Yan v Mainzeal Property and Construction Ltd (in liq) - [2021] 3 NZLR 598

Company law — Directors’ duties — Reckless trading — “Serious” — “Substantial” — “Likely” — Objective — Risk beyond what is normal, acceptable and legitimate — Companies Act 1993 ss 135 and 301.

Company law — Directors’ duties — Duty in relation to incurring obligations — Long-term contracts without reasonable grounds for belief obligations would be met — Short-term debts at later date without reasonable grounds for belief obligations would be met — Companies Act 1993 ss 136 and 301.

Company law — Directors’ duties — Compensation — Correct basis for award — Breach of reckless trading did not lead to loss as no net deterioration could be shown — Whether entire deficiency or net deterioration basis appropriate — Loss in relation to incurring obligations to be calculated — Companies Act ss 135, 136 and 301.