Kenneth John Rennie in his capacity as joint liquidator of the third Plaintiff & 2 Ors v Printbase Pty Limited [2002] NSWSC 78

Kenneth John Rennie in his capacity as joint liquidator of the third Plaintiff & 2 Ors v Printbase Pty Limited [2002] NSWSC 78

The Defendant could not make out the s 588FG(2) defence because, from April 1996, the Company's disclosed cash flow difficulties, its policy of paying only some creditors, and the instalment arrangement for invoice 9608 gave a reasonable person grounds to suspect insolvency. However, the payments were part of a continuing business relationship or running account under s 588FA(3) because the parties maintained a mutual assumption of continued supply of consulting services and payment, and the instalment arrangement ensured rather than ended that relationship. The recoverable preference was therefore the difference between the greatest indebtedness during the relevant period and the final...

Jurisdiction
Australia
Judgment Date
22 February 2002
Procedural Posture
Winding Up Unfair Preference Insolvent Transaction / Judgment
Outcome
Judgment for the Plaintiffs in the sum of $11,680 together with interest from the date of the letter of demand.
Legal Topics
['unfair Preference' 'insolvent Transaction' 'voidable Transaction' 'good Faith Defence' 'reasonable Grounds to Suspect Insolvency' 'continuing Business Relationship' 'running Account']
['corporations Law' 'insolvency'] ['unfair Preference' 'insolvent Transaction' 'voidable Transaction' 'good Faith Defence' 'reasonable Grounds to Suspect Insolvency' 'continuing Business Relationship' 'running Account']

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Procedural Posture

Winding Up Unfair Preference Insolvent Transaction / Judgment

Legal Issues

  1. 1 ['Whether the Defendant was able to satisfy the matters within s 588FG(2)(b) of the Corporations Act 2001 (Cth).' 'Whether any or all of the payments were an integral part of a continuing business relationship under s 588FA(3) of the Corporations Act 2001 (Cth).']

Ratio Decidendi

The Defendant could not make out the s 588FG(2) defence because, from April 1996, the Company's disclosed cash flow difficulties, its policy of paying only some creditors, and the instalment arrangement for invoice 9608 gave a reasonable person grounds to suspect insolvency. However, the payments were part of a continuing business relationship or running account under s 588FA(3) because the parties maintained a mutual assumption of continued supply of consulting services and payment, and the instalment arrangement ensured rather than ended that relationship. The recoverable preference was therefore the difference between the greatest indebtedness during the relevant period and the final...

Court Disposition

Judgment for the Plaintiffs in the sum of $11,680 together with interest from the date of the letter of demand.

Orders

  • ['The Defendant pay to the Plaintiffs the sum of $11 680.00 together with interest from the date of the letter of demand.' 'The Defendant is to pay the Plaintiffs costs of these proceedings.']