Castlereagh Properties Limited (Castlereagh) and Gibbston Water Holdings Limited (Water Holdings) were both companies in David Henderson's Property Venture group. Castlereagh and Water Holdings entered into a sale and purchase agreement (SPA), under which Water Holdings sold all of its shares in Gibbston Water Services Limited (Water Services) to Castlereagh for $1. Water Holdings was subsequently put into liquidation.
The Court of Appeal held that the liquidator could set aside the transaction under schedule 6 of the Companies Act 1993. A transaction can be avoided if the vendor company does not receive fair value under the contract. Although Water Services was insolvent, the $1 consideration was not fair value. There was demand for Water Services' Gibbston water scheme, and the company's newly acquired permit to extract potable water until 2043 was in itself very valuable.
See Court decision here.