By Tina Hoyer*
One of the main elements to be established by a liquidator in order to successfully challenge a pre-liquidation transaction known as an unfair preference is contained in s 588FA(1)(b) of the Corporations Act 2001 (Cth). This subsection provides that the transaction must result in the creditor receiving from the company more than the creditor would receive from the company if the transaction was set aside and the creditor was to prove for the debt in a winding up of the company. This wording is substantially different from that of the subsection’s statutory predecessor. It was foreshadowed that despite the differences in the wording, the enactment of s 588FA would cause no fundamental change to the law with respect to unfair preferences. However, this article will demonstrate that there have been subtle, yet significant, changes to the way the court deals with unfair preferences since the enactment of s 588FA.
The full article can be accessed here: “Section 588FA of the Corporations Act – change of wording but no change to meaning?” (2010) 18 Insolv LJ 77.
* Tina Hoyer is a solicitor, and also a casual lecturer and tutor at the School of Law at James Cook University. The author wishes to thank Dr Colin Anderson of the School of Law at the Queensland University of Technology for helpful comments on earlier drafts of this article. Responsibility for any errors remains with the author.