respondent on a “Pickwick” basis.1
[3] The applicant argues for urgency justifying proceeding without notice on the basis that the events it seeks to restrain are imminent and once the shares are reclassified and the transfer of shares registered, the available recourse if its substantive claim is made out will be limited.
Background
[4] This brief summary of the background is necessarily drawn from the memorandum of counsel filed in support of the application and the affidavit of Ms Janine Crawford filed in support.
[5] Taxicharge provides data processing services to taxi operators in New Zealand and especially payments processing. It is a partner in the partnership known as Taxicharge Limited Partnership (TLP). Interests in or membership of TLP is held by a number of taxi companies in New Zealand including the applicant, TPNL. The
1 As explained by the Court of Appeal in Viagogo v Commerce Commission [2019] NZCA 472, [2018] 3 NZLR 559, the application remains a “without notice” application that has not been served on the respondent in accordance with the High Court Rules 2016. However, counsel for the respondent were notified of the hearing and were present at it. They were heard on a limited basis in relation to the application.
relationship of the various members is governed by the Taxicharge Constitution and Shareholders’ Agreement and the TLP Limited Partnership Agreement.
[6] WCT is (or was) a shareholder of Taxicharge. It was placed in voluntary administration in September 2024. It has taken steps to sell its business assets to WCT2025, a company incorporated to acquire those business assets. WCT2025 is controlled by Auckland Co-operative Taxi Society Limited (Auckland Co-op Taxis), itself a limited partner of TLP and shareholder in Taxicharge.
[7] The transfer of WCT’s shares to WCT2025 involves “reclassification” of the shares from Class A to Class B shares to facilitate the overall arrangements. This has required amendments to Taxicharge’s Constitution and Shareholders’ Agreement. The amendments were the subject of a special shareholder resolution passed by a majority of shareholders.
[8] Therein lies the genesis of the dispute. TPNL holds Class B shares in Taxicharge. It opposed the reclassification of WCT’s shares as Class B shares and the transfer to WCT2025. It says that the majority of holders of Class B shares opposed the transaction, but the shareholder resolution called for a majority of all shareholders combined, that is both Class A and Class B shareholders, when it was the interests of Class B shareholders which would be detrimentally affected.
[9] TPNL challenges the validity of the transaction and the mechanism effecting it. It argues that s 117 of the Companies Act 1993 (the Act) prohibits a company from taking any action that affects the rights attached to shares unless that action is approved by a special resolution of each interest group. It says that the amendments to the Constitution and Shareholders’ Agreement are devices to circumvent existing protective provisions for minority shareholders which breach an obligation of good faith.
[10] Taxicharge disputes this interpretation of the Act. It says s 117 is not engaged and there has been no failure to act in good faith. Its position is that the amendments are completed and none of the arguments relied on by TPNL can invalidate amendments already made.
[11] Ms Crawford’s affidavit outlines the challenge which TPNL intends to make and asserts that the proposed share sale needs to be paused until the lawfulness of the transaction and the steps taken to facilitate it can be tested in court. She deposes that the parties have competing interpretations of the legal obligations, but if the share sale takes effect, it will fundamentally alter the control dynamic of TLP and expose TPNL and other smaller operators to material business risk.
[12] This evidence underscores the underlying commercial dispute between the parties
Legal principles
[13] A party may proceed without notice where requiring notice would cause undue delay or prejudice. Mr Connolly, on behalf of TPNL, submits that the share transfer at issue may be registered by Taxicharge “imminently”. He is not privy to the timing since this depends on the arrangements between WCT and WCT2025, but it is anticipated that those parties will provide a duly executed share transfer to Taxicharge and this has not yet happened. In turn, unless restrained by this Court, Taxicharge will forthwith enter the name of the transferee on the share register.2
[14] The legal principles relevant to interim injunctions are well settled. A three-stage test is required. I must decide whether there is a serious question to be tried and, if there is, where the balance of convenience lies. At the third stage, I must step back and assess the overall justice of the case.
Discussion
[15] It is apparent that the amendments to the Constitution and Limited Partnership Agreement have been made already, as I am told that the Companies Office website reflects such. Indeed, the amendment was approved by a majority of shareholders as long ago as 8 July 2025. The only step remaining to complete the transaction so far as Taxicharge is concerned is delivery of the share transfer notices to Taxicharge and, on receipt, for Taxicharge to update its share register.
2 Companies Act 1993, s 84.
[16] Taxicharge is not legally able to undertake not to register the contemplated share transfer from WCT to WCT2025. It is obliged to “forthwith” register the transfer once a compliant share transfer form is provided pursuant to s 84 of the Act. (Mr Connolly contends that the present situation is unusual in that Taxicharge is the party who facilitated the transaction.)
[17] Mr Connolly properly concedes that this means the relief sought in [1.1.1] of the application is otiose. That horse has bolted.
[18] Regarding the update of the share register he submits that, although the share transfer may have been executed already, once that final step of registration is taken it may mean that a court is unable (or less able) to unwind the share transfer if TPNL is ultimately successful. However, he is unable to put it any higher than this nor refer me to any authority in support of that proposition as to consequence other than pointing to s 119 of the Act.
[19]Section 119 reads:
119 Actions not invalid
The taking of action by a company affecting the rights attached to shares is not invalid by reason only that the action was not approved in accordance with section 117.
[20] He asserts that there should be no prejudice to Taxicharge or to WCT or WCT2025 if the share transfer is “paused” until the validity of the amendments can be determined. He maintains that damages will not be an adequate remedy if the share transfer proceeds and is subsequently found to have done so on an incorrect and irreversible legal basis. He suggests that once Taxicharge is under the de facto majority control of Auckland Co-op Taxis, the decision-making powers of all other Class B shareholders will be permanently diminished.
[21] Pressed as to why only Taxicharge is named as respondent when there are clear implications for WCT and WCT2025, Mr Connolly explains that it is only Taxicharge’s actions which are at issue, and it was Taxicharge which orchestrated the underlying transaction. He acknowledges however that other parties have an interest and consideration would be given to joining them as respondents.
[22] Mr Fitzgerald, for Taxicharge, submits that the fundamental problem is that those other parties who as yet have no notice of the application, are in fact key parties possessing knowledge relating to the timing of completion of the transaction and its impacts on them and related parties, such as creditors of WCT. He contends it was a strategic choice on the part of TPNL to frame the application against Taxicharge only and now to rely on the absence of this knowledge of the parameters, conditionality or timing of the underlying share sale transaction.
[23] He submits that there is no serious issue to be tried in respect of s 117 of the Act because the rights which attach to TPNL’s shares have not been affected and since Class B shares have not been “issued”, s 117 is not engaged. He argues there is no breach of good faith as alleged.
[24] He characterises the core of TPNL’s complaint as disapproval of the commercial outcome which should not be conflated with the complaint about compliance with the Act. He maintains that there is a risk to Taxicharge’s ongoing commercial viability if WCT or its new iteration does not continue in business. (Mr Fitzgerald is careful not to suggest that such prejudice could be realised even with an interim interlocutory order with a short “sunset” provision.)
[25] In the limited time available to review the material and evidence, I intend to proceed on the basis that there is a serious question to be tried that the amendments to the Shareholder’s Agreement and related documents have not been validly approved under the Act and/or call into question the good faith obligations in cl 9.6. The threshold is a low one, requiring no more than that the claim is not frivolous or is at least tenable.
[26] Therefore, the application turns on questions of balance of convenience and overall justice.
[27] I am not satisfied on the present material before me that the balance of convenience falls in favour of the grant of interim relief, even for a short period as a “holding pattern”. Similarly, the overall justice does not favour interim relief. I set
out my reasons. These are necessarily brief given the stated urgency of the matter. I stress that this assessment is made on the present material before the Court only.
[28] It is not at all apparent that TPNL’s legal arguments are strong when the Class B shareholders remain entitled to an equal vote, to equal distributions and to participate in the selection of the Class B director.
[29] While I accept that damages would not be an adequate remedy in the circumstances (damages is the not the substantive relief which would be sought), I am not persuaded that there is any arguable efficacy in restraining registration of the transfer when, even on TPNL’s case, the identified prejudice has already arisen. TPNL is not able to identify additional detriment arising from the step of execution of the registration as opposed to an executed share transfer and completion of all the earlier steps. Assuming that the transfer has been executed, it is likely that beneficial ownership of the shares will already have passed. The final, incremental step is not the source of the alleged prejudice and does not appear to add to it.
[30] As noted, no authority is provided in support of the proposition that registration will prevent a court from unwinding the transfer if the grounds are made out. (I do not overlook that there will be a point in time when it will not be practically possible to reinstate WCT as shareholder once the administration is completed.)
[31] There are other parties with potentially significant interests at stake. TPNL ought to have engaged with WCT and WCT2025 on these issues, as Taxicharge’s legal advisers invited. They did not. The Court is left with an absence of information about the full context and potential impact on other parties and particularly the vendor company in administration.
[32] The undertaking as to damages does not extend to the interested parties who will be impacted by an interim order made. Nor is there evidence of TPNL’s financial ability to support the undertaking.
[33] Those reasons collectively lead me to decline the present without notice application. Nothing in this judgment prevents a fresh application if further grounds are made out.
............................................................
Walker J
0