Torchlight was a private equity fund investing in distressed assets. One of its investments was the purchase of a debt from Bank of Scotland International totalling $185m, of which Torchlight had repaid all but $37m.  Being in a difficult liquidity position to pay off the debt, Torchlight sought bridging finance from a Mr Grill.  Torchlight and Mr Grill entered into a 60-day contract in which Mr Grill would provide $37m to discharge the debt.

In Erwood v Official Assignee [2015] NZCA 478 an application was made to review a decision declining to dispense with security for costs.  The applicant, Mr Erwood, argued that he had demonstrated impecuniosity, and that the Registrar had erred in finding to the contrary.

Mr Erwood held nearly $800,000 on deposit with a bank. His account had been frozen by the bank on the basis that Mr Erwood lacked the capacity to give the bank authority for the account.  The bank had formed this view on information provided to them by Mr Erwood.

The majority expressly noted that, had they not felt bound by the Supreme Court’s interpretation, they would have agreed with the minority and required the investor to pay back not just the fictional profits, but also the profits of his capital investment.

We look at the reverberations last year from Fences & Kerbs and speculate on their continuing effect this year.

Case volume

Following the determination of the substantive High Court case earlier last year (see our previous summary here), this case concerned a dispute in respect of a right to claim int

In Cook v Mortgage Debenture, Mr Cook applied to be joined to a proceeding that was being continued by a claimant company after it had been placed into administration.  The issue was whether the Court's consent was required on the basis that the application was against a company in administration (the English legislation being similar to section 248 of the Companies Act 1993).  The Court concluded that, while the moratorium covered legal proceedings against a company in administration or liquidation, it does not cover defensive steps in proceedings brought (or contin

In Madsen-Ries and Vance v Petera the High Court found that the directors of Petranz Limited (in liquidation) had breached certain directors' duties under the Companies Act and, as a consequence, were liable to pay compensation to the Company.  In particular, the directors failed to keep proper financial records and produce financial statements.

The decision of Graham & Jackson v Arena Capital Limited (In Liquidation) concerned an application under the Companies Act 1993 by liquidators seeking direction on the application of liquidation funds.

If asked to provide information to a liquidator, the safest course may be to provide it under oath under section 261 of the Companies Act 1993 because the High Court has found that immunity will apply to such statements.

We look at the decision.

The case

In Body Corporate 162791 v Gilbert [2014] NZHC 567, the High Court found that receivers are not personally liable under s 32(5) of the Receiverships Act 1993 (the Act) for body corporate levies under the Unit Titles Act 2010.

The facts

Admiralty proceedings against a vessel are necessarily territorial in nature. A debtor’s vessel may sail into a certain jurisdiction and be arrested and sold for the benefit of creditors who both have Admiralty in rem claims against the vessel and actively take the required steps in the Court proceeding concerned.  Creditors not having rights of claim of that nature would miss out or only have a very low priority in respect of the proceeds of sale.