In 2013, Mrs Hanara was adjudicated bankrupt. The Assignee subsequently disclaimed Mrs Hanara's half-interest in a Hastings property (the Interest), in which Mrs Hanara had very little equity. In 2016, the owner of the other half-share in the property, Mr Hanara, was also adjudicated bankrupt. The Assignee, acting in respect of both bankrupt estates, looked again at the likely equity that might be available in the property. The Assignee considered that, on its own, Mr Hanara's one half- share in the property would be unsaleable and therefore applied under s 119
The Commissioner of Inland Revenue (Commissioner) appealed a decision of Associate Judge Christiansen to approve a payment proposal by Mr Wilson to discharge a debt he owed the Commissioner and thereby avoid a declaration of bankruptcy.
The Supreme Court’s decision in McIntosh v Fisk has confirmed how the courts will deal with claw back claims under the voidable transactions regime in the context of Ponzi schemes. Liquidators’ recoveries will be limited to the fictitious profits for which there was no value given.
Ebert Construction Limited v Sanson concerned the question of whether payments made by a third party under a 'direct agreement' to finance construction are payments made by the company in liquidation for the purposes of the insolvent transaction regime. Direct agreements are an agreement between the developer, builder and financier of a construction project. The agreement in this case obliged the financier to make progress payments directly to the builder throughout the duration of the project.
In Official Assignee v Carrim the High Court considered the concept of a "gift" in the Insolvency Act 2006.
The Official Assignee sought to cancel insolvent gifts made by the bankrupt to complete a property purchase by a family trust settled by the bankrupt and Ms Carrim, the bankrupt's partner (as trustees). The High Court considered:
Two High Court decisions setting aside creditors' compromises give new guidance on the parameters of Part 14 of the Companies Act 1993.
The regime:
- cannot require the release of the company's guarantors (but that may not be the case under Part 15), and
- requires separate classes of creditors based on a pragmatic, business-oriented approach with regard to both the legal rights and economic interests of creditors.
No release of the company's guarantors
The Supreme Court has recently dismissed an appeal against a Court of Appeal decision on the disclosure of trust documents to discretionary beneficiaries.
Commercial Factors Ltd v Meltzer concerned a funding agreement between Commercial Factors Ltd (CFL) and the liquidators of Blue Chip New Zealand Ltd (in liq) (Company) by which CFL agreed to lend $67,750 to allow the liquidators to obtain an opinion on the merits of claims against the Company's directors.
If proceedings were commenced, the Company was to pay 2.5% of any proceeds received to CFL. If the Company did not commence proceedings but otherwise received funds, the agreement stipulated CFL's right to repayment after any liquidator costs.
In 2008, Harvey, an experienced businessman, guaranteed a debt owed to Dunbar Assets plc (Dunbar). Dunbar subsequently served a statutory demand on Harvey in 2011 for payment under the guarantee.
In 2012, Harvey applied, unsuccessfully, to set aside the demand in the County Court on the ground of promissory estoppel. However, the demand was subsequently set aside by the Court of Appeal on a completely unrelated ground.
The liquidators of Marathon Imaging Limited (Marathon) brought a claim against the company's director, Mr Greenhill, for a prejudicial disposition of property under section 346 of the Property Law Act 2007 and a breach of director's duties under the Companies Act 1993. Marathon had begun defaulting on its tax commitments from 2008 onwards and became insolvent shortly after. The Greenhill Family Trust (Trust), a secured creditor of Marathon, appointed receivers and the Commissioner of Inland Revenue had Marathon placed into liquidation just three days later.