TRC CONSULTANTS LTD V HIGGS & ORS HC AK CIV 2005-425-00290

TRC CONSULTANTS LTD V HIGGS & ORS HC AK CIV 2005-425-00290

The payments were made in the ordinary course of business between the parties and therefore not voidable under s292(2); alternatively, even if voidable, the plaintiff received the funds in good faith and altered its position by continuing performance and incurring expenses, and considering the delay by the liquidators recovery would be inequitable under s296(3), so relief is granted and the payments will not be set aside.

Citation
openlaw-4e28322c_338e_4415_972c_666a16e3e0fd.pdf
Parties
Applicant/plaintiff: TRC Consultants Limited; Respondent/defendant Liquidator: Stephen James Higgs; Respondent/defendant Liquidator: Stephen Alan Dunbar
Court
High Court
Jurisdiction
New Zealand
Judgment Date
21 December 2007
Procedural Posture
Liquidation Application Under Companies Act 1993 for Order That Transactions Not Be Set Aside (voidable Transaction Application) / Hearing on Application (interlocutory/application Hearing)
Outcome
Application granted; payments declared not voidable and not to be set aside.
Legal Topics
Voidable Transactions, Ordinary Course of Business, Alteration of Position, Relief From Recovery, Liquidator's Powers
Company Law Insolvency Law Equity Voidable Transactions Ordinary Course of Business Alteration of Position Relief From Recovery Liquidator's Powers

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Parties

TRC Consultants Limited

Applicant/plaintiff

Stephen James Higgs

Respondent/defendant Liquidator

Stephen Alan Dunbar

Respondent/defendant Liquidator

Procedural Posture

Liquidation Application Under Companies Act 1993 for Order That Transactions Not Be Set Aside (voidable Transaction Application) / Hearing on Application (interlocutory/application Hearing)

Legal Issues

  1. 1 Whether the payments made within six months of liquidation when company was unable to pay debts were voidable under s292(2) Companies Act 1993
  2. 2 Whether the payments enabled the recipient to receive more than they would have in liquidation
  3. 3 Whether the payments were made in the ordinary course of business

Ratio Decidendi

The payments were made in the ordinary course of business between the parties and therefore not voidable under s292(2); alternatively, even if voidable, the plaintiff received the funds in good faith and altered its position by continuing performance and incurring expenses, and considering the delay by the liquidators recovery would be inequitable under s296(3), so relief is granted and the payments will not be set aside.

Court Disposition

Application granted; payments declared not voidable and not to be set aside.

Orders

  • Order that the payment of $50,000 made on 30 September 2005 by Southern Lakes Construction Limited to TRC Consultants Limited shall not be set aside
  • Order that the payment of $40,000 made on 4 October 2005 by Southern Lakes Construction Limited to TRC Consultants Limited shall not be set aside