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Likewise a pooling order may benefit creditors of a liquidated company which has
fewer assets because they will receive more than what they would have had no order
been made. However, a pooling order may prejudice creditors of the company with
greater assets because they will now receive less than what they would have
received. 128
It is unclear, due to inconsistencies in the courts‟ decisions, whether in making a
pooling order, the court can pool both the assets and liabilities of the companies. In
Re Dalhoff and King Limited (in liq), 129 the court allowed assets and liabilities,
including to unsecured creditors of the companies, to be pooled. The court, however,
rejected an application by the creditor who obtained a guarantee from one of the
related companies to maintain right to take action. This is because the pooling order
had the effect of merging both assets and liabilities and to allow the creditor the right
to action against both companies would defeat the purpose of making the order.
The position, however, differs in Re Stewart Timber & Hardware (Whangarei)
Limited (in liq) 130 where Justice Doogue disagreed that the pooling of assets also has
the consequence of pooling liabilities of companies. The same position is taken in
Mountfort, 131 where the pooling order is made so that creditors of both related
companies are treated alike. In Re Grazing & Export Meat Company Ltd, 132 the court
interpreted similar phrase "to be wound up as one company under the Companies
Special Investigation Act" to mean to form a common pool of all assets of related
companies in order to meet claims by unsecured creditors. The judge in Re Pacific
128 Jonathan Landers “A Unified Approach to Parent, Subsidiary, and Affiliate Questions in
Bankruptcy” (1975) 42 Uni Chi L Rev 589 at 630.
129 [1991] NZLR 296.
130 (1991) 5 NZCLC 67,137.
131 Mountford v Tasman Pacific Airlines of NZ Limited [2006] 1 NZLR 104.
132 (1984) 1 NZCLC 99,226.
100