New Zealand Case Law: Decisions & Judgments

Topic

Shareholder current account

Legal area

Court

28 Apr 2023

VIJAYAKUMAR v MANUKAU FAMILY DOCTORS LTD [2023] NZHC 967

Citation

[2023] NZHC 967
Court

High Court

Application to set aside the Formal Proof Judgment was dismissed because the applicant failed to show an excusable non-appearance and did not demonstrate a substantial defence to the orders for the shareholder current account and compensation; the court allowed a limited variation only to permit four weeks to complete purchase of the shares and left costs to follow the event on a 2B basis.
14 Nov 2022

JINDAL v ORANGE CAPITAL LTD [2022] NZCA 540

Citation

[2022] NZCA 540
Court

Court of Appeal

The claim was a common law debt action by the company in liquidation and did not invoke s301 or the voidable transaction provisions of the Companies Act 1993; therefore the District Court had jurisdiction under the District Courts Act 2016 to hear the claim, the appellant had no arguable entitlement to salary without s161 authorisation and failed to establish a credible set-off, further evidence was irrelevant to the legal issue, and the appeal is dismissed with costs to the respondent.
29 Jul 2022

VANCE v VEY GROUP LIMITED [2022] NZHC 1861

Citation

[2022] NZHC 1861
Court

High Court

The application for leave to appeal was dismissed because the High Court correctly applied the law and facts: the liquidators reasonably concluded the Orana debt comprised a shareholder current account (and a $200,000 advance) repayable on demand and therefore not statute-barred; the court-appointed receiver/liquidator's evidence was admissible and appropriate; no arguable error of law or fact warranting leave was demonstrated; and granting leave would cause unjustified delay and prejudice to creditors and the liquidation process.
17 May 2022

EVERSONS INTERNATIONAL LTD (In Liq) v STEWART [2022] NZHC 906

Citation

[2022] NZHC 906
Court

High Court

The application for particular discovery under r 8.19 was dismissed because the applicant failed to establish that the documents sought were relevant to issues raised on the pleadings and failed to show grounds for believing additional discoverable documents existed; the liquidators demonstrated they had made reasonable and extensive searches and any undisclosed material was not in their control.
2 Feb 2022

VANCE v VEY GROUP LIMITED (IN LIQUIDATION AND RECEIVERSHIP) [2022] NZHC 75

Citation

[2022] NZHC 75
Court

High Court

The liquidators conducted a reasonable, documented review and properly treated the intermingled transactions as a shareholder current account (except the 2015 term loan); under the applicable authorities a current account of this nature gives rise to liability on demand so pre-2011 components were not statute-barred; accordingly the liquidators' admission of Orana's claim was not unreasonable and the review application is dismissed; the termination application is discontinued and the agreed share transfer is approved under s248.
24 Nov 2021

ONESTOP PROJECTS LTD (IN LIQ) v CORIN [2021] NZHC 3170

Citation

[2021] NZHC 3170
Court

High Court

Withdrawals of $237,932.23 from the shareholder current account were not shown to be validly authorised remuneration; accordingly, they are advances payable to the company and judgment is entered for the plaintiffs for that sum with interest and costs.
16 Aug 2021

ANOTHER ORANGE SERVICE CENTRE LTD (in liquidation) v VINCENT [2021] NZHC 2135

Citation

[2021] NZHC 2135
Court

High Court

Plaintiff established defendant had a liability on her shareholder current account such that summary judgment as to liability was appropriate, but the quantum could not be determined on the material filed because the liquidator did not produce his underlying workpapers, relied on draft financials without explanation, and an independent review identified disputed items reducing the claimed sum; defendant cannot reclassify drawings as remuneration absent compliance with s161.
3 Dec 2020

EVERSONS INTERNATIONAL LTD (In Liq) v STEWART [2020] NZHC 3188

Citation

[2020] NZHC 3188
Court

High Court

The application for summary judgment was dismissed because material factual disputes existed about the nature of key payments (investments v advances), the liquidators had not produced a satisfactory reconstructed set of accounts or reconciled post-2014 transactions, and there was an arguable limitation defence in relation to at least the $2,000,000 payment; those disputes made summary determination of liability or amount inappropriate.
13 Aug 2020

MONNERY v CONVENDIUM LIMITED (IN LIQUIDATION) [2020] NZCA 345

Citation

(2020) 25 PRNZ 417
Court

Court of Appeal

Where company accounting records show an overdrawn shareholder current account and the shareholder does not provide an adequate explanation that creates a legal defence, the shareholder (or its trustees) is liable to repay the deficit on demand; absent unusual or oppressive circumstances the court will not decline summary judgment; non‑compliance with s161 does not defeat the company's direct claim to recover shareholder advances; because the defence did not challenge the pleaded quantum, summary judgment should have been entered for the full claimed sum of $560,243.43.
9 Apr 2019

KELSTWORURAL LIMITED (In Liquidation) v MOUNSEY-ROSS [2019] NZHC 752

Citation

[2019] NZHC 752
Court

High Court

The company established the debt to the summary judgment standard by producing signed, director-approved financial statements prepared by accountants and Xero records; the defendants produced only general, unparticularised denials and an application for more time, which did not raise an arguable defence—therefore summary judgment was appropriate and entered for $326,219.86 with interest from 17 September 2018 under s10 Interest on Money Claims Act 2016.