New Zealand Case Law: Decisions & Judgments

Topic

Insolvency test

Legal area

Court

16 Sept 2021

COMMISSIONER OF INLAND REVENUE v FS FIBRESOLUTIONS LIMITED [2021] NZHC 2439

Citation

[2021] NZHC 2439
Court

High Court

The court refused a further adjournment because the defendant provided no affidavit evidence, presented only uncertain prospective income and an unconfirmed loan, and on the face of it appeared insolvent or trading in strained circumstances; accordingly the creditor was entitled to a winding up order and the court appointed liquidators and awarded costs to the Commissioner.
25 Sept 2017

MOTEL HOLDINGS LIMITED v TAIRUA PACIFIC HARBOUR LIMITED [2017] NZHC 2327

Citation

[2017] NZHC 2327
Court

High Court

The application for an interim liquidator was dismissed because the plaintiff did not establish necessity or expediency: insolvency was not established on the material before the Court, the principal assets (management rights) were not shown to be in jeopardy, and the status quo could be maintained without appointing an interim liquidator despite a reasonable prospect the plaintiff might prove a debt.
27 Mar 2017

THE COMMISSIONER OF INLAND REVENUE v L J LEASING LIMITED [2017] NZHC 564

Citation

[2017] NZHC 564
Court

High Court

Because s 109 of the Tax Administration Act 1994 precludes disputing the assessed tax amounts in court absent Part 8/8A proceedings and no such proceedings were brought, the assessed debts are taken as correct; combined with evidence of failure to meet current tax obligations and loss of the company's sole client, the company was insolvent and a liquidation order was warranted.
17 Sept 2015

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

Citation

[2015] NZHC 2267
Court

High Court

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.
15 Jun 2015

LEVIN AND MADSEN-RIES AS LIQUIDATORS OF ZENITH KITCHEN & JOINERY LTD (IN LIQUIDATION) v BCS HOLDING ACCOUNT LIMITED [2015] NZHC 1564

Citation

[2015] NZHC 1564
Court

High Court

Zenith was unable to pay its due debts during the relevant periods; payments to Holding Account Ltd from 10 May 2007 to 19 December 2008 ($39,500) were voidable under s 292; payments of $37,177.61 made in September–October 2006 were in the ordinary course of business and saved; supplies in late August 2006 reduced the preference by $5,591.19; Holding Account Ltd failed s 296(3) because a reasonable person in its position would have suspected Zenith was insolvent; the court declined to exercise s 295 discretion to deny relief but limited interest recoverable to two years; orders followed accor…
20 May 2015

V J MADSEN REIS AND H D LEVIN v DONOVAN DRAINAGE AND EARTH MOVING LIMITED [2015] NZHC 1081

Citation

[2015] NZCCLR 13
Court

High Court

The application was dismissed because the respondent demonstrated it acted in good faith, gave value and a reasonable person in the respondent's position would not have had reasonable grounds to suspect the Company's insolvency given the commercial context and industry practices; therefore the s296(3) defence applies and the payments are not recoverable.
21 Oct 2013

BURGESS and YOUNG v THE RAINDANCE COMPANY NEW ZEALAND LIMITED [2013] NZHC 2738

Citation

[2013] NZHC 2738
Court

High Court

Payments were not voidable under s292 because they were contemporaneous payments for services (cash‑on‑delivery style): Raindance provided value at the time of each payment and therefore was not a creditor who received more than it would in liquidation; accordingly the liquidators' ss294/295 application is dismissed.
3 Sept 2013

REYNOLDS v JPL TRADING LIMITED [2013] NZHC 2287

Citation

[2013] NZHC 2287
Court

High Court

The deeds of forgiveness were dispositions within s345, made as gifts without reasonably equivalent value by debtors who were insolvent under s346(2)(a); no bona fide purchaser for value without notice existed to protect the defendant, service requirements under s347 were satisfied, and accordingly relief under s348(2)(b) was granted requiring the defendant to pay specified sums to James Products Limited and Klasse Properties Limited.
1 Nov 2012

PETER ESMOND FARRELL AND SIMON PAUL ROGAN AS LIQUIDATORS OF CONTRACT ENGINEERING LIMITED (IN LIQUIDATION) V ACME ENGINEERING LIMITED HC ROT CIV 2012-463-000175

Citation

openlaw-b09c2f5e_9915_4bec_8c2e_b6a1a03343fd.pdf
Court

High Court

Although the liquidators proved the company was insolvent at the relevant time, the respondent satisfied s 296(3) by proving it acted in good faith, had no reasonable grounds to suspect insolvency, and had given value (supplied the contracted flash silencer); accordingly the payments were not recoverable and the application was dismissed.
20 Sept 2010

BROWNS REAL ESTATE LIMITED V GRAND LAKES PROPERTIES LIMITED CA157/2010

Citation

openlaw-5c0c6ba4_47fa_410c_97a3_7aefe195f71c.pdf
Court

Court of Appeal

An express contractual no set-off clause (cl 3.1) that prohibits deductions, withholdings or set-offs in a commercial lease precludes a lessee from relying on a counterclaim or set-off as an excuse for non-payment in an application to set aside a statutory demand under s 290(4)(b); accordingly the court will ordinarily exercise its discretion against an applicant whose sole ground is such a counterclaim, absent other grounds under s 290(4)(c).