MADSEN-RIES AND LEVIN v BRYANT [2015] NZHC 2267

MADSEN-RIES AND LEVIN v BRYANT [2015] NZHC 2267

Payments of $47,030 made to the respondent between 1 April 2012 and 31 March 2013 were preferences voidable under s292 because AG47 Ltd was unable to pay its debts as they fell due; the respondent did not establish a s296(3) defence; the proper remedy is to set aside the payments and order repayment with interest and costs.

Citation
[2015] NZHC 2267
Parties
Applicant Liquidator: Vivien Judith Madsen-Ries; Applicant Liquidator: Henry David Levin; Respondent Sole Director and Shareholder: Bruce Silver Bryant
Court
High Court
Jurisdiction
New Zealand
Judgment Date
17 September 2015
Procedural Posture
Companies Act 1993 Liquidation: Application to Set Aside Voidable Preference Payments / Hearing and Judgment (application to Set Aside Transactions Under Ss 292 295)
Outcome
Application granted in part: transactions set aside and repayment ordered.
Legal Topics
Voidable Transactions, Preference Payments, Insolvency Test, Notice of Objection Under S294, Defence Under S296(3)
Company Law Insolvency Liquidation Creditor Preference Civil Procedure Voidable Transactions Preference Payments Insolvency Test +2 more

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Parties

Vivien Judith Madsen-Ries

Applicant Liquidator

Henry David Levin

Applicant Liquidator

Bruce Silver Bryant

Respondent Sole Director and Shareholder

Procedural Posture

Companies Act 1993 Liquidation: Application to Set Aside Voidable Preference Payments / Hearing and Judgment (application to Set Aside Transactions Under Ss 292 295)

Legal Issues

  1. 1 Whether payments to the director during the specified period were voidable preferences under s292 Companies Act 1993
  2. 2 Whether the respondent's notice of objection under s294 could be disregarded for drafting defects or treated as a valid objection
  3. 3 Whether the respondent had a defence under s296(3) (no reasonable grounds to suspect insolvency)

Ratio Decidendi

Payments of $47,030 made to the respondent between 1 April 2012 and 31 March 2013 were preferences voidable under s292 because AG47 Ltd was unable to pay its debts as they fell due; the respondent did not establish a s296(3) defence; the proper remedy is to set aside the payments and order repayment with interest and costs.

Court Disposition

Application granted in part: transactions set aside and repayment ordered.

Orders

  • Set aside payments made to Bruce Silver Bryant between 1 April 2012 and 31 March 2013 amounting to $47,030.
  • Order that Bruce Silver Bryant pay to the liquidators $47,030 together with interest at 5% per annum from 7 March 2014 to 18 September 2015.