New Zealand Case Law: Decisions & Judgments

Topic

Liquidator remedies

Legal area

Court

30 Jun 2022

WHITLEY v SDCIC NZ ARCHITECTURE LTD [2022] NZHC 1528

Citation

[2022] NZHC 1528
Court

High Court

The Court found the vehicle was conveyed to SDCIC (through its sole director) not to Mr Wu personally; SDCIC was a creditor of Ezybuilding Group and, by receiving $20,000 and the vehicle within the restricted period when the company was insolvent, received more than it would in liquidation. The transfers were therefore voidable and, as SDCIC did not object to the notice, automatically set aside as against it. The Court exercised its discretion under s295 to order SDCIC to repay $20,000 and to pay an amount fairly representing the benefit received from the vehicle transaction ($25,240). The ap…
13 Aug 2020

MONNERY v CONVENDIUM LIMITED (IN LIQUIDATION) [2020] NZCA 345

Citation

(2020) 25 PRNZ 417
Court

Court of Appeal

Where company accounting records show an overdrawn shareholder current account and the shareholder does not provide an adequate explanation that creates a legal defence, the shareholder (or its trustees) is liable to repay the deficit on demand; absent unusual or oppressive circumstances the court will not decline summary judgment; non‑compliance with s161 does not defeat the company's direct claim to recover shareholder advances; because the defence did not challenge the pleaded quantum, summary judgment should have been entered for the full claimed sum of $560,243.43.
7 Dec 2017

ULSTERMAN HOLDINGS LIMITED (IN LIQ) v WALLS [2017] NZHC 3040

Citation

[2017] NZHC 3040
Court

High Court

Walls, as sole director, breached duties under ss 131, 135 and 137 by allowing the company to trade while insolvent (from at least 31 March 2012), preferring shareholder/related interests and causing deterioration in the company's financial position; accordingly the Court ordered Walls to contribute $489,810.06 to company assets plus interest, with costs to the liquidators.
30 Oct 2017

CHRIS DE RUYTER PAINTING LIMITED (IN LIQ) v ASB BANK LIMITED [2017] NZHC 2515 [30 October 2017]

Citation

[2017] NZHC 2515
Court

High Court

Because the trustees failed to cooperate with pre-action documentary requests, necessitating a discovery application that materially contributed to successful substantive claims, costs follow the event and the applicant is entitled to costs against the second and third respondents in the sum claimed; liability of Mr Shaw is limited to trust assets available for distribution.
7 Aug 2017

DAVID BROWNE CONTRACTORS LIMITED AND DAVID BROWNE MECHANICAL LIMITED v DAVID ROSS PETTERSON AS LIQUIDATOR OF POLYETHYLENE PIPE SYSTEMS LIMITED (IN LIQUIDATION) [2017] NZSC 116

Citation

[2017] NZSC 116
Court

Supreme Court

For the cashflow test in s292(2)(a) 'due debts' includes contingent or unliquidated claims that, objectively assessed from the perspective of a reasonable and prudent business person, are sufficiently certain to crystallise into legally due debts within a reasonably proximate period; the McConnell Dowell claim met that standard at the time of the repayments and, when taken into account, Polyethylene was unable to pay its due debts; recipients could not rely on s296(3) because the director's knowledge is attributable to them and they did not act in good faith; accordingly the repayments were v…
17 Aug 2016

TIME3 GLOBAL LTD v NORRIE AS LIQUIDATOR OF PAKIRI INVESTMENTS LTD (IN LIQUIDATION) [2016] NZCA 400

Citation

[2016] NZCA 400
Court

Court of Appeal

The appeal is allowed because the Associate Judge's uncontested factual finding that Time3 was not a creditor was open on the evidence; without a creditor/debtor relationship the transaction could not be set aside under s295, and the liquidator also failed to prove any transfer of intellectual property such as would support an order under s298, so the order directing transfer back was quashed and the cross-appeal dismissed.
29 Apr 2015

DAVID ROSS PETTERSON AS LIQUIDATOR OF POLYETHYLENE PIPE SYSTEMS LIMITED (IN LIQUIDATION) v DAVID CHARLES BROWNE [2015] NZHC 866

Citation

[2015] NZHC 866
Court

High Court

The Court held the GSA would not be set aside because PPS was solvent when the transactions occurred, the transfers and charge formed part of a legitimate, contemporaneous restructuring for which the directors had reasonable grounds (including reliance on advice about insurance), and the advance was, in substance, by David Browne; accordingly the liquidator's applications were dismissed.
28 Nov 2014

REYNOLDS AS THE LIQUIDATOR OF JAMES DEVELOPMENTS LTD (IN LIQUIDATION) v JAMES CA608/2012 [2014] NZCA 578

Citation

[2014] NZCA 578
Court

Court of Appeal

The Court upheld the finding that Mr James paid or procured payments (including via OREL) which met liquidator remuneration and litigation costs properly incurred for the company in liquidation; those payments fell within Schedule 7 cl 1(a) and by subrogation and equity offset the preferential receipts of $60,904, and it was appropriate under s295 to deny the liquidator repayment in this rare case.
2 Sept 2013

GRANT BRUCE REYNOLDS AS THE LIQUIDATOR OF JAMES DEVELOPMENTS LTD (IN LIQUIDATION) V CHRIS JAMES CA608/2013 [2013] NZCA 413

Citation

[2013] NZCA 413
Court

Court of Appeal

Extension of time granted because delay was minimal, explained by counsel error, no apparent prejudice to respondent, and the proposed appeal was not plainly without merit; discretionary factors favour reinstatement and any future delay can be managed by directions.
15 Nov 2012

FARRELL & ANOR V HOOKER HC AK CIV-2012-404-000739

Citation

openlaw-326ddfd5_ede3_4230_989b_131968692f3e.pdf
Court

High Court

The company was unable to pay its due debts by 16 December 2010; the sale was at an undervalue when measured against the value the company received; the defendant cannot avail himself of the s296(3) defence because he had reasonable grounds to suspect insolvency (he lent money to keep the company afloat and accepted the sale of essential plant and equipment and a lease to a different entity), therefore the liquidators are entitled to recover $34,000 plus interest and costs.