By Tony Johnson and Claire Mansell - 7 Nov 2014
The Supreme Court has today handed down its Judgment
in the long awaited Jennings Roadfreight Limited (In Liq) & Ors
v Commissioner of Inland Revenue [2014] NZSC 160.
Martelli McKegg acted for the liquidators of Jennings
Roadfreight Limited (In Liq) who succeeded in their argument that
PAYE withheld but not paid to the Commissioner before liquidation
should be dealt with according to the priorities set out by
schedule 7 of the Companies Act.
The Supreme Court has unanimously held that the PAYE trust under
s167(1) of the Tax Administration Act 1969 ends on the liquidation
of a company. This means that, upon liquidation, any unpaid PAYE
will be treated as a preferential debt.
This means there may well be potentially more funds available
for unpaid employees in company liquidations.
The Supreme Court has also issued a media
release.
Contacts
Tony
Johnson
Claire
Mansell
Links
Judgment
of the Court - Jennings Roadfreight Limited (In Liq) & Ors v
Commissioner of Inland Revenue
Supreme
Court of New Zealand - Media Release