28 Aug 2019

Halifax liquidators seek court ruling on NZ-Australia cooperation

10:22 am on 28 August 2019

Thousands of investors who used the failed online broker Halifax are one step closer to seeing the millions of dollars they are owed.

New Zealand's sharemarket has immediately fallen two percent after opening after the Waitangi Day closure. Global markets have been left reeling in the biggest one-day fall on Wall Street since 2011.

Photo: RNZ / Rebekah Parsons-King

Halifax liquidators are seeking a ruling from Australia's Federal Court ruling allowing it to collaborate with the New Zealand High Court so investors on both sides of the Tasman can have money refunded.

About 12,000 investors in New Zealand and Australia are owed $220 million.

Online accounts holding their funds were frozen late last year when Halifax collapsed.

There is a shortfall of about $20m after investors' funds were mingled and used to keep the business afloat, to liquidators KPMG Australia.

KPMG's Morgan Kelly said it needed the courts to decide how to distribute the remaining funds to investors fairly and the ruling had to be the same in both jurisdictions - Australia and New Zealand.

A Federal Court judgement delivered last week said Halifax was a classic case for cross-border cooperation between courts.

Mr Kelly said it would start proceedings in a New Zealand court within the two weeks.

Meanwhile, the liquidators have received court approval to spend $A12.8m to cover the cost of maintaining Halifax's online investor platforms, and other trading expenses.