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Contract and Commercial Law Act 2017

Other commercial matters - Carriage of goods - Other provisions relating to liability of carriers

267: Liquidator or assignee in bankruptcy holds money on trust

You could also call this:

“Money from lost or damaged goods must go to customers first when a company closes”

If a company that carries goods goes bankrupt or is being closed down, the person in charge of handling the company’s money (called a liquidator or assignee) can still try to get money from other carriers who might be responsible for losing or damaging the goods. When they do this, they have to be careful with any money they get.

The money they collect, after paying for the costs of getting it, has to be used in a special way. First, it must be used to pay back the customer who lost their goods or had them damaged. If there’s any money left after that, it can be used to pay other people the company owes money to.

This rule is very important and it doesn’t matter what other laws say about companies closing down or going bankrupt. It always applies in these situations.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6844578.

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Part 5 Other commercial matters
Carriage of goods: Other provisions relating to liability of carriers

267Liquidator or assignee in bankruptcy holds money on trust

  1. If the liquidator or assignee in bankruptcy of an insolvent contracting carrier brings a proceeding against an actual carrier in respect of a right referred to in section 266(2), the relevant amount must be held by the liquidator or assignee on the following trusts:

  2. for or towards the payment of the whole of the sum payable by the contracting carrier to the contracting party in respect of the loss of or damage to the goods:
    1. subject to that payment, as an asset in liquidation or bankruptcy.

      1. In this section, the relevant amount is the sum recovered from the actual carrier, less all costs and expenses reasonably incurred by the liquidator or assignee in bringing and prosecuting the proceeding and not recovered by the liquidator or assignee from the actual carrier.

      2. This section applies despite anything in the Companies Act 1993, the Insolvency Act 2006, or any other enactment.

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