In a decision released in September 2011, the High Court ruled that a mortgagee cannot exercise its power of sale under the mortgage if the Family Court has subsequently made an interim occupation order under the Property (Relationships) Act. That ruling had significant consequences for mortgagees, and was appealed to the Court of Appeal.
The High Court has confirmed its broad power to bypass the strict legislative requirements that otherwise govern voluntary administrations. Section 239ADO(1) of the Companies Act allows the Court to make any order that it thinks appropriate about how the voluntary administration provisions of the Companies Act are to operate in relation to a particular company.
“...we consider that the section means what it says, and that there is not much point in trying to paraphrase it.” (Supreme Court in Thompson v CIR)
This guide introduces you to New Zealand's business and trading environment, with particular focus on legal and regulatory matters.
The Law Commission is looking into whether the regulation of trading trusts gives enough protection to creditors and beneficiaries in circumstances of insolvency.
Submissions are due on the issues paper by 2 March 2012.
What is a trading trust?
The Insolvency Practitioners Bill is now unlikely to come into force until early 2013 due to the disruption caused by the election. The Finance and Expenditure Select Committee’s report on the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill will also be delayed until next year.
Insolvency Practitioners Bill
A recent Court of Appeal decision (Clark v Libra Developments Ltd [2011] NZCA 493), provides a useful guide to the general principles which apply to partners who do not have a formal agreement in place governing the dissolution of their partnership.
Receivers cannot escape personal liability on contracts they cause the company to enter into simply because all of the company’s assets have been paid out.
So the Court of Appeal found last week in a decision which explored the application of limitation of liability clauses where, as is common practice, the liability is limited to the “available assets” of the company.
The Supreme Court has affirmed the Court of Appeal’s finding in August of this year that a voluntary administrator may only use a casting vote at a watershed meeting where the number of creditors voting for and against a proposed deed of company arrangement (DOCA) is equal.
In Stockco Ltd v Denize the applicants sought an order to set aside bankruptcy notices on the ground that the creditor had not complied with High Court Rule 24.8(3). That Rule requires that a certified copy of the judgment or order on which the bankruptcy notice is based must be attached to the bankruptcy notice. The applicants claimed that the notice was defective as it was served separately from copies of the judgment.