(New Zealand) The issue was whether a transaction by a company should be set aside, following its liquidation, on the basis that it was a preference within the New Zealand Companies Act 1955. The applicant applied to the High Court of New Zealand for an order that the transaction should not be set aside on the ground that it had taken place in the ordinary course of business.
Held: The Board declined to formulate a universally applicable test for what was in the ordinary course of business for the purposes of a provision of the New Zealand Companies Act concerned with the avoidance of corporate transactions having a preferential effect, stressing the diversity of contexts in which the courts had given consideration to that expression. Gault J nevertheless stressed the need for ‘examination of the actual transaction in its factual setting’, an examination which is ‘undertaken objectively by reference to the standard of the ordinary course of business’. The judgment also noted that ‘there may be circumstances where a transaction, exceptional to a particular trader, will nonetheless be in the ordinary course of business’ and that ‘[t]he particular circumstances will require assessment in each case’
Gault J
[1997] UKPC 57, [1998] BCC 105, [1998] AC 338, [1998] 2 WLR 441, [1998] BPIR 676, [1998] 1 BCLC 306
Bailii
England and Wales
Updated: 25 July 2021; Ref: scu.159269