GRANT BRUCE REYNOLDS V TOPLINE EXPORT & TRADING LIMITED HC AK CIV 2012-404-003532

GRANT BRUCE REYNOLDS V TOPLINE EXPORT & TRADING LIMITED HC AK CIV 2012-404-003532

The presumption of insolvency arising from the payment within six months was not rebutted; Topline proved good faith and lack of actual (subjective) knowledge of insolvency but failed to establish alteration of position required by s 296(3); accordingly the February 2011 payment of $19,613.24 was an insolvent transaction and must be set aside and repaid with interest; the March 2011 payment was a cash transaction and not pursued by the liquidator.

Citation
openlaw-fb5d4b69_5aaf_4772_b679_18bc387c9b55.pdf
Parties
Applicant (liquidator): Grant Bruce Reynolds; Respondent (creditor): Topline Export & Trading Limited; Company in Liquidation: Richmond Meats Limited (in Liquidation)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
21 November 2012
Procedural Posture
Insolvent Transaction Recovery Under the Companies Act 1993 / Oral Judgment at Hearing (high Court, Auckland)
Outcome
Payment of $19,613.24 set aside as an insolvent transaction; Topline ordered to repay that sum with interest; March 2011 payment not challenged; costs awarded to liquidator on scale 2B (half day) plus disbursements.
Legal Topics
Voidable Transaction, Insolvent Transaction, Statutory Defence S 296(3), Alteration of Position, Preference, Set Aside Payments
Company Law Insolvency Law Civil Procedure Voidable Transaction Insolvent Transaction Statutory Defence S 296(3) Alteration of Position Preference +1 more

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Parties

Grant Bruce Reynolds

Applicant (liquidator)

Topline Export & Trading Limited

Respondent (creditor)

Richmond Meats Limited (in Liquidation)

Company in Liquidation

Procedural Posture

Insolvent Transaction Recovery Under the Companies Act 1993 / Oral Judgment at Hearing (high Court, Auckland)

Legal Issues

  1. 1 Whether payment of $19,613.24 on or before 2 February 2011 was an insolvent transaction within six months of liquidation
  2. 2 Whether respondent established the defence in s 296(3) of the Companies Act 1993 (good faith, no reasonable grounds for suspicion of insolvency, and alteration of position)
  3. 3 Whether the $2,500 March 2011 payment was a cash transaction and not recoverable as an insolvent transaction

Ratio Decidendi

The presumption of insolvency arising from the payment within six months was not rebutted; Topline proved good faith and lack of actual (subjective) knowledge of insolvency but failed to establish alteration of position required by s 296(3); accordingly the February 2011 payment of $19,613.24 was an insolvent transaction and must be set aside and repaid with interest; the March 2011 payment was a cash transaction and not pursued by the liquidator.

Court Disposition

Payment of $19,613.24 set aside as an insolvent transaction; Topline ordered to repay that sum with interest; March 2011 payment not challenged; costs awarded to liquidator on scale 2B (half day) plus disbursements.

Orders

  • Order under s 292 Companies Act 1993: payment of $19,613.24 on or before 2 February 2011 set aside as an insolvent transaction
  • Order under s 295 Companies Act 1993: Topline to pay the liquidator $19,613.24 with interest at the prevailing Judicature Act 1908 rate from 22 June 2012 until payment