Stone v Melrose Cranes & Rigging Pty Ltd, in the matter of Cardinal Project Services Pty Ltd (in liq) (No 2) [2018] FCA 530

FEDERAL COURT OF AUSTRALIA

Stone v Melrose Cranes & Rigging Pty Ltd, in the matter of Cardinal Project Services Pty Ltd (in liq) (No 2) [2018] FCA 530 File number: NSD 1320 of 2014

Judge: MARKOVIC J

Date of judgment: 19 April 2018

Catchwords: CORPORATIONS – where the plaintiffs seek to claw back payments made by the company to the defendant prior to its liquidation – whether the company was insolvent at the time each of the payments were made – whether any payments made to the defendant were unfair preferences within the meaning of s 588FA of the Corporations Act 2001 (Cth) (Act) – whether any payments are an integral part of a continuing business relationship between the company and the defendant pursuant to s 588FA(3) of the Act – whether the defendant has a good faith defence pursuant to s 588FG(2) of the Act – whether a set-off pursuant to s 553C of the Act is available in the event that the defendants are required to pay the unfair preference amount

Legislation: Corporations Act 2001 (Cth) ss 95A, 286, 588FA, 588FA(1), 588FA(3), 588FE, 588FE(2), 588FF, 588FF(1)(a), 588FG(2), 1305(1), 1306, 1306(5), 1306(6)

Cases cited: Airservices Australia v Ferrier (1996) 185 CLR 483 Australian Securities and Investments Commission v Rich (2009) 75 ACSR 1; [2009] NSWSC 1229 Australian Securities and Investments Commission v Plymin (2003) 46 ACSR 126; [2003] VSC 123 Australian Securities and Investments Commission v Rich (2005) 216 ALR 320; [2005] NSWSC 417 Bradshaw v McEwans (1951) 217 ALR 1 Buzzle Operation Pty Limited (in liq) v Apple Computer Australia Pty Ltd (2011) 81 NSWLR 47 Commissioner of Taxation v Kassem and Secatore (2012) 205 FCR 156 Crema (Vic) Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (2006) 58 ACSR 631; [2006] VSC 338 Cussen as liquidator of Akai Pty Ltd (in liq) v Commissioner of Taxation (2004) 51 ACSR 530; [2004] NSWCA 383 Cussen v Sultan (2009) 74 ACSR 496; [2009] NSWSC 1114 Hall v Poolman (2007) 215 FLR 243; [2007] NSWSC 1330 Hancock v Conergy Pty Limited (in liquidation), in the matter of DCM Solar Pty Limited (in liquidation) [2015] FCA 738 Henderson v Queensland (2014) 255 CLR 1 Hussain v CSR Building Products Ltd (2016) 112 ACSR 507; [2016] FCA 392 Jetaway Logistics Pty Ltd v Deputy Commissioner of Taxation (2009) 26 VR 657 Lewis v Doran (2004) 208 ALR 385; [2004] NSWSC 608 Mann v Sangria Pty Ltd (2001) 38 ACSR 307; [2001] NSWSC 172 McKern v Minister Administering the Mining Act 1978 (WA) (2010) 28 VR 1 Murray v Murray (1960) 33 ALJR 521 Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 Quick v Stoland Pty Ltd (1998) 87 FCR 371 Re ACN 007 534 000 Pty Ltd (in liq); Ex Parte Parker (1997) 80 FCR 1 Rees v Bank of New South Wales (1964) 111 CLR 210 Richardson v Commercial Banking Co of Sydney Ltd (1952) 85 CLR 110 Sandell v Porter (1966) 115 CLR 666 Smith v Boné (2015) 104 ACSR 528; [2015] FCA 319 Southern Cross Interiors Pty Ltd v. Deputy Commissioner of Taxation (2001) 53 NSWLR 213 Sutherland v Eurolinx Pty Ltd (2001) 37 ACSR 477; [2001] NSWSC 230 Treloar Constructions Pty Ltd v McMillan (2017) 318 FLR 58; [2017] NSWCA 72 Trinick (as liquidator of Australian Foods Company Pty Ltd (in liq)) v Keller [2009] WASC 298 Valoutin Pty Ltd v Furst (1998) 154 ALR 119 Van Reesema v Flavel (1992) 7 ACSR 225; (1992) 10 ACLC 291 V R Dye & Co v Peninsula Hotels Pty Ltd (in liq) ([1999] 3 VR 201 Walsh v Natra Pty Ltd (2000) 1 VR 523 Williams v Peters [2010] 1 Qd R 475