The Ministry of Economic Development has released a discussion document (together with a Q & A) which considers a range of potential changes to the fees and levies that fund the institutions that regulate New Zealand's corporate environment and financial markets.

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. 

Finnigan v He underlines the obligatory nature of bankruptcy set-off whereby once the statutory requirements that exist in section 310 of the Companies Act 1993 are met (and no exclusion applies), such a set-off is mandatory. It also discusses when a transaction occurs and the operation of the exclusion in section 310(2) that preludes bankruptcy set-off.

Registration will be mandatory under the Insolvency Practitioners Bill as reported back to the House by the Commerce Committee.  This is a radical and far-reaching change from the negative licensing regime initially proposed in the Bill.

This Brief Counsel summarises and comments on the Committee’s report.

It is not uncommon for a receiver, liquidator or competing creditor to be presented with a security agreement, the ink on which appears scarcely to be dry.

If that secured creditor registered on the Personal Property Securities Register (PPSR) months or years earlier, does that registration date determine priority between competing security interests?  Or is that unfair to other creditors?

Between 2006 and 2010, 50 New Zealand finance companies either went into liquidation or receivership, or froze payments. The Securities Commission has now released information about its investigations into these finance companies.

The information released highlights the Commission's work to date, the companies being investigated, the status of the investigations and the behaviour or act that triggered the Commission's involvement. It also answers some common questions about the Commission's work in connection with the failures, including:

A liquidator may assign to a third party funder, among other things:

1. the rights that are conferred on the liquidator under statute to bring a claim on behalf of the company. For example, rights accruing to the liquidator under the voidable transaction provisions of the Companies Act 1993
2. a company's rights that exist at the time of liquidation.

A recent decision confirms that liquidators can require creditors and other persons with relevant knowledge about the affairs of the company in liquidation to provide information.

Case law on the new insolvent transactions regime is scarce, even though the changes were introduced three years ago. The High Court's recent decision in Blanchett v McEntee Hire Holdings Limited examines, for the first time in New Zealand, central principles in the new voidable transactions regime.

Ministerial Decisions  

Ministry of Manpower

Decision No. 611/2012  

Dissolves the trade union of the employees of Sojex Oman due to its failure to appoint sufficient members for the General Assembly.

Promulgated on 10 November 2012         Effective on promulgation  

Ministry of Manpower  

Decision No. 612/2012

Dissolves the trade union of the employees of Gulf Air due to its liquidation.