Legal Claim For Businesses: Report Discussion And Analysis

Legal and Cultural Differences between Māori Businesses and General Businesses

Discuss about the Report for Legal Claim for Businesses.

1 (a) There also are some important areas in which M?ori businesses may differ from those of ‘general’ businesses in New Zealand. Differences between M?ori businesses and general business operations can be broken down into two main categories:

Legal Differences

M?ori businesses must comply with all New Zealand laws that apply to businesses generally. However there are some laws that apply only to M?ori businesses. For example, the M?ori Reserved Lands Act (1997); Te Ture Whenua M?ori Act (1993) and the M?ori Fisheries Act (2004) set rules and establish structures and processes that many M?ori businesses, based on collectively owned assets (such as M?ori land and fishing quota), must follow.

Cultural differences

M?ori culture and values may be woven throughout M?ori businesses in clear and obvious ways, or in a more subtle and less visible manner. For example, some businesses openly promote M?ori language, culture and products; or are based on tribal assets. Other M?ori businesses may appear to operate like general businesses, but may incorporate M?ori values such as manaakitanga, whanaungatanga and tuhonotangaion.

1(b) It is imperative to note that the Maori companies are run based on moral values. As such it is important to note that Principles and a guiding philosophy based on values can determine how a company wishes to operate, and organize internally, how it relates to others, how it wishes to be seen by others, and help establish a company culture

indigenous branding is also practiced by the Maori and can be used by other corporate entities as a way to tell a story, create a distinct cultural identity, express culture, express company concepts and values, or illustrate company philosophy, but believed indigenous branding should be carefully controlled.

1(c) The major cultural challenge for the Maori businesses is the people who are adamant to change. The people have made their minds and thinking to rigid cultural beliefs instead of opening up to the modern aspects that are applied in business. This has cased a gradual growth and development of majority of the corporate entities.

The legal challenge that faces the Maori business is the lack of skilled human resource that will comply with the general legal standards. Lack of quality strategic planning and implementation has also been regarded as some of the legal challenges.

1(d) The legal challenge that the non –Maori people face when approaching Maori corporate entities is the fact that there are too many owners and thus fulfilling the legal requirement that a consent and approval must be sought from all owners is burdensome.

Challenges Faced by Māori Businesses and Non-Māori Businesses

Issue

The issue for determination here is whether the Ms., Clark’s actions were valid as an agent of the two companies. The fundamental question that lies here is whether she had authority to represent both companies.

Rule

The applicable law in this case will be the indoor management rule only which has scope for operation if it can be established independently that the person purporting to represent the company had actual or ostensible authority to enter into the transaction. (Northside Developments Pty v Registrar-General)

Application

The doctrine of necessitous intervention asserts that an individual may act on behalf of the firm out of necessity. Mrs Clark can claim that she acted out of necessity and therefore the contracts are valid.

It can also be argued that Ms. Clarks acted for the purposes of the business efficiency and to ensure that the business does not lose it customers. In ANZ Bank v Ateliers (1966) the court held that Helios had the authority to act as an agent of the business where it would be efficient and beneficial to the company.

The authority may also be an apparent authority where the company made the impression to other outside parties that Ms. Clarks was representing the company in the position of a managing director. (Freeman and Lockyer v Buckhurst Park Properties (Mangal) Ltd 1964)

It is of interest to note that section 18 of the companies act connotes that when the person has knowledge or ought to have knowledge of the affairs in the company then the agency relationship will not be presumed.in this case. If the third parties have the knowledge that the agent has no such authority then the actions of the agent will be invalidated. The requirement is that the third party ought to have actual knowledge of the true facts (Brick and Pipe Industries Ltd v Occidental Life Nominees Ltd. Supreme Court of Victoria).

Conclusion

It can be concluded that if the actions of Mrs. Clarks were also ratified by the board there can be valid contract if she was acting for the benefit of the company and not for her own personal interest. It should also be noted that the companies will be liable for actions or omissions of a person who was acting as an agent of the company if the act was committed during the course of the work authorized to perform (Blake v JR Perry Nominees Pty Ltd, 2012). It can thus be concluded that contractual liability will attach where it can be shown that Ms. Clarks was acting in the normal authority permitted by the company.

Issue Related to Authority of an Agent

As part of the Corporate Social Responsibility the company should ensure that goods or services provided by the enterprise meet all legal standards required for maintaining the consumer's health and safety, including health precautions and product safety regulations, in addition to providing informative labels on the products. All reasonable precautions should be employed or taken to ensure the quality and safety of its services and goods', taking into consideration the entire life cycle for each product, as the objective is to ensure safe utilization,

The company should ensure that it manages the concerns of the stakeholders. It should employ Stakeholder Analysis which is a technique used to identify and assess the influence and importance of key people, groups of people, or organizations that may significantly impact the success of your activity or project. Stakeholder is a person who has something to gain or lose through the outcomes of a planning process, programme or project. Therefore the company should ensure that they reduce any risks that may be available to the stake holders by providing consumer guarantees that the goods are of acceptable quality to protect the stake holders from any harm (Consumer guarantee Act section 41). In Nesbit v Porter [2000] goods may be of merchantable quality under SOGA but not of acceptable quality under the CGA. A higher standard seems to have been taken by the Consumer Guarantee Act. However, everything would be tested against a reasonable consumer well acquainted with the nature of the goods and defects and have regard to section 7.

The overarching rule entrenched by the law of negligence is that one should reasonably foresee acts or omissions that are like to cause harm to a neighbor (Donoghue v. Stevenson, 1932).  Ideally, Lording Artkin in the foregoing case defines a neighbor as persons who are likely to be affected by ones act or omissions and should therefore be put in their contemplation. Additionally pursuant to Section 15 of the Sale of Goods Act, the company should thus ensure that the products are safe for use and their content matches the description that has bee provided. This position was also restated in Taylor v Combined Buyers [1924].

Social protection programme within a company should be much more sensitive to child protection issues by including elements that ensure that the products that are manufactured are not harmful to children. UNICEF, the UN Global Compact, and Save the Children developed the Children’s Rights and Business Principles (the “Principles”). The Principles “call on business to respect and support children’s rights throughout their activities and business relationships” and build on the Protect, Respect, and Remedy framework outlined in the U.N. Guiding Principles on Business and Human Rights. The Principles illustrate that companies can impact the rights of the child through actions in the workplace, the marketplace, the community, and the environment.

Question 6

Issues

The issue here is whether mini can bring a claim pursuant to the Companies Act 1993 despite the fact the she is a minority share holder.

Rule

The general rule is that if a company suffers a wrong then prima facie it is the company that should seek redress for that wrong (Foss v Harbottle 1843).  The proper plaintiff in challenge against any wrong in the company is the company itself. Howevr, the derivative action in the Companies Act 1993 creates an exception.

Application

A derivative action confers standing on a single director or shareholder of a company to seek the leave of the High Court to bring proceedings in the name of or on behalf of a company or related company, or, to intervene in proceedings to which the company or related company is a party (Section 165(1) of the Companies Act 1993).

Section 165(2) of the Companies Act 1993 provides that, when determining whether to exercise its discretion to grant leave to an applicant shareholder or director, the Court shall have regard to:

• The likelihood of the proceedings succeeding:
• The costs of the proceedings in relation to the relief likely to be obtained:
• Any action already taken by the company or related company to obtain relief:
• The interests of the company or related company in the proceedings being commenced, continued, defended or discontinued as the case may be.

Fisher J first considered the criteria in s 165(2) in the High Court in Vrij v Boyle (1995) .Here the applicant's complaint on behalf of the company was that Boyle, the defendant director and majority shareholder, had diverted custom and opportunities of the company to another business he and his family had set up. The plaintiff sought leave to commence proceedings in the company's name for breach of fiduciary duty against Boyle, Boyle's wife (also a shareholder), and Boyle's children who were involved in the new business. Fisher J considered all of the criteria in s 165(2) but that in s 165(2)(a) - the likelihood of the proceedings succeeding - received the greatest attention.

Conclusion.

It can be concluded that Mini can bring a legal claim towards the action of the Dux who is the sole director of the company. However fro the action to be successful it must satisfy the test above.