Business Law
DIRECTORS COLLEGE OF BUSINESS
School of Accountancy
BACHELOR OF BUSINESS STUDIES BACHELOR OF BUSINESS INFORMATION BACHELOR OF ACCOUNTANCY 155.203 Law of Business Organisations Semester 2 2008 Wellington
Week 7 Lecture 2
21 DIRECTORS (1)
21.1 Who is a director? Section 126. gives an extended meaning to the term director in order that the persons who actually run the company are liable as such in law.
126 Meaning of “director” (1) In this Act, director, in relation to a company, includes—
A person occupying the position of director of the company by whatever name called; and In the recent case of Clark v. Libra Developments Ltda the Supreme Court held that even where a person who had been declared bankrupt continued to manage the affairs of the company, he was held to be a director although disqualified under s151(2)(b) as a result of the combined effect of s126(1) and s158 which provides:—
158 Validity of director's acts The acts of a person as a director are valid even though— (a) The person's appointment was defective; or (b) The person is not qualified for appointment.
In Debt Relief (NZ) Limited (In Liquidation) v. A E Wycherleyb one issue raised in the case was whether the defendant had been a director of DRNZL while he was subject to a banning order under s111 Insolvency Act 1967. The defendant was not registered as a director nor did his name appear as such in the company documentation. He claimed that that he provided consultancy services for the company, payments for which, were subject of the claim by the liquidators.c In finding that summary judgment should lie against the defendant on the basis that he had acted as the director of a company in breach of the banning order the court relied on affidavit evidence of an interview with M, the nominal director of the plaintiff company.
[2007] 2 NZLR 709 (CA & SC); [2007] NZSC 16 [2008] NZHC 90 c On the basis that they were made under an illegal contract since W was acting as a director in
School of Accountancy
BACHELOR OF BUSINESS STUDIES BACHELOR OF BUSINESS INFORMATION BACHELOR OF ACCOUNTANCY 155.203 Law of Business Organisations Semester 2 2008 Wellington
Week 7 Lecture 2
21 DIRECTORS (1)
21.1 Who is a director? Section 126. gives an extended meaning to the term director in order that the persons who actually run the company are liable as such in law.
126 Meaning of “director” (1) In this Act, director, in relation to a company, includes—
A person occupying the position of director of the company by whatever name called; and In the recent case of Clark v. Libra Developments Ltda the Supreme Court held that even where a person who had been declared bankrupt continued to manage the affairs of the company, he was held to be a director although disqualified under s151(2)(b) as a result of the combined effect of s126(1) and s158 which provides:—
158 Validity of director's acts The acts of a person as a director are valid even though— (a) The person's appointment was defective; or (b) The person is not qualified for appointment.
In Debt Relief (NZ) Limited (In Liquidation) v. A E Wycherleyb one issue raised in the case was whether the defendant had been a director of DRNZL while he was subject to a banning order under s111 Insolvency Act 1967. The defendant was not registered as a director nor did his name appear as such in the company documentation. He claimed that that he provided consultancy services for the company, payments for which, were subject of the claim by the liquidators.c In finding that summary judgment should lie against the defendant on the basis that he had acted as the director of a company in breach of the banning order the court relied on affidavit evidence of an interview with M, the nominal director of the plaintiff company.
[2007] 2 NZLR 709 (CA & SC); [2007] NZSC 16 [2008] NZHC 90 c On the basis that they were made under an illegal contract since W was acting as a director in