New Zealand Case Law: Decisions & Judgments

Topic

Voidable transaction

Legal area

Court

28 Apr 2022

MATRIX HOMES LIMITED (in liquidation) v TAWA LIMITED PARTNERSHIP [2022] NZHC 848 [28 April 2022]

Citation

[2022] NZHC 848
Court

High Court

Court found on balance of probabilities that the payments were advances recorded as loans and that the issuance of credit invoices constituted a transaction under s292(3) that, while not involving a cash payment by Matrix, operated to transfer the apartments to Tawa LP and thereby enabled Tawa LP to receive more towards satisfaction of its position than it would have in Matrix's liquidation; accordingly the credit invoices were an insolvent transaction and relief under the Companies Act was granted; caveat maintained and Tawa LP charge set aside.
21 Apr 2021

ANDERSON v JONES [2021] NZHC 843

Citation

[2021] NZHC 843
Court

High Court

The applicant failed to provide cogent evidence of incapacity at the relevant times; medical records did not establish inability to understand or respond and the applicant had negotiated with liquidators, demonstrating understanding; therefore the bankruptcy notice could not be set aside as an abuse of process and the application was dismissed.
30 Sept 2019

GRANT v LAWSON ROBINSON LIMITED [2019] NZHC 2465

Citation

[2019] NZHC 2465
Court

High Court

The payment was made within the relation‑back period to a company that was unable to pay its due debts as at 9 May 2017 (large secured liabilities far exceeding liquid assets and substantial unsecured creditors), the creditor received more than it would likely obtain in liquidation (full payment versus negligible recovery), and the creditor was aware of or had reasonable grounds to suspect GLW's insolvency so could not rely on s 296(3); accordingly the payment was voidable and must be repaid with interest.
22 Feb 2019

APOLLO BATHROOM & KITCHEN LTD (IN LIQ) v LING [2019] NZHC 237

Citation

[2019] NZHC 237
Court

High Court

The liquidators were entitled to recover $400,000 under s297 because the company entered the transaction within the specified period and the payment caused or occurred when the company was unable to pay its due debts; the s296 defence did not bar recovery because s296 does not operate to defeat a s297 claim for the difference in value and, in any event, the defendant failed to prove she acted in good faith, had no reasonable grounds to suspect insolvency, or altered her position believing the transfer valid; the money had and received claim failed for lack of evidence of a mistake of fact; in…
20 Jun 2017

LEVIN & MADSEN-RIES v MARTIN [2017] NZHC 1354

Citation

[2017] NZHC 1354
Court

High Court

The disposition of $249,163 was set aside under s 348 because the Company was unable to pay its due debts at the time, the disposition prejudiced and delayed the Commissioner of Inland Revenue, and therefore the sum vests back in the Company; interest and costs were properly awarded against the trustee.
4 Jul 2016

MADSEN-RIES & ANOR (AS LIQUIDATORS OF TE PUA ROAD DEVELOPMENT LIMITED (IN LIQUIDATION) v DONOVAN DRAINAGE AND EARTHMOVING LIMITED [2016] NZCA 301

Citation

[2016] NZCA 301
Court

Court of Appeal

The Court dismissed the appeal, holding that even if the payments were insolvent transactions, Donovan Drainage established the s 296(3) defence: it acted in good faith and neither it nor a reasonable person in its position would have suspected Te Pua was or would become insolvent given the contemporaneous evidence (temporary cashflow explanation from the developer, industry practices, subsequent payments that cleared invoices, and that the earliest invoice may not have been due until 20 November 2008); insolvency must be assessed more broadly than mere liquidity and the objective/subjective…
13 Jun 2016

REYNOLDS v BURNARD INTERNATIONAL LIMITED [2016] NZHC 1292

Citation

[2016] NZHC 1292
Court

High Court

The payment of $14,225.21 constituted a company payment within s 292 despite being sourced from a third party because Planhorse directed the payment to a creditor's nominated account; service on the registered office was valid; Burnard had no substantial defence (including failing s 296(3) due to suspicion of insolvency) and therefore the application to set aside the default judgment was dismissed.
16 Mar 2016

MCINTOSH v FISK AND ANOR [2016] NZCA 74

Citation

[2016] 2 NZLR 783
Court

Court of Appeal

The Court held that the appellant gave value only for the antecedent capital element ($500,000) because RAM's misappropriation created a debt which was discharged pro tanto on payment, but the $454,047 fictitious profits did not correspond to any quantifiable antecedent liability or real value and must be repaid; the alteration of position defence fails because the appellant did not prove a causal detrimental change of position a reasonable person would have held in reliance on the payment.
14 Mar 2016

COLIN DAVID OWENS AND DAVID STUART VANCE v T R GROUP LIMITED [2016] NZHC 427

Citation

[2016] NZHC 427
Court

High Court

The court held the payments did not form part of a continuing business relationship because truck rentals had been stopped and the payments were predominantly backward‑looking to reduce indebtedness; T R Group established the s 296(3) defence for payments of 5 and 14 February 2014 but from 21 March 2014 onwards a reasonable person in T R Group's position would have suspected insolvency, so payments from 21 March 2014 are voidable and must be repaid to the liquidators with interest.
18 Aug 2015

GRANT AND KHOV AS LIQUIDATORS OF SPRAYMAN & AUCKLAND DOOR FINISHERS LTD (IN LIQUIDATION) v MCKENZIE [2015] NZHC 1958

Citation

[2015] NZHC 1958
Court

High Court

Defendant satisfied s 296(3): he acted in subjective good faith, a reasonable person in his position would not have suspected that Sprayman was or would become insolvent given the information he had, and he gave value by virtue of services rendered as an employee (and/or reasonably altered his position); accordingly the liquidators' application to set aside the $36,000 payments failed.