Re Jones, G.J. & Anor v Ex parte Ledger, A.E. as Trustee of the Property of Jones, G.J. & Anor [1988] FCA 2

Re Jones, G.J. & Anor v Ex parte Ledger, A.E. as Trustee of the Property of Jones, G.J. & Anor [1988] FCA 2

The respondent was not a payee in good faith because it knew, or had reason to suspect, the bankrupts' insolvency and that payments would give it a preference over other creditors. Consequently, the payments totalling $10,238.59 are void against the trustee and must be repaid with interest.

Jurisdiction
Australia
Judgment Date
15 January 1988
Procedural Posture
Application by Trustee in Bankruptcy / Final Determination With Declaration and Orders
Outcome
Judgment for the applicant (trustee) against the respondent (Bunnings Limited)
Legal Topics
['voidable Preferences' 'bankruptcy Act S.122' 'preference Payments' 'good Faith Defences']
['bankruptcy'] ['voidable Preferences' 'bankruptcy Act S.122' 'preference Payments' 'good Faith Defences']

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Procedural Posture

Application by Trustee in Bankruptcy / Final Determination With Declaration and Orders

Legal Issues

  1. 1 ['Were payments made by the bankrupts to the respondent within six months prior to bankruptcy voidable preferences under s.122 of the Bankruptcy Act?' 'Was the respondent a payee in good faith, for valuable consideration, and in the ordinary course of business under s.122(2)?']

Ratio Decidendi

The respondent was not a payee in good faith because it knew, or had reason to suspect, the bankrupts' insolvency and that payments would give it a preference over other creditors. Consequently, the payments totalling $10,238.59 are void against the trustee and must be repaid with interest.

Court Disposition

Judgment for the applicant (trustee) against the respondent (Bunnings Limited)

Orders

  • ['Declaration that each of the six payments made by the bankrupts to the respondent between 22 May 1986 and 8 August 1986 is a voidable preference, priority, or advantage under Bankruptcy Act s.122.' 'Judgment for the applicant against the respondent for $10,238.59 together with interest of $1,890, making a total of...