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Receiverships Act 1993

30D: Meaning of surplus and net proceeds

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"What 'surplus' and 'net proceeds' mean when a receiver sells something to pay off debts"

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When a receiver sells personal property, you need to figure out if there is a surplus. A surplus happens if the money from the sale is more than the debt owed to the person the receiver is working for. The debt can be money owed or a promise to do something. The money from the sale is called the net proceeds. To find the net proceeds, you subtract the receiver's costs and payment from the sale money. You also subtract any money or promises owed to others who have a higher claim to the property. You also take away any other special claims that are more important according to the law, as stated in sections 30A to 30C.

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30DMeaning of surplus and net proceeds

  1. For the purposes of sections 30A to 30C, there is a surplus if the receiver has disposed of personal property in receivership, and the net proceeds exceed—

  2. the amount of the debt owed by the grantor to the person in whose interests the receiver was appointed (where the property secures payment of that debt); or
    1. the monetary value of the obligation owed by the grantor to the person in whose interests the receiver was appointed (where the property secures performance of that obligation).

      1. In subsection (1), net proceeds, in relation to the disposal of personal property in receivership, means the net proceeds of the disposal after deducting—

      2. the receiver's expenses and remuneration; and
        1. any amount or the monetary value of any obligation, as the case may be, secured by any security interest that ranks in priority to the security interest granted to the person in whose interests the receiver was appointed; and
          1. any other preferential claims or priority claims according to law.

            Notes
            • Section 30D: 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).