REYNOLDS AS LIQUIDATOR OF BAR AND BISTRO LIMITED (IN LIQUIDATION) AND ANOR V LOCHIEL CORPORATION LIMITED AND ANOR HC AK CIV-2009-404-501

REYNOLDS AS LIQUIDATOR OF BAR AND BISTRO LIMITED (IN LIQUIDATION) AND ANOR V LOCHIEL CORPORATION LIMITED AND ANOR HC AK CIV-2009-404-501

On the liquidator's affidavit and inquiry under s301(1) the Court was satisfied the second defendant caused the company to incur $156,250 of unsecured liabilities at a time when he had no reasonable grounds to believe the company could meet them, thereby breaching s136; the Court therefore ordered under s301(1)(b)(ii) that he contribute $156,250 to the company, with interest and costs.

Citation
openlaw-62768736_7cc8_4bdf_94b9_1bce06932f7e.pdf
Parties
First Plaintiff: Grant Bruce Reynolds as Liquidator of Bar and Bistro Limited (In Liquidation); Second Plaintiff: Bar and Bistro Limited (In Liquidation); First Defendant: Lochiel Corporation Limited; Second Defendant: Alexander Miroslav Blagojevic
Court
High Court
Jurisdiction
New Zealand
Judgment Date
20 May 2010
Procedural Posture
Company Law / Liquidation Claim Under the Companies Act 1993 / Judgment After Formal Proof (default; Substituted Service)
Outcome
Judgment for plaintiffs; second defendant found to have breached s136 Companies Act 1993 and ordered to contribute to company assets.
Legal Topics
Directors' Statutory Duties, Reckless Trading/insolvent Transactions, Contribution Orders, Related Party Transactions, Statutory Inquiries Under S301
Company Law Insolvency Civil Procedure Directors' Statutory Duties Reckless Trading/insolvent Transactions Contribution Orders Related Party Transactions Statutory Inquiries Under S301

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 3 Authorities cited 1 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Grant Bruce Reynolds as Liquidator of Bar and Bistro Limited (In Liquidation)

First Plaintiff

Bar and Bistro Limited (In Liquidation)

Second Plaintiff

Lochiel Corporation Limited

First Defendant

Alexander Miroslav Blagojevic

Second Defendant

Procedural Posture

Company Law / Liquidation Claim Under the Companies Act 1993 / Judgment After Formal Proof (default; Substituted Service)

Legal Issues

  1. 1 Whether the second defendant breached s136 of the Companies Act 1993 by causing the company to incur obligations when there were no reasonable grounds to believe the company could perform them
  2. 2 Whether the Court should, under s301(1)(b)(ii), order the second defendant to contribute to the company's assets
  3. 3 Determination of the amount for which the second defendant is liable

Ratio Decidendi

On the liquidator's affidavit and inquiry under s301(1) the Court was satisfied the second defendant caused the company to incur $156,250 of unsecured liabilities at a time when he had no reasonable grounds to believe the company could meet them, thereby breaching s136; the Court therefore ordered under s301(1)(b)(ii) that he contribute $156,250 to the company, with interest and costs.

Court Disposition

Judgment for plaintiffs; second defendant found to have breached s136 Companies Act 1993 and ordered to contribute to company assets.

Orders

  • Second defendant to contribute $156,250 to the assets of Bar and Bistro Limited (In Liquidation) pursuant to s301(1)(b)(ii) Companies Act 1993
  • Interest from the date of filing of the claim