O'Gorman J maps out when liquidator must open up about a company's insurance cover
Liquidators need not give a claimant creditor sensitive insurance details unless that information bears directly on the substantive dispute, the High Court has held.
In Candida Trustee Co Ltd v Teak Construction Group Ltd (in liq) [2026] NZHC 1352, O'Gorman J granted the applicants leave to bring an originating application under s 284 of the Companies Act 1993 but declined the directions they sought against the liquidators of Teak Construction Group Ltd.
Candida Trustee Company Ltd and Guilder Group Ltd, as trustees of the Candida Family Trust, asked the liquidators to produce Teak's professional indemnity policy wording, policy schedules, insurer and broker details, and confirmation of whether the insurer had accepted indemnity or advanced defence costs subject to a reservation of rights.
The dispute traced to an arbitration claim the trustees commenced in December 2024. They alleged Teak so poorly constructed a two-storey concrete car park on Auckland's North Shore that the upper floor leaked into the lower floor during rain, and they claimed breach of a contractual warranty and breach of an implied duty to warn, seeking more than $750,000. Teak entered liquidation on 2 March 2026, weeks before the substantive arbitration hearing scheduled for 29 April. That proceeding now awaits a separate s 248 leave application set down for 16 June 2026.
AIG Insurance New Zealand Ltd, which confirmed it insured Teak at the date of liquidation, appeared as an interested non-party and opposed the orders.
O'Gorman J accepted leave under s 284 because the application raised a novel point with no direct New Zealand authority, making it reasonable for the court to guide liquidators on their disclosure obligations. The judge emphasised this would not turn s 284 into a routine route for creditors to obtain documents, a function s 256 already serves.
On the merits, the judge held insurance details remained irrelevant to the substantive claim. Neither the arbitration pleadings nor the defence put Teak's professional indemnity cover in issue, and the long-standing principle that a defendant's insurance position stays out of the assessment of liability or damages does not weaken simply because a company enters liquidation. The judge distinguished the Australian authorities the trustees relied on, noting those cases turned on statutory provisions with no New Zealand equivalent and on circumstances where the viability of the claim depended on insurance funds. Here, the first liquidators' report estimated a surplus of around $6 million, and the trustees gave no indication they would abandon the claim without insurance.
O'Gorman J also found the statutory charge under s 9 of the Law Reform Act 1936 already protected the trustees. The charge arose when the event giving rise to liability occurs, AIG held actual notice of the claim, and any payment the insurer made to the insured after notice fell at the insurer's own risk. The judge added that liquidators should still answer questions confirming an insurer's identity so a creditor can perfect notice under s 9(6) - a threshold AIG's participation had already met.
The judge concluded the trustees' real purpose involved securing a stronger negotiating position, which does not justify directing disclosure. The Contracts of Insurance Act 2024, which introduces broader third-party information rights from November 2027, did not apply.
