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The New Zealand Receivership Act also imposes duty on people other than the debenture
holder. 2 The receiver is required under the section to exercise his or her power in good
faith and for proper purpose. 3
Insolvency Test - referred to in thesis Chapter 8 at Page 175
Section 4 of the New Zealand Companies Act 1993 requires that both the balance sheet
and the cash flow tests are complied with for the general purpose of the Act. However see
also Commissioner of Inland Revenue v FB Duvall Limited HC AK CIV 2007-4-4-2708
[2008] NZHC 1748 at [10] where the court stated „ In determining whether the
liquidation of a company can be justified under section 241(4)(a), it is the cash flow test
that counts.”
Third party Litigation funding- referred to in thesis Chapter 11 at page 64
Development in Australia
Campbells Cash and Carry Pty Limited v Fostif Pty Ltd (2006) 229 CLR 386 at [93] -The
majority 5:2 decision held that it is not contrary to public policy under Australian law for a
funder to finance and control litigation in the expectation of profit and that litigation funded
on this basis does not amount to an abuse of the court‟s process.
See also Sons of Gwalia Ltd v Margaretic (2007) 231 CLR 160; Jeffery & Katauskas Pty
Limited v SST Consulting Pty Ltd (2009) 239 CLR 75; Brookfield Multiplex Limited v
International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11; Green (as liquidator
of Arimco Mining Pty Ltd) v CGU Insurance Ltd (2008) 67 ACSR 105
2 See section 18 (3) of the New Zealand Receivership Act 1993; see also section 19 of the same Act.
3 See section 18(1) of the New Zealand Receivership act 1993. In exercising good faith and proper purpose,
the receiver must act in a manner he or she believes on reasonable ground to be in the interest of the
person who appoints him or her- see section 18(2) of the same Act.
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