L N & M J STANLEY V D P MCDONALD HC AK CIV-2011-404-005898

L N & M J STANLEY V D P MCDONALD HC AK CIV-2011-404-005898

The Court concluded the sale of 49 shares to the wife was a carefully contrived scheme made with intent to prejudice the applicants and was effected without reasonably equivalent value; the transferee did not act in good faith in the relevant insolvency sense and therefore s349 did not protect her, so s348 relief...

Source-derived case information.

Citation
openlaw-addfa087_4eda_4345_af29_c916626f3ef8.pdf
Parties
Applicants: L N & M J Stanley; First Respondent: D P McDonald; Second Respondent: McDonald Textures Properties Limited; Third Respondent: L M McDonald
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 March 2012
Procedural Posture
Civil Application Under Property Law Act 2007 (s348) Following Weathertight Homes Tribunal Award / Judgment on S348 Application (remedy and Vesting Order)
Outcome
Court ordered the 49 shares vested in D P McDonald pursuant to s348 and s350 for the limited purpose of allowing execution or bankruptcy administration; leave reserved for further orders; costs application reserved.
Legal Topics
Voidable Dispositions, Intent to Prejudice Creditors, Preference of Creditors, Valuation of Assets, Remedies Under Property Law Act 2007 (s348, S350, S349)
Property Law Insolvency Law Civil Procedure Voidable Dispositions Intent to Prejudice Creditors Preference of Creditors Valuation of Assets Remedies Under Property Law Act 2007 (s348,s350,s349)

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Parties

L N & M J Stanley

Applicants

D P McDonald

First Respondent

McDonald Textures Properties Limited

Second Respondent

L M McDonald

Third Respondent

Procedural Posture

Civil Application Under Property Law Act 2007 (s348) Following Weathertight Homes Tribunal Award / Judgment on S348 Application (remedy and Vesting Order)

Legal Issues

  1. 1 Whether the transfer of 49 shares was a disposition made with intent to prejudice creditors under s346(1)(b) of the Property Law Act 2007
  2. 2 Whether the disposition was made without receiving reasonably equivalent value
  3. 3 Whether s349 protects the transferee (good faith and valuable consideration)

Ratio Decidendi

The Court concluded the sale of 49 shares to the wife was a carefully contrived scheme made with intent to prejudice the applicants and was effected without reasonably equivalent value; the transferee did not act in good faith in the relevant insolvency sense and therefore s349 did not protect her, so s348 relief was available and vesting of the shares in the transferor was ordered under s350 to permit enforcement or bankruptcy administration.

Court Disposition

Court ordered the 49 shares vested in D P McDonald pursuant to s348 and s350 for the limited purpose of allowing execution or bankruptcy administration; leave reserved for further orders; costs application reserved.

Orders

  • Vested the 49 shares in McDonald Textures Properties Limited (transferred by D P McDonald to L M McDonald) in D P McDonald for the sole purpose of enabling execution or similar process against him or for administration of a future bankruptcy or arrangement with his creditors (s348/s350)
  • Reserved leave to the parties to apply for further orders