New Zealand Case Law: Decisions & Judgments

Topic

Ordinary course of business

Legal area

Court

30 Jun 2020

WENZHOU HONGLIANG TRADING CO LIMITED v MSUT TRUSTEE LIMITED & ANOR [2020] NZHC 1492

Citation

[2020] NZHC 1492
Court

High Court

The court ordered MSM to produce transactional source documents sufficient to verify that future lot sales are arm's length and that sale proceeds are properly applied — specifically sale and purchase agreements with purchaser identity and introduction, purchaser and mortgagee settlement statements and supporting vouchers, loan and security agreements and any variations, and the solicitor's draft statement of application of settlement funds — and refused orders for post-2017 management/project accounts and for disclosure about historic Jordan transactions as irrelevant to policing the freezin…
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…
15 May 2015

GIBSON AND ANOR v ROBERT BURNES TRUSTEE (2009) LTD AND ORS [2015] NZHC 1022

Citation

[2015] NZHC 1022
Court

High Court

The SSAs were not transactions in the ordinary course of NZF's business given their novelty, timing during an acute liquidity crisis, involvement of a related party, the absence of Trustee consent or required valuation/evidence, and the urgent, non-routine purpose; accordingly the SSAs could not defeat the Trustee's prior floating charge and the Trustee's interest prevails over the Hillview Trust interests.
20 Dec 2013

FISK v GALVANISING (H.B.) LIMITED [2013] NZHC 3543

Citation

[2013] NZHC 3543
Court

High Court

East Quip was insolvent for the entire specified period (5 May 2007–10 July 2009). The payments, set‑offs and transfers identified were transactions within s 292(3) and, viewed at the time they were entered into, enabled Galvanising, the Easton Property Trust, Hooked on Transport and the Eastons to receive more than they would in liquidation. Respondents' defences — that transactions were with the Eastons personally via a shareholders' current account, that they were in the ordinary course of business, part of a running account, or offset by later repayments — were rejected on the evidence. A…
10 Oct 2013

LEVIN and MADSEN-RIES v TITAN CRANES LIMITED [2013] NZHC 2628

Citation

[2013] NZHC 2628
Court

High Court

The court found G T Rigging Ltd was unable to pay its due debts at the times of payment; the first three payments (16 Feb, 6 Mar, 3 May 2007) were made in the ordinary course and saved by transitional provisions, but the payments of 22 June and 31 July 2007 were made in response to a statutory demand and threats of liquidation, were not in the ordinary course, are voidable under s 292, and Titan failed to establish the defence under s 296(3) because a reasonable person in Titan's position would have suspected insolvency and Titan did not prove a relevant alteration of position; accordingly th…
5 Sept 2013

CAREY and ANOR v SMITH and ORS [2013] NZHC 2291

Citation

(2013) 10 NZBLC 99
Court

High Court

The plaintiffs lacked the necessary right to immediate possession because the sale and buy-back agreement contractually restrained possessory rights until expiry or cancellation and, in any event, the transaction was not in the ordinary course of business and was subject to a perfected bank GSA (and functioned as an unregistered security interest); therefore conversion and trespass claims against defendants fail and judgment is entered for defendants.
1 May 2013

HENRY DAVID LEVIN AND DAVID STUART VANCE AS LIQUIDATORS OF ST GEORGE DEVELOPMENTS LIMITED (IN LIQUIDATION) V WEST CITY CONSTRUCTION LIMITED HC AK CIV 2012-404-002891

Citation

openlaw-2e17298e_1be8_4a56_b0d8_25a30fcdd0b1.pdf
Court

High Court

The liquidators failed to prove the assignment occurred within the statutory two year specified period prior to liquidation; on the balance of probabilities the court accepted there was an agreement to assign in or about November 2005 (outside the specified period), therefore the application under s292 failed and was dismissed.
21 Dec 2012

HENRY DAVID LEVIN AND DAVID STUART VANCE AS LIQUIDATORS OF MULTI CONSTRUCTION CONCEPTS (MCC) LIMITED (IN LIQUIDATION) V SHOT BLAST SERVICES (AUCK) LIMITED HC AK CIV 2012-404-000433

Citation

openlaw-51543035_dcd1_4a15_9962_7335d67a88f6.pdf
Court

High Court

On the evidence the liquidators failed to prove the first payment was outside the ordinary course and Shot Blast successfully rebutted the presumption for the second and third payments; consequently the three payments in issue were made in the ordinary course of business and cannot be set aside under s292; matters relating to s296 defences and later payments were reserved.
22 Aug 2012

SHOTBLAST SERVICES (AUCK) LIMITED V HENRY DAVID LEVIN AND DAVID STUART VANCE AS LIQUIDATORS OF MULTI CONSTRUCTION CONCEPTS (MCC) LIMITED (IN LIQUIDATION) HC AK CIV 2012-404-433

Citation

openlaw-5ee28fa8_8998_47e8_8250_af293248e4ec.pdf
Court

High Court

The Court set aside the default judgment because Shotblast demonstrated a substantial defence that the three pre-1 November 2007 payments were ordinary trade payments in the construction sector, its failure to appear was at least plausibly explained, and the liquidators would not suffer irreparable harm; in all the circumstances it was just to set aside the judgment.
1 Sept 2011

LEVIN AND JORDAN V ITI & SYDDALL ENTERPRISES LIMITED HC AK CIV 2011-404-405

Citation

openlaw-bb490cd0_582d_4fbb_8971_695056b763c9.pdf
Court

High Court

Except for the ledger entry totalling $23,144.42 (found not paid), the challenged payments were made in the ordinary course of the parties' commercial dealings (contractor/subcontractor relationship) and therefore were not voidable under s 292; the liquidators' application to set aside the payments is refused.