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251: Restriction on rights of creditors to complete execution, distraint, or attachment
or “Limits on creditors taking company property when company is closing”
You could also call this:

“Rules for handling company property during legal action and liquidation”

When someone takes a company’s property as part of a legal process, there are special rules to follow. If you’re the person in charge of taking the property, you need to know what to do if the company goes into liquidation.

If you find out that a liquidator has been appointed for the company, you must give the property to the liquidator if they ask for it. This includes any money you received from selling the property or money that was paid to stop the sale. However, you can keep some money to cover the costs of taking the property.

If you sell a company’s property for more than $500 or if someone pays you money to avoid selling the property, you need to keep that money for 10 working days. During this time, if you hear that the company might go into liquidation, and it actually does, you must give the money to the liquidator. But first, you can take out the costs of selling the property.

The liquidator gets to keep this money, even if someone else was supposed to get it because of the legal process. However, a court can change these rules if they think it’s necessary.

Remember, if you want to know more about how a liquidator is appointed, you can look at section 241(2)(a), section 241(2)(b), and section 241(2)(c) of this law.

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Next up: 253: Principal duty of liquidator

or “Liquidator's main job: manage company assets during closure”
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Part 16 Liquidations
Provisions relating to prior execution process

252Duties of officer in execution process

  1. Subject to subsection (6), where—

  2. property of a company is taken in an execution process; and
    1. before completion of the execution process the officer charged with the execution process receives notice that a liquidator of the company has been appointed,—
        1. he or she must, on being required by the liquidator to do so, deliver or transfer the property and any money received in satisfaction or partial satisfaction of the execution or paid to avoid a sale of the property, as the case may be, to the liquidator.

      1. The costs of the execution process are a first charge on any property or money delivered or transferred to the liquidator under subsection (1) and the liquidator may sell all or some of the property to satisfy that charge.

      2. Subject to subsection (6), where—

      3. property of a company is sold in an execution process in respect of a judgment for a sum exceeding $500; or
        1. money is paid to the officer charged with the execution process to avoid a sale of the property,—
            1. the officer must retain the proceeds of sale or the money so paid for 10 working days.

          1. Subject to subsection (6), if,—

          2. within the period of 10 working days, the officer has notice of—
            1. the calling of a meeting at which a special resolution is proposed to appoint a liquidator pursuant to section 241(2)(a); or
              1. the calling of a meeting of the board at which a resolution is proposed to appoint a liquidator pursuant to section 241(2)(b); or
                1. the making of an application to the court to appoint a liquidator pursuant to section 241(2)(c); and
                2. the company is put into liquidation—
                    1. the officer must deduct from the amount the costs of the execution process and pay the balance to the liquidator.

                  1. A liquidator to whom money is paid under subsection (4) is entitled to retain it as against the execution creditor.

                  2. The court may set aside the application of this section to such extent and on such terms and conditions as it thinks fit.

                  Compare
                  • 1955 No 63 s 315