March 2009

The High Court upheld the effect of an "entire agreement" clause and would not allow a Fair Trading claim to be used as a "general warranty" where the Business Sale & Purchase Agreement contained specific warranties.

As from 1 March 2009 New Zealand has introduced a 90 day probationary period whereby a persons employment can be terminated without cause.  This is restricted to businesses with less than 20 employees and is subject to good faith obligations.  This is yet to be tested and is considered likely to give rise to alternative claims, e.g. breach of good faith or discrimination.

Following the Capital Markets Development Task Force the SDFA Bill proposes that:

• a streamlined disclosure prospectus to be used for a pro-rata rights issue (including access to the due diligence defence – in contrast to the Australian “cleaning statement” regime);

• amending the “eligible person” exemption .

• The Australian Government has  expanded their Foreign Acquisitions & Takeovers Act to ensure their 15% limit for overseas investment also covered more complex investment structures (e.g. convertible notes or debentures).

• The Australian Takeovers Panel in the "Perilya decision" took a pragmatic approach, in today’s volatile credit climate, holding a refundable deposit paid to a target company combined with a call option over a major asset of the target company was not “frustrating action” and was not a coercive lock-up.

• The USA announced the revised index for foreign investment thresholds for US investment.

• The Ontario Superior Court enforced obligations in a confidentiality agreement to injunct an unsolicited takeover.

The Commerce Commission has:

• cleared Media Monitors to acquire the business and assets of Chong Bureau Limited (Quigg Partners acting for Media Monitors);

• cleared Fletcher Building to acquire the assets of Stevenson's Whangarei and Auckland masonry businesses (accepting a failing firm argument);

• cleared Coca-Cola Amatil to acquire various assets of Old Fashioned Foods; and

• declined to approve Tegel Foods acquiring the Brinks poultry business.

• Multinational firm TenCate in acquiring a strategic shareholding in NZ synthetic company TigerTurf;
• On New Zealand matters concerning the global restructuring plan of AIG;

• European bank KBC on its sale of Liontamer interest to its NZ partners;

• An Australian private equity seller of a New Zealand business;

• On New Zealand matters concerning the international purchase of IBM's internal global logistics operations by Geodis;
• On New Zealand matters concerning Australian capital markets matters (including Wesfarmers, Bow Energy, Abacus Property Group and Lihir Gold); and
• On New Zealand matters concerning the US Treasury financial investment and restructuring plan of General Motors.