SANSON AND ANOR v EBERT CONSTRUCTION LIMITED [2015] NZHC 2402

SANSON AND ANOR v EBERT CONSTRUCTION LIMITED [2015] NZHC 2402

The payments made by BOSI under the Direct Agreement were advances of TPL's funds and functioned to reduce TPL's indebtedness to Ebert; those advances and the transfer of the apartment were transactions of TPL entered into within the restricted/specified period while TPL was insolvent; Ebert failed to prove the cumulative s296(3) defence (good faith and lack of reasonable grounds to suspect insolvency), so recovery under s295 is ordered.

Citation
[2015] NZHC 2402
Parties
Applicant (liquidator): Craig Alexander Sanson; Applicant (liquidator): David John Bridgman; Respondent: Ebert Construction Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
6 October 2015
Procedural Posture
Company Liquidation Voidable Transactions / Judgment (high Court)
Outcome
Application granted: transactions set aside and respondent ordered to repay sums received; leave reserved on interest and costs
Legal Topics
Voidable Transactions, Preferential Payments, Set Off, Direct Payment Agreements, Pari Passu Rule, Insolvency Defences
Companies Law Insolvency Contract Property Voidable Transactions Preferential Payments Set Off Direct Payment Agreements +2 more

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Parties

Craig Alexander Sanson

Applicant (liquidator)

David John Bridgman

Applicant (liquidator)

Ebert Construction Limited

Respondent

Procedural Posture

Company Liquidation Voidable Transactions / Judgment (high Court)

Legal Issues

  1. 1 Whether payments made by financier BOSI were transactions of the company (s292)
  2. 2 Whether transfer of apartment occurred within specified period and is a transaction under s292
  3. 3 Whether TPL was insolvent at time of the transactions

Ratio Decidendi

The payments made by BOSI under the Direct Agreement were advances of TPL's funds and functioned to reduce TPL's indebtedness to Ebert; those advances and the transfer of the apartment were transactions of TPL entered into within the restricted/specified period while TPL was insolvent; Ebert failed to prove the cumulative s296(3) defence (good faith and lack of reasonable grounds to suspect insolvency), so recovery under s295 is ordered.

Court Disposition

Application granted: transactions set aside and respondent ordered to repay sums received; leave reserved on interest and costs

Orders

  • Orders setting aside the Transactions: payment of $499,226.50 dated 18 November 2008, transfer of Apartment B401 and accessory unit AU40 treated as reduction of indebtedness of $540,000, and payment of $564,665.40 dated 21 November 2008
  • Order that Ebert Construction Limited pay to the liquidators the sum of NZD 1,603,891.90 pursuant to s295 Companies Act 1993