Sandell v Porter [1966] HCA 28

Sandell v Porter [1966] HCA 28

The appeal was allowed because the respondent did not prove that the partnership was insolvent at any of the times when the challenged repayments were made. The evidence showed, at most, a temporary lack of liquidity pending progress payments and one continuing unpaid debt, which did not establish inability to pay debts as they fell due within s. 95.

Jurisdiction
Australia
Procedural Posture
Bankruptcy Appeal Concerning Alleged Preferences / Appeal to the High Court of Australia From the Federal Court of Bankruptcy
Outcome
Appeal allowed with costs.
Legal Topics
['voidable Preferences' 'insolvency' 'running Account' 'ordinary Course of Business' 'good Faith']
['bankruptcy Law'] ['voidable Preferences' 'insolvency' 'running Account' 'ordinary Course of Business' 'good Faith']

Case Brief

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Procedural Posture

Bankruptcy Appeal Concerning Alleged Preferences / Appeal to the High Court of Australia From the Federal Court of Bankruptcy

Legal Issues

  1. 1 ['Whether the trustee established that the partnership was insolvent at the dates of the impugned repayments for the purposes of s. 95 of the Bankruptcy Act 1924-1960 Cth.' 'Whether the appellant maintained a running account with the partnership so that only the difference between opening and closing balances could be treated as preferential.' 'Whether the appellant was a payee for valuable consideration in the ordinary course of business and in good faith.']

Ratio Decidendi

The appeal was allowed because the respondent did not prove that the partnership was insolvent at any of the times when the challenged repayments were made. The evidence showed, at most, a temporary lack of liquidity pending progress payments and one continuing unpaid debt, which did not establish inability to pay debts as they fell due within s. 95.

Court Disposition

Appeal allowed with costs.

Orders

  • ['Declaration and order of the Federal Court of Bankruptcy insofar as they related to payments made by the bankrupts to the appellant between 15th October 1963 and 14th February 1964 and to the payment by the appellant to the respondent of £3,650 set aside.' "In lieu thereof, the respondent's application insofar as...