Creditors’ claims for damages in tort or contract
Creditors’ claims for damages in tort or contract
Is the claim admissible?
- An unliquidated claim for damages in tort or contract may be admitted as claim against a company in liquidation. Section 303 of the Companies Act 1993 provides that a debt or liability, present or future, certain or contingent, whether it is an ascertained debt or a liability for damages, may be admitted as a claim against a company in liquidation.
- The fact that liability has not yet arisen, or is contingent on a future event, or has not been established (i.e. by court judgment), does not in itself preclude a claim being made against the company in liquidation.
- The High Court has described the scope of section 303 as:1
It is in wide terms so as to allow a range of debts and liabilities to be recognised. Claims may be in debt but also for other forms of liability. They need not be certain. They may need to be estimated, a matter of some difficulty with uncertain variables. Claims in tort may be recognised, even if the company has not admitted liability and also if a court has not so far found the company liable. Because future liabilities may be admitted as claims, future tort claims are admissible. (Wellington City Council v Registrar of Companies 2015 NZHC 572)
- As a result, a dissatisfied customer, eg alleging losses, is a creditor and can make a claim against the company in liquidation. The claim is admissible and cannot be rejected for the simple fact that liability is not accepted by the company and has not yet been established by court proceedings.