Assessing the Personal Liability of Directors and Employees: s9 of the FTA

Assessing the Personal Liability of Directors and Employees: s9 of the FTA

Assessing the Personal Liability of Directors and Employees: s9 of the FTA

When: 5.15pm to 6.15pm, Tuesday 4 September 2018

Where: Northern Club, Princes St, Auckland

When will a director or employee be individually liable for misleading or deceptive conduct under section 9 of the Fair Trading Act?

Generally trading corporations rather than individuals are sued under section 9 of the FTA. However, when a company has become insolvent or financially unstable it makes sense for aggrieved parties to sue the individual employees or directors for misleading and deceptive conduct. Certainly this is common in leaky building disputes when the developer or construction company has been liquidated or has gone into receivership.  The main issue is whether the individual, who is acting for the trading entity, can be considered to be acting “in trade”. There are two dominant approaches to this question - a broad and a narrow approach. 

The divergence of approaches makes it somewhat difficult for lawyers to advise their clients and also for the lower courts to apply the law. The problem in practice is the appropriate scope of the law, that is, when will employees and directors be categorized as acting “in trade”? In this seminar, Kate Tokeley argues for a middle ground approach. She will explore the wording of section 9, the latest case law and then articulate a possible new framework.

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