New Zealand Case Law: Decisions & Judgments | LexChat

Topic

Statutory defence under s296

Legal area

Court

29 Nov 2013

LEVIN & ANOR v TIMBERWORLD LIMITED [2013] NZHC 3180

Citation

[2013] NZHC 3180
Court

High Court

The liquidators proved Northside was insolvent during the specified period; s292(4B) is to be applied to transactions within the specified period (not from the start of the trading relationship) and the peak indebtedness rule is not adopted; Timberworld failed the s296(3) defence because a reasonable creditor in its position had grounds to suspect insolvency; accordingly the specified transactions are voidable and Timberworld must repay $73,490.46 plus interest and costs.
16 Oct 2013

VIVIEN JUDITH MADSEN-RIES V RAPID CONSTRUCTION LIMITED CA76/2013 [2013] NZCA 489

Citation

[2013] NZCA 489
Court

Court of Appeal

On the undisputed evidence the Court accepted Rapid's unchallenged account that the payment was part of a reciprocal cheque‑swap trading arrangement, and found Rapid satisfied all three limbs of s296(3): it acted in good faith, a reasonable person in its position would not have suspected Giant was or would become insolvent, and Rapid altered its position/gave value in the reasonable belief the transfer was valid; accordingly recovery was limited to the net balance and the liquidators' appeal was dismissed.