Re T G Cummins & Anor v. Ex parte Harris, E.G. & Anor [1985] FCA 309

Re T G Cummins & Anor v. Ex parte Harris, E.G. & Anor [1985] FCA 309

The payment was not made in the ordinary course of business, and was made in circumstances that gave the respondent reason to suspect the debtors' insolvency and that the payment would give them a preference over other creditors. Therefore, the respondent failed to establish good faith and the protective provisions of s.122(2) could not be invoked.

Parties
Debtors: Thomas George Cummins and Jill Imelda Cummins trading as Nam Constructions; Trustees/applicants: Ernest George Harris and Wilson Joseph Wilde; Respondent: Refrigeration Parts (Qld) Pty. Ltd.
Jurisdiction
Australia
Judgment Date
03 July 1985
Procedural Posture
Application Under Bankruptcy Act 1966, Part X / Final Judgment
Outcome
Payment declared void as against the trustees. Respondent to repay money and pay costs.
Legal Topics
Voidable Preferences, Ordinary Course of Business, Good Faith in Avoidance Provisions
Bankruptcy Voidable Preferences Ordinary Course of Business Good Faith in Avoidance Provisions

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Parties

Thomas George Cummins and Jill Imelda Cummins trading as Nam Constructions

Debtors

Ernest George Harris and Wilson Joseph Wilde

Trustees/applicants

Refrigeration Parts (Qld) Pty. Ltd.

Respondent

Procedural Posture

Application Under Bankruptcy Act 1966, Part X / Final Judgment

Legal Issues

  1. 1 Whether the payment of $10,169.17 made to the respondent was a voidable preference under s.122 of the Bankruptcy Act 1966
  2. 2 Whether the payment was received in good faith and for valuable consideration in the ordinary course of business

Ratio Decidendi

The payment was not made in the ordinary course of business, and was made in circumstances that gave the respondent reason to suspect the debtors' insolvency and that the payment would give them a preference over other creditors. Therefore, the respondent failed to establish good faith and the protective provisions of s.122(2) could not be invoked.

Court Disposition

Payment declared void as against the trustees. Respondent to repay money and pay costs.

Orders

  • Declaration that the payment of $10,169.17 on 6 October 1983 is void as against the trustees/applicants.
  • Respondent to pay to applicants the sum of $10,169.17 plus costs of and incidental to the application, such costs to be taxed if not agreed.