The English High Court in Re Caledonian Ltd considered whether the business practices of two companies justified the winding up of these companies on a just and equitable basis.
Caledonian Ltd and Caledonian Commodities Ltd (Companies) in concert marketed and sold (among other products) carbon credits, rare earth metals and coloured diamonds (Products) to individual investors.
The Secretary of State for Business, Innovation and Skills brought a petition for the winding-up of the Companies on the grounds of public interest, including that the Companies had overpromised, used marketing material that was misleading and charged inflated commissions on their products (such as mark-ups of 170%-345%). In determining whether it was just and equitable to wind up the Companies, the Court noted that:
- The Companies had been conducted in a way which did not meet accepted minimum standards of commercial behaviour
- The Companies' failings were serious and the sums involved were significant for many of the individual investors.
The Court made an order winding up the Companies.
While there is no express power for the Court here to liquidate a company on public interest grounds, liquidation orders would be made in similar circumstances in New Zealand on the 'just and equitable' ground.
See Court decision here.