Warren Metals v Grant [2013] NZHC 263 was a successful appeal against a District Court decision that struck out the appellant's cause of action on the basis that the District Court did not have jurisdiction to review the acts of liquidators.
Under section 241(4) of the Companies Act 1993 the High Court "may" order that a company which is unable to pay its debts be put into liquidation. While the Court retains a discretion not to order the liquidation of an insolvent company, it will not usually exercise that discretion in the absence of good reasons for doing so.
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 Official Assignee v Spencer, Mr Spencer's bankruptcy period was extended from three to six years due to his conduct and failure to comply with his obligations under the Insolvency Act 1967 (Act).
Mr Spencer was adjudicated bankrupt for the second time in August 2007 and was due to be discharged from bankruptcy in 2010. However, the Official Assignee objected to Mr Spencer's discharge and asked the Court to exercise its discretion and decline to order the discharge.
In Taylor & Ors v Bank of New Zealand (HC, 14/12/2010, Panckhurst J, Christchurch, CIV 2008-409-964), the High Court held that a bank's appointment of a receiver without any prior written notice to the debtor was in accordance with the terms of the security agreement and was therefore valid.
Since our last newsletter, Russia's war in Ukraine rumbles on, domestic inflation hits new highs and there are signs of an increase in activity in the insolvency market. Russians unlawful assault on Ukraine continues unabated, as we enter the European summer months, and the fourth month of the invasion. Besides the utter devastation inflicted on the people and infrastructure of Ukraine, the war is having a significant impact on both global food and oil prices.
In the two judgments, Commissioner of Inland Revenue v Salus Safety Equipment Ltd (in liq) [2020] NZHC 1368 and Commissioner Inland Revenue v Green Securities Ltd (in liq) [2020] NZHC 1371, Associate Judge Bell significantly reduced the amount recoverable in each proceeding by liquidators.
Both cases considered applications from liquidators to seek approval of their remuneration. In Salus the amount claimed was $91,600 and in Green Securities it was $159,044.
A recent decision of the High Court of New Zealand provides helpful guidance for insolvency practitioners on how aspects of the voluntary administration regime should operate in the context of the COVID-19 pandemic.
On 30 March 2020, the board of directors of EncoreFX (NZ) Limited resolved to appoint administrators to the company. By then, New Zealand was already at Level 4 on the four-level alert system for COVID-19.
The Hobson Apartments suffer from water tightness issues. Unusually for a unit development, the top floor apartment on level 12 owned by the appellant Manchester Securities, owned the exterior of its unit including the roof of the building rather than the Body Corporate. Severe water damage was identified in October 2009. Following a series of High Court decisions and one Court of Appeal decision, Manchester Securities was required to contribute certain amounts to the Body Corporate for repair costs.
The decision of the English High Court in Willmont and Finch v Shlosberg clarifies how insolvency practitioners can use and disclose documents obtained under compulsion or litigation to related insolvency estates.