National Australia Bank Ltd v KDS Construction Services Pty Ltd (In Liq) [1987] HCA 65

National Australia Bank Ltd v KDS Construction Services Pty Ltd (In Liq) [1987] HCA 65

The payment by the respondent to the appellant bank did not constitute a preference void against the liquidator because the bank held a lien over the cheques as security for the overdrawn account, received the cheques in good faith and in the ordinary course of business, and thus the payment was not void under s. 122(1) of the Bankruptcy Act 1966 (Cth).

Jurisdiction
Australia
Procedural Posture
Appeal / Judgment After Hearing in the High Court of Australia
Outcome
appeal allowed
Legal Topics
['voidable Preferences' "banker's Lien" 'good Faith Acquisition' "liquidator's Powers"]
['banking Law' 'insolvency Law' 'company Law'] ['voidable Preferences' "banker's Lien" 'good Faith Acquisition' "liquidator's Powers"]

Case Brief

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Procedural Posture

Appeal / Judgment After Hearing in the High Court of Australia

Legal Issues

  1. 1 ['Whether payment to the appellant bank of $102,030.33 gave it a voidable preference under s. 122(1) of the Bankruptcy Act 1966 (Cth) as applied by s. 293(1) of the Companies Act 1961 (Qld)' 'Whether the appellant bank received the cheques as agent for collection or as holder for value' 'Whether the payment was made in good faith and in the ordinary course of business' 'Whether the bank had a lien over the cheques and, if so, whether this precluded a voidable preference finding']

Ratio Decidendi

The payment by the respondent to the appellant bank did not constitute a preference void against the liquidator because the bank held a lien over the cheques as security for the overdrawn account, received the cheques in good faith and in the ordinary course of business, and thus the payment was not void under s. 122(1) of the Bankruptcy Act 1966 (Cth).

Court Disposition

appeal allowed

Orders

  • ['Order of the Full Court of the Supreme Court of Queensland set aside' 'In lieu thereof, order that the appeal be dismissed with costs' 'Restore the orders made by Kelly A.C.J. on 1 May 1986']