Equiticorp Industries Group Ltd (In Statutory Management) v The Crown (Judgment No 47: Summary) - [1996] 3 NZLR 586

Trusts and trustees — Constructive trust — Knowing receipt of trust property — Dishonest assistance in misappropriation of trust property — Crown selling shares to subsidiary company financially assisted in purchase by holding company — Sale grossly improvident for purchaser to knowledge of Crown agents and officials — Whether knowledge of agents and officials able to be imputed to Crown — Whether Crown liable to return property — Remedy for knowing receipt and dishonest assistance.

Equity — Equitable defences — Clean hands — Directors entering into illegal transactions — Company seeking to recover property transferred — Whether company party to directors' acts — Whether company coming to equity with clean hands.

Company law — Shares — Company assisting purchase of own shares — Transaction amounting to sale of shares by holding company to subsidiary company — Whether illegal contracts — Whether contracts should be validated — Companies Act 1955, ss 40 and 62 — Illegal Contracts Act 1970, ss 6 and 7.

Contract — Quasi-contract — Action for money had and received — Company illegally providing financial assistance for purchase of own shares — Subsidiary company purchasing shares in holding company — Whether recipient of money paid for shares liable for money had and received.

Company law — Statutory management — Statutory trust — Company illegally providing financial assistance for purchase of own shares — Subsidiary company purchasing shares in holding company — Companies later placed in statutory management — Whether money and bank deposits "property" — Whether just and equitable that money paid be held on trust for companies — Corporations (Investigation and Management) Act 1989, s 54(1).

Contract — Illegal contract — Tainting — Contract with foreign company — Crown purchasing shares from third party — Purchase of Crown's shares illegal due to purchasing company's being provided with financial assistance for purchase of own shares — Foreign companies providing some of finance for purchase — Subsidiary company purchasing shares in holding company — Whether property passing under contracts — Whether Crown's purchase tainted by illegality of on-sale — Whether contract with foreign company illegaL

Equity — Unjust enrichment — Crown receiving money from illegal sale of shares — Whether unjust enrichment an independent cause of action.

Equity — Estoppel — Estoppel by representation — Delinquent directors entering into unlawful transactions on behalf of company — Whether representations by directors binding on company — Whether reliance on representations.

Company law — Directors — Customary authority — Delinquent directors entering into illegal and grossly improvident transactions on behalf of company — Whether transactions within directors' customary authority — Whether directors have power to commit company to illegal and grossly improvident transactions — Companies Act 1955, s 18C.

Company law — Shareholders — Ratification — Delinquent directors entering into unlawful transactions on behalf of company — No general meeting of shareholders to ratify directors' acts — Whether transactions ratified by shareholders.