The Law Commission has kicked off its review of the duties and potential liabilities of company directors.

Director duties have risen to particular prominence following recent Supreme Court decisions, including a 2023 decision ordering the directors of Mainzeal to pay a total of NZ$39.8 million plus interest and costs to its liquidators. Our article on that case is available here. 

The review is looking at two main areas:

• Core director duties and liabilities under the Companies Act 1993.
• Whether duties and liabilities under other legislation “…can be approached in a more consistent and principled manner in future legislative reform.”

The Law Commissioner leading the review is Geof Shirtcliffe, an experienced corporate lawyer, who has said that:

“Recent court decisions have highlighted issues with directors’ duties at the time a company is at risk of insolvency. This review provides an important opportunity to address those and other concerns about the current law.” 

The Commission is now researching the current law and identifying areas for reform.

Next year the Commission will publish an issues paper and will consult publicly on the paper before presenting its final report to the Minister in 2027. If the Commission concludes that law reform is necessary, it will suggest specific amendments in its report. For more information, please click here and here.

Dentons is supportive of the Law Commission’s work in this area and we look forward to the release of the Commission’s issues paper and the opportunity to comment on this important area of the law.