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a) Extent to which the Related Company took part in Management 141
The degree of involvement in the management of one company by another must be
substantial before a contribution or pooling order can be made by the court. The
example of substantial involvement includes when the management had been
operating inter-related groups of companies as one entity. 142 Hence, mere
participation by the holding company in the subsidiary is not enough to justify the
making of the order; the facts must show an element of control exercised by the
holding company over the subsidiary. 143 In other words, courts will scrutinize both
the operational and policy level to determine whether the holding company is pulling
the strings in the subsidiary. 144
In Rea v Barker, 145 the liquidator was required to allege that the companies were
related and that it was just and equitable for the court to make a contribution order.
The court would refer to the conduct by related companies either directly or
indirectly, which would affect the creditors of the wound up company when making
the order.
b) Conduct of Related Company towards Creditors 146
There must be a clear distinction between the creditors of one company and those of
another. Creditors of companies within the same group must be clear who they are
dealing with and the circumstances involved. If it was established that the nature of
141 Section 272(2)(a).
142 Re Dalhoff and King Holdings Ltd (in liq) [1991] NZLR 296 at 302.
143 See also arguments by Gunasekara and Toy above n99 at 23-24.
144 Mountford v Tasman Pacific Airlines of NZ Limited [2006] 1 NZLR 104 at 127.
145 (1988) 4 NZCLC 64,312.
146 Section 272(2)(b).
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