Supreme Court of New Zealand

1 December 2005

MEDIA RELEASE – FOR IMMEDIATE PUBLICATION

TRANS OTWAY LIMITED v IAN BRUCE SHEPHARD AND CHRISTINE MARGARET DUNPHY

(SC 39/2005)

[2005] NZSC 76

PRESS SUMMARY

This summary is provided to assist in the understanding of the Court’s judgment. It does not comprise part of the reasons for that judgment.

The full judgment with reasons is the only authoritative document. The full text of the judgment and reasons can be found at Judicial Decisions of Public Interest www.courts.govt.nz/judgments.

The Supreme Court has dismissed an appeal by Trans Otway Ltd against lower court judgments holding that it received an advantage over other creditors of an insolvent company, Newman Carrying Ltd, when shortly before Newman’s liquidation it bought assets from Newman and arranged that part of the price would be off-set against an unsecured debt already owing to it by Newman. That arrangement enabled it to receive payment of its debt in priority to other creditors and was a voidable preference which could be set aside under the Companies Act 1993.

The Supreme Court has held that Trans Otway was advantaged because it would not have been entitled to claim a set-off in the liquidation because it could not show that at the time of the purchase of the assets it did not have good reason to suspect that Newman was insolvent.

ENDS

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