Justice Venning approved a scheme of arrangement under Part 15 of the Companies Act 1993 effecting the managed withdrawal by ACS (NZ) Limited from its insurance business in New Zealand. The Court noted that the Scheme provided the best opportunity for an ordered and efficient run-off and management of claims with minimal disruption in relation to the company's processes. In liquidation, the liquidators would need time to familiarise themselves with the operation of the company and would proceed on a cautious basis, which would likely result in a material delay in meeting claims.
The recent case ofBay Flight 2012 Limited v Flight Care Limited is a reminder that holders of common law liens must take care to ensure that their lien is not extinguished by giving up possession.
In a decision concerning the expiry of a subordination agreement, the High Court has indicated that the priority of competing security interests is to be determined at the time the competing interests come in to conflict.
In Simpson v Commission of Inland Revenue (2012) 25 NZTC 20-119 (CA) the Court of Appeal held that receivers of a mortgagee which is not registered for GST must still account to Inland Revenue for GST on a mortgagee sale. This decision is controversial and pending possible resolution of the matter by an appeal to the Supreme Court, receivers of mortgagees that are not registered for GST should take legal advice as to how they should best proceed.
It’s now official. Priority between competing security interests under the Personal Property Securities Act (PPSA) is assessed at the time those interests come into conflict. This will usually, but not always, be when receivers are appointed.
The PPSA is silent on the issue but the general view, now confirmed by the High Court, has been that the rule established in the Canadian Sperry1 case is the correct approach.
Making a payment to a creditor (in this case, the IRD) will in and of itself give that creditor priority over competing creditors. A recent Court of Appeal judgment to that effect, under section 95 of the Personal Property Securities Act (PPSA), carries serious implications for receivers.1
In Aotearoa Kiwifruit Export Limited v ANZ National Bank Limited, the High Court was required to examine the difficulties that arise when a director of a company ordered into liquidation disputes that order.
Official Assignee v Mayers and Ors concerns the common practice of forgiveness of debt owed by a family trust and the consequences of such a gifting programme in the event of the bankruptcy of the lender.
In Sea Management Singapore Pte Ltd v Professional Service Brokers Ltd, SEA, a 50% shareholder in PSB, applied to put PSB into liquidation due to the irreconcilable deadlock SEA claimed existed at both board and shareholder levels over the direction of Conexa, a PSB subsidiary. Associate Judge Bell dismissed the application, holding that it was not just and equitable to order liquidation when a reasonable option existed in the constitution, or under the shareholders' agreement.
In Wilson v APG Holdings Ltd (In Liquidation), Mrs Rita Wilson (Mrs W) received amounts totalling approximately $1m from APG Holdings Limited (in liquidation) (APG) of which her husband, Mr Terry Wilson (Mr W), was a director. In a defence against a summary judgment application, Mrs W argued in the HC that the amounts in question were payments of Mr W's salary from APG, that she had not borrowed any money from APG and that the payments did not fall within the scope of section 298(2) of the Companies Act 1993 (CA 93).