The Supreme Court has recently denied leave to appeal a judgment concerning the application of the continuing business relationship to voidable transactions under section 292(4B) of the Companies Act 1993.

Galvanising (HB) Ltd v Fisk involved an arrangement between a group of companies and a trust (the trustees of which owned and controlled the group of companies), which together comprised a corporate trading group.  The arrangement involved the companies making cash payments to one another for goods and services.  Each cash payment was met by an advance to the seller company from the trustees' shareholder current account, and a corresponding debit to the trustees' shareholder current account with the purchaser company.  One of the companies, East Quip Limited, went into liquidation and the liquidators succeeded in clawing back payments made by East Quip Limited to Galvanising (HB) (and others). 

The High Court and Court of Appeal had rejected Galvanising (HB)'s argument that the tripartite relationship between East Quip, a payee company, and the trustees, was a continuing business relationship, meaning there was no basis for clawing back monies paid.  In Galvanising (HB) Ltd v Fisk [2016] NZSC 49the Supreme Court denied leave to appeal.  The decision signifies the reluctance to allow entities related to an insolvent company to have preferential treatment, and endorses the orthodox view that continuing business relationships are ordinarily those of two unrelated entities transacting at arm's length.

See Court decision here.