New Zealand Case Law: Decisions & Judgments

Topic

Pari passu distribution

Legal area

Court

5 May 2023

THE OFFICIAL ASSIGNEE AS LIQUIDATOR OF FINANCIAL PLANNING LIMITED (IN LIQ) v KLOOGH [2023] NZHC 1054

Citation

[2023] NZHC 1054
Court

High Court

Stolen client funds transferred into the family trusts were received as volunteer gifts and are traceable; both the principal stolen amounts and the capital gains attributable to their use are recoverable from the trusts by restitution or imposition of a constructive trust, subject to preserving an untainted personal contribution of $35,000 and after payment of the liquidator's costs, to be distributed pari passu to victims under s284 Companies Act 1993.
26 Oct 2021

LOO v QUINLAN AND KELLY (IN THEIR CAPACITY AS LIQUIDATORS) [2021] NZCA 561

Citation

[2021] NZCA 561
Court

Court of Appeal

The Court held the administration date (27 November 2018) is the appropriate valuation date because investor account positions were bookkeeping fictions lacking proprietary title, investors held equitable charges in a single deficient mixed fund, increases in value enured to all beneficiaries proportionately, the liquidators gave no binding assurance to value at a later date, and permitting positions to remain open did not alter the legal entitlements.
19 May 2021

HALIFAX NEW ZEALAND LTD v LOO [2021] NZHC 1113

Citation

[2021] NZHC 1113
Court

High Court

The Court held on the evidence that assets and client funds across Halifax AU and Halifax NZ were commingled and constituted a single deficient mixed fund; tracing was impracticable for most investors so pooling and a pari passu distribution of the pooled trust assets is appropriate; exceptions apply where holdings are demonstrably untainted (Category 3 and certain Category 5 clients) which may be transferred to claimants on proof and payment of processing fees; the appropriate date for quantification of entitlements is the New Zealand administration date of 27 November 2018; post-appointment…
1 Oct 2018

RE FISK AND MCMILLAN [2018] NZHC 2570

Citation

[2018] NZHC 2570
Court

High Court

Costs were refused because Fehsenfeld primarily supported an argument already advanced by the liquidators, offered no independent evidence or materially different submissions, sought joinder largely to preserve appeal rights, and awarding costs would unfairly diminish the distribution pool for other investors.
12 May 2017

GRAHAM v ARENA CAPITAL LIMITED (IN LIQ) [2017] NZHC 973

Citation

[2017] NZHC 973
Court

High Court

Court directed that all recovered assets of Arena (after costs) form a single common pool available to both general unsecured creditors and investors, to be distributed pro rata pari passu calculated on a net contribution basis (total paid in by each investor less total paid out to that investor as at liquidation); liquidators may deduct costs of recovery and distribution from the common pool; creditors and investors must lodge claims in substantially Form 1 and the relevant Companies Act provisions and Regulations apply.
17 Feb 2016

GRAHAM v ARENA CAPITAL LIMITED (IN LIQUIDATION) [2016] NZHC 194

Citation

[2016] NZHC 194
Court

High Court

Post-APO deposits were subject to the statutory trust and, because the FMA asset preservation orders froze the account and prevented use of subsequent deposits, those post-APO deposits remained identifiable and traceable; accordingly they have a proprietary interest enforceable in priority to other investors and the liquidators' application to treat those funds as part of Arena's general assets was declined.
18 Dec 2015

TIETJENS AND ANOR v QUIGLEY AND ANOR [2015] NZHC 3276

Citation

[2015] NZHC 3276
Court

High Court

Where a solicitor firm that acts for the liquidators is also a material creditor and has a pecuniary interest that does not correspond in all respects with the liquidators' duty to act impartially between creditors, debarment from acting for the liquidators in proceedings against an interested party is justified to ensure justice is done and seen to be done; accordingly Grove Darlow was debarred from acting in the originating application.
4 Nov 2013

FINNIGAN and VAN DELDEN v YUAN FU CAPITAL MARKETS LIMITED (In Liquidation) [2013] NZHC 2899

Citation

[2013] NZHC 2899
Court

High Court

Funds and shares held by Yuan Fu at the date of liquidation (except interest earned post-liquidation and commissions on sale) are held on trust for investors; because tracing individual investors' contributions to particular assets was impracticable on the evidence, the equitable course is to pool and sell shares and distribute all trust assets pari passu to investors with proved claims after deducting and allowing liquidators' remuneration (which the court approved and permitted to be charged to trust assets); time for claims closed and leave reserved for successful tracing claims and other…
25 Jul 2013

FARRELL AND ROGAN AS LIQUIDATORS OF CONTRACT ENGINEERING LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) v FENCES & KERBS LIMITED CA773/2012 [2013] NZCA 329

Citation

[2013] NZCA 329
Court

Court of Appeal

Mere receipt of payment in satisfaction of an antecedent debt does not constitute 'value' under s 296(3) of the Companies Act 1993; instead the creditor must have given new value at the time of receipt that is real and substantial (forbearance may qualify only if it is real and substantial and evidenced); accordingly the impugned payments were set aside and amounts recovered with interest; High Court insolvency finding upheld.