Introduction

In this Banking Reform updater we examine the single resolution mechanism (SRM), which together with the single supervisory mechanism (SSM) (Banking Reform updater 10) forms the key pillars of the EU Banking Union.

What is the SRM?

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.