241:
into the consultancy contract; but such a limitation is a common fact of business and, in relation to economic loss and duties of care, the consequences should in my view be accepted in the absence of special circumstances. It is not to be doubted that, in relation to an obligation to give careful and skilful advice, the owner of a one-man company may assume personal responsibility. Fairline is an analogy. But it seems to me that something special is required to justify putting a case in that class. To attempt to define in advance what might be sufficiently special would be a contradiction in terms. What can be said is that there is nothing out of the ordinary here.
272:“What does run counter to the purposes and effect of incorporation is a failure to recognise the two capacities in which directors may act; that in appropriate circumstances they are to be identified with the company itself, so that their acts are in truth the company’s acts. Indeed I consider that the nature of corporate personality requires that this identification normally be the basic premise and that clear evidence be needed to displace it with a finding that a director is not acting as the company but as the company’s agent or servant in a way that renders him personally liable.”
194:
28:
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perhaps where the director as a person is highly prominent and his company is barely visible, resulting in a focus predominantly on the man himself. All will depend upon the facts of individual cases, and the degree of implicit assumption of personal responsibility, with no doubt some policy elements also applying. I do not think this is such a case, although it approaches the line.
223:. Viewing the issue as one of the assumption of a duty of care, which is the way in which Mr Fogarty for the respondents rightly asked us to view it, I cannot think it reasonable to say that Mr Ivory assumed a duty of care to the plaintiffs as if he were carrying on business on his own account and not through a company.
263:
discussed the central importance of a director assuming responsibility, either expressly or by imputation and, noted the current case was "approaching the borderline" and that, "It may be that in the present case there would have been a sufficient assumption of responsibility had Mr Ivory undertaken
240:
Without venturing further into what some would see as unduly theoretical, it not heterodox, I commit myself to the opinion that, when he formed his company, Mr Ivory made it plain to all the world that limited liability was intended. Possibly the plaintiffs gave little thought to that in entering
176:
The raspberry orchardists sued Trevor Ivory in negligence and Heron J in the Nelson High Court found in their favour and awarded damages of $ 145,332 plus interest. The award of damages was made on the basis that the company was liable for breach of contract and negligent misstatement and that Mr
162:
Roundup is a powerful herbicide, well suited to killing couch grass but having the same effect on raspberry plants. Its use in the near vicinity of the plants was highly dangerous to them, especially when (as again the Judge found) no instructions were given by Mr Ivory to mow near and under the
302:
When it comes to assumption of responsibility, I do not accept a company director of a one-man company is to be regarded as automatically accepting tort responsibility for advice given on behalf of the company by himself. There may be situations where such liability tends to arise, particularly
180:
Mr Ivory and Trevor Ivory Ltd appealed the decision that he was personally liable for negligent misstatement; the judges alleged failure to consider contributory negligence; and the quantum of damages. The Court of Appeal dismissed the appeal except on the question of personal liability.
146:
orchardists for the provision of consultancy services and the supply of sprays and fertilisers. The orchardists sought advice under the agreement about the spread of couch grass which was threatening their raspberry plantation and in March 1985 Mr Ivory recommended a trial spray of
214:
In this field I agree with Nourse J (as he then was) in the White Horse case that it behoves the Courts to avoid imposing on the owner of a one-man company a personal duty of care which would erode the limited liability and separate identity principles associated with the names of
285:
This could happen in certain situations, Hardie Boys J believed, "Assumption of responsibility may well arise or be imputed where the director or employee exercises particular control or control over a particular operation or activity".
189:
The main point that the Court considered was whether Mr Ivory was personally liable for negligent advice given in the course of his company's operations. The unanimous decision of the Court was that Mr Ivory was not personally liable
321:
The case remains the benchmark in New
Zealand law for establishing whether a director's action are those of the company or those of herself as an individual. However this area of law, which has received frequent attention due to the
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plants or otherwise remove any foliage from the plants near the ground. In the spring it was discovered that the crop had been seriously affected. Ultimately the raspberries had to be dug out. They were replaced by boysenberries.
119:
is one of the leading New
Zealand cases regarding the personal liability of company directors. The case concerns the personal liability of a director of a one-man company for negligent misstatement and applied the principle of
267:
Hardie Boys J stated that one of the key hurdles in this area of law was establishing that a director owed a personal duty of care because his acts were his acts as the agent of the company and not of the company itself.
209:
Cooke P then surveyed
Commonwealth case law that showed that a company officer or agent may, in certain circumstances, "come under a personal duty to a third party, breach of which ay entail personal liability".
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In his judgement Cooke P restated the "elementary" law that "an incorporated company and any shareholder are separate legal entities, no matter that the shareholder may have absolute control."
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Justice McGechan concurred with the rest of the Court, expressly noting of the argument given by counsel for the raspberry orchardists, "It may indeed be drawing the long bow to apply a
126:
that where a director is the "directing mind" of a company, his actions are legally those of the company. The application of the case by New
Zealand courts during the
142:
province and described as "agricultural and horticultural supplies and advisory service". In 1983, Trevor Ivory
Limited entered into an oral contract with
295:
575:
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The trial spray had no immediate ill-effects and so Mr Ivory advised spraying all of the couch grass with
Roundup. President
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have done little but create uncertainty for litigants. The courts’ approaches have varied widely with some judges applying
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79:
542:
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approach so as to impose personal liability upon the managing director of a one-man company, in rural New
Zealand".
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An orchard of raspberries had been killed by the negligent application of
Roundup to a couch grass infestation.
38:
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326:, remains unstable. The importance of the case has been eroded by the decision of the Court of Appeal in
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has been described as a "barrier to litigants recovering from directors of these companies".
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to do the spraying himself, but it is not necessary to consider that possibility."
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569:
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As two commercial law academics reported, "New
Zealand cases subsequent to
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543:"The corporate shield: What happens to directors when companies fail?"
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Trevor Ivory Ltd was a one-man company run by Trevor Ivory in the
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Ivory was also personally liable for negligent misstatement.
49:
Trevor Ivory
Limited & Anor v Anderson & Ors
342:and others making every effort to distinguish it."
567:
541:Watson, Susan; Noonan, Chris (Autumn 2005).
540:
357:
360:Company & Securities Law in New Zealand
26:
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236:Expanding on this point Cooke P noted,
568:
550:University of Auckland Business Review
358:Watson, Susan`; Farrar, John (2013).
576:Court of Appeal of New Zealand cases
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14:
607:
123:Tesco Supermarkets Ltd v Nattrass
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534:
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362:. Brooker. pp. Chapter 10.
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328:Body Corporate 202254 v Taylor
158:described what happened thus,
108:, assumption of responsibility
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259:In his own judgement Justice
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7:
529:Trevor Ivory Ltd v Anderson
517:Trevor Ivory Ltd v Anderson
505:Trevor Ivory Ltd v Anderson
493:Trevor Ivory Ltd v Anderson
481:Trevor Ivory Ltd v Anderson
469:Trevor Ivory Ltd v Anderson
457:Trevor Ivory Ltd v Anderson
445:Trevor Ivory Ltd v Anderson
433:Trevor Ivory Ltd v Anderson
421:Trevor Ivory Ltd v Anderson
409:Trevor Ivory Ltd v Anderson
397:Trevor Ivory Ltd v Anderson
385:Trevor Ivory Ltd v Anderson
373:Trevor Ivory Ltd v Anderson
310:Trevor Ivory Ltd V Anderson
279:Trevor Ivory Ltd V Anderson
248:Trevor Ivory Ltd V Anderson
230:Trevor Ivory Ltd V Anderson
170:Trevor Ivory Ltd v Anderson
116:Trevor Ivory Ltd v Anderson
98:Piercing the corporate veil
21:Trevor Ivory Ltd v Anderson
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100:, Director's liabilities,
591:New Zealand tort case law
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96:Negligent misstatement,
581:1991 in New Zealand law
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102:Corporate personality
596:Corporate case law
531:2 NZLR 517 at 532.
519:2 NZLR 517 at 530.
507:2 NZLR 517 at 527.
495:2 NZLR 517 at 527.
483:2 NZLR 517 at 527.
471:2 NZLR 517 at 527.
459:2 NZLR 517 at 528.
447:2 NZLR 517 at 524.
435:2 NZLR 517 at 523.
423:2 NZLR 517 at 520.
411:2 NZLR 517 at 520.
399:2 NZLR 517 at 517.
387:2 NZLR 517 at 519.
375:2 NZLR 517 at 519.
324:leaky homes crisis
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128:leaky homes crisis
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586:1991 in case law
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86:and McGechan JJ
39:Court of Appeal
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553:. Retrieved
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340:Trevor Ivory
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317:Significance
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308:McGechan J,
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296:Hedley Byrne
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261:Hardie Boys
84:Hardie Boys
570:Categories
346:References
290:McGechan J
134:Background
66:2 NZLR 517
330:2 NZLR 17
246:Cooke P,
228:Cooke P,
185:Judgments
168:Cooke P,
144:raspberry
555:15 April
306:—
275:—
244:—
226:—
166:—
91:Keywords
63:Citation
217:Salomon
202:Cooke P
149:Roundup
80:Cooke P
55:Decided
140:Nelson
546:(PDF)
156:Cooke
35:Court
557:2015
219:and
221:Lee
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