Overview of enforcement powers and civil remedies

(1) The following enforcement orders and remedies (civil remedy orders) are available under this subpart for a contravention of the takeovers code:

1. an injunction:
2. a civil remedy order under section 33I:
3. a compensatory order:
4. a pecuniary penalty order and declaration of contravention (on application by the Panel only).

(2) See section 2(2) for the definition of contravention of the takeovers code in this subpart.

(3) This section is a guide only to the general scheme and effect of this subpart

What Court may injunct

The Court may, on application by any person in accordance with section 35, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of the takeovers code.

When Court may grant injunctions and interim injunctions

(1) The Court may grant an injunction restraining a person from engaging in conduct of a particular kind if-

1. it is satisfied that the person has engaged in conduct of that kind; or
2. it appears to the Court that, if an injunction is not granted, it is likely that the person will engage in conduct of that kind.

(2) The Court may grant an interim injunction restraining a person from engaging in conduct of a particular kind if in its opinion it is desirable to do so.

(3) Subsections (1)(a) and (2) apply whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind.

(4) Subsections (1)(b) and (2) apply whether or not-

1. the person has previously engaged in conduct of that kind:
2. there is an imminent danger of substantial damage to any other person if that person engages in conduct of that kind.

Undertaking as to damages not required by Panel

(1) If the Panel applies to the Court for the grant of an interim injunction under this subpart, the Court must not, as a condition of granting an interim injunction, require the Panel to give an undertaking as to damages.

(2) However, in determining the Panel's application for the grant of an interim injunction, the Court must not take into account that the Panel is not required to give an undertaking as to damages.

When Court may make various civil remedy orders

The Court may, on application by any person in accordance with section 35, make 1 or more of the civil remedy orders described in section 33J if the Court is satisfied on reasonable grounds that a person has contravened or is contravening or intends to contravene the takeovers code.

Terms of various civil remedy orders

A civil remedy order under section 33I may-

1. restrain the exercise of rights attaching to securities or declare an exercise of those rights to be void and of no effect:
2. restrain the issue or allotment of securities or restrain any distribution due in relation to securities:
3. restrain the acquisition or disposal of securities or of interests in or rights relating to them or restrain the registration of any transfer or transmission of securities:
4. direct the disposal of securities or of interests in or rights relating to them (including the person or class of persons to which they must, or must not, be disposed of) and direct the payment of the proceeds of any disposal:
5. require securities to be forfeited and require the public issuer to cancel the forfeited securities:
6. cancel an agreement for the acquisition or disposal of securities or interests in or rights relating to them:
7. vest securities or interests in or rights relating to them in a trustee for sale on the terms and conditions the Court thinks fit:
8. declare an agreement for the acquisition of securities or interests in or rights relating to them to be voidable at the option of the person from whom the securities or interests or rights were acquired:
9. if a contract is entered into in contravention of the takeovers code, or a contract contains a provision which, if given effect to, would contravene the takeovers code,-
   1. vary the contract, in such manner as the Court thinks fit:
   2. cancel the contract:
   3. require any person who is a party to the contract to make restitution or pay compensation to any other person who is a party to the contract:
10. prohibit or restrict a person from making any statement or distributing any document that is or that may reasonably be expected to constitute a contravention of the takeovers code:
11. direct a person to disclose in accordance with the order information for the purpose of securing compliance with the takeovers code even though the time for doing so may have expired:
12. direct a person to publish, at the person's own expense, in the manner and at the times specified in the order corrective statements that are specified in, or are to be determined in accordance with, the order:
13. require a person to comply with any provision of the takeovers code even though the time for doing so may have expired.

When Court may make compensatory orders

(1) The Court may make a compensatory order, on application by any person in accordance with section 35, if the Court is satisfied that-

1. there is a contravention of the takeovers code; and
2. a person (the aggrieved person) has suffered, or is likely to suffer, loss or damage because of the contravention.

(2) The Court may make a compensatory order whether or not the aggrieved person is a party to the proceedings.

Terms of compensatory orders

If section 33K applies, the Court may make any order it thinks just to compensate an aggrieved person in whole or in part for the loss or damage, or to prevent or reduce that loss or damage, including an order (without limitation) to-

1. direct the person in contravention to pay to the aggrieved person the amount of the loss or damage:
2. direct the person in contravention to refund money or return property to the aggrieved person:
3. if a contract has been entered into between the person in contravention and the aggrieved person,-
   1. vary the contract or any collateral arrangement as specified in the order and, if the Court thinks fit, declare the contract or arrangement to have had effect as so varied on and after a date before the order was made, as specified in the order:
   2. cancel the contract and, if the Court thinks fit, declare the cancellation to have had effect on and after a date before the order was made, as specified in the order:
   3. require the person in contravention to take any action the Court thinks fit to reinstate the parties as near as may be possible to their former positions.

When Court may make pecuniary penalty orders and declarations of contravention

If the Panel applies for a pecuniary penalty order against a person under this Act in accordance with section 35, the Court-

1. must determine whether the person has contravened the takeovers code; and
2. must make a declaration of contravention (see sections 33N and 33O) if satisfied that the person has contravened the takeovers code; and
3. may order the person to pay a pecuniary penalty that the Court considers appropriate to the Crown (see sections 33P and 33Q) if satisfied that the person has contravened the takeovers code, that the person knew or ought to have known of the conduct that constituted the contravention, and that the contravention-
   1. materially prejudices the interests of offerees, the specified company, the offeror or acquirer, competing offerors, or any other person involved in or affected by a transaction or event that is or will be regulated by the takeovers code, or that is incidental or preliminary to a transaction or event of that kind; or
   2. is likely to materially damage the integrity or reputation of any of New Zealand's securities markets; or
   3. is otherwise serious.

Purpose and effect of declarations of contravention

(1) The purpose of a declaration of contravention is to enable an applicant for a civil remedy order under section 33I or a compensatory order under section 33K to rely on the declaration of contravention in the proceedings for that order, and not be required to prove the contravention.

(2) Accordingly, a declaration of contravention is conclusive evidence of the matters that must be stated in it under section 33O.

What declarations of contravention must state

A declaration of contravention must state the following:

1. the court that made the declaration; and
2. the provision of the takeovers code to which the contravention relates or, if the contravention is of an exemption, both the term or condition contravened and the takeovers code provision to which the exemption relates; and
3. the person in contravention; and
4. the conduct that constituted the contravention and, if a transaction constituted the contravention, the transaction; and
5. the specified company to which the conduct related.

Maximum amount of pecuniary penalty

The maximum amount of a pecuniary penalty is $500,000 for an individual and $5,000,000 for a body corporate, for each contravention.

Considerations for Court in determining pecuniary penalty

In determining an appropriate pecuniary penalty, the Court must have regard to all relevant matters, including-

1. the principles contained in the takeovers code; and
2. the nature and extent of the contravention; and
3. the likelihood, nature, and extent of any damage to the integrity or reputation of any of New Zealand's securities markets because of the contravention; and
4. the nature and extent of any loss or damage suffered by a person referred to in section 33M(c)(i) because of the contravention; and
5. the circumstances in which the contravention took place; and
6. whether or not the person in contravention has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct.

Court must order that recovery from pecuniary penalty be applied to Panel's actual costs

If the Court orders that a person pay a pecuniary penalty, and the proceedings were brought (in whole or in part) by the Panel, the Court must also order that the penalty must be applied first to pay the Panel's actual costs in bringing the proceedings.

Court may make orders (repealed)

Persons who may apply

(1) Where the Panel makes a determination under section 32(3)(b) of this Act (a determination that the Panel is not satisfied that a person has acted or is acting or intends to act in compliance with the takeovers code) the following persons may, subject to subsection (2) of this section, make an application to the Court under section 33F, 33I, or 33K:

1. The Panel:
2. If the specified company's securities are, or were at any material time, quoted on a registered exchange's market, that registered exchange:
3. The specified company concerned:
4. A member or security holder of the specified company concerned:
5. A person who was a member or security holder of the specified company concerned at the time that the conduct to which the application relates occurred:
6. A person who, at any time within the period of 6 months before the making of the application, has made an offer or offers to acquire securities in the specified company in accordance with the takeovers code:
7. with the leave of the Court, any other person.

(2) A person referred to in any of paragraphs (b) to (f) of subsection (1) of this section is not entitled to make an application to the Court unless -

1. The Panel has consented to the making of the application; or
2. That person has requested the Panel in writing to make an application to the Court itself and the Panel has not made such an application before the expiration of 10 days after receiving the request.

(3) Where a request is made to the Panel to hold a meeting under section 32 (1) of this Act and the Panel does not, within 14 days after receiving the request, make a determination under section 32(3) of this Act, the following persons may make an application to the Court under section 33F, 33I, or 33K -

1. If the specified company's securities are, or were at any material time, quoted on a registered exchange's market, that registered exchange:
2. The specified company concerned:
3. A member or security holder of the specified company concerned:
4. A person who was a member or security holder of the specified company concerned at the time that the conduct to which the application relates occurred:
5. A person who, at any time within the period of 6 months before the making of the application, has made an offer or offers to acquire securities in the specified company in accordance with the takeovers code:
6. With the leave of the Court, any other person.

(4) If the Panel makes a determination under section 32(3)(b) (a determination that the Panel is not satisfied that a person has acted or is acting or intends to act in compliance with the takeovers code), the Panel may make an application to the Court under section 33M.

Court may have regard to determinations and recommendations by Panel

(1) The Court may, in determining any application under this subpart, have regard to any determination made by the Panel under section 32(3) of this Act relating to the matter concerned.

(2) The Court may, in determining whether to make any order under section 33I or 33K and the type of any such order, have regard to any recommendation made by the Panel either at any meeting of the Panel held for the purposes of section 32 of this Act or at the request of the Court.

Court may excuse contravention

(1) If the Court is satisfied that a person has, by any act or omission, contravened the takeovers code, but that the contravention ought to be excused, the Court may (by order) declare that the act or omission was not a contravention of the code.

(2) In considering whether the contravention should be excused, the Court may have regard to-

1. inadvertence or mistake on the part of the person concerned:
2. whether the person was aware of a relevant factor or circumstance:
3. circumstances beyond that person's control:
4. any other matters that the Court thinks fit.

(3) The order has effect according to its tenor.

Court may require person to give evidence or produce documents relating to interests in securities

(1) The Court may, in any application under this subpart, for the purpose of ascertaining whether any person -

1. Has or had any direct or indirect interest in or right to any security in the specified company concerned; or
2. Has or had any direct or indirect right to exercise any voting rights attaching to any such security, -

order any person to -

3. Attend before the Court and be examined on oath or affirmation; or
4. Produce documents in that person's possession or under that person's control.

(2) An order under subsection (1) of this section may be made on the application of any person who is a party to the application under this subpart.

More than 1 civil remedy order may be made for same conduct

The Court may make a civil remedy order of one kind against a person even though the Court has made another civil remedy order of a different kind against the person for the same conduct.

Examples
The Court may make a compensatory order and a pecuniary penalty order for the same conduct.
The Court may make a civil remedy order requiring forfeiture of securities and declaring a previous exercise of voting rights attaching to those securities to be void.

Only 1 pecuniary penalty order may be made for same conduct

If conduct by a person constitutes a contravention of 2 or more provisions of the takeovers code, proceedings may be brought against that person for the contravention of any one or more of the provisions, but no person is liable to more than one pecuniary penalty order for the same conduct.

Standard of proof for civil remedies

The proceedings under this subpart are civil proceedings and the usual rules of the Court and rules of evidence and procedure for civil proceedings apply (including the standard of proof).

Time limit for applying for civil remedies

(1) An application for a civil remedy order under section 33I or a pecuniary penalty order under section 33M may be made at any time within 2 years after the date on which the matter giving rise to the contravention was discovered or ought reasonably to have been discovered.

(2) The usual time limits apply to all applications for other civil remedy orders.

(3) However, an application for a compensatory order in respect of a contravention may be made at any time within 6 months after the date on which a declaration of contravention is made, even if the usual time limit has expired.