Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufactures Pty Limited [2021] FCAFC 228

FEDERAL COURT OF AUSTRALIA

Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufactures Pty Limited [2021] FCAFC 228 File number: QUD 31 of 2021

Judgment of: ALLSOP CJ, MIDDLETON AND DERRINGTON JJ

Date of judgment: 16 December 2021

Catchwords: CORPORATIONS – question reserved for consideration of the Full Court pursuant to s 25(6) of the Federal Court of Australia Act 1976 (Cth) – whether set-off under s 553C(1) of the Corporations Act 2001 (Cth) (Act) available to the defendant against the plaintiff's claim as liquidator for the recovery of an unfair preference under s 588FA of the Act – effect of a preference, nature of the preference action, and consequences of the success of such an action in Australian insolvency law – nature of mutuality – nature and history of set-off prior to and following the Harmer Report – set-off not available against the recovery of an unfair preference – requisite mutuality not present – right to the recovery of the preference is a right of the liquidator and not the company, in the liquidator's own right for the benefit of all creditors and the administration of the estate under the terms of the relevant statutory regime

Legislation: Bankruptcy Act 1924 (Cth) Bankruptcy Act 1966 (Cth) Corporate Law Reform Act 1992 (Cth) Corporations Act 2001 (Cth) Federal Court of Australia Act 1976 (Cth) Federal Court Rules 2011 (Cth) Income Tax Assessment 1936 (Cth) Judiciary Act 1903 (Cth) Bankruptcy Act 1883 (UK) Bankruptcy Act 1914 (UK) Companies (Consolidation) Act 1908 (UK) Companies Act 1862 (UK) Companies Act 1948 (UK) Insolvency Act 1986 (UK)