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Companies Act 1993

Liquidations - Appointment and supervision of liquidators

284: Court supervision of liquidation

You could also call this:

“How the court can oversee and assist with company liquidations”

You can ask the court to help with a company’s liquidation. If you’re the liquidator, part of a liquidation committee, or (with the court’s permission) a creditor, shareholder, other entitled person, or director of the company being liquidated, you can do this.

The court can do many things to help. It can give directions about any liquidation issues. It can change or confirm the liquidator’s decisions. It can order an audit of the liquidation accounts. It can make the liquidator show the accounts and records to an auditor and give the auditor information about how the liquidation is being run.

The court can also look at how much the liquidator is being paid and make sure it’s fair. If the liquidator has been paid too much, the court can make them give some money back. The court can also decide if the liquidator was appointed properly or if they took control of property correctly. It can also make orders about keeping or getting rid of the liquidation or company records.

The court can use these powers for things that happened before or after the liquidation started, or even after the company was taken off the New Zealand register. It can even use these powers if the liquidator has stopped working.

If a liquidator follows a direction from the court about their job, they can use this as a defence if someone complains about what they did or didn’t do. But the court can decide that the liquidator doesn’t get this protection if someone shows that there were special reasons why the direction was given.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM321958.

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Part 16 Liquidations
Appointment and supervision of liquidators

284Court supervision of liquidation

  1. On the application of the liquidator, a liquidation committee, or, with the leave of the court, a creditor, shareholder, other entitled person, or director of a company in liquidation, the court may—

  2. give directions in relation to any matter arising in connection with the liquidation:
    1. confirm, reverse, or modify an act or decision of the liquidator:
      1. order an audit of the accounts of the liquidation:
        1. order the liquidator to produce the accounts and records of the liquidation for audit and to provide the auditor with such information concerning the conduct of the liquidation as the auditor requests:
          1. in respect of any period, review or fix the remuneration of the liquidator at a level which is reasonable in the circumstances:
            1. to the extent that an amount retained by the liquidator as remuneration is found by the court to be unreasonable in the circumstances, order the liquidator to refund the amount:
              1. declare whether or not the liquidator was validly appointed or validly assumed custody or control of property:
                1. make an order concerning the retention or the disposition of the accounts and records of the liquidation or of the company.

                  1. The powers given by subsection (1) are in addition to any other powers a court may exercise in its jurisdiction relating to liquidators under this Part, and may be exercised in relation to a matter occurring either before or after the commencement of the liquidation, or the removal of the company from the New Zealand register, and whether or not the liquidator has ceased to act as liquidator when the application or the order is made.

                  2. Subject to subsection (4), a liquidator who has—

                  3. obtained a direction of a court with respect to a matter connected with the exercise of the powers or functions of liquidator; and
                    1. acted in accordance with the direction—
                        1. is entitled to rely on having so acted as a defence to a claim in relation to anything done or not done in accordance with the direction.

                      1. A court may, on the application of any person, order that, by reason of the circumstances in which a direction was obtained under subsection (1), the liquidator does not have the protection given by subsection (3).