New Zealand Legislation: Acts

17C Meaning of inability to pay debts

• For the purposes of section 17A of this Act, an association is unable to pay its debts

  • (a) If

    • (i) A creditor who is owed an amount exceeding $100 by the association has served on the association a demand for payment of that amount by leaving it at the principal office of the association in New Zealand, or delivering it to the secretary or a director or manager or principal officer of the association; and

    • (ii) The association has for 3 weeks after the demand was served on it failed to pay the amount due or secure the payment of it or compound for it to the satisfaction of the creditor; or

  • (b) If

    • (i) An action or proceeding has been commenced against a member of the association for the payment of an amount owing by the association or that member in his or her capacity as a member; and

    • (ii) Notice in writing of the action or proceeding has been served on the association by leaving it at its principal place of business in New Zealand or by delivering it to the secretary or a director, or principal officer of the association or serving it on the association in such manner as the Court may approve or direct; and

    • (iii) The association has not, within 10 days after the notice was served on it, paid or secured the debt, or compounded for it or had the action or proceeding stayed or indemnified the member for the amount of any judgment that may be entered against him or her and any costs, damages, and expenses that may be incurred by him or her in the action or proceeding; or

  • (c) If execution or other process issued on a judgment, decree, or order obtained in a court in favour of a creditor against the association, or a member of the association in his or her capacity as a member, or a person authorised to be sued on behalf of the association, is returned unsatisfied; or

  • (d) If it is proved to the satisfaction of the High Court that the association is unable to pay its debts, and in determining whether an association is unable to pay its debts, the Court shall take into account the contingent and prospective liabilities of the association.

  Sections 17A to 17E were inserted, as from 1 July 1994, by section 2 Judicature Amendment Act 1993 (1993 No 117).