Tekplas Limited v Kirby

[2025] NZCA 397

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA178/2025
 [2025] NZCA 397

BETWEEN	TEKPLAS LIMITED First Applicant IAN MCDOUGAL Second Applicant TONY SCHRAMM Third Applicant
AND	CORRENA KIRBY Respondent

Court:	Campbell and Whata JJ
Counsel:	W C Pyke for Applicants D J Cooper KC and H L Quinlan for Respondent
Judgment   (On the papers):	12 August 2025 at 11.00am

JUDGMENT OF THE COURT

AThe application for leave to appeal is declined.

BThe applicants must pay the respondent costs for a standard application on a band A basis, together with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Whata J)

1. Ms Kirby sued for relief under s 174 of the Companies Act 1993 alleging that Tekplas Ltd and its remaining directors and shareholders, Messrs McDougall and Schramm, treated her oppressively and unfairly.  They, in turn, applied for summary judgment on the grounds that Ms Kirby’s claim cannot succeed because:[1]

   (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.

2. The High Court refused summary judgment finding, in short, that even if the shares have no value, s 174 might still afford a remedy against one of the remaining directors.[2]  The Court also found that whether the deed of revocation precluded a claim was highly sensitive to the facts and circumstances and therefore not amenable to summary judgment.[3]

3. The High Court also refused leave to appeal under s 56 of the Senior Courts Act 2016.[4]  The applicants now seek leave to appeal to this Court.  They contend that (in summary):

   (a)The High Court was clearly wrong to find that:

   (i)s 174 could provide relief in respect of a shell corporate trustee (noting also that any relief that might be available for a director’s wrongdoing must go to the trust, not Ms Kirby); and

   (ii)the buyout payment of $4 million by way of deed of revocation did not settle all of Mr Kirby’s claims.

   (b)The questions raised by the appeal are matters of general and public importance or of sufficient importance to the applicants.

   (c)Resolution of the questions will likely expedite resolution of the claim.

Threshold for leave

1. In Greendrake v District Court of New Zealand this Court set out the following considerations as relevant on an application for leave to appeal under s 56:[5]

   (a)a high threshold exists;

   (b)the applicant must identify an arguable error of law or fact;

   (c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;

   (d)these circumstances must warrant incurring further delay; and

   (e)the ultimate question is whether the interests of justice are served by granting leave.

Assessment

1. We are not satisfied that the proposed appeal reaches the high threshold required.  It does not advance an alleged error of general or public importance warranting determination and it is not of sufficient importance to the applicants to outweigh its lack of general or precedential value.  In reality, the resolution of the proposed appeal issues turns on the application of settled principles of company law, trust law and contractual interpretation to bespoke facts.[6]  In any event, to the extent that the appeal raises novel issues concerning, for example, the availability of s 174 relief in respect of an assetless trustee company, we consider that those issues are better resolved in light of the fully formed context following trial.[7]

Result

1. The application for leave to appeal is declined.

2. The applicants must pay the respondent costs for a standard application on a band A basis, together with usual disbursements.

Solicitors:
McKenna King, Hamilton for Applicants
Anthony Harper, Auckland for Respondent

[1]Kirby v Tekplas Ltd [2024] NZHC 2320 at [4].

[2]At [37]–[39].

[3]At [79]–[84].

[4]Kirby v Tekplas Ltd [2025] NZHC 345.

[5]Greendrake v District Court of New Zealand [2020] NZCA 122 at [6]. See also Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17]; and Meates v Taylor (1992) 5 PRNZ 524 (CA) at 526.

[6]For example, Mr Pyke in his submissions for the applicants went so far as to submit that it is “trite law that shareholders do not own a company’s assets” and offered a series of general propositions of law that are said to apply, implicitly conclusively, to this case.

[7]See Sandman v McKay [2019] NZSC 41, [2019] 1 NZLR 519 at [113]; North Shore City Council v Attorney-General [2012] NZSC 49, [2012] 3 NZLR 341 at [25]; Body Corporate No 207624 v North Shore City Council [Spencer on Byron] [2012] NZSC 83, [2013] 2 NZLR 297 at [4]; McNamara v Auckland City Council [2012] NZSC 34, [2012] 3 NZLR 701 at [80]; Couch v Attorney-General (on appeal from Hobson v Attorney-General) [2008] NZSC 45, [2008] 3 NZLR 725 at [33]; and Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [62].