The recent Court of Appeal decision in Healy Holmberg Trading Partnership v Grant, clarified the issue of prioritising multiple security interest claims. The Court held the first registered interest takes priority over a latter perfected claim. The Court analysed section 66 of the Personal Property Securities Act 1999, which provides that priority is determined by which report was registered first, not by which claim is perfected first. The Court held section 66 was the guiding provision in establishing which party registered their interest first.
In the Court of Appeal decision of Herbert v New Zealand Guardian Trust Company Limited, the Court declined to grant Mrs Herbert's appeal in relation to the High Court's refusal to approve her creditor's proposal (see the summary in our October 2011 update).
The Reserve Bank has published a consultation paper on insurance solvency standards: the quality of capital and regulatory treatment of financial reinsurance. The paper outlines the attributes the Reserve Bank expects to see in regulatory capital instruments, such as permanence and the ability to absorb losses, and proposes consequential clarifications to the solvency standards to reflect these expectations.
New Zealand is a highly entrepreneurial society. Even during the sluggish economic growth of the past three years, we have maintained an average company registration rate in excess of 45,000 a year.
The lessons to be drawn from the Crafar receivership in relation to the Personal Properties Securities Act (PPSA) have now been distilled by the Court of Appeal, which has largely confirmed the High Court’s reasoning.
We discuss the implications of the litigation.
When insolvency practitioners consider who may be held accountable for corporate failures, auditors are often near the top of the list. It is easy to see why. From a practical perspective, auditors are relatively likely to be able to meet good claims, and from a legal perspective it is easy to identify the duties that the auditors owed and, in an unfortunate number of cases, breached.
Justice Heath issued a sweeping judgment last month limiting the ability of liquidators to examine witnesses and seek documents. In the decision, ANZ National Bank Ltd v Sheahan and Lock [2012] NZHC 3037, the Court also:
The High Court has clarified the extended good faith defence, introduced into the Companies Act in 2007, for creditors facing ‘claw back’ of a payment by liquidators.1
The Court’s interpretation, while good news for creditors, may make it more difficult for liquidators to recover insolvent transactions.
The 2007 amendment to section 296(3)
Further to our November update, the Securities Markets (Unsolicited Offers) Regulations 2012 have now come into force, on 1 December 2012. The Regulations set out specific rules applying to unsolicited offers (also known as "predatory" or "low-ball" offers) including new processes, detailed disclosure requirements, and the right to cancel acceptances of unsolicited offers.
Big changes are proposed to the use of trusts as trading enterprises by the Law Commission as part of its ongoing review into trust law.
Recommendations include: