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was enacted and to date, it remains the principal act in relation to company law and
insolvency law.
In addition to the Companies Act 1993, the Receivership Act 1993 and the Personal
Property Securities Act 1999 (PPSA) also govern matters relating to companies. The
Receivership Act 1993 deals with receivership 107 for both corporate and personal
debtors. It codifies the law relating to private and court appointed receivers. In 2006,
amendments were made to the Receivership Act 1993 by the Companies
(Amendments) Act 2006 which clarifies employee‟s wages and salary, during the 14
days grace period when a receiver decides whether to adopt or terminate the
employment contract, as a preferential debt. 108 It also elucidates clearly the order in
which a receiver must pay preferential and secured creditors 109 as well as the position
of transactions voidable by receiver. 110
The PPSA 1999 provides for an integrated code of personal security law by replacing
the Chattels Transfer Act 1924, the Companies (Registration of Charges) Act 1993,
the Motor Vehicle Securities Act 1989 and the Industrial and Provident Societies
Amendment Act 1952. 111 It provides, in particular, for the creation and
107 A receivership is an external mechanism in which the company‟s management is placed at the
hand of a receiver to act in the interests of a debenture holder who appointed him. A receiver can
also be appointed by the court in certain circumstances. A receivership differs from liquidation
because the receiver‟s duty is to the person who appoints him, unlike a liquidator who owes a duty
to the company.
108 See section of 30(3)(d) and( e) of the New Zealand Receivership Act 1993.
109 See section 30(2A) of the New Zealand Receivership Act 1993; see also Schedule 2 Companies
(Amendments) Act 2006.
110 Schedule 7, para 2(1) (B) and (C) of the New Zealand Companies Act 1993 as inserted by
Schedule 1 of the Companies (Amendments) Act 2006 provides that the preferential claims listed in
schedule 7 will have priority over the claims of any person under the security interests over
accounts receivable and inventory which is "not a purchase money security interests that has been
perfected at the time specified in section 74 of the Personal Property Securities Act 1999."
111
Ministry of Economic Development Personal Property Securities Act
at17 June 2010; See
also John Farrar “Debt Capital” in John Farrar (Ed.) Companies and Securities Law (Brookers,
Wellington, 2008) at [25.1].
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