For a Court ready (fee required) version please follow this link
IN THE SUPREME COURT OF NEW ZEALAND
SC 51/2013 [2015] NZSC 7
BETWEEN
ALLIED CONCRETE LIMITED Appellant
AND
JEFFREY PHILIP MELTZER AND LLOYD JAMES HAYWARD AS LIQUIDATORS OF WINDOW HOLDINGS LIMITED (IN LIQUIDATION) Respondents
SC 80/2013
BETWEEN
FENCES & KERBS LIMITED Appellant
AND
PETER ESMOND FARRELL AND SIMON PAUL ROGAN AS LIQUIDATORS OF CONTRACT ENGINEERING LIMITED (IN LIQUIDATION) Respondents
SC 81/2013
BETWEEN
HIWAY STABILIZERS NEW ZEALAND LIMITED Appellant
AND
JEFFREY PHILIP MELTZER AND LLOYD JAMES HAYWARD AS LIQUIDATORS OF WINDOW HOLDINGS LIMITED (IN LIQUIDATION) Respondents
Hearing:
18 March 2014
Court:
Elias CJ, McGrath, William Young, Glazebrook and Arnold JJ
Counsel:
J V Ormsby, C L Webber and J-L Day for Appellant Allied Concrete Limited B P Keene QC and J F Anderson for Respondents Meltzer and Hayward J P Temm, S A Hickman and K A Badcock for Appellant Fences & Kerbs Limited M D Branch and K I Bond for Respondents Farrell and Rogan D M Hughes and D I Durovich for Appellant Hiway Stabilizers New Zealand Limited
Judgment:
18 February 2015
JUDGMENT OF THE COURT
A The appeals are allowed.
BThe applications of the liquidators for the transactions to be voided are dismissed.
C The respondents in each appeal must pay costs of $10,000 to the appellant in the relevant appeal, plus the appellant’s reasonable disbursements.
DAbsent agreement between the parties, costs in the High Court and Court of Appeal are to be fixed by those Courts in light of this judgment.
These appeals involve a short but important point about the operation of the voidable transaction provisions in the Companies Act 1993 (the Act). The provisions engage two important but potentially conflicting policies.[1]
(a)On the one hand, a key purpose of the voidable transaction regime is to protect an insolvent company’s creditors as a whole against a diminution of the assets available to them resulting from a transaction which confers an inappropriate advantage on one creditor by allowing that creditor to recover more than it would in a liquidation. The pari passu principle requires equal treatment of creditors in like positions (in these appeals, unsecured creditors) and facilitates the orderly and efficient realisation of the company’s assets for distribution to creditors.
(b)On the other hand, Parliament has long accepted that creditors who enter into transactions with companies which have reached the point of insolvency are…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Allied Concrete Ltd v Meltzer
Sign in free to access the full text
Details
AGLC
Allied Concrete Ltd v Meltzer [2015] NZSC 7
Case
[2015] NZSC 7
Decision Date
CaseChat Overview and Summary
These appeals concern the interpretation of s 296(3) of the Companies Act 1993, which provides a defence to a liquidator’s claim for recovery of a payment received by a creditor from a company within two years of the company’s liquidation. The question was whether the “value” referred to in s 296(3)(c) must be given at or after the time of payment or may precede it. The Court of Appeal had held that the value must be given at the time of payment. The Court allowed the appeals, holding that value given when the antecedent debt was created may also qualify as value given for the purposes of s 296(3). The Court noted that the statutory language, context and purpose, informed by relevant background material, supported this conclusion. In addition, the Court observed that the language used in s 296(3) was similar to that used in Australian legislation, which had long accepted that value given when the antecedent debt was created could qualify as “valuable consideration” for the purposes of the Australian provision. The Court concluded that the Australian authorities supported this approach. The Court dismissed the liquidators’ applications to set aside the payments.