PETER ESMOND FARRELL AND SIMON PAUL ROGAN AS LIQUIDATORS OF CONTRACT ENGINEERING LIMITED (IN LIQUIDATION) V ACME ENGINEERING LIMITED HC ROT CIV 2012-463-000175

PETER ESMOND FARRELL AND SIMON PAUL ROGAN AS LIQUIDATORS OF CONTRACT ENGINEERING LIMITED (IN LIQUIDATION) V ACME ENGINEERING LIMITED HC ROT CIV 2012-463-000175

Although the liquidators proved the company was insolvent at the relevant time, the respondent satisfied s 296(3) by proving it acted in good faith, had no reasonable grounds to suspect insolvency, and had given value (supplied the contracted flash silencer); accordingly the payments were not recoverable and the application was dismissed.

Citation
openlaw-b09c2f5e_9915_4bec_8c2e_b6a1a03343fd.pdf
Parties
Applicant (liquidator): PETER ESMOND FARRELL; Applicant (liquidator): SIMON PAUL ROGAN; Respondent: ACME ENGINEERING LIMITED
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 November 2012
Procedural Posture
Companies Act Liquidation Voidable Transactions (s 296) / Judgment on Application to Set Aside Payments
Outcome
Application dismissed
Legal Topics
Voidable Transactions, Preference, Insolvency Test, Good Faith, Alteration of Position, Companies Act 1993 S 296
Insolvency Company Law Civil Procedure Voidable Transactions Preference Insolvency Test Good Faith Alteration of Position +1 more

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Parties

PETER ESMOND FARRELL

Applicant (liquidator)

SIMON PAUL ROGAN

Applicant (liquidator)

ACME ENGINEERING LIMITED

Respondent

Procedural Posture

Companies Act Liquidation Voidable Transactions (s 296) / Judgment on Application to Set Aside Payments

Legal Issues

  1. 1 Whether the company was insolvent at the time of the payments
  2. 2 Whether the respondent acted in good faith when receiving payments
  3. 3 Whether a reasonable person in the respondent's position would have suspected insolvency

Ratio Decidendi

Although the liquidators proved the company was insolvent at the relevant time, the respondent satisfied s 296(3) by proving it acted in good faith, had no reasonable grounds to suspect insolvency, and had given value (supplied the contracted flash silencer); accordingly the payments were not recoverable and the application was dismissed.

Court Disposition

Application dismissed

Orders

  • Application dismissed
  • Applicants to pay respondent's costs on a category 2B basis