Reynolds v Lal - [2025] NZHC 2640

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-1168

[2025] NZHC 2640

IN THE MATTER of the liquidation of Rank Properties Limited (in liquidation)

UNDER

the Companies Act 1993

BETWEEN

GRANT BRUCE REYNOLDS as liquidator of RANK PROPERTIES LIMITED (in

liquidation) Applicant

AND

KISHAN MAHI LAL

Respondent

Hearing: 1 September 2025

Appearances:

B M K Pamatatau for Applicant A S Nair for Respondent

Judgment:

11 September 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 11 September 2025 at 12.30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

REYNOLDS v LAL [2025] NZHC 2640 [11 September 2025]

[1] The applicant (Mr Reynolds) is the liquidator of Rank Properties Ltd (the company). He seeks to recover from Kishan Mahi Lal (Mr Lal), a payment of
$427,562.541 made by the company on 17 May 2023 on the basis it is a voidable
insolvent transaction under s 292 of the Companies Act 1993 (the Act).

[2] Mr Lal opposes the application. As the argument was developed by Mr Nair, the issues arising are whether:

(a)the notice issued by the liquidator under s 294(1) and (2) of the Act to set aside the transaction was deficient and invalid; and

(b)for the purposes of s 292(1A) and (2) of the Act the payment enabled Mr Lal to receive more towards satisfaction of a debt owed to him by the company than he would receive, or would be likely to receive, in the company’s liquidation.

[3] These arguments reflect Mr Lal’s position that the payment identified in the liquidator’s notice was not made to him or for his benefit but to Bass Road Ltd, a creditor of the company of which he is not a director or shareholder and has no other interest.

The facts

[4] The company was incorporated on 22 April 2021. It carried on business purchasing properties for subsequent sale at a profit.

[5] Mr Lal was the sole director and shareholder of the company until 28 November 2023, when he was replaced by Jeremy James Murphy. Mr Lal also transferred his shares to Mr Murphy.

[6] The company was put into liquidation on 21 March 2024 by Mr Murphy as shareholder pursuant to s 241(2)(a) of the Act. Mr Reynolds was appointed liquidator.

1 Throughout the balance of this judgment, I use rounded figures except where they appear in quotations.

[7] In around May 2023, the company purchased 29 Pah Road, Papatoetoe, which comprised six lots each with separate titles. It immediately sold the properties to Housing New Zealand Ltd and incurred a GST liability of $742,232 which has not been paid. From the proceeds of sale, $432,562 was paid on 17 May 2023 by the company’s lawyers into its account with the ANZ Bank.

[8] Also on 17 May 2023 an amount of $427,562 was paid from the ANZ Bank account to Bass Road Ltd. The company’s bank statement narrates the payment…

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 Reynolds v Lal

Details

AGLC: Reynolds v Lal [2025] NZHC 2640
Case: [2025] NZHC 2640
Decision Date: 11 September 2025

CaseChat Overview and Summary

The case of Reynolds v Lal involved a dispute between Grant Bruce Reynolds, the liquidator of Rank Properties Limited, and Kishan Mahi Lal. The liquidator sought to recover a payment of $427,562.54 made by the company on the basis that it was a voidable insolvent transaction under the Companies Act 1993. Mr Lal opposed the application, arguing that the payment was made to Bass Road Ltd, not him, and therefore did not constitute an insolvent transaction. The court was required to decide whether the notice issued by the liquidator was deficient and invalid and whether the payment enabled Mr Lal to receive more towards satisfaction of a debt owed to him by the company than he would receive in the company's liquidation. The court held that the liquidator's notice was invalid as it did not specify the transaction to be set aside. The notice identified a payment made by the company on 17 May 2023 to Mr Lal, which was not accurate as the payment was made to Bass Road Ltd. The court found that the requirements of the section as to the contents of the notice must be closely observed, and a substantive error in the notice will be fatal. The court dismissed the liquidator's application and awarded Mr Lal costs on a 2B basis plus reasonable disbursements as fixed by the Registrar.

Orders