In an unusual case, an Australian court has decided the New Zealand High Court should cooperate with its Australian counterpart and hold a joint hearing to resolve matters in the A$19 million Halifax liquidation.
The decision of the Australian Federal Court brings investors a step closer to recovering funds, and may set a new legal precedent in cross-border cooperation.
Online broker Halifax was moved into liquidation in November last year with KPMG's Morgan Kelly, Stewart McCallum and Phil Quinlan appointed. Early estimates say 2,100 New Zealand investors will get back 85-95 cents in the dollar from trust funds and can then join unsecured creditors in the claims for the remaining money.
The ruling of Justice Jacqueline Gleeson dated August 22 suggests a joint hearing, held in one location or aided through audio-video link, in order to sort out what to do with creditors' funds. The liquidators have indicated clients in both jurisdictions also want to have their say in court.
Evidence from KPMG was that 98 per cent of the funds held on trust were affected by commingling.