In Cook v Mortgage Debenture, Mr Cook applied to be joined to a proceeding that was being continued by a claimant company after it had been placed into administration. The issue was whether the Court's consent was required on the basis that the application was against a company in administration (the English legislation being similar to section 248 of the Companies Act 1993). The Court concluded that, while the moratorium covered legal proceedings against a company in administration or liquidation, it does not cover defensive steps in proceedings brought (or contin
In Madsen-Ries and Vance v Petera the High Court found that the directors of Petranz Limited (in liquidation) had breached certain directors' duties under the Companies Act and, as a consequence, were liable to pay compensation to the Company. In particular, the directors failed to keep proper financial records and produce financial statements.
The decision of Graham & Jackson v Arena Capital Limited (In Liquidation) concerned an application under the Companies Act 1993 by liquidators seeking direction on the application of liquidation funds.
In Body Corporate 162791 v Gilbert [2014] NZHC 567, the High Court found that receivers are not personally liable under s 32(5) of the Receiverships Act 1993 (the Act) for body corporate levies under the Unit Titles Act 2010.
The facts
Admiralty proceedings against a vessel are necessarily territorial in nature. A debtor’s vessel may sail into a certain jurisdiction and be arrested and sold for the benefit of creditors who both have Admiralty in rem claims against the vessel and actively take the required steps in the Court proceeding concerned. Creditors not having rights of claim of that nature would miss out or only have a very low priority in respect of the proceeds of sale.
Liquidators are not limited to the procedure set out in section 295 of the Companies Act to recover a debt once an insolvent transaction has been set aside.
The Supreme Court, in a judgment released last Friday,1 has overruled the Court of Appeal by deciding that the IRD stands behind liquidators and employees when cash is available in liquidation and PAYE is owed.
This decision, which upholds the payment waterfall in Schedule 7 of the Companies Act, will be welcomed by insolvency practitioners after the Court of Appeal had upset previous industry practice.
Context
Two court judgments which could significantly affect New Zealand’s insolvent transactions regime are due out soon. When they are released, we will provide a Hothouse seminar on their potential implications for creditors and liquidators (sign up here).
We discuss the cases briefly here and provide an overview of the current liquidation “market” based on information supplied by the Companies Office.
Directors beware – unless you are careful to maintain a subsidiary’s independence, the parent company may be liable for the debts of its subsidiary.
That is the effect of a recent High Court decision invoking a rarely used provision in the Companies Act.
We analyse the judgment and draw some practical advice from it.
Section 271
Section 271(1)(a) of the Companies Act 1993 (the Act) has been used only rarely and is unique to New Zealand law, although Ireland has a similar provision.