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ARTICLE · 23 JULY 2017

Third party payments – Have you received an unfair preference?

Corrs Chambers Westgarth
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This case considers if payments made by a third party to a company's creditors could be recovered as unfair preferences.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Jade Rowarth
Jade Rowarth
Jason Salman
Jason Salman
Kirsty Sutherland
Kirsty Sutherland
Author LinkedIn connections

This week's TGIF examines a recent decision of the Supreme Court of New South Wales which considered whether payments made by a third party to a company's creditors could be recovered as unfair preferences.

WHAT HAPPENED?

On 2 September 2015, liquidators were appointed to a building and construction company (the Company) and later commenced proceedings against eight defendants for the recovery of payments considered to be unfair preferences.

The defendants did not challenge the liquidators' evidence as to insolvency. Rather, they contended the payments received were not from the Company and had been paid directly by the principal (Head Contractor) as opposed to the insolvent debtor they had subcontracted with.

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