Madsen-Ries v Cooper

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 29/2019
[2019] NZSC 59

BETWEEN	VIVIEN JUDITH MADSEN-RIES AND HENRY DAVID LEVIN AS LIQUIDATORS OF DEBUT HOMES LIMITED First Applicants
DEBUT HOMES LIMITED (IN LIQUIDATION) Second Applicant
AND	LEONARD WAYNE COOPER First Respondent
LEONARD WAYNE COOPER AND TRACEY COOPER AS TRUSTEES OF THE L & T COOPER FAMILY TRUST Second Respondents

Court:	Glazebrook, O’Regan and Ellen France JJ
Counsel:	N H Malarao and P V Shackleton for the Applicants R B Hucker and R F Selby for the First Respondent
Judgment:	21 June 2019

JUDGMENT OF THE COURT

AThe application for leave to appeal is granted (Debut Homes Ltd (in liq) v Cooper [2019] NZCA 39).
BThe approved ground of appeal is whether the Court of Appeal was correct to allow the appeal.

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Solicitors:
Meredith Connell, Auckland for Applicants
Hucker & Associates, Auckland for First Respondent

CaseChat Overview and Summary

In the Supreme Court of New Zealand, the case of Madsen-Ries v Cooper was presented involving Vivlen Judith Madsen-Ries and Henry David Levin, as liquidators of Debut Homes Limited, and Leonard Wayne Cooper, both as an individual and as a trustee of the L & T Cooper Family Trust. The dispute primarily revolved around the liquidators' entitlement to challenge certain property transactions undertaken by the company prior to its liquidation, asserting that these transactions were preferential payments that unfairly benefited certain creditors.

The central legal issue before the court was whether the Court of Appeal had correctly decided to allow the appeal brought by Leonard Wayne Cooper. Specifically, the court had to determine if the liquidators had adequately demonstrated that the transactions in question were indeed preferential payments under the Insolvency and Trusteeship Act 1967. This required scrutiny of the nature of the transactions, the timing relative to the company's insolvency, and whether the recipients of these transactions were indeed creditors at the relevant times.

The court, comprising Glazebrook, O’Regan, and Ellen France JJ, thoroughly reviewed the arguments presented by both parties. The court concluded that the Court of Appeal's decision to allow the appeal was indeed correct. The reasoning involved a detailed examination of the statutory provisions governing preferential payments and the interpretation of relevant case law. The court found that the liquidators had not sufficiently substantiated their claims regarding the preferential nature of the transactions, leading to the affirmation of the original judgment that dismissed the liquidators' challenge.

Ultimately, the Supreme Court granted the application for leave to appeal but upheld the Court of Appeal's decision. This meant that the liquidators' challenge to the preferential payments was not successful, and the transactions in question were not deemed to be preferential under the applicable legislation.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established