JAQUES V THE OFFICIAL ASSIGNEE HC WN CIV-2006-485-973

JAQUES V THE OFFICIAL ASSIGNEE HC WN CIV-2006-485-973

The payment was made by the company (through its solicitor) within the restricted period while the company was insolvent; it enabled the Trust to receive more than it would in liquidation and was objectively an extraordinary transaction not in the ordinary course of business given the clear intent to prefer the Trust; the Trust did not receive the payment in good faith; therefore the payment is voidable under s292 and the applicant's s294 application to prevent setting aside fails.

Citation
openlaw-c9f2a52b_3dae_4c15_a332_8fa6654c4ed4.pdf
Parties
Applicant (trustee of Jaques Family Trust): David Arthur Jaques; Respondent (liquidator): The Official Assignee
Court
High Court
Jurisdiction
New Zealand
Judgment Date
16 July 2007
Procedural Posture
Companies Act 1993 S294 Application (voidable Transaction) / Judgment (hearing 11 July 2007; Judgment 16 July 2007)
Outcome
Applicant's application that the transaction not be set aside dismissed; transaction is voidable and liable to be set aside; costs awarded to the Official Assignee.
Legal Topics
Voidable Transactions, Preference, Ordinary Course of Business, Setting Aside Payments, Liquidator Remedies, Costs
Company Law Insolvency Law Trust Law Voidable Transactions Preference Ordinary Course of Business Setting Aside Payments Liquidator Remedies +1 more

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Parties

David Arthur Jaques

Applicant (trustee of Jaques Family Trust)

The Official Assignee

Respondent (liquidator)

Procedural Posture

Companies Act 1993 S294 Application (voidable Transaction) / Judgment (hearing 11 July 2007; Judgment 16 July 2007)

Legal Issues

  1. 1 Whether the $64,411.66 payment was a transaction by the company
  2. 2 Whether the company was insolvent when the payment was made
  3. 3 Whether the payment occurred within the restricted period

Ratio Decidendi

The payment was made by the company (through its solicitor) within the restricted period while the company was insolvent; it enabled the Trust to receive more than it would in liquidation and was objectively an extraordinary transaction not in the ordinary course of business given the clear intent to prefer the Trust; the Trust did not receive the payment in good faith; therefore the payment is voidable under s292 and the applicant's s294 application to prevent setting aside fails.

Court Disposition

Applicant's application that the transaction not be set aside dismissed; transaction is voidable and liable to be set aside; costs awarded to the Official Assignee.

Orders

  • Application dismissed
  • Costs awarded to the Official Assignee on a 2B scale together with disbursements as approved by the Registrar, to be paid by the Jaques Family Trust