Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2

HIGH COURT OF AUSTRALIA

KIEFEL CJ,

GAGELER, GORDON, EDELMAN, STEWARD, GLEESON AND JAGOT JJ

DANIEL MATHEW BRYANT & ORS APPELLANTS

AND

BADENOCH INTEGRATED LOGGING PTY LTD RESPONDENT

Bryant v Badenoch Integrated Logging Pty Ltd

[2023] HCA 2

Date of Hearing: 18 October 2022

Date of Judgment: 8 February 2023

A10/2022

ORDER

1. The appeal be dismissed.

2. Special leave be granted to the respondent to cross-appeal to this Court from part of the judgment and order of the Full Court of the Federal Court of Australia given and made on 24 June 2021.

3. The cross-appeal be dismissed.

4. The appellants pay the respondent's costs of the appeal and the respondent pay the appellants' costs of the cross-appeal, such costs to be set off against each other.

On appeal from the Federal Court of Australia

Representation

B W Walker SC with B M Gibson for the appellants (instructed by Johnson Winter & Slattery)

M G R Gronow KC with R G Morison for the respondent (instructed by Scanlan Carroll Lawyers)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Bryant v Badenoch Integrated Logging Pty Ltd

Corporations – Winding up ­– Insolvency – Voidable transactions – Unfair preferences – Construction of s 588FA(3) of Corporations Act 2001 (Cth) – Where appellants liquidators of debtor company – Where respondent entered into agreement to supply services to debtor company for harvesting and hauling timber – Where respondent continued to provide services to debtor company despite debtor company's increasing indebtedness – Where liquidators applied to have series of payments made by debtor company to respondent within six‑month period ending on relation‑back day set aside as unfair preferences – Where liquidators contended that, if "continuing business relationship" existed so as to engage s 588FA(3), liquidators entitled by "peak indebtedness rule" to choose starting date of "single transaction" within relation‑back period to prove existence of unfair preference – Whether "peak indebtedness rule" part of or excluded by s 588FA(3) – Proper approach to construction of element of s 588FA(3)(a) that "transaction is, for commercial purposes, an integral part of a continuing business relationship" – Whether payments engaged s 588FA(3)(a).