Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Appeal court boots out appeals against Feltex class suit

Court of Appeal boots out appeals against Feltex shareholders' class action

Nov. 23 (BusinessDesk) - Attempts by the former directors of the failed carpet-maker Feltex to halt a class action by 2,852 shareholders who lost $250 million have been thrown out by the Court of Appeal.

All five appeals against the class action started by Feltex shareholder Eric Houghton were rejected in a judgment issued by the court today, clearing the way for the class action seeking repayment of shareholders' original investment to proceed.

Feltex made an initial public offering of shares in mid-2004 and by December 2006 was in liquidation with all shareholders' funds lost.

Shareholders are alleging Fair Trading Act and Securities Act breaches, negligence, dishonesty and deception, although claims of breaches of fiduciary duty have been struck out in earlier appeals.

Former Feltex directors named in the action are its chairman and one-time Contact Energy director Tim Saunders, current MightyRiverPower and Auckland International Airport chair Joan Withers, Feltex's then chief financial officer, Sam Magill, and directors John Feeney, Craig Horrocks, Peter Hunter, and then chief executive Peter Thomas.

The appeals fell broadly into three categories: the way the case was being managed should not be allowed; statute of limitation rules should prevent shareholders seeking redress; and that some claims were not sufficiently made out to pass tests of arguability.

Counsel for the Feltex directors objected to the way in which the courts allowed Tony Gavigan, a former Fay Richwhite investment banker who has undertaken to organise case management, time to source guaranteed funding of at least $200,000 to meet court costs in the event the shareholders' action failed.

They also objected to Gavigan's conduct in the proceedings, including delays and missed deadlines, which a previous appeal court decision had found were more the product of "an excess of enthusiasm rather than bad faith."

"What was critical was securing Mr Houghton's access to justice through appropriate funding arrangements. That objective has now been satisfied," Court of Appeal president Mark O'Regan and fellow judges Tony Randerson and Rhys Harrison ruled.

On the complaints alleging Magill "engaged into manipulation" of Feltex's earnings, the judges agreed the "evidence in support was not strong", but that it "provided a sufficient factual foundation for arguability, involving as it does an element of deceit."

"Mr Houghton is on notice that he has a significant hurdle to cross if he is to prove" that Feltex had engaged in so-called "channel-stuffing", where goods in excess of those ordered had been sent to customers to boost reported revenue, along with alleged attempts to shift the timing of receipts.

"But for now, the action must remain," the court ruled.

Apparent conflicts between rulings in other Commonwealth jurisdictions were also rejected as grounds for appeal, with the judges siding with Australian judgments that justified the class action moving forward, rather than a "narrow" English ruling on statutes of limitation.

The appellants were, in effect, arguing for an unmanageable and wasteful exercise in which as many as 6,000 separate causes of action would be required, rather than a single class action, the judges said.

Reduced to its essential elements, this element of the appeals related to High Court rules intended to prevent "stale" or "ancient" claims being pursued, and the inability of defendants to mount adequate defences. These could not be held to apply in this case.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Real Estate: Housing Prices Head South In Most Of NZ

Housing became more affordable for first home buyers in many parts of the country including Auckland last month, as falling prices more than offset rising mortgage interest rates. More>>

ALSO:

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:

NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news