In the Matter of Emanuel (No 14) Pty Ltd (in liq) Macks, Peter Ivan & Anor v Blacklaw & Shadforth Pty Ltd [1997] FCA 667

In the Matter of Emanuel (No 14) Pty Ltd (in liq) Macks, Peter Ivan & Anor v Blacklaw & Shadforth Pty Ltd [1997] FCA 667

A composite arrangement initiated by the debtor company, whereby a third party pays a creditor at the direction of the debtor and in discharge of the debtor's liability, constitutes a single 'transaction' involving both the company and the creditor for the purposes of s588FA(1)(a) of the Corporations Law. The transaction is voidable as an unfair preference if it results in the creditor receiving more than would be obtained in a winding up. The transaction here satisfied both limbs of s588FA(1) and constituted an unfair preference.

Jurisdiction
Australia
Judgment Date
23 July 1997
Procedural Posture
Appeal / Judgment After Appeal Hearing
Outcome
appeal allowed with costs
Legal Topics
['unfair Preference' 'voidable Transactions' "definition of 'transaction'" 'extinguishment of Debt' 'agency' 'trusts and Contractual Arrangements in Payment of Debts']
['corporations Law' 'insolvency Law'] ['unfair Preference' 'voidable Transactions' "definition of 'transaction'" 'extinguishment of Debt' 'agency' 'trusts and Contractual Arrangements in Payment of Debts']

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Procedural Posture

Appeal / Judgment After Appeal Hearing

Legal Issues

  1. 1 ["Whether a composite arrangement involving payment by a third party at the debtor company's direction for the purpose of extinguishing the company's debt to a creditor constitutes a 'transaction' for the purposes of s588FA of the Corporations Law" 'Whether such a transaction can be voidable as an unfair preference' 'Whether both the company and the creditor are parties to the transaction as required by s588FA(1)(a)']

Ratio Decidendi

A composite arrangement initiated by the debtor company, whereby a third party pays a creditor at the direction of the debtor and in discharge of the debtor's liability, constitutes a single 'transaction' involving both the company and the creditor for the purposes of s588FA(1)(a) of the Corporations Law. The transaction is voidable as an unfair preference if it results in the creditor receiving more than would be obtained in a winding up. The transaction here satisfied both limbs of s588FA(1) and constituted an unfair preference.

Court Disposition

appeal allowed with costs

Orders

  • ['The appeal be allowed with costs.']