Ebert Construction Limited v Sanson concerned the question of whether payments made by a third party under a 'direct agreement' to finance construction are payments made by the company in liquidation for the purposes of the insolvent transaction regime. Direct agreements are an agreement between the developer, builder and financier of a construction project. The agreement in this case obliged the financier to make progress payments directly to the builder throughout the duration of the project.

In Official Assignee v Carrim the High Court considered the concept of a "gift" in the Insolvency Act 2006.

The Official Assignee sought to cancel insolvent gifts made by the bankrupt to complete a property purchase by a family trust settled by the bankrupt and Ms Carrim, the bankrupt's partner (as trustees).  The High Court considered:

Two High Court decisions setting aside creditors' compromises give new guidance on the parameters of Part 14 of the Companies Act 1993.

The regime:

• cannot require the release of the company's guarantors (but that may not be the case under Part 15), and
• requires separate classes of creditors based on a pragmatic, business-oriented approach with regard to both the legal rights and economic interests of creditors.

No release of the company's guarantors

The Supreme Court has recently dismissed an appeal against a Court of Appeal decision on the disclosure of trust documents to discretionary beneficiaries.

Commercial Factors Ltd v Meltzer concerned a funding agreement between Commercial Factors Ltd (CFL) and the liquidators of Blue Chip New Zealand Ltd (in liq) (Company) by which CFL agreed to lend $67,750 to allow the liquidators to obtain an opinion on the merits of claims against the Company's directors.

If proceedings were commenced, the Company was to pay 2.5% of any proceeds received to CFL.  If the Company did not commence proceedings but otherwise received funds, the agreement stipulated CFL's right to repayment after any liquidator costs.

In 2008, Harvey, an experienced businessman, guaranteed a debt owed to Dunbar Assets plc (Dunbar).  Dunbar subsequently served a statutory demand on Harvey in 2011 for payment under the guarantee.

In 2012, Harvey applied, unsuccessfully, to set aside the demand in the County Court on the ground of promissory estoppel.  However, the demand was subsequently set aside by the Court of Appeal on a completely unrelated ground.

The liquidators of Marathon Imaging Limited (Marathon) brought a claim against the company's director, Mr Greenhill, for a prejudicial disposition of property under section 346 of the Property Law Act 2007 and a breach of director's duties under the Companies Act 1993.  Marathon had begun defaulting on its tax commitments from 2008 onwards and became insolvent shortly after.  The Greenhill Family Trust (Trust), a secured creditor of Marathon, appointed receivers and the Commissioner of Inland Revenue had Marathon placed into liquidation just three days later.

In Body Corporate 341188 v Kelly, a judgment debtor sought to overturn an Associate Judge's decision not to set aside a bankruptcy notice.  The notice was in respect of a District Court judgment and a costs order obtained by the Body Corporate in a separate High Court proceeding.  The debtor argued (among other grounds) that the notice was invalid because it was in respect of two judgment debts rather than one.

​The Insolvency Working Group's second and final report, released last week, deals with voidable transactions and Ponzi schemes. It proposes a number of changes to the voidable transaction regime, including returning the “gave value" defence to its earlier, more limited, form.

It makes a range of other recommendations across the law of insolvency. Key among them are that the IRD's preferential debt be subject to a limit, and that gift card and voucher holders be treated as preferential creditors.

Three recent decisions clarify issues around personal bankruptcy proceedings.

These include:

• compromise proposals

• procedures for substitution of creditors, and

• vesting of property disclaimed by the Official Assignee.

Debtors' compromises in bankruptcy proceedings

A bankruptcy notice under the Insolvency Act requires the debtor to pay the debt or compromise the amount owing on terms that satisfy the Court or the creditor.