New Zealand Case Law: Decisions & Judgments

Topic

Defence under s 296(3)

Legal area

Court

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…
6 May 2013

JEFFREY PHILIP MELTZER AND LLOYD JAMES HAYWARD AS LIQUIDATORS OF WINDOW HOLDINGS LIMITED (IN LIQUIDATION) V ALLIED CONCRETE LIMITED HC AK CIV 2012-404-003170

Citation

openlaw-5a450c15_3cbe_47b3_8b82_e86cc970c62a.pdf
Court

High Court

Allied established the first two limbs of the s 296(3) defence (it acted in good faith and had no reasonable grounds to suspect insolvency) but failed the third limb because it did not prove it gave value at the time the payment was received; under s 296(3)(c) value must be given at receipt (subject only to the separate alteration-of-position exception), so $63,649.50 of the payment is a voidable preference and must be repaid to the liquidators with interest and costs.
17 Dec 2004

GRAHAM V PHARMACY WHOLESALERS (WELLINGTON) LTD CA CA37/04

Citation

openlaw-16de18fe_f93a_4627_a6a0_e95ee8ca1cf8.pdf
Court

Court of Appeal

Court of Appeal held PWL knew it was being preferred when it received the payments, the payments were not made in the ordinary course of business, PWL could not establish good faith for the purposes of s296(3), and therefore the liquidator's notices were upheld and the payments were recoverable under s292 with Judicature Act interest; Associate Judge Lang's contrary conclusions were set aside.

New Zealand Case Law

LEVIN AND MADSEN-RIES AS LIQUIDATORS OF ZENITH KITCHEN & JOINERY LTD (IN LIQUIDATION) v BCS HOLDING ACCOUNT LIMITED [2015] NZHC 1564

JEFFREY PHILIP MELTZER AND LLOYD JAMES HAYWARD AS LIQUIDATORS OF WINDOW HOLDINGS LIMITED (IN LIQUIDATION) V ALLIED CONCRETE LIMITED HC AK CIV 2012-404-003170

GRAHAM V PHARMACY WHOLESALERS (WELLINGTON) LTD CA CA37/04