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Receiverships Act 1993

30B: Priorities on distribution by receiver of surplus representing proceeds of personal property

You could also call this:

"How a receiver shares leftover money from selling personal property"

Illustration for Receiverships Act 1993

When a receiver sells personal property, you need to know how the leftover money is shared. The money is distributed in a certain order. First, it goes to people who have a security interest in the property, which means they have a claim on it, and they registered this interest under the Personal Property Securities Act 1999.

If there are people with security interests, they get the money first, but only if their interest was registered before the property was sold and their interest is subordinate to the person the receiver is working for. Then, the money goes to other people who had an interest in the property when it was sold, if the receiver knows about them and thinks their interest is valid.

If there is still money left, it goes to the person who owned the property, called the grantor. The order in which people get the money is decided by the law, including Part 7 or Part 8 of the Personal Property Securities Act 1999.

If the grantor cannot be found after the receiver tries to locate them, the receiver follows the rules in section 186(2) to (5) of the Property Law Act 2007, but replaces the words "the mortgagee" and "the mortgagor" with "the receiver" and "the grantor". This means the receiver treats the grantor like a mortgagor and themselves like a mortgagee when trying to find the grantor or deal with the leftover money.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM327750.

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30A: Extinguishment of subordinate security interests, or

"What happens to lesser claims on property when a receiver sells it"

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30C: Surplus may be paid into court, or

"When a receiver has extra money, they can pay it to the court if they're unsure who it belongs to."

30BPriorities on distribution by receiver of surplus representing proceeds of personal property

  1. A surplus representing the proceeds of personal property must be distributed in the following order:

  2. to any person who has registered a financing statement under the Personal Property Securities Act 1999, or a security interest under any other Act, in the name of the grantor over the property, if—
    1. the registration was effective immediately before the receiver disposed of the property; and
      1. the security interest relating to that registration was subordinate to the security interest of the person in whose interests the receiver was appointed:
      2. to any other person (A), if the receiver has notice that A had an interest in the property when it was disposed of, and the receiver is satisfied that A's interest was legally enforceable:
        1. to the grantor.

          1. Priority as between persons referred to in subsection (1)(a), and as between persons referred to in subsection (1)(b), must be determined according to the applicable law (including Part 7 or Part 8 of the Personal Property Securities Act 1999) as if, in the case of persons referred to in subsection (1)(a), their security interests had not been extinguished.

          2. If, in the case of a distribution of the surplus to a grantor, the grantor cannot be found after reasonable inquiry by the receiver, the provisions of section 186(2) to (5) of the Property Law Act 2007 apply with all necessary modifications as if references in that section to the mortgagee and the mortgagor were references to the receiver and the grantor respectively.

          Notes
          • Section 30B: inserted, on (applying to any surplus referred to in this provision that has not been distributed on that date), by section 4 of the Receiverships Amendment Act 2005 (2005 No 112).
          • Section 30B(3): amended, on , by section 364(1) of the Property Law Act 2007 (2007 No 91).