Making a payment to a creditor (in this case, the IRD) will in and of itself give that creditor priority over competing creditors.  A recent Court of Appeal judgment to that effect, under section 95 of the Personal Property Securities Act (PPSA), carries serious implications for receivers.¹

A recent judgment in the Wellington High Court makes receivers, liquidators – and, potentially, the directors of companies in receivership and liquidation – personally liable for GST on the sale of mortgaged properties even where the mortgagee is not GST registered.1

The decision is being appealed and may be overturned as – in our view – it rests upon an unusual interpretation of the law.