In a recent decision of the Supreme Court of New South Wales (In the matter of Pacific Plumbing Group Pty Limited (in liquidation) [2024] NSWSC 525), Justice Black determined that a payment made by a third party was not an unfair preference because the payment did not diminish assets available to creditors.
Key Takeaways
- When identifying potential recoveries, liquidators should carefully consider whether payments made by third parties amount to unfair preferences.
- Liquidators bear the onus of proving that payments made by third parties are unfair preferences, even where the liquidator’s claim is undefended.
- Book entries recording the relevant transaction together with an inferred arrangement for payment will not alone be sufficient….
