New Zealand Case Law: Decisions & Judgments

Topic

Ability to pay debts

Legal area

Court

5 Mar 2021

ARJANG v NF GLOBAL LIMITED [2021] NZHC 395

Citation

[2021] NZHC 395
Court

High Court

Where a reporting entity must terminate a business relationship under the AML Act because it cannot conduct required due diligence, the entity must return the customer's funds to the customer (or to a customer‑directed account) unless restrained by court forfeiture/restraining orders; suspicions alone do not permit a reporting entity to keep customer funds or direct them to originators. NF Global's customers (Arjang, Sky Capital, LD Drago, Eleonora Sport) are creditors; NF Global is unable to pay its debts and the proceeding was adjourned to allow shareholder Starboard Capital (and Northern F…
9 Mar 2020

SHEPHARD & KELLOW v WAKEFIELD PLANT LTD [2020] NZHC 439

Citation

[2020] NZHC 439
Court

High Court

The Court concluded that the challenged payments were, in substance, repayments that reduced the group's secured indebtedness to BNZ and therefore did not result in WPL receiving more in liquidation; alternatively the payments formed part of a continuing business relationship (a running account) between ECL, WPL and BNZ under s292(4B); additionally WPL satisfied the s296 alteration of position defence, so the liquidators' application to set aside the transactions failed.
19 Nov 2018

BODY CORPORATE 68792 v MEMELINK [2018] NZCA 509

Citation

[2018] NZCA 509
Court

Court of Appeal

The Associate Judge correctly exercised the s 37 discretion: evidence showed the debtor was able (or demonstrated readiness) to meet debts and there was a genuine dispute as to liability and quantum; bankruptcy is not a substitute for debt collection, so adjudication was properly refused and the appeal dismissed.
2 Jun 2016

HARRY MEMELINK AND IAN TREVOR NEILL HAMILTON v BODY CORPORATE 68792 [2016] NZHC 1181

Citation

[2016] NZHC 1181
Court

High Court

The setting aside application was dismissed because the applicants failed to prove valid service of the application within the statutory 10 working day service period, depriving the Court of jurisdiction to entertain the application; additionally, on the merits at least part of the debt claimed was undisputed and owing, and costs were declined because the creditor had no proper entitlement to invoke the liquidation procedures against trustees.
9 Dec 2011

NEW ZEALAND GREYHOUND RACING ASSOCIATION INCORPORATED V MANAWATU GREYHOUND RACING CLUB INCOPORATED HC PMN CIV-2011-454-529

Citation

openlaw-1985031c_1ffe_41b4_9b7b_14fc6d396f40.pdf
Court

High Court

The defendant failed to comply with the statutory demand and produced no credible, recent evidence to rebut the presumption of inability to pay; the plaintiff established that advances of $660,000 were loans and remain unpaid despite demand; the Court therefore exercised its power to appoint liquidators to protect creditors and enable investigation; discretion to refuse liquidation was not engaged given the lack of substantive grounds and the risk of prejudice to creditors.
16 Apr 2010

THE COMMISSIONER OF INLAND REVENUE V PROPERTY VENTURES LIMITED (IN RECEIVERSHIP) HC CHCH CIV-2010-409-000123

Citation

openlaw-19c4e75b_365d_4744_9583_a153eb2d73ae.pdf
Court

High Court

No binding settlement was formed by the correspondence and filing of returns; the receivership materially changed circumstances so the Commissioner was entitled to file an amended claim; there are not clear and persuasive grounds to stay the liquidation or restrain advertising; assuming leave was required to file the amended statement of claim, leave is granted because the amendment is necessary to resolve the real controversy and causes no illegitimate prejudice; costs awarded 2B and a short temporary stay was granted pending possible appeal.
27 Aug 2009

THE COMMISSIONER OF INLAND REVENUE V MM JOHNSTON HC WANG CIV-2008-483-150

Citation

openlaw-18bea1dc_86da_4b06_af89_a26a3e913c0f.pdf
Court

High Court

The applicant failed to demonstrate that Mr Johnston's medical condition constituted a material fact not brought before the Court that would have affected the outcome; independent evidence (Official Assignee report and market valuations) established the applicant's insolvency and that adjudication was inevitable, therefore annulment under s.309(1)(a) was not warranted.
29 Jun 2006

LEE V ZHANG AND CHEN HC WN CIV-2006-485-42

Citation

openlaw-0b8c7801_0c5f_4c0f_bd6f_0be893f5ec8d.pdf
Court

High Court

The court found on the evidence that the debtor was solvent and able to pay his debts within the meaning of s26(2) Insolvency Act 1967 (noting equity in the jointly owned property), and accordingly the creditors' petition to adjudicate him bankrupt was dismissed; it was unnecessary to resolve the contested legal effect of the charging order under s25.