INTRODUCTION

Meridian Global Funds Management Asia v Securities commission (Meridian) is one of the important cases of New Zealand Company law that has outlined the constructive or interpretative approach to the corporate liability. The conventionally followed directing mind and will test was rejected by the Privy Council in Meridian, which instead gave a limelight to the rules of attribution. The primary, general and special rules of attribution, as described by Lord Hoffman in the judgement of the Meridian case, have been considered in many subsequent cases after Meridian that contained the issue of attribution. Before analysing the impact of Meridian on other cases it is important to have a brief review of the facts of the Meridian case itself. The facts were that a provision of the Securities Amendment Act 1988 required any person who acquired an interest in 5 per cent or more of the shares of a public listed company to give notice to the company and the stock exchange as soon as he knew, or ought to have known, of the position. A group of investors tried to gain control of a company using bridging finance provided by Meridian Global funds Management Asia Ltd (the appellant). Koo and Ng were senior investment managers of the appellant who improperly used their authority to provide the finance out of the companys fund. The court was asked to attribute their knowledge to the company. It did so in respect of Koo, who was the chief investment officer of the company. (McDermott, 2011, p. 42)

DISCUSSION OF THE SUBSEQUENT CASES Commerce Commission v Contours Exclusive Limited & Anor (1998) 6 NZBLC 102,585

Commerce Commission v Contours Exclusive Limited &Anor (1998) 6 NZBLC 102,585 is one among a line of cases where the Meridian approach has been applied by the District Court Auckland in its judgement. The case deals with the convictions entered against Contours Exclusive Ltd (CEL), the franchising company of women gymnasium and Mr Bishop, the director of CEL for false advertising of their services. In this case Commerce Commission (the informant) held both the company and the director liable for misrepresentation of their companys services to the public. The informant suspected Mr Bishop for the fraud on the ground that being a director of the company he assisted in planning and encouraging such advertising on behalf of the company on the basis of Crimes Act 1961 which states that everyone is a party to and guilty of an offence wh o actually commits the offence; or does or omits an act for the purpose of aiding any person to commit the offence; or abets any person in the commission of the offence; or incites, counsels, or procures any person to commit the offence.(s 66). Contrary to the above section of Crimes Act, The Fair Trading Act 1986 has mentioned about the necessity of state of mind of the director or agent to be established for any act or conduct done within the scope of that persons actual or apparent authority that is bound to the body corporate. (s 45). The court followed these facts in the judgement which is linked with the Meridian approach.

Americano's Ltd v State Insurance Ltd (1999) 6 NZBLC 102,892

Another case that has applied the Meridian approach in its judgement is Americano's Ltd v State Insurance Ltd (1999) 6 NZBLC 102,892. This is the case of arson where Peter Phillips, the quasi-partner cum the chef of

Americanos Ltd, is held liable for intentionally setting fire in the companys premises. During the judgement of the case the High Court of Christchurch has followed the rule of attribution as outlined by the Privy Council in the Meridian case and has attributed the acts of Peter Phillips to the company, thus denying the indemnity from the insurance company. As per the Meridian approach it is implied that if the general principles of attribution are met, there is still the scope for attributing a persons knowledge and conduct to the company when the person is not the directing mind and will of the company. It has focused on the matter of interpretation of the relevant substantive rule, which in the Meridian case was a statute; whereas in this case, it is a contract of insurance. Had the court applied the pre-Meridian directing mind and will of the company approach, the decision would have altered. Young J, during the judgement in Americano case, had explained The approach in Meridian Global Funds Management Asia Pvt Ltd v Securities Commission (1995) 7 NZCLC 260,836 ; [1995] 3 NZLR 7 encouraged me to look at the issue very much in the specific insurance, wilful act and arson context. The above abstract makes it clear that the Meridian approach has been very effective in the judgement of the above case.

Equiticorp Industries Group Ltd (in stat man) & Ors v Attorney-General & Anor (No 47) (1996) 7 NZCLC 261,143
This is the case of company law that deals with the company financing purchase of own shares and the ratification of the directors action. In this case the Labour Government (the Crown) decided to sell New Zealand Steel Ltd (NZS), for which it swapped its shares in NZS for shares in Equiticorp Holdings Ltd (EHL). EHL had informed about the arrangement of being the financier of last resort for the sub-underwriters before underwriting the shares which was in breach of the section 62 of the Companies Act 1955. The overall matter put forward by the statutory managers of EHL was based on the constructive trust of knowing receipt, constructive trust of dishonest assistance, illegality, money had and received, and statutory trust pursuant to section 54(2) of the Corporations (Investigation and Management) Act 1989.

The Crown was, thus, held liable on the notice of illegality by the decision of High Court of Auckland. The application of the Meridian approach is effective when the illegal conducts of the EHL directors, going beyond the prohibition of the law and breaching their fiduciary duties, could not be attributed to the company.

CONCLUSION

After analysing the rules of attribution outlined by the Privy Council in the Meridian case and going through its subsequent cases, it is clearly visible that the Meridian has, undoubtedly, been applied effectively. It has replaced the old test of whether the relevant individual is the directing mind and will of the company for the purpose of particular transaction by outlining the constructive approach in each of the cases described above. The constructive approach laid down by Lord Hoffman in the Privy Council has not ignored the statute of the company law, but has focused on the acknowledgement that each rule is not intended to apply into the same metaphysical theory. There is the need of special rule of attribution to be fashioned in some exceptional cases. The rule has been equally applicable to the cases of company law, security law, business law and arson cases as well in accordance with the relevant substantive rule followed in the particular case.

Lists of cases: Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 All ER 918; [1995] 3 NZLR 7 (PC). Retrieved on August 13, 2013 from CCH Database

Commerce Commission v Contours Exclusive Limited & Anor (1998) 6 NZBLC 102,585. Retrieved on August 13, 2013 from CCH
Database

Americano's Ltd v State Insurance Ltd (1999) 6 NZBLC 102,892.

Retrieved on August 13, 2013 from CCH Database

Equiticorp Industries Group Ltd (in stat man) & Ors v AttorneyGeneral & Anor (No 47) (1996) 7 NZCLC 261,143. Retrieved on
August 13, 2013 from CCH Database

REFERENCE LIST:

Crimes Act 1961. New Zealand Legislation: Acts. Retrieved on August 15, 2013, from http://www.legislation.govt.nz/act/public/1961/0043

The Fair Trading Act 1996. New Zealand Legislation: Acts. Retrieved on August 15, 2013, from http://www.legislation.govt.nz/act/public/1986/0121

McDermott, J. (2011). Understanding Company Law (2nd ed.). Wellington, New Zealand: LexisNexis