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Companies Act 1993

Liquidations - Duties, rights, and powers of liquidators

275: Refusal to supply essential services prohibited

You could also call this:

“Essential services must be provided to companies in liquidation”

An essential service means gas, electricity, water, or telecommunications. Telecommunications services are when information or signals are sent from one device to another using things like wires, radio waves, or other methods.

If a company is in liquidation, the people who provide essential services are not allowed to refuse service just because the company didn’t pay its bills before the liquidation started. They also can’t make the company pay old bills as a condition for getting new service. The service provider can’t make the liquidator personally promise to pay for new services either.

When a liquidator has to pay for essential services, these costs are treated as an expense of the liquidation. This is covered in clause 1(1)(a) of Schedule 7.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321943.

Topics:
Business > Industry rules
Money and consumer rights > Consumer protection
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Part 16 Liquidations
Duties, rights, and powers of liquidators

275Refusal to supply essential services prohibited

  1. For the purposes of this section, an essential service means—

  2. the retail supply of gas:
    1. the retail supply of electricity:
      1. the supply of water:
        1. telecommunications services.

          1. For the purposes of this section, telecommunications services means the conveyance from one device to another by a line, radio frequency, or other medium, of a sign, signal, impulse, writing, image, sound, instruction, information, or intelligence of any nature, whether or not for the information of a person using the device.

          2. Notwithstanding the provisions of any other Act or any contract, a supplier of an essential service must not—

          3. refuse to supply the service to a liquidator, or to a company in liquidation, by reason of the company's default in paying charges due for the service in relation to a period before the commencement of the liquidation; or
            1. make it a condition of the supply of the service to a liquidator, or to a company in liquidation, that payment be made of outstanding charges due for the service in relation to a period before the commencement of the liquidation; or
              1. make it a condition of the supply of the service to a company in liquidation that the liquidator personally guarantees payment of the charges that would be incurred for the supply of the service.

                1. The charges incurred by a liquidator for the supply of an essential service are an expense incurred by the liquidator for the purposes of clause 1(1)(a) of Schedule 7.

                Notes
                • Section 275(4): amended, on , by section 37 of the Companies Amendment Act 2006 (2006 No 56).