New Zealand Case Law: Decisions & Judgments | LexChat

Topic

Companies act schedule 7

Legal area

Court

7 Nov 2014

JENNINGS ROADFREIGHT LIMITED (IN LIQUIDATION) v COMMISSIONER OF INLAND REVENUE [2014] NZSC 160

Citation

[2014] NZSC 160
Court

Supreme Court

Section 167(2) is a specific qualification of s167(1); where PAYE amounts fell due before liquidation but remain unpaid at liquidation, s167(2) applies and those amounts are distributed under Companies Act Schedule 7 rather than being retained as s167(1) trust property (unless potentially segregated prior to liquidation). Consequently the Commissioner must repay the contested bank balance of $14,076.38.
1 Oct 2013

COMMISSIONER OF INLAND REVENUE V JENNINGS ROADFREIGHT LIMITED (IN LIQUIDATION) CA432/2012 [2013] NZCA 455

Citation

[2013] NZCA 455
Court

Court of Appeal

Majority held that s167(1) creates a statutory trust over PAYE deductions that are represented by funds held in the employer's bank account at the commencement of liquidation; that trust survives liquidation and excludes those funds from the company estate, so s167(2) applies only to unpaid PAYE not represented by funds at liquidation; accordingly the Commissioner was entitled to retain $14,076.38 paid by the bank.