In the recent decision of Allied Concrete v Meltzer [2015] NZSC 7, a majority of the Supreme Court has increased certainty for traders who provide goods and/or services on credit. In the context of insolvent transactions, the Court held that where creditors have acted in good faith, had no knowledge that a company is about to enter liquidation, and have received payment made for goods and/or services provided on credit, the payment will be upheld. The Court reversed a Court of Appeal ruling which held that the payment would only be upheld if new value was provided upon payment. The decision has clarified the position for creditors who provide goods and/or services on credit, and significantly decreases the possibility of two year old transactions being reversed for liquidation purposes.
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