GERALD STANLEY REA AND PAUL GRAHAM SARGISON V NEIL ALBERT WOLFGRAM HC AK CIV 2008-404-005635

GERALD STANLEY REA AND PAUL GRAHAM SARGISON V NEIL ALBERT WOLFGRAM HC AK CIV 2008-404-005635

The court concluded on the evidence that Claybrook was insolvent in August 2007 and the payments were therefore presumptively voidable; the respondent failed to rebut the presumption because the repayments were informal, poorly documented, not in the ordinary course of business and not part of an integral continuing business relationship; accordingly the payments are set aside and the respondent ordered to repay $160,000 pursuant to s 295(a).

Citation
openlaw-9f66ccac_128f_445c_b707_70f5fbbeab9a.pdf
Parties
Applicant Liquidator: Gerald Stanley Rea; Applicant Liquidator: Paul Graham Sargison; Respondent: Neil Albert Wolfgram
Court
High Court
Jurisdiction
New Zealand
Judgment Date
21 August 2009
Procedural Posture
Companies Act 1993 Liquidation; Application to Set Aside Transactions / High Court Final Judgment on Application to Set Aside Payments
Outcome
Application to set aside payments granted; payments set aside and respondent ordered to repay $160,000; applicants awarded costs
Legal Topics
Voidable Transactions, Preferences, Ordinary Course of Business, Continuing Business Relationship, Running Account, Setting Aside Payments
Companies Law Insolvency Law Civil Procedure Voidable Transactions Preferences Ordinary Course of Business Continuing Business Relationship Running Account +1 more

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Parties

Gerald Stanley Rea

Applicant Liquidator

Paul Graham Sargison

Applicant Liquidator

Neil Albert Wolfgram

Respondent

Procedural Posture

Companies Act 1993 Liquidation; Application to Set Aside Transactions / High Court Final Judgment on Application to Set Aside Payments

Legal Issues

  1. 1 Whether payments of $60,000, $80,000 and $20,000 made by Claybrook in August 2007 are voidable under s 292/294 Companies Act 1993
  2. 2 Whether the payments were made in the ordinary course of business (pre-amendment test)
  3. 3 Whether the payments form an integral part of a continuing business relationship/run ning account under s 292(4B)

Ratio Decidendi

The court concluded on the evidence that Claybrook was insolvent in August 2007 and the payments were therefore presumptively voidable; the respondent failed to rebut the presumption because the repayments were informal, poorly documented, not in the ordinary course of business and not part of an integral continuing business relationship; accordingly the payments are set aside and the respondent ordered to repay $160,000 pursuant to s 295(a).

Court Disposition

Application to set aside payments granted; payments set aside and respondent ordered to repay $160,000; applicants awarded costs

Orders

  • Set aside $60,000 paid on 8 August 2007
  • Set aside $80,000 paid on 30 August 2007