Chapter 14 - The commercial provisions in the Judicature Act 1908


Sections 17A to 17E: Liquidation of Associations

Sections 17A to 17E address what is to happen when an “association” needs to go into liquidation. An association is defined as a partnership, company, or other body corporate, or unincorporated body (other than a company under the Companies Act 1955 or Companies Act 1993, or a body corporate, which may be put into liquidation under an Act under which it was constituted).381 The High Court is given jurisdiction to appoint a liquidator when it is satisfied that the association is dissolved or has ceased to carry on business, or the association is unable to pay its debts, or it is just and equitable that it should be put into liquidation.382 Section 17C provides guidance in determining when an association can be considered to be unable to pay its debts.383

Section 17B applies Part 16 of the Companies Act 1993 (which relates to liquidations of companies) to associations. With the necessary modifications to the descriptions of the bodies and persons involved and exclusions of certain irrelevant sections, this part of the Companies Act 1993 applies to the partnerships, companies and bodies that meet the definition of association under section 17A. This imports provisions relating to the process of liquidation, the duties, rights and powers of liquidators, the qualifications and supervision of liquidators, and creditors’ claims. In Commissioner of Inland Revenue v Official Assignee, it was decided that section 17B and the application of Part 16 of the Companies Act 1993 did not apply where both partners to a partnership were adjudged bankrupt rather than the association itself being liquidated.384

A liquidator is empowered to require any person who is liable to pay or to contribute to the payment of the association’s debts, liabilities and the costs of liquidation to pay or contribute accordingly.385 Where a liquidator is in place actions or proceedings cannot be taken against a person liable to pay or contribute to the association’s debts except with the court’s leave and subject to the terms imposed by the court.386

Sections 17A to 17E were inserted into the Judicature Act 1908 in 1994.387 They were introduced at the time of the coming into force of the Companies Act 1993. The Judicature Amendment Act 1993 also repealed Part 11 of the Companies Act 1955, which related to the winding up of unregistered companies.388 Provisions addressing unregistered companies were not included in the Companies Act 1993, presumably to keep the new Companies Act focused purely on registered companies. The legislative provisions for the winding up of unregistered companies needed to be preserved, however. At the time, the Judicature Act 1908 was considered to be the most suitable place for them.

One issue with the liquidation provisions in the Judicature Act 1908 is the extent to which the provisions have been overtaken by other legislation. The Limited Partnerships Act 2008 establishes a liquidation procedure for limited partnerships, which would previously have been covered by sections 17A to 17E. There is no cross-referencing between the two Acts or exemption of limited partnerships from the application of sections 17A to 17E. Similarly, partnerships are covered by the Partnerships Act 1908, which includes provisions on the dissolution of a partnership and its consequences. Given these other legislative provisions, we doubt that the reference to partnerships in section 17A is still necessary.

Liquidations of incorporated societies are covered by the Incorporated Societies Act 1908 and, in accordance with section 17A(1)(c) of the Judicature Act 1908, sections 17A to 17E do not apply to them. There is a question of how many types of association that are not incorporated societies, companies, bodies corporate covered by other legislation, or limited partnerships, continue to exist. However, there do seem to be some unincorporated societies that need to have statutory liquidation provisions in place. We think it is, therefore, necessary to retain provisions regarding the liquidation of associations on the statute book. But, where do they belong?

One option is to shift these provisions back to the companies’ legislation. In the United Kingdom, similar provisions to these are included in the Companies Act 1948 where the entities at issue are described as “unregistered companies”, but are defined to include the same types of association as covered by sections 17A to 17E of the Judicature Act 1908.389 The Companies Act 1993 contains a variety of provisions, not all of which are closely related to registered companies.

Alternatively, these provisions could be retained in a “rump” Judicature Act. (We discuss this option further at the end of this chapter.)


Do you think there is a need to retain statutory provisions along the lines of sections 17A to 17E governing the liquidation of associations?


If these provisions are retained, do you agree that the reference to partnerships in section 17A of the Judicature Act is unnecessary?


If the provisions are retained, could they be included in the Companies Act 1993?

Section 17A(1).

Section 17A(4).

See, for example, Trustees Executors Ltd v Mt Auckland Forest Partnership (2005) 2 NZCCLR 338 (HC).

Commissioner of Inland Revenue v Official Assignee [2000] 2 NZLR 198 (CA).

Section 17D.

Section 17E.

Judicature Amendment Act 1993, s 2.

Judicature Amendment Act 1993, s 3.

Companies Act 1948 (UK), s 398.