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This is similar to the case of fraudulent preference and the Court of Appeal followed
the authority in Re Yagerphone, 213 which stated that money recovered by a liquidator
under fraudulent preference was never part of the company‘s assets and hence would
not fall under a debenture which created a charge on all present and future assets.
The liquidator, nevertheless, held the proceeds which came to his or her hand on
trust for the benefit of unsecured creditors. Likewise in Re MC Bacon (No 2), 214 the
court regarded the claim for voidable preference and wrongful trading as rights
which are only available to a liquidator at the time when the company is in
liquidation and therefore could not form a part of assets subject to floating charge.
Unlike the UK, New Zealand does not have separate provision on remedies for
misfeasance and insolvent trading. 215 As a result of this, it provides remedies for
different types of liabilities including reckless trading and breach of the duty in
relation to obligations. Section 301 does not provide for a new course of action but a
mere procedural mechanism; hence liability in sections 135 and 136 should arise
independently from it.
Section 301 does not of itself impose any duties on directors, but is rather a means of
enforcement against directors. 216 In order to pursue claims under section 301, the
Court must first consider whether there has been breach of duty under section 135 or
136. 217 Secondly, the Court should, in its discretion, determine whether and to what
213 [1935] Ch 392; see also William Gough Company Charges (Butterworths, London 1996) at 122-
123.
214 [1990] BCLC 607
215 See the historical origins of section 301 of New Zealand Companies Act 1993 in Noonan and
Watson above n117 at 38-39.
216 Peace and Glory Society Ltd (in liq) v Samsa [2010] 2 NZLR 57 at [48].
217 Peace and Glory Society Ltd (in liq) v Samsa [2010] 2 NZLR 57 at [48].
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