New Zealand Case Law: Decisions & Judgments

Topic

Creditors' compromise

Legal area

Court

2 Dec 2020

MURRAY v WEST COAST HOLDINGS LIMITED [2020] NZCA 611

Citation

[2020] NZCA 611
Court

Court of Appeal

The application for an extension of time was declined because, although the applicant satisfactorily explained the delay and prejudice to respondent was minimal, the proposed appeal had no real prospect of success: the evidence showed no binding compromise was ever agreed, the third bankruptcy notice was validly served and not complied with, and the High Court's adjudication was legally and factually justified; thus the interests of justice did not require granting an extension.
6 Jul 2020

MENZIES v VAYCAY TRADING LTD [2020] NZHC 1413

Citation

[2020] NZHC 1413
Court

High Court

Applicant entitled to recover actual and reasonable costs of the liquidation application from the liquidator under Schedule 7 cl 1(1)(c); claimant awarded indemnity costs of $46,316.06 payable by the liquidator. The opposing shareholder (Bourton) was not ordered to pay full indemnity costs but was held liable for 2B scale costs with a 30% uplift plus disbursements, amounting to $28,554.47; liability for that amount is joint and several. Costs should not lie where they fall because the opponent's alternative (creditors' compromise) never materialised and his conduct, while ultimately unreasona…
24 Aug 2017

TRENDS PUBLISHING INTERNATIONAL LIMITED v ADVICEWISE PEOPLE LIMITED [2017] NZCA 365

Citation

[2017] NZCA 365
Court

Court of Appeal

The Court held that under Part 14 classes must be determined by reference to both legal rights and competing economic interests where necessary; the insider creditors should have been placed in a separate class, Callaghan (a disputed creditor) should have been separate or excluded, and material non-disclosure occurred; those defects rendered the compromise unfairly prejudicial under s232(3)(c), warranting setting aside of the compromise and dismissal of the appeal.
18 Dec 2015

ACCIDENT COMPENSATION CORPORATION & ORS v TRENDS PUBLISHING INTERNATIONAL LIMITED [2015] NZHC 3316

Citation

[2015] NZHC 3316
Court

High Court

The Court ordered the s232 claim and the counterclaim to be separated by consent but refused to order immediate consecutive hearings of the s232 application and the counterclaim because the public interest and presumption favouring prompt resolution of insolvency-related proceedings, the procedural readiness and complexity of the counterclaim, and the separate interests of the other plaintiffs justified hearing the s232 application first; potential equitable set-off and other defenses to any subsequent liquidation can be addressed later when appropriate.
18 Dec 2013

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD v SOLID ENERGY NEW ZEALAND LIMITED [2013] NZHC 3458

Citation

[2013] NZHC 3458
Court

High Court

The High Court held the Part 14 compromises were valid and within the scope of the Companies Act 1993; the Support Deed did not prohibit the negotiations or formal agreement reached nor was it breached in a way that invalidated the compromises; notices and creditor class composition complied with the statute and practice; no material irregularity or unfair prejudice to Bank of Tokyo was established; accordingly Bank of Tokyo's claims were dismissed and it is bound by the compromises.
2 Nov 2010

VISKOVICH HC AK CIV 2010-404-004157

Citation

openlaw-c88d3de1_87c6_41bd_aa79_f46eaad980dc.pdf
Court

High Court

The Court approved the proposal because the statutory requirements under the Insolvency Act 2006 were satisfied, the proposal was accepted by the requisite number and value of creditors, the post‑vote modifications related only to one creditor and did not prejudice others, the proposal delivers materially greater returns to creditors ($150,000 over three years) than likely bankruptcy realisations ($9,450), and proper provision was made for preferential debts and trustee fees.
23 Sept 2010

THE COMMISSIONER OF INLAND REVENUE AND ANOR V PARK ESTATE LIMITED HC NAP CIV-2010-441-117

Citation

openlaw-65e39fd7_3a16_4afd_a8b8_402fd9d31d9b.pdf
Court

High Court

Because a Part 14 creditors' compromise was approved by a significant majority of creditors, and the court was satisfied that earlier integrity concerns had been resolved and key objectors had consented, the court exercised its discretion to stay the liquidation proceedings for one year and reserve leave for further applications, with costs awarded by consent.
22 Sept 2009

RYMER V ANZ NATIONAL BANK LTD & ORS HC AK CIV 2009-404-004070

Citation

openlaw-3703a392_b7b5_4bb4_b91d_997715374f08.pdf
Court

High Court

The court was satisfied that the statutory prerequisites of s333 and s333(4) were met, that notice and voting procedures had been complied with and that the proposal was reasonable and calculated to benefit the general body of creditors; therefore the insolvents' proposal filed on 7 July 2009 was approved.
16 Jul 2007

POLPERRO CORPORATION LTD V INTERNATIONAL MARINE SERVICES LTD HC AK CIV-2006-404-2390

Citation

openlaw-c6e9ddf4_9b59_405a_99d5_ec95fd539af2.pdf
Court

High Court

The Court has authority and duty in s 232 proceedings to determine whether a party who voted was in fact a creditor; Smartships was not a creditor because the asserted liability arose from an unenforceable oral guarantee and documentation showed the debt related to Saba, not IMS; counting Smartships' vote was a material irregularity and/or made the compromise unfairly prejudicial under s 232(3), therefore Polperro is not bound by the compromise and an order to that effect should be made.