Debut Homes – all change from the Supreme Court

I wrote about the Debut Homes case, after the Court of Appeal decision in early 2019. 

 In particular, I wrote that the Court of Appeal decision (again) underlined the point, from an earlier judgment of the Court, that the decision-making processes of distressed businesses are not to be assessed with the benefit of hindsight. Instead, those decisions are to be measured against the information available at the time – and the decisions made (in good faith) in reliance on that information.

 This week, the Supreme Court has dramatically and rather emphatically overturned the Court of Appeal. 

 While it can be said that a decision from the highest court of the land (clearly) provides clarity – it probably also serves to highlight an unwanted or un-needed gulf between the position faced by a company director in New Zealand when compared with their counterparts in Australia. There are no votes in (commercial) law reform but the temporary safe harbour for company directors for duties relating to insolvent trading made as a result of COVID-19 expires on 30 September. The Australians have extended their temporary relief until the end of the year. I am left wondering if the Supreme Court’s clarification is what was needed to make the case for better alignment with Australia.

For more information, based on a first read-through of the decision, please see the attached link: https://stephenlayburn.co.nz/debut-homes-all-change-from-the-supreme-court