The High Court's ruling in Priest v Ross Asset Management Ltd (In Liq) [2016] NZHC 1803 arose out of the devastation of the Ponzi scheme effected by David Ross of Ross Asset Management Limited (In Liquidation) (RAM) and Dagger Nominees Limited (Dagger). For many years RAM and Dagger reported spectacular returns for investors before their illusion was revealed, the Financial Markets Authority became involved and liquidators were appointed.
In Petterson v Browne [2016] NZCA 189 a liquidator successfully appealed to the Court of Appeal and obtained orders under sections 295 and 299 of the Companies Act 1993 (Act) for certain payments and security to be set aside.
In our June 2015 update we reported on the Court of Appeal decision in which Mr Gilbert was held personally liable for body corporate levies, as a receiver of QSM Trustees Limited (QSMTL). QSMTL owned units in a unit title complex. The Body Corporate sought to exercise its statutory power and impose levies on Mr Gilbert personally, as receiver of QSMTL.
Bankruptcy represents a significant interference with the bankrupt's property and business activities. Those consequences form the judicial policy at work in Re Bartercard Exchange Ltd [2016] NZHC 703, in which the Court refused to cure deficiencies in Bartercard's bankruptcy notice, and dismissed its application to adjudicate Mr de Vires bankrupt.
James Developments Limited (JDL) went into liquidation on 6 July 2009.
In November 2012, the liquidator issued proceedings against a trust for repayment of a loan, six years and one month after the loan was made. The trustees argued the claim was time-barred. The liquidator argued there had been a fraudulent cover-up of the loan and that the High Court should postpone the limitation period under section 28 of the Limitation Act 1950 (Act).
In Erceg v Erceg1 the New Zealand Court of Appeal ruled on the standing of bankrupt beneficiaries to bring claims against trustees. In addition, the Court considered the role of trustee discretion when determining beneficiary access to trust documentation. The decision is useful for trustees and beneficiaries alike, and provides clarity on the steps a Court may take when deciding whether or not to grant beneficiaries disclosure of trust information. Although this is a New Zealand decision, other common law courts such as Hong Kong may reach similar conclusions.
A High Court finding this month that a liquidator fabricated a key document and failed to account for receipts of over half a million dollars highlights the need for regulation of the insolvency profession.
The case
The liquidator, Geoff Martin Smith, claimed to have sent a notice under section 305 of the Companies Act to the bank holding security over the company in liquidation. The notice required the bank’s election, in default of which its security would be deemed surrendered. The bank said it never received the notice.
The High Court has issued its first major decision under Part 15A of the Companies Act, rejecting a multi-faceted challenge by Cargill International to the Solid Energy Deed of Company Arrangement (DOCA).
The ruling provides important guidance on the operation of New Zealand’s voluntary administration regime.
Chapman Tripp acted for Solid Energy’s lenders, the fourth respondents in the proceeding.
Background
The Ministry of Business, Innovation and Employment (MBIE) is proposing law change after the Court of Appeal ruled that KiwiSaver funds are beyond the reach of the Official Assignee.
The effect of the ruling is to provide a higher level of protection for KiwiSaver balances than for other forms of retirement savings.
MBIE is seeking feedback on a range of options to create a uniform policy approach to the use of retirement savings in bankruptcy.
Submissions close on 30 September 2016. We encourage you to make a submission.
Background
The Court of Appeal has dismissed an appeal by Steel & Tube Holdings Limited (STH) against the legal basis and quantum of a $750,000 judgment based on a “de facto amalgamation” with its subsidiary company.
The ruling reinforces the message from the High Court that directors must be careful to maintain a subsidiary’s independence if they are to protect the parent against liability for the subsidiary’s debts.
The context