Plain language law

New Zealand law explained for everyone

Companies Act 1993

Voluntary administration - Effect of appointment of administrator

239Z: Effect on dealing with company property

You could also call this:

“Rules for property transactions when a company is in administration”

When a company is in administration, any transaction or dealing that affects the company’s property is not valid unless it meets certain conditions. You can only make these transactions or dealings if the administrator does it for the company, the administrator gives written permission before it happens, or a court orders it.

If a transaction or dealing is not valid because it doesn’t meet these conditions, a court can still make it valid if they choose to.

There’s an exception for registered banks. If a bank makes a payment from the company’s account in good faith and as part of their normal banking business, it’s okay. This is true if the payment is made before the bank is told in writing about the administration, or before the bank has reason to think the company is in administration.

If you’re a director or officer of the company, you can get in trouble if you try to make a transaction or dealing that isn’t allowed, or if you’re involved in it in any way. This includes doing something or not doing something, directly or indirectly.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321521.

Topics:
Business > Industry rules
Business > Fair trading
Money and consumer rights > Banking and loans
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239Y: Effect on employees, or

“How an administrator's appointment affects employees' jobs and wages”

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239AA: Company officer's liability for compensation for void transaction or dealing, or

“Officers may have to pay compensation for wrongful actions that cause losses”

Part 15A Voluntary administration
Effect of appointment of administrator

239ZEffect on dealing with company property

  1. A transaction or dealing by a company in administration, or by a person on behalf of the company, that affects the company's property is void unless the transaction or dealing was entered into—

  2. by the administrator, on the company's behalf; or
    1. with the administrator's prior written consent; or
      1. under an order of the court.

        1. The court may validate a transaction or dealing that is void under subsection (1).

        2. Subsection (1) does not apply to a payment made by a registered bank—

        3. out of an account kept by the company with the bank; and
          1. in good faith and in the ordinary course of the bank's banking business; and
            1. on or before the day on which the bank was notified in writing by the administrator that the administration had begun, or before the bank had reason to believe that the company was in administration, whichever was earlier.

              1. A director or officer of the company commits an offence if he or she—

              2. purported, on the company's behalf, to enter into a transaction or dealing that is void under subsection (1); or
                1. was in any other way knowingly concerned in, or party to, the void transaction or dealing, whether—
                  1. by act or omission; or
                    1. directly or indirectly.

                    Compare
                    • Corporations Act 2001 s 437D (Aust)
                    Notes
                    • Section 239Z: inserted, on , by section 6 of the Companies Amendment Act 2006 (2006 No 56).