New Zealand Companies Act 1993 - Liability

New Zealand New Zealand Companies Act 1993 New Zealand Companies Act 1993 New Zealand Companies Act 1993

300 Liability if proper accounting records not kept

  • (1) Subject to subsection (2), if—

    • (a) a company that is in liquidation and is unable to pay all its debts has failed to comply with—

      • (i) section 194 (which relates to the keeping of accounting records); or

      • (ii) section 10 of the Financial Reporting Act 1993 (which relates to the preparation of financial statements); and

    • (b) the court considers that—

      • (i) the failure to comply has contributed to the company's inability to pay all its debts, or has resulted in substantial uncertainty as to the assets and liabilities of the company, or has substantially impeded the orderly liquidation; or

      • (ii) for any other reason it is proper to make a declaration under this section,—

    the court, on the application of the liquidator, may, if it thinks it proper to do so, declare that any 1 or more of the directors and former directors of the company is, or are, personally responsible, without limitation of liability, for all or any part of the debts and other liabilities of the company as the court may direct.

    (2) The court must not make a declaration under subsection (1) in relation to a person if the court considers that the person—

    • (a) took all reasonable steps to secure compliance by the company with the applicable provision referred to in paragraph (a) of that subsection; or

    • (b) had reasonable grounds to believe and did believe that a competent and reliable person was charged with the duty of seeing that that provision was complied with and was in a position to discharge that duty.

    (3) The court may give any direction it thinks fit for the purpose of giving effect to the declaration.

    (4) The court may make a declaration under this section even though the person concerned is liable to be convicted of an offence.

    (5) An order under this section is deemed to be a final judgment within the meaning of section 17(1)(a) of the Insolvency Act 2006.

    Compare: 1955 No 63 s 319; 1980 No 43 s 31

    Section 300(5): amended, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).

301 Power of court to require persons to repay money or return property

  • (1) If, in the course of the liquidation of a company, it appears to the court that a person who has taken part in the formation or promotion of the company, or a past or present director, manager, administrator, liquidator, or receiver of the company, has misapplied, or retained, or become liable or accountable for, money or property of the company, or been guilty of negligence, default, or breach of duty or trust in relation to the company, the court may, on the application of the liquidator or a creditor or shareholder,—

    • (a) inquire into the conduct of the promoter, director, manager, administrator, liquidator, or receiver; and

    • (b) order that person—

      • (i) to repay or restore the money or property or any part of it with interest at a rate the court thinks just; or

      • (ii) to contribute such sum to the assets of the company by way of compensation as the court thinks just; or

    • (c) where the application is made by a creditor, order that person to pay or transfer the money or property or any part of it with interest at a rate the court thinks just to the creditor.

    (2) This section has effect even though the conduct may constitute an offence.

    (3) An order for payment of money under this section is deemed to be a final judgment within the meaning of section 17(1)(a) of the Insolvency Act 2006.

    (4) In making an order under subsection (1) against a past or present director, the court must, where relevant, take into account any action that person took for the appointment of an administrator to the company under Part 15A.

    Compare: 1955 No 63 s 321; 1980 No 43 s 33

    Section 301(1): amended, on 1 November 2007, by section 14(1) of the Companies Amendment Act 2006 (2006 No 56).

    Section 301(1)(a): amended, on 1 November 2007, by section 14(1) of the Companies Amendment Act 2006 (2006 No 56).

    Section 301(3): amended, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).

    Section 301(4): inserted, on 1 November 2007, by section 14(2) of the Companies Amendment Act 2006 (2006 No 56).

Creditors' claims

302 Application of bankruptcy rules to liquidation of insolvent companies

  • (1) Subject to this Part, the rules in force under the law of bankruptcy with respect to the estates of persons adjudged bankrupt apply in the liquidation of a company that is unable to pay its debts to—

    • (a) the rights of secured and unsecured creditors:

    • (b) claims by creditors:

    • (c) the valuation of annuities and future and contingent liabilities—

    and all persons who in any such case would be entitled to make claims and receive payment in whole or in part are so entitled in the liquidation.

    (2) In applying in a liquidation the rules in force under the law of bankruptcy, a claim made under section 304 and admitted by a liquidator is to be treated as if it were a debt proved in accordance with the requirements of the Insolvency Act 2006.

    Section 302(2): amended, on 3 December 2007, by section 445 of the Insolvency Act 2006 (2006 No 55).

303 Admissible claims

  • (1) Subject to subsection (2), a debt or liability, present or future, certain or contingent, whether it is an ascertained debt or a liability for damages, may be admitted as a claim against a company in liquidation.

    (2) Fines, monetary penalties, and costs to which section 308 applies are not claims that may be admitted against a company in liquidation.

    Section 303: replaced, on 1 July 1994, by section 34 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

304 Claims by unsecured creditors

  • (1) A claim by an unsecured creditor against a company in liquidation must be made in the prescribed form and must—

    • (a) contain full particulars of the claim; and

    • (b) identify any documents that evidence or substantiate the claim.

    (2) The liquidator may require the production of a document referred to in subsection (1)(b).

    (3) The liquidator must, as soon as practicable, either admit or reject a claim in whole or in part, and if the liquidator subsequently considers that a claim has been wrongly admitted or rejected in whole or in part, may revoke or amend that decision.

    (4) If a liquidator rejects a claim, whether in whole or in part, he or she must forthwith give notice in writing of the rejection to the creditor.

    (5) The costs of making a claim under subsection (1) or producing a document under subsection (2) must be met by the creditor making the claim.

    (6) Every person who—

    • (a) makes, or authorises the making of, a claim under this section that is false or misleading in a material particular knowing it to be false or misleading; or

    • (b) omits, or authorises the omission, from a claim under this section of any matter knowing that the omission makes the claim false or misleading in a material particular—

    commits an offence, and is liable on conviction to the penalties set out in section 373(4).

305 Rights and duties of secured creditors

  • (1) A secured creditor may—

    • (a) realise property subject to a charge, if entitled to do so; or

    • (b) value the property subject to the charge and claim in the liquidation as an unsecured creditor for the balance due, if any; or

    • (c) surrender the charge to the liquidator for the general benefit of creditors and claim in the liquidation as an unsecured creditor for the whole debt.

    (2) A secured creditor may exercise the power referred to in paragraph (a) of subsection (1) whether or not the secured creditor has exercised the power referred to in paragraph (b) of that subsection.

    (3) A secured creditor who realises property subject to a charge—

    • (a) may, unless the liquidator has accepted a valuation and claim by the secured creditor under subsection (6), claim as an unsecured creditor for any balance due after deducting the net amount realised:

    • (b) must account to the liquidator for any surplus remaining from the net amount realised after satisfaction of the debt, including interest payable in respect of that debt up to the time of its satisfaction, and after making any proper payments to the holder of any other charge over the property subject to the charge.

    (4) If a secured creditor values the security and claims as an unsecured creditor for the balance due, if any, the valuation and any claim must be made in the prescribed form and—

    • (a) contain full particulars of the valuation and any claim; and

    • (b) contain full particulars of the charge including the date on which it was given; and

    • (c) identify any documents that substantiate the claim and the charge.

    (5) The liquidator may require production of any document referred to in subsection (4)(c).

    (6) Where a claim is made by a secured creditor under subsection (4), the liquidator must—

    • (a) accept the valuation and claim; or

    • (b) reject the valuation and claim in whole or in part, but—

      • (i) where a valuation and claim is rejected in whole or in part, the creditor may make a revised valuation and claim within 10 working days of receiving notice of the rejection; and

      • (ii) the liquidator may, if he or she subsequently considers that a valuation and claim was wrongly rejected in whole or in part, revoke or amend that decision.

    (7) Where the liquidator—

    • (a) accepts a valuation and claim under subsection (6)(a); or

    • (b) accepts a revised valuation and claim under subsection (6)(b)(i); or

    • (c) accepts a valuation and claim on revoking or amending a decision to reject a claim under subsection (6)(b)(ii),—

    the liquidator may, unless the secured creditor has realised the property, at any time, redeem the security on payment of the assessed value.

    (8) The liquidator may at any time, by notice in writing, require a secured creditor, within 20 working days after receipt of the notice, to—

    • (a) elect which of the powers referred to in subsection (1) the creditor wishes to exercise; and

    • (b) if the creditor elects to exercise the power referred to in paragraph (b) or paragraph (c) of that subsection, exercise the power within that period.

    (9) A secured creditor on whom notice has been served under subsection (8) who fails to comply with the notice, is to be taken as having surrendered the charge to the liquidator under subsection (1)(c) for the general benefit of creditors, and may claim in the liquidation as an unsecured creditor for the whole debt.

    (10) A secured creditor who has surrendered a charge under subsection (1)(c) or who is taken as having surrendered a charge under subsection (9) may, with the leave of the court or the liquidator and subject to such terms and conditions as the court or the liquidator thinks fit, at any time before the liquidator has realised the property charged,—

    • (a) withdraw the surrender and rely on the charge; or

    • (b) submit a new claim under this section.

    (11) Every person who—

    • (a) makes, or authorises the making of, a claim under subsection (4) that is false or misleading in a material particular knowing it to be false or misleading; or

    • (b) omits, or authorises the omission, from a claim under that subsection of any matter knowing that the omission makes the claim false or misleading in a material particular—

    commits an offence, and is liable on conviction to the penalties set out in section 373(4).

    Section 305(4): replaced, on 1 July 1994, by section 35 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

306 Ascertainment of amount of claim

  • (1) The amount of a claim must be ascertained as at the date and time of commencement of the liquidation.

    (2) The amount of a claim based on a debt or liability denominated in a currency other than New Zealand currency must be converted into New Zealand currency at the rate of exchange on the date of commencement of the liquidation, or, if there is more than 1 rate of exchange on that date, at the average of those rates.

    Section 306(1): amended, on 26 April 1999, by section 12 of the Companies Amendment Act 1999 (1999 No 19).

307 Claim not of an ascertained amount

  • (1) If a claim is subject to a contingency, or is for damages, or, if for some other reason, the amount of the claim is not certain, the liquidator may—

    • (a) make an estimate of the amount of the claim; or

    • (b) refer the matter to the court for a decision on the amount of the claim.

    (2) On the application of the liquidator, or of a claimant who is aggrieved by an estimate made by the liquidator, the court shall determine the amount of the claim as it sees fit.

308 Fines and penalties

  • Nothing in this Part limits or affects the recovery of—

    • (a) a fine imposed on a company, whether before or after the commencement of the liquidation of the company, for the commission of an offence; or

    • (b) a monetary penalty payable to the Crown imposed on a company by a court, whether before or after the commencement of the liquidation of the company, for the breach of any enactment; or

    • (c) costs ordered to be paid by the company in relation to proceedings for the offence or breach.

309 Claims relating to debts payable after commencement of liquidation

  • (1) A claim in respect of a debt that, but for the liquidation, would not be payable until a date that is 6 months, or later than 6 months, after the date of commencement of the liquidation is to be treated, for the purposes of this Part, as a claim for the present value of the debt.

    (2) For the purposes of subsection (1), the present value of a debt is to be determined by deducting from the amount of the debt interest at the prescribed rate (within the meaning of section 87(3) of the Judicature Act 1908) for the period from the date on which the company is put into liquidation to the date when the debt is due.

    Section 309(1): amended, on 26 April 1999, by section 13 of the Companies Amendment Act 1999 (1999 No 19).

310 Mutual credit and set-off

  • (1) Where there have been mutual credits, mutual debts, or other mutual dealings between a company and a person who seeks or, but for the operation of this section, would seek to have a claim admitted in the liquidation of the company,—

    • (a) an account must be taken of what is due from the one party to the other in respect of those credits, debts, or dealings; and

    • (b) an amount due from one party must be set off against an amount due from the other party; and

    • (c) only the balance of the account may be claimed in the liquidation, or is payable to the company, as the case may be.

    (2) A person, other than a related person, is not entitled under this section to claim the benefit of a set-off arising from—

    • (a) a transaction made within the specified period, being a transaction by which the person gave credit to the company or the company gave credit to the person; or

    • (b) the assignment within the specified period to that person of a debt owed by the company to another person—

    unless the person proves that, at the time of the transaction or assignment, the person did not have reason to suspect that the company was unable to pay its debts as they became due.

    (3) A related person is not entitled under this section to claim the benefit of a set-off arising from—

    • (a) a transaction made within the restricted period, being a transaction by which the related person gave credit to the company or the company gave credit to the related person; or

    • (b) the assignment within the restricted period to that person of a debt owed by the company to another person—

    unless the related person proves that, at the time of the transaction or assignment, the related person did not have reason to suspect that the company was unable to pay its debts as they became due.

    (4) This section does not apply to an amount paid or payable by a shareholder—

    • (a) as the consideration, or part of the consideration, for the issue of a share; or

    • (b) in satisfaction of a call in respect of an outstanding liability of the shareholder made by the board of directors or by the liquidator.

    (5) In this section, related person means a related company and includes a director of the company in liquidation.

    (6) For the purposes of subsection (2), specified period means—

    • (a) the period of 6 months before the date of commencement of the liquidation together with the period commencing on that date and ending at the time at which the liquidator is appointed; and

    • (b) in the case of a company that was put into liquidation by the court, the period of 6 months before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date on which, and at the time at which, the order of the court was made; and

    • (c) if—

      • (i) an application was made to the court to put a company into liquidation; and

      • (ii) after the making of the application to the court a liquidator was appointed under paragraph (a) or paragraph (b) of section 241(2),—

    the period of 6 months before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date and at the time of the commencement of the liquidation.

    (7) For the purposes of subsection (3), restricted period means—

    • (a) the period of 2 years before the date of commencement of the liquidation together with the period commencing on that date and ending at the time at which the liquidator is appointed; and

    • (b) in the case of a company that was put into liquidation by the court, the period of 2 years before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date on which, and at the time at which, the order of the court was made; and

    • (c) if—

      • (i) an application was made to the court to put a company into liquidation; and

      • (ii) after the making of the application to the court a liquidator was appointed under paragraph (a) or paragraph (b) of section 241(2),—

      the period of 2 years before the making of the application to the court together with the period commencing on the date of the making of that application and ending on the date and at the time of the commencement of the liquidation.

    Section 310(6)(a): replaced, on 26 April 1999, by section 14(1) of the Companies Amendment Act 1999 (1999 No 19).

    Section 310(6)(b): amended, on 26 April 1999, by section 14(2)(a) of the Companies Amendment Act 1999 (1999 No 19).

    Section 310(6)(b): amended, on 3 June 1998, by section 16(1) of the Companies Amendment Act 1998 (1998 No 31).

    Section 310(6)(c): inserted, on 3 June 1998, by section 16(1) of the Companies Amendment Act 1998 (1998 No 31).

    Section 310(6)(c): amended, on 26 April 1999, by section 14(2)(b) of the Companies Amendment Act 1999 (1999 No 19).

    Section 310(7)(a): replaced, on 26 April 1999, by section 14(3) of the Companies Amendment Act 1999 (1999 No 19).

    Section 310(7)(b): amended, on 26 April 1999, by section 14(4)(a) of the Companies Amendment Act 1999 (1999 No 19).

    Section 310(7)(b): amended, on 3 June 1998, by section 16(2) of the Companies Amendment Act 1998 (1998 No 31).

    Section 310(7)(c): inserted, on 3 June 1998, by section 16(2) of the Companies Amendment Act 1998 (1998 No 31).

    Section 310(7)(c): amended, on 26 April 1999, by section 14(4)(b) of the Companies Amendment Act 1999 (1999 No 19).

310A Definitions relating to set-off under netting agreement

  • In this Act, unless the context otherwise requires,—

    Bank means the Reserve Bank of New Zealand

    bilateral netting agreement means an agreement that provides, in respect of transactions between 2 persons to which the agreement applies,—

    • (a) that on the occurrence of an event specified in the agreement, all or any of those transactions must (or may, at the option of a party) be terminated and—

      • (i) an account taken of all money due between the parties in respect of the terminated transactions; and

      • (ii) all obligations in respect of that money satisfied by payment of the net amount due from or on behalf of the party having a net debit to or on behalf of the party having a net credit; or

    • (b) that each transaction is to be debited or credited to an account with the effect that the rights and obligations of each party that existed in respect of the relevant account prior to the transaction are extinguished and replaced by rights and obligations in respect of the net debit due on the relevant account after taking into account that transaction; or

    • (c) that amounts payable by each party to the other party are to be paid or satisfied by payment of the net amount of those obligations by the party having a net debit to the party having a net credit;—

    but does not include any bilateral netting agreement that is part of a multilateral netting agreement

    clearing house means a person that provides clearing or settlement services in respect of financial transactions between parties to a multilateral netting agreement

    multilateral netting agreement means an agreement that provides for the settlement, between more than 2 persons, of payment obligations arising under transactions that are subject to the agreement, and that provides, in respect of transactions to which it relates, that debits and credits arising between the parties are to be brought into account so that amounts payable by or to each party are satisfied by—

    • (a) payment by or on behalf of each party having a net debit to or on behalf of a clearing house (whether as agent or as principal) or a party having a net credit; and

    • (b) receipt by or on behalf of each party having a net credit from or on behalf of a clearing house (whether as agent or as principal) or a party having a net debit

    netted balance means any amount calculated under a netting agreement as the net debit payable by or on behalf of a party to the agreement to or on behalf of another party to the agreement in respect of all or any transactions to which the netting agreement applies

    netting agreement means a bilateral netting agreement or a recognised multilateral netting agreement

    recognised multilateral netting agreement means a multilateral netting agreement that is contained in, or is subject to, the rules of a recognised clearing house.

    Section 310A: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310B Application of set-off under netting agreement

  • (1) Despite anything in section 313, sections 310A to 310O apply—

    • (a) to a netting agreement—

      • (i) made in or evidenced by writing; and

      • (ii) in which the application of sections 310A to 310O has not been expressly excluded; and

      • (iii) whether made before or after the commencement of this section; and

    • (b) to all obligations under a netting agreement (whether those obligations are payable in New Zealand currency or in some other currency).

    (2) Sections 310A to 310O apply despite—

    • (a) any disposal of rights under a transaction that is subject to a netting agreement in contravention of a prohibition in the netting agreement; or

    • (b) the creation of a charge or other interest in respect of the rights referred to in paragraph (a) in contravention of a prohibition in the netting agreement.

    (3) Nothing in sections 310A to 310O applies to an amount paid or payable by a shareholder—

    • (a) as the consideration, or part of the consideration, for the issue of a share; or

    • (b) in satisfaction of a call in respect of an outstanding liability of the shareholder made by the board of directors or by the liquidator.

    Section 310B: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310C Calculation of netted balance

  • If a company that is a party to a netting agreement is in liquidation,—

    • (a) any netted balance payable by or to the company must be calculated in accordance with the netting agreement; and

    • (b) that netted balance constitutes the amount that may be claimed in the liquidation or is payable to the company, as the case may be, in respect of the transactions that are included in the calculation.

    Section 310C: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310D Mutuality required for transactions under bilateral netting agreements

  • Sections 310A to 310O apply to transactions that are subject to a bilateral netting agreement only if those transactions constitute mutual credits, mutual debts, or other mutual dealings.

    Section 310D: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310E When mutuality required for transactions under recognised multilateral netting agreements

  • (1) Sections 310A to 310O apply to transactions that are subject to a recognised multilateral netting agreement, whether or not those transactions constitute mutual credits, mutual debts, or other mutual dealings.

    (2) Despite subsection (1), sections 310A to 310O do not apply to transactions that are subject to a recognised multilateral netting agreement if—

    • (a) those transactions do not constitute mutual credits, mutual debts, or other mutual dealings; and

    • (b) a party to any of those transactions is acting as a trustee for another person; and

    • (c) the party acting as trustee is not authorised by the terms of the trust of which the party is a trustee to enter into the transaction.

    Section 310E: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310F Application of set-off under section 310 to transactions subject to netting agreements

  • (1) Section 310 does not apply to transactions that are subject to a netting agreement to which sections 310A to 310O apply.

    (2) However, a netted balance is to be treated as an amount to which section 310(1) applies if the company that is in liquidation and the other party to the netting agreement also have mutual credits, mutual debts, or other mutual dealings between them that are not subject to the netting agreement.

    Section 310F: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310G Transactions under netting agreement and effect on certain sections

  • (1) Nothing in sections 310A to 310O prevents the operation of section 56 or section 292 or section 297 or section 298 in respect of a transaction that is subject to a netting agreement.

    (2) However, nothing in section 292(4A) applies to a transaction that is subject to a netting agreement.

    (3) For the purposes of sections 292 and 297, the term transaction, in relation to a company, does not include a netting agreement entered into by the company, except to the extent that the effect of entering into the netting agreement is to reduce any amount that was owing by or to the company at the time the company entered into the agreement.

    Section 310G: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

    Section 310G(2): amended, on 7 July 2010, by section 6 of the Companies Amendment Act (No 2) 2010 (2010 No 53).

310H Rights under netting agreement not affected by commencement of liquidation

  • Nothing in section 248(1) affects, in respect of a company in liquidation, the exercise of any of the following rights under a netting agreement:

    • (a) the termination, in accordance with the netting agreement, of all or any transactions that are subject to the netting agreement by reason of the occurrence of an event specified in the netting agreement, being an event (including the appointment of a liquidator) occurring not later than the commencement of the liquidation; or

    • (b) the taking of an account, in accordance with the netting agreement, of all money due between the parties to the netting agreement in respect of transactions affected by the termination.

    Section 310H: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310I Set-off under netting agreement not affected by notice under section 294

  • The filing of a notice under section 294 in respect of any transaction that is subject to a netting agreement does not affect the operation of section 310C in respect of the transaction, and that section continues to apply to the transaction until the transaction is set aside under subsection (3) or subsection (4) of section 294.

    Section 310I: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310J Court may set aside bilateral netting agreement between company and related person

  • (1) The court may order, on the application of a liquidator, that a bilateral netting agreement entered into by a company be set aside as against the liquidator of the company if—

    • (a) the netting agreement is between the company and a person who was a related person at the time that the netting agreement was entered into; and

    • (b) the netting agreement was entered into within the restricted period; and

    • (c) the related person does not prove that, at the time the netting agreement was entered into, the related person did not have reason to suspect that the company was unable to pay its debts as they became due.

    (2) The court may make any other orders it thinks proper for the purpose of giving effect to an order under subsection (1).

    (3) In this section, unless the context otherwise requires,—

    related person, in relation to the company in liquidation, means—

    • (a) a director of the company, or a nominee or relative of or a trustee for, or a trustee for a relative of, a director of the company; or

    • (b) a person, or a relative of a person, who has control of the company; or

    • (c) another company that is controlled by a director of the company, or a nominee or relative of or a trustee for, or a trustee for a relative of, a director of the company; or

    • (d) a related company

    restricted period has the same meaning as in section 310(7).

    Section 310J: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310K Certain persons may be declared to be recognised clearing houses

  • (1) The Bank may, by notice in the Gazette, declare any person that provides or proposes to provide clearing or settlement services to be a recognised clearing house for the purposes of sections 310A to 310O.

    (2) The Bank may, by notice in the Gazette, vary or revoke any declaration made under subsection (1).

    Section 310K: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310L Matters that Bank must or may have regard to when making, varying, or revoking declaration under section 310K

  • (1) In determining whether a declaration should be made, varied, or revoked under section 310K, the Bank must have regard to the extent to which the application of sections 310A to 310O to any multilateral netting agreement that is subject to the rules of that clearing house would assist in promoting the soundness or efficiency of the financial system.

    (2) In determining whether a declaration should be made, varied, or revoked under section 310K, the Bank may have regard to any of the following matters:

    • (a) the type of transactions that may be effected through the clearing house; and

    • (b) any laws or regulatory requirements relating to the operation of that clearing house and compliance with those laws or regulatory requirements; and

    • (c) any other matters that the Bank may, in any particular case, consider appropriate.

    Section 310L: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310M Bank may impose conditions in declaration under section 310K

  • (1) The Bank may, in any declaration made or varied under section 310K, impose conditions relating to any of the matters referred to in section 310L.

    (2) If a recognised clearing house fails to comply with any conditions referred to in subsection (1), the Bank may revoke the declaration made under section 310K that relates to the clearing house.

    Section 310M: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310N Bank to notify recognised clearing house about Bank's intention to revoke or vary declaration under section 310K

  • The Bank must not revoke or vary a declaration made under section 310K unless—

    • (a) the recognised clearing house to which the notice applies has been given not less than 7 days' notice in writing of the Bank's intention to do so; and

    • (b) the clearing house has a reasonable opportunity to make submissions to the Bank; and

    • (c) the Bank considers those submissions.

    Section 310N: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

310O Transactions under recognised multilateral netting agreement not affected by variation or revocation of declaration under section 310K

  • The variation or revocation of a declaration under section 310K does not affect the application of sections 310A to 310O to any transaction—

    • (a) that is or was subject to a recognised multilateral netting agreement; and

    • (b) that was entered into before the variation or revocation of the declaration.

    Section 310O: inserted, on 26 April 1999, by section 15 of the Companies Amendment Act 1999 (1999 No 19).

311 Interest on claims

  • (1) The amount of a claim may include interest up to the date of commencement of the liquidation—

    • (a) at such rate as may be specified or contained in any contract that makes provision for the payment of interest on that amount; or

    • (b) in the case of a judgment debt, at such rate as is payable on the judgment debt.

    (2) If any surplus assets remain after the payment of all admitted claims, interest shall be paid at the prescribed rate on those claims from the date of commencement of the liquidation to the date on which each claim is paid, and if the amount of the surplus assets is insufficient to pay interest in full on all claims, payment shall abate rateably among all claims.

    (3) If any surplus assets remain after the payment of interest in accordance with subsection (2), interest shall be paid on all admitted claims referred to in subsection (1) from the date of commencement of the liquidation to the date on which the claim is paid at a rate equal to the excess between the prescribed rate and the rate referred to in paragraph (a) or paragraph (b) of that subsection, as the case may be, and, if the amount of the surplus assets is insufficient to pay interest in full on all claims, payment shall abate rateably among all claims.

    (4) For the purposes of this section, prescribed rate means the prescribed rate within the meaning of section 87(3) of the Judicature Act 1908.

    Section 311(1): amended, on 26 April 1999, by section 16 of the Companies Amendment Act 1999 (1999 No 19).

    Section 311(3): amended, on 26 April 1999, by section 16 of the Companies Amendment Act 1999 (1999 No 19).

    Section 311(3): amended, on 1 July 1994, by section 36 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

312 Preferential claims

  • (1) The liquidator must pay out of the assets of the company the expenses, fees, and claims set out in Schedule 7 to the extent and in the order of priority specified in that schedule and that schedule applies to the payment of those expenses, fees, and claims according to its tenor.

    (2) Without limiting clause 2(1)(b) of Schedule 7, the term assets in subsection (1) does not include assets subject to a charge unless the charge is surrendered or taken to be surrendered or redeemed under section 305.

    Section 312(2): amended, on 1 November 2007, by section 38 of the Companies Amendment Act 2006 (2006 No 56).

313 Claims of other creditors and distribution of surplus assets

  • (1) After paying preferential claims in accordance with section 312, the liquidator must apply the assets of the company in satisfaction of all other claims.

    (2) The claims referred to in subsection (1) rank equally among themselves and must be paid in full, unless the assets are insufficient to meet them, in which case payment shall abate rateably among all claims.

    (3) Where, before the commencement of a liquidation, a creditor agrees to accept a lower priority in respect of a debt than that which it would otherwise have under this section, nothing in this section prevents the agreement from having effect according to its terms.

    (4) Subject to section 311, after paying the claims referred to in subsection (1), the liquidator must distribute the company's surplus assets—

    • (a) in accordance with the provisions contained in the company's constitution; or

    • (b) if the company's constitution does not contain provisions for the distribution of surplus assets or, if the company does not have a constitution, in accordance with this Act.

Liquidation committees

314 Meetings of creditors or shareholders

  • (1) At any time in the course of the liquidation, the liquidator shall, at the request in writing of any creditor or shareholder or on the liquidator's own motion, call a meeting of creditors or shareholders—

    • (a) to vote on a proposal that a liquidation committee be appointed to act with the liquidator; and

    • (b) if it is so decided, to choose the members of the committee.

    (2) A liquidator may decline a request by a creditor or shareholder to call a meeting on the ground that—

    • (a) the request is frivolous or vexatious; or

    • (b) the request was not made in good faith; or

    • (c) except where a creditor or shareholder agrees to meet the costs, the costs of calling a meeting would be out of all proportion to the value of the company's assets.

    (3) The decision of a liquidator to decline the request may be reviewed by the court on the application of any creditor or shareholder, as the case may be.

    (4) Subject to subsections (2) and (3), a liquidator who receives a request to call a meeting of creditors or of shareholders must forthwith call such a meeting in accordance with Schedule 1 or, if applicable, Schedule 5 as the case may be.

    (5) The members of a liquidation committee chosen by a meeting of creditors or of shareholders take office forthwith, but if there is a difference between the decisions of meetings of creditors and meetings of shareholders on—

    • (a) the question of appointing a liquidation committee; or

    • (b) the membership of a liquidation committee—

    the liquidator must refer the matter to the court which may make such decision as it thinks fit.

    (6) The sole shareholder of a company may present to the liquidator a view on any matter which could have been decided at a meeting of shareholders under this section, and that view must, for all purposes, be treated as though it were a decision taken at a meeting of shareholders.

    Section 314(2)(c): replaced, on 1 July 1994, by section 37 of the Companies Act 1993 Amendment Act 1994 (1994 No 6).

315 Liquidation committees

  • (1) A liquidation committee must consist of not less than 3 persons who are—

    • (a) creditors or shareholders; or

    • (b) persons holding general powers of attorney from creditors or shareholders; or

    • (c) authorised directors or representatives of companies which are creditors or shareholders of the company in liquidation.

    (2) A liquidation committee has the power to—

    • (a) call for reports from the liquidator on the progress of the liquidation:

    • (b) call a meeting of creditors or of shareholders:

    • (c) apply to the court under section 284 and section 286:

    • (d) assist the liquidator as appropriate in the conduct of the liquidation.

    (3) The provisions set out in Schedule 8 govern proceedings at meetings of liquidation committees.

    (4) A meeting of creditors called under subsection (2)(b) shall be held in accordance with Schedule 5.

    (5) Where, by reason of vacancies in a liquidation committee, the committee is unable to act, the liquidator must call attention to the situation in the next 6-monthly report required to be prepared and sent under section 255(2)(d).

Liquidation Surplus Account

316 Establishment of Liquidation Surplus Account

  • (1) Money representing unclaimed assets of a company standing to the credit of a liquidator shall, after completion of the liquidation, be paid to Public Trust.

    (2) At the expiration of a period of 12 months after the date on which the money is paid, Public Trust must, after deduction of any amount required to meet the claim of any person which is established within that period, pay the balance into an account entitled the “Liquidation Surplus Account for distribution in accordance with this section.

    (3) Money held in the Liquidation Surplus Account may be invested in accordance with the provisions of the Trustee Act 1956 as to the investment of trust funds. Interest on any investment must be distributed in accordance with this section.

    (4) Money held in the Liquidation Surplus Account may be—

    • (a) paid or distributed to any person entitled to payment or distribution in the liquidation of a company any money representing the surplus assets of which has been credited to the Account; or

    • (b) paid, subject to such conditions as the Official Assignee for New Zealand may impose, in meeting the claims of the creditors of a company in the liquidation of which the Official Assignee or any other person is the liquidator, for payment of the costs of proceedings in the liquidation after the commencement of the liquidation, legal or other expert advice, or the costs of any expert witness, where the Official Assignee for New Zealand is satisfied that it is fair and reasonable for those costs to be met out of the Account.

    (5) Payments from the Liquidation Surplus Account shall be made by Public Trust at the direction of the Official Assignee for New Zealand.

    (6) In making a payment under this section, Public Trust is not required to ascertain that money or sufficient money was received on account of any company to which the claim for payment relates.

    (7) Nothing in the Unclaimed Money Act 1971 applies in relation to money to which this section applies.

    Compare: 1955 No 63 s 330A; 1989 No 101 s 12

    Section 316(1): amended, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).

    Section 316(1): amended, on 3 June 1998, by section 17 of the Companies Amendment Act 1998 (1998 No 31).

    Section 316(2): amended, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).

    Section 316(5): amended, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).

    Section 316(6): amended, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).

Transitional provisions

  • Heading: replaced, on 30 June 1997, by section 17 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).

316A Transitional provision in relation to voidable transactions

  • [Repealed]

    Section 316A: repealed, on 5 December 2013, by section 9 of the Companies Amendment Act 2013 (2013 No 111).

316B Transitional provision in relation to Liquidation Surplus Account under section 290 of Companies Act 1955

  • On the repeal of the Companies Act 1955 by section 2 of the Companies Act Repeal Act 1993,—

    • (a) all money standing to the credit of the Liquidation Surplus Account established under section 290 of the Companies Act 1955 and representing unclaimed assets of an existing company is deemed to be money held in the Liquidation Surplus Account established under section 316, and that section applies as if the money represented unclaimed assets of a company registered under this Act; and

    • (b) section 316 applies to all money to which section 290 of the Companies Act 1955 would have applied if the Companies Act 1955 had been in force, and section 316 applies as if the money represented unclaimed assets of a company registered under this Act.

    Section 316B: inserted, on 30 June 1997, by section 18 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).

New Zealand Companies Act 1993 New Zealand Companies Act 1993 New Zealand Companies Act 1993
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