The New South Wales Court of Appeal recently handed down an important judgment on the remuneration of registered liquidators.
Sakr concerned an appeal by Sanderson as liquidator of Sakr against an order determining his remuneration on anad valorem basis, without reference to his time attendances or hourly rate. Due to the importance of the issues, the Australian Securities and Investments Commission (ASIC) and Australian Restructuring Insolvency and Turnaround Association (ARITA) appeared and made submissions on the issue.
In CGES Limited (in liquidation and receivership) v Kelly [2016] NZHC 1465, the liquidator of CGES Limited brought claims against the former directors of the company for breaches of duties owed to the company. The High Court held:
Mr and Ms Moncur were the sole directors and effective owners of Monocrane NZ (Monocrane). Following their separation, they entered into a relationship property agreement under which Mr Moncur assumed full ownership and control of Monocrane, including agreeing to assume sole responsibility for the overdrawn shareholders' current account. In return, Ms Moncur agreed to resign her directorship, transfer her shares to Mr Moncur and pay various joint debts.
Mr Pala and Mr Luthera were directors of Shanton, a large retailer of women's clothing in New Zealand. BTC Group Limited (BTC) was in the business of supplying clothing to Shanton in accordance with Shanton's stock orders. BTC had obtained guarantees from Shanton's directors, pursuant to which each director guaranteed the obligations of Shanton to BTC. Earlier this year, Shanton was unable to pay its debts as they fell due and was placed into voluntary administration owing creditors over $7m.
In Bunting v Buchanan, the applicant shareholders sought discovery ahead of a hearing of their substantive application which involved the level of costs charged by two liquidators as a consequence of a drawn-out liquidation.
The Wellington litigation team successfully defended a voidable transaction claim under section 296(3) of the Companies Act 1993 by the liquidators of Contract Engineering Limited in the High Court in Farrell v ACME Engineering Limited [2012] NZHC 2874.
ACME Engineering manufactured and delivered a flash silencer to Contract Engineering in May 2010 and issued an invoice for it. The invoice was paid late and pursuant to a payment plan. Contract was placed into receivership in late 2010 and then into liquidation in July 2011.
In this case Westpac sought to have joint debtors Thomas and Sheena Fuller adjudicated bankrupt.
Burns & Agnew v Commissioner of the Inland Revenue and Strategic Finance Limited (in rec) concerned a dispute between a secured creditor and the IRD (as a preferential creditor) in respect of certain funds received by the liquidators of Takapuna Procurement Limited (TPL). The liquidators applied to the High Court for directions as to the application of those funds and this required the Court to undertake an analysis of the concept of an "account receivable" for the purposes of determining whether such funds could be applied to satisfy preferential claims under the Seventh
(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.
A liquidator may assign to a third party funder, among other things:
- the rights that are conferred on the liquidator under statute to bring a claim on behalf of the company. For example, rights accruing to the liquidator under the voidable transaction provisions of the Companies Act 1993
- a company's rights that exist at the time of liquidation.