The recent case of Simpson v Commission of Inland Revenue (HC, 17/5/2011; Dobson J, Wellington, CIV 2010-485-1860) concerned the issue of whether receivers are personally liable to account for goods and services tax (GST) on the sale of six properties effected by them.

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. 

The government placed the Hubbards, their companies (Aorangi Securities and Hubbard Management Funds), and seven charitable trusts in statutory management in June 2010. 

Simpson and Downes v CIR involved an application by receivers for directions under section 34 of the Receiverships Act 1993 in relation to whether the receivers of a mortgagee were personally liable to account for GST on the supply of six properties sold by the receivers at mortgagee sale.

In Jordan and Vance v First City (in liquidation ) & Gore Street (in liquidation), the liquidators of Gore Street applied for a pooling order that the liquidation of the two defendants, First City and Gore Street, proceed as if they were one company.

(High Court Auckland, CIV 2010-404-6381, 8 April 2011, Associate Judge Matthews)

In ASB Bank Limited v Hall, the High Court confirmed that a bank does not owe a duty of care to a creditor, director or shareholder of a customer of the bank. 

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.

The case of Taylor and Ors v B concerned a company that imported and distributed hair care products, Cabellos Holdings Limited.

Khan v Reid acts as a reminder to file applications and appeals promptly.

In Taylor & Ors v Bank of New Zealand (HC, 14/12/2010, Panckhurst J, Christchurch, CIV 2008-409-964), the High Court held that a bank's appointment of a receiver without any prior written notice to the debtor was in accordance with the terms of the security agreement and was therefore valid.