GRANT v LAWSON ROBINSON LIMITED [2019] NZHC 2465

GRANT v LAWSON ROBINSON LIMITED [2019] NZHC 2465

The payment was made within the relation‑back period to a company that was unable to pay its due debts as at 9 May 2017 (large secured liabilities far exceeding liquid assets and substantial unsecured creditors), the creditor received more than it would likely obtain in liquidation (full payment versus negligible recovery), and the creditor was aware of or had reasonable grounds to suspect GLW's insolvency so could not rely on s 296(3); accordingly the payment was voidable and must be repaid with interest.

Citation
[2019] NZHC 2465
Parties
Applicant (liquidator): Damien Grant; Respondent (solicitors): Lawson Robinson Limited; Company in Liquidation (subject Matter): GLW Group Ltd (in liq)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 September 2019
Procedural Posture
Voidable Transaction Proceeding Under Companies Act 1993 S292 / High Court Judgment on Application
Outcome
Payment of $51,733.93 made to Lawson Robinson on 9 May 2017 set aside; respondent ordered to repay amount to liquidator with interest; costs reserved
Legal Topics
Voidable Transaction, Insolvent Transaction, Preference, Statutory Demand, Good Faith Defence
Company Law Insolvency Law Civil Procedure Voidable Transaction Insolvent Transaction Preference Statutory Demand Good Faith Defence

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Parties

Damien Grant

Applicant (liquidator)

Lawson Robinson Limited

Respondent (solicitors)

GLW Group Ltd (in liq)

Company in Liquidation (subject Matter)

Procedural Posture

Voidable Transaction Proceeding Under Companies Act 1993 S292 / High Court Judgment on Application

Legal Issues

  1. 1 Whether the 9 May 2017 payment was an insolvent transaction capable of being set aside
  2. 2 Whether GLW was unable to pay its due debts as at 9 May 2017
  3. 3 Whether Lawson Robinson received more towards satisfaction of its debt than it would in liquidation

Ratio Decidendi

The payment was made within the relation‑back period to a company that was unable to pay its due debts as at 9 May 2017 (large secured liabilities far exceeding liquid assets and substantial unsecured creditors), the creditor received more than it would likely obtain in liquidation (full payment versus negligible recovery), and the creditor was aware of or had reasonable grounds to suspect GLW's insolvency so could not rely on s 296(3); accordingly the payment was voidable and must be repaid with interest.

Court Disposition

Payment of $51,733.93 made to Lawson Robinson on 9 May 2017 set aside; respondent ordered to repay amount to liquidator with interest; costs reserved

Orders

  • Lawson Robinson Limited to repay $51733.93 to the liquidator (Damien Grant)
  • Liquidator entitled to interest on the amount pursuant to s 10 of the Interest on Money Claims Act 2016