REA AND SARGISON V RUSSELL HC AK CIV-2011-404-829

REA AND SARGISON V RUSSELL HC AK CIV-2011-404-829

Payments by Five Star Finance Ltd into the trust's bank account were restoration of trust property misapplied by the trustee's agent and thus were not ordinary debtor-creditor repayments within s292; accordingly they did not constitute insolvent transactions voidable under the current s292 and the liquidators' s294 application must be dismissed. The trustee had not authorized transfers and agent Kirk's actions were not attributable to the trustee for s292 purposes.

Citation
openlaw-3cae5e0e_d2cb_4973_9d26_57cba2c1211f.pdf
Parties
Applicant (liquidator): Gerald Stanley Rea; Applicant (liquidator): Paul Graham Sargison; Respondent (former Trustee): Ronald Leslie Russell
Court
High Court
Jurisdiction
New Zealand
Judgment Date
24 January 2012
Procedural Posture
Application Under Companies Act S294 to Set Aside Transactions as Voidable Under S292 / Hearing and Reserved Judgment of the High Court on Application; Judgment Delivered
Outcome
Application by liquidators dismissed
Legal Topics
Voidable Transactions S292, Insolvent Transaction, Preferences, Running Account Doctrine, Trustee Delegation and Attribution, Proprietary Tracing, Defences Under S296, S27(5) Savings Provision
Insolvency Law Company Law Trusts and Equity Statutory Interpretation Voidable Transactions S292 Insolvent Transaction Preferences Running Account Doctrine +4 more

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Parties

Gerald Stanley Rea

Applicant (liquidator)

Paul Graham Sargison

Applicant (liquidator)

Ronald Leslie Russell

Respondent (former Trustee)

Procedural Posture

Application Under Companies Act S294 to Set Aside Transactions as Voidable Under S292 / Hearing and Reserved Judgment of the High Court on Application; Judgment Delivered

Legal Issues

  1. 1 which version of s292 applies
  2. 2 whether respondent is proper party
  3. 3 whether transactions occurred in specified period

Ratio Decidendi

Payments by Five Star Finance Ltd into the trust's bank account were restoration of trust property misapplied by the trustee's agent and thus were not ordinary debtor-creditor repayments within s292; accordingly they did not constitute insolvent transactions voidable under the current s292 and the liquidators' s294 application must be dismissed. The trustee had not authorized transfers and agent Kirk's actions were not attributable to the trustee for s292 purposes.

Court Disposition

Application by liquidators dismissed

Orders

  • Application dismissed
  • Liquidators to pay respondent costs on a 2B basis