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Limited Partnerships Act 2008

General - Derivative actions

82: Derivative actions

You could also call this:

"When a partner can take a court case on behalf of their limited partnership"

Illustration for Limited Partnerships Act 2008

If you are a partner in a limited partnership, you can ask the Court for permission to take legal action on behalf of the partnership. The Court can give you permission to start a court case in the name of the partnership or to join a case that the partnership is already a part of. You can do this to continue, defend, or stop a court case on behalf of the partnership. When the Court decides whether to give you permission, it thinks about whether the court case will succeed, how much it will cost, and what the partnership has already done about the issue. The Court also considers what is best for the partnership and whether the partnership's leaders are taking the right action. You must tell the limited partnership that you are asking the Court for permission to take legal action. The limited partnership can then tell the Court its thoughts on the matter and whether it plans to take any action. Normally, a limited partner cannot take legal action on behalf of the partnership, but the Court can make an exception in certain cases, you can see similar rules in the s 165 legislation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1139244.

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83: Costs of derivative action to be met by limited partnership, or

"Who pays the costs when a partner in a limited partnership takes legal action"

Part 2General
Derivative actions

82Derivative actions

  1. Subject to subsection (3), the Court may, on the application of a partner of a limited partnership, grant leave to that partner to—

  2. bring proceedings in the name and on behalf of the limited partnership; or
    1. intervene in proceedings to which the limited partnership is a party for the purpose of continuing, defending, or discontinuing the proceedings on behalf of the limited partnership, as the case may be.

      1. Without limiting subsection (1), in determining whether to grant leave under that subsection, the Court must have regard to—

      2. the likelihood of the proceedings succeeding:
        1. the costs of the proceedings in relation to the relief likely to be obtained:
          1. any action already taken by the limited partnership to obtain relief:
            1. the interests of the limited partnership in the proceedings being commenced, continued, defended, or discontinued, as the case may be.

              1. Leave to bring proceedings or intervene in proceedings may be granted under subsection (1) only if the Court is satisfied that either—

              2. the limited partnership does not intend to bring, diligently continue or defend, or discontinue the proceedings, as the case may be; or
                1. it is in the interests of the limited partnership that the conduct of the proceedings should not be left to the general partners or to the determination of the partners as a whole.

                  1. Notice of the application must be served on the limited partnership.

                  2. The limited partnership—

                  3. may appear and be heard; and
                    1. must inform the Court whether or not it intends to bring, continue, defend, or discontinue the proceedings, as the case may be.

                      1. Except as provided in this section, a limited partner is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a limited partnership.

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