It is settled law that section 261 of the Companies Act 1993 applies to directors and former directors residing outside of New Zealand. Here, the liquidators requested documents from a shareholder company and a creditor company incorporated outside of New Zealand. The Court noted that the question of whether it had jurisdiction to make the orders sought against an overseas shareholder or creditor turns on the territorial reach of section 261, and the starting point is the long-established presumption of statutory interpretation that statues do not have extraterritorial effect in the absence of clear words or necessary implication.
The High Court was reluctant to extend the powers under sections 261 and 266 to have an extraterritorial reach to overseas shareholders and creditors, as they are not responsible for the company, and do not control its business or operations. It is also noted that the fact that non-compliance with section 261 is an offence punishable by a potentially significant fine or imprisonment tells against the provision being interpreted to have extraterritorial application in the absence of a clear indication of the Parliament’s intention to allow the section to have an extraterritorial reach.
Grant v Arena Alceon NZ Credit Partners LLC, [2023] NZHC 3048
