IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-670
[2021] NZHC 1651
IN THE MATTER OF
AND
Liquid Studios Limited IN THE MATTER OF
Section 174 of the Companies Act 1993
BETWEEN
PETER WILLIAM VAN DER FLUIT and TAMARA JOAN O’NEILL
Plaintiffs
AND
MICHAEL ARTHUR JAMES O’NEILL
Defendant
Hearing: 28 June 2021 Appearances:
D W Grove for the Plaintiffs
R M Keane and E F Armstrong for the Defendant
Judgment:
5 July 2021
JUDGMENT OF GAULT J
This judgment was delivered by me on 5 July 2021 at 5:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Mr D W Grove, Barrister, Auckland
Mr I Vodanovich (plaintiffs’ instructing solicitor), Vodanovich Law Ltd, Auckland Ms R M Keane and Ms E F Armstrong, LeeSalmonLong, Auckland
VAN DER FLUIT v O’NEILL [2021] NZHC 1651 [5 July 2021]
[1] Mr van der Fluit and Ms O’Neill (the plaintiffs) seek an interim order removing Mr O’Neill as a director of Liquid Studios Ltd (Liquid). The parties are Liquid’s three directors and shareholders.
[2] The substantive proceeding alleges prejudicial conduct by Mr O’Neill and seeks orders removing him as a director of Liquid and that the plaintiffs purchase his shares at a value to be determined by the Court.
Background
[3] Mr van der Fluit and Mr O’Neill were members of the music band Screaming Meemees in the 1980s.
[4]Mr and Ms O’Neill were married in 1998.
[5] Liquid was formed in 1999 by Mr O’Neill and three others. It carries on business producing music. By 2002 Mr O’Neill and Mr van der Fluit were each 50 per cent shareholders, and in 2002 Mr van der Fluit transferred 5,000 of his shares to Ms O’Neill. In 2015 Mr van der Fluit transferred 1,000 of his shares to Mr O’Neill. So now Mr O’Neill holds 26,000 shares (52 per cent), Mr van der Fluit holds 19,000 shares (38 per cent) and Ms O’Neill holds 5,000 shares (10 per cent).
[6]In May 2014 Mr O’Neill suffered a potentially fatal stroke.
[7] In January 2020 Mr and Ms O’Neill separated. They are involved in relationship property proceedings in the Family Court. Both accept that their shares in Liquid are relationship property.
Dispute in this proceeding
[8] The plaintiffs say that since Mr O’Neill’s stroke in 2014 he has been incapacitated and unable to undertake his functions and duties as a director of Liquid. The plaintiffs say there is no ill will towards Mr O’Neill but that he is being manipulated and controlled by his father and/or sister. The plaintiffs say that Mr O’Neill’s father and sister have actively disrupted and adversely affected the
operations of Liquid, and the plaintiffs have been prevented from running the company as directors.
[9] By way of defence and counterclaim, Mr O’Neill says the plaintiffs have acted improperly and prejudicially in terms of s 174 of the Companies Act 1993 (the Act), and his…
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- AGLC
- Van der Fluitt v O'Neill [2021] NZHC 1651
- Case
- [2021] NZHC 1651
- Decision Date
CaseChat Overview and Summary
The court needed to determine whether there was a serious question to be tried regarding Mr O’Neill's capacity and conduct, the balance of convenience in either granting or denying the interim order, and where the overall justice lay in the matter. The court held that there was a serious question to be tried based on several specific complaints, such as the unilateral directive from Mr O’Neill’s father in an email purporting to be from Mr O’Neill himself, and the padlocking of the company's storage facility. However, the court declined to grant leave to cross-examine Mr O’Neill as it did not believe there were special circumstances warranting such an examination.
In terms of the balance of convenience, the court found that it favoured maintaining the status quo. While the plaintiffs proposed several undertakings and indemnities to protect Mr O’Neill's interests, the court considered that the interim order sought was a form of mandatory injunction, typically granted only in special circumstances. The court also noted that the order sought was effectively final relief, and weighed against granting the interim relief. Consequently, the overall justice also favoured maintaining the status quo.
The application for the interim order was dismissed, and the court encouraged the parties to agree on costs. If they could not, the court would determine the costs on the papers.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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