Karen Petch recently appeared for the Deputy Commissioner of Taxation in an application by a liquidator of Pacific Steelfixing Pty Ltd (in liq) pursuant to s 588FF of the Corporations Act 2001 (Cth) (voidable transactions).
The liquidator alleged that payments received by the Deputy Commissioner in reduction of the company’s running account balance were voidable by reason that they were made during the relation back period at a time when the company was insolvent.
The Commissioner successfully contended that the liquidator had not undertaken sufficient enquiries to enable him to establish (as is required by s 588FA of the Corporations Act) that the payments had preferential effect.
The Court accepted the Commissioner’s contention and held that the liquidator had failed to discharge his onus because he had failed to investigate the possibility of setting-aside a deed of release that released a valuable claim and because he conceded that he may do so.
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