Judgment: Te Mania v Wilding

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TE MANIA v WILDING

Reasons for Interim Judgment delivered on 5 April 2017

The long contest over the future of New Zealand's prestigious Te Mania Aberdeen Angus Stud in North Canterbury has been determined by the High Court in Christchurch.

Te Mania Livestock Ltd ("TML") was formed in 1996, to include descendants of the stud's 1926 founder, Edwin Wilding, together with overseas and New Zealand interests.

Over time severely fractured personal and corporate relationships developed, leading to a range of court actions culminating in a 2016 civil trial, which ran into 2017.

The principal issue for the Court was whether TML should be put into liquidation or whether a minority shareholder and the plaintiff in the case, Mr Timothy Wilding, should have the opportunity to purchase the shares of other shareholders who wish to exit their investment, and if so at what price.

Under section 174 of the Companies Act the Court has wide discretionary powers to act in circumstances where a shareholder or the affairs of a company have been, are being, or are likely to be "conducted in a manner that is oppressive, unfairly discriminatory, or unfairly prejudicial."

In an interim judgment released on 5 April 2017, Nicholas Davidson J held that S 174 was engaged. Voluminous evidence adduced over 32 days of hearing demonstrated the conduct of the parties, had at times been prejudicial and discriminatory to the company, in various ways and there was no good will left between them. The likelihood of further prejudice to TML was elevated to certainty,

The Court noted that while the parties were all able and well intentioned, their different aspirations, and a breakdown in their personal relationships, meant they should have separated their interests several years ago. Instead they remained involved while a series of severely disruptive events heightened the division between them.

The Court held that the company must be fundamentally restructured or liquidated.

As liquidation is an option of last resort and there is a promising future for the Te Mania Aberdeen Angus Stud, the Court concluded it was in the interest of all parties, including creditors, that Timothy Wilding be given the opportunity to purchase the shares of those shareholders who wish to exit their investment, at a fair value fixed by the Court. Only if Mr Wilding cannot or will not do so should the Company pass into liquidation.

The reasons for the Court's judgment, including a detailed fair value of the shares, are set outset out the separate Reasons for interim Judgment released today.

Among the wide range of claims and counterclaims the court had to determine before coming to its final decision were: the conduct of the parties since TML's formation; the handling of various lease arrangements relating to land, including Department of Conservation land; allegations of stock mistreatment, malicious prosecution and abuse of process. Multiple valuation issues have been determined.

A condition of the Interim Judgment is that Mr Wilding not pursue any further action in relation to any of the issues addressed in the Interim Judgment, as without this there would be no clean break between the parties. Some residual issues are still to be determined if Mr Wilding elects to purchase the shares.

Original document of media notes [PDF]
Full judgment [PDF]

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