GRANT BRUCE REYNOLDS AS LIQUIDATOR OF CHAFFERS PROPERTIES LIMITED AND WARKWORTH GRANGE PROPERTY INVESTMENT LIMITED (BOTH IN LIQUIDATION) V GLAISTER ENNOR HC AK CIV 2011-404-001380

GRANT BRUCE REYNOLDS AS LIQUIDATOR OF CHAFFERS PROPERTIES LIMITED AND WARKWORTH GRANGE PROPERTY INVESTMENT LIMITED (BOTH IN LIQUIDATION) V GLAISTER ENNOR HC AK CIV 2011-404-001380

The court found the evidence established the payments were made by the Trustee pursuant to an irrevocable authority and there was no contemporaneous evidence that the Trustee advanced funds to the companies or that the transactions were loans or payments on behalf of the companies; therefore the transfers were not "transactions by the companies" under s292 and the application to set them aside was dismissed.

Citation
openlaw-0d0d8b17_54ce_4bcf_9225_169f22716890.pdf
Parties
Applicant Liquidator: Grant Bruce Reynolds as Liquidator of Chaffers Properties Limited and Warkworth Grange Property Investment Limited (both in liquidation); Respondent Creditor: Glaister Ennor
Court
High Court
Jurisdiction
New Zealand
Judgment Date
1 August 2011
Procedural Posture
Liquidation/voidable Transaction Under Companies Act 1993 / Judgment
Outcome
application dismissed
Legal Topics
Voidable Transactions (s292), Preference, Liquidator Remedies (s295), Payments by Third Parties
Company Law Insolvency Law Trusts Voidable Transactions (s292) Preference Liquidator Remedies (s295) Payments by Third Parties

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Parties

Grant Bruce Reynolds as Liquidator of Chaffers Properties Limited and Warkworth Grange Property Investment Limited (both in liquidation)

Applicant Liquidator

Glaister Ennor

Respondent Creditor

Procedural Posture

Liquidation/voidable Transaction Under Companies Act 1993 / Judgment

Legal Issues

  1. 1 Whether the payments constituted "transactions by the companies" under s292 of the Companies Act 1993
  2. 2 Whether the payments were made on behalf of the companies (i.e. advances/loans) such that the respondent must account
  3. 3 Whether the respondent received a preference while companies were insolvent within the relevant period

Ratio Decidendi

The court found the evidence established the payments were made by the Trustee pursuant to an irrevocable authority and there was no contemporaneous evidence that the Trustee advanced funds to the companies or that the transactions were loans or payments on behalf of the companies; therefore the transfers were not "transactions by the companies" under s292 and the application to set them aside was dismissed.

Court Disposition

application dismissed

Orders

  • Application dismissed
  • Costs reserved to be fixed upon application; court inclination that costs should lie where they fall