Plain language law

New Zealand law explained for everyone

239AEK: When mutuality required for transactions under recognised multilateral netting agreements
or “When special financial agreements apply even without mutual transactions, except for certain trustee situations”

You could also call this:

“Rules for handling set-offs in netting agreements during company administration”

When you are dealing with transactions that are part of a netting agreement, the rules about set-off in section 239AEG don’t apply. These transactions are covered by different rules in sections 239AEI to 239AEP instead.

However, there’s an exception to this. If you and the company in administration have other dealings that aren’t part of the netting agreement, then the leftover balance from the netting agreement can be used for set-off under section 239AEG. This happens when you and the company owe each other money or have other mutual dealings outside of the netting agreement.

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Next up: 239AEM: Transactions under netting agreement and effect on certain sections

or “Special rules for netting agreements during company administration”

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Companies Act 1993
Voluntary administration
239AEL: Application of set-off under section 239AEG to transactions subject to netting agreements

Part 15A Voluntary administration
Set-off and netting agreements

239AELApplication of set-off under section 239AEG to transactions subject to netting agreements

Section 239AEG does not apply to transactions that are subject to a netting agreement to which sections 239AEI to 239AEP apply.
However, a netted balance is to be treated as an amount to which section 239AEG applies if the company in administration 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.

Notes