Clifton v CSR Building Products Pty Ltd - [2011] SASC 103

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
CLIFTON (AS LIQUIDATOR OF ADELAIDE FIBROUS PLASTERBOARD LININGS PTY LTD (IN LIQ)) & ANOR v CSR BUILDING PRODUCTS PTY LTD
[2011] SASC 103
Judgment of The Honourable Justice Peek
5 July 2011
CORPORATIONS - WINDING UP - CONDUCT AND INCIDENTS OF WINDING UP - EFFECT OF WINDING UP ON OTHER TRANSACTIONS - PREFERENCES
Action by plaintiffs seeking declaration pursuant to s 588FF Corporations Act 2001 (Cth) that five payments totalling $142,027.16 made by Adelaide Fibrous Plasterboard Linings Pty Ltd ("AFPL") to the defendant during the six month relation back period were unfair preferences and therefore voidable transactions - plaintiffs seek further order that defendant pay this amount to the plaintiffs.
Whether the defendant had no reasonable grounds for suspecting that AFPL was insolvent at the time of each of the impugned payments – whether the five payments were part of a “running account” – whether the absence of a running account from 14 July 2006 retrospectively negated a running account defence in relation to payments made prior to that date.
Held: judgment for the plaintiff in the amount of $90,185.81 – defendant has not proven that at the time of each of the five payments it had no reasonable grounds for suspecting that the company was insolvent or would have become insolvent – there was a running account between the parties up until 13 July 2006 - the running account between the parties was interrupted on 14 July 2006 and there ceased to be a continuing business relationship - the point at which a running account ceases to exist is when the mutual purpose of inducing further supply is subordinated to a predominant purpose of recovering past indebtedness – the absence of a running account from 14 July 2006 did not negate the running account defence in relation to payments made prior to that date – plaintiffs are entitled to the recovery of the final three of the five payments - the plaintiffs are also entitled to the difference between the highest amount AFPL owed to the defendant during the period of the running account and the amount that it owed on the last day of that period.
Corporations Act 2001 (Cth) s 588FF, s 436C(1), s 588FE(2)(b)(i), s 9, s 588FE(2), s 588FC, s 588FA(1), s 588E(3), s 588FG, s 588FA(3), s 588FG(1), referred to.
Sutherland v Eurolinx (2001) 37 ACSR 477; Julzar Pty Ltd v Rodgers [1999] NSWSC 199, applied.
Maxsted v HP Launder Holdings Australia Pty Ltd [2006] SADC 130, distinguished.
Sims v Celcast Pty Ltd (1998) 71 SASR 142; Cooks's Construction Pty Ltd v Brown (2004) 49 ACSR 62; Smith v Commissioner of Taxation (1997) 75 FCR 339; Pegulan Floor Coverings Pty Ltd v Carter (1997) 24 ACSR 651; Cussen v Commissioner of Taxation (2004) 51 ACSR 530; Jones v Dunkel (1959) 101 CLR 298; Wily (as liquidator) v Easter Elevators Pty Ltd [2003] NSWSC 377; Olifent v Australian Wine Industries Pty Ltd (1996) 14 ACLC 510; Sutherland v Lofthouse (2007) 214 FLR 157; Airservices Australia v Ferrier (1996) 185 CLR 483; Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266, considered.

WORDS AND PHRASES CONSIDERED/DEFINED
"running account" "unfair preference" "insolvent transaction" "good faith"

CLIFTON (AS LIQUIDATOR OF ADELAIDE FIBROUS PLASTERBOARD LININGS PTY LTD (IN LIQ)) & ANOR v CSR BUILDING PRODUCTS PTY LTD
[2011] SASC 103
Civil

PEEK J. The plaintiffs, liquidators of Adelaide Fibrous Plasterboard Linings Pty Ltd (in liq) (“AFPL”), pursuant to s 588FF of the Corporations Act 2001 (Cth) (the “Act”), seek a declaration that five payments made by AFPL to the defendant, CSR Building Products Ltd (“CSR”) during the last six months before administrators were appointed are unfair preferences and therefore voidable transactions. They therefore seek a further order that CSR pay the amount of $142,027.16, being the total of those five payments.
For the reasons that follow, I find that AFPL was insolvent at all relevant times and that CSR has not discharged the onus of proving its asserted primary “good faith” defence but that its liability is partly reduced by virtue of a running account between the parties continuing from before the start of the six month period until 14 July 2006 when it ceased to operate as a running account of the requisite type. I ultimately find that the plaintiffs are entitled to recover the final three of the five claimed payments (in total $56,361.13), in addition to an amount of $33,824.68, that being the value of the unfair preference during the running account period to 14 July 2006. The judgment amount in favour of the plaintiffs is therefore the final total of those two amounts being $90,185.81.
Background
The plaintiffs, Mr Timothy Clifton and Mr Peter Macks, are liquidators of AFPL. They were appointed joint and several administrators of AFPL on 3 October 2006 by resolution of the chargee Brunswick Pty Ltd pursuant to s 436C(1) of the Act. Subsequently, the plaintiffs were appointed joint and several liquidators of AFPL on 29 October 2006, after the creditors of the company resolved to wind up the company and appoint the plaintiffs as liquidators.
AFPL was registered on 5 November 2002 and at all times its sole director and shareholder was Mr Allan Schnaars (Schnaars). From its incorporation on 5 November 2002 to 30 October 2006, the company carried on business as a building contractor, supplying labour and materials for the framing up of internal walls, ceilings and erecting plasterboard on commercial properties. It was involved primarily in the commercial area, but also to a lesser extent in the residential area.
The defendant CSR is a large and well-known entity carrying on business in manufacturing and supplying building products to customers. Included in its line of products are gyprock plasterboard and accessories, which it supplied to AFPL.
The plaintiffs seek the recovery of five payments which were made by AFPL to CSR during the period 3 April 2006 to 3 October 2006, the “relation back period”, being the six month period ending on the “relation back day”, which in this case is the date AFPL was wound up: see s 588FE(2)(b)(i) and s 9. These payments were made by AFPL to CSR in reduction of AFPL’s liability to CSR for the cost of goods supplied by CSR to AFPL pursuant to a credit agreement that had been approved by CSR on 2 June 2005. A summary of these payments is as follows:

Date presented Cheque number Date drawn Amount

20 April 2006 1335 18 April 2006 $57,926.64

5 June 2006 1392 2 June 2006 $27,739.39

20 July 2006 1453 19 July 2006 $20,000.00

3 August 2006 1466 3 August 2006 $19,385.05

8 August 2006 1469 8 August 2006 $16,976.08

TOTAL $142,027.16

Summary of legislative provisions

The legislative scheme in summary form is as follows.
By virtue of s 588FE(2), an “insolvent transaction” of a company is voidable if, amongst other things, it was entered into during the six months ending on the relation back day (3 October 2006), that being when the plaintiffs were appointed joint and several administrators of AFPL.
By virtue of s 588FC, a transaction of a company is an “insolvent transaction” if it is an “unfair preference” given by the company, and the company is insolvent when the transaction is entered into.
By virtue of s 588FA(1) a transaction is an “unfair preference” if the transaction results in a creditor receiving more from the company in respect of an unsecured debt than the creditor would receive on proof in a winding up of the company.
As to “insolvency”, Mr Turon, counsel for the defendant, conceded at the hearing that AFPL was insolvent as by the date of the first alleged unfair preference payment.
Counsel for the plaintiffs, Mr Ower, relied upon this concession and therefore did not dwell on the question of insolvency. He did, however, provide an appendix to his written submissions submitting that AFPL had been insolvent as from September 2005 on the basis of an internal memorandum of the liquidators’ firm which was tendered at trial. However, it is unnecessary to pursue this further; the effect of s 588E(3) is that the insolvency of AFPL is presumed to continue from 18 April 2006 until the end of the relation back period on 3 October 2006.
The effect of the legislation as summarised above was common ground between the parties. CSR advanced two defences. The first was the “good faith” defence under s 588FG of the Act in respect of all or some of the five payments, thus seeking to deprive such payments of the status of unfair preferences. The second alternative defence was that some or all of the payments constituted part of a “running account” under s 588FA(3) of the Act and that the value of the unfair preference during that running account period should therefore be reduced to the value of the difference between the highest amount owing on the account after 3 April 2006 and the lower amount owing on the last day of the operation of the running account.
The “good faith” defence
The defendant seeks to rely on the “good faith” defence which appears in s 588FG(1) of the Act which provides:
588FG Transaction not voidable as against certain persons
(1)A court is not to make under section 588FF an order materially prejudicing a right or interest of a person other than a party to the transaction if it is proved that:
(a)     the person received no benefit because of the transaction; or
(b)     in relation to each benefit that the person received because of the transaction:
(i)    the person received the benefit in good faith; and
(ii)     at the time when the person received the benefit:
(A)the person had no reasonable grounds for suspecting that the company was insolvent at that time or would become insolvent as mentioned in paragraph 588FC(b); and
(B)a reasonable person in the person’s circumstances would have had no such grounds for so suspecting.
CSR bears the burden of establishing each of the elements of the good faith defence.[1]
[1] Sims v Celcast Pty Ltd (1998) 71 SASR 142; Cooks’s Construction Pty Ltd v Brown (2004) 49 ACSR 62.
The first element of good faith has been held to relate to the state of mind of the creditor as to whether the transaction is to advantage the creditor over other creditors of the company.[2] In this case, the plaintiff did not contend that the defendant had received the payments other than in good faith in relation to the five payments.
[2] Smith v Commissioner of Taxation (1997) 75 FCR 339, 350.
The second element consists of two parts. First, CSR subjectively had no reasonable grounds for suspecting that AFPL was insolvent or would become insolvent and, second, that a reasonable person in CSR’s circumstances would have had no such grounds for so suspecting. These two parts involve CSR proving a negative and it has been held that this is a fairly demanding test.[3] The first part involves the subjective belief of the relevant employees or agents of CSR, while the second part involves an objective inquiry as to whether suspicion would be held by a reasonable person in the circumstances.[4]
[3] Pegulan Floor Coverings Pty Ltd v Carter (1997) 24 ACSR 651, 658.
[4] Cussen v Commissioner of Taxation (2004) 51 ACSR 530, 535-536.
For the reasons that follow, I find that CSR has failed to establish the good faith defence with respect to all of the relevant five payments.
The witnesses called at trial
The plaintiff called only one witness, Mr Peter Macks, a joint and several administrator of AFPL. I accept his evidence.
The defendant called as his first witness, Mr Anthony Farrelley, the National Credit Manager for CSR. I accept his evidence but note that owing to his national position and lack of participation in the running of the particular account here in South Australia, his evidence was essentially limited to fairly broad considerations of company policy and credit management.
The second of the defendant’s two witnesses was Mr Ron Murch (Murch). He no longer was employed by CSR but, at the relevant time, had been the Regional Credit Manager for CSR, South Australia and the person who managed the AFPL account. I generally accept his evidence. I do not suggest that he was consciously doing other than attempting to give accurate evidence to the Court but I did find him to be somewhat defensive in areas where it might possibly be suggested that he had not been stringent enough in his credit management. As a consequence, he may have had an unconscious tendency to minimise the extent to which there were apparent signs of potential insolvency at various times.
Accounting procedures and staff at CSR
Mr Robert Smith (Smith) was the State Sales Manager for CSR at the relevant time. He approved the initial credit application by AFPL on 2 June 2005 with a credit limit of $70,000 and one of the terms was that AFPL would settle its accounts with CSR at 30 days which in practice meant that AFPL was required to make payments to CSR by the last working day of the month after the month of the particular invoice in question. The evidence was that Smith was well aware of the AFPL account and that Schnaars would contact Smith directly due to Murch’s limited authority. Smith was not called by the defendant.
As stated above, Murch was the Regional Credit Manager for CSR, South Australia and managed the AFPL account. He reported directly to Smith. Although AFPL was required to pay its accounts within 30 days, Murch had authority to let accounts run up to 45 days. When AFPL’s account was approaching 45 days, Murch would contact one of the accounts staff at AFPL to see when payment was going to be made.
Murch gave evidence that although the standard terms of credit were that customers pay their accounts within 30 days, many customers would pay only after 30 days. Once overdue accounts had reached 45 days, Murch would have to seek permission from Smith for the account to continue trading. Murch gave evidence that Smith had authority to let the account continue to trade up until 52 days and that if an account were to trade at 60 days, the approval of the National Credit Manager or the Chief Financial Officer had to be obtained in writing.
Murch made notes in relation to the operation of the accounts for which he was responsible. These notes were entered into a computer system and extracts were tendered or referred to at trial. Mr Murch gave evidence that every time he dealt with a customer he would enter the date, who he discussed the account with, what the conversation involved and what sort of promises were made. He stated that it was more of a help for someone else who later needed to examine a particular account so that he or she could see what actions had been taken. The extracts that were tendered at trial included notes made by Murch, but also notes made by other staff including Ms Joanne Passfield (Passfield), Mr Smith’s assistant. Murch recorded conversations that he had with AFPL accounts staff including Kelly and Stephanie.
There were a number of employees of CSR who would have had relevant knowledge apart from the witnesses who were called. The most obvious example was Smith referred to above. Another was Mr Jason Norrish, the Accounts Manager of CSR; Murch stated that he relied upon Norrish for information about the account and that Norrish had more intimate knowledge of the AFPL account than his own as Norrish was dealing with Schnaars on a daily basis and would have known if there were problems with the account. The final example was Passfield, who had a direct role in monitoring accounts with Murch and would have been acquainted with the operation of the relevant account.
The non-calling of witnesses
The plaintiffs have made submissions as to the non-calling of these witnesses both along standard Jones v Dunkel[5] lines and also to the effect that it was necessary for the defendant to call such witnesses to make out the affirmative “good faith” defence since the onus of proof was there upon the defence. However, since I consider that, on the evidence that was called, the defendants have plainly not made out the “good faith” defence, I do not consider it necessary to consider these submissions further in relation to that area of the case.
[5] (1959) 101 CLR 298.
In relation to the payments I have found to be subject to the running account defence, it is clear that the onus of proof is there on the plaintiffs to exclude the defence. As to a Jones v Dunkel inference, I am prepared to draw the inference that the evidence of the named witnesses, if called, would not have assisted the defendant on this aspect. However, it must be noted that I do not thereby infer that such evidence would have been inconsistent with the evidence of the witnesses who were called by the defendants. In reality, I consider that the evidence matrix relevant to the running account aspect of the case is sufficiently established by the evidence of the witnesses who were called together with the documentary evidence and little is to be gained by speculating on what other witnesses might or might not have said of relevance in this particular area.
The “SAP” computer system
The accounts department at CSR at the relevant time used the “SAP” computer system, a program designed to manage customer accounts. The program automatically put an account on “block” when either the account was overdue by a certain period of time or went over its credit limit. In the case of most customers, including AFPL, the critical period was 45 days. For some smaller or new accounts that were assigned a tighter risk category, the period was 33 days.
Automatic “block” intervention
If AFPL’s account went over the $70,000 credit limit, the SAP program would activate the automatic “block”. The purpose of this feature was to flag that the customer was over their credit limit or had an account overdue by 45 days or more and a decision would therefore need to be made as to whether product was to be released. Mr Farrelley, CSR’s National Credit Risk Manager for the “lightweight systems” department of CSR, said that the automatic “block” was a measure designed to protect CSR from supplying goods in circumstances where they might potentially not be paid for; it did not of itself prevent orders still going through the account and CSR staff could still release goods to be supplied to AFPL.
Manual “big block” intervention
The SAP system also allowed a person in the accounts department to activate a manual “big block” intervention procedure which prevented any transactions being processed on a customer’s account. Murch gave evidence that when an account was on “big block”, one could not go into the account for an inquiry or even do a quotation – the whole account was just frozen. CSR’s policy was to place an account on “big block” where, inter alia, mail was returned or cheques bounced.
The evidence was that AFPL’s account was placed on automatic “block” at numerous times during the period of the commercial relationship between AFPL and CSR. The company’s account was also placed on and off manual “big block” at various times. A print out from the SAP system of the history of the activation and de-activation of the manual “big block” on AFPL’s account was tendered by the defendant at trial.[6] It is not necessary to record all the times that AFPL’s account went on and off “big block”, but it at least incorporated the following periods, to which I will later refer:
·19 – 24 October 2005 (6 days)[7]
·18 – 21 November, and 30 November – 7 December 2005 (12 days)[8]
·15 December 2005 – 11 January 2006 (27 days)[9]
·15 – 29 May 2006,[10] and 2 – 5 June 2006 (18 days)
·16 June – 28 July 2006 (43 days)[11]
·11 August 2006 onwards.[12]
[6]    Exhibit D32.
[7]    The account was taken off “big block” on 20 October 2005 but was immediately placed back on “big block” the same day.
[8]    The account was taken off “big block” on 5 December 2005 but was immediately placed back on “big block” the same day.
[9]    The account was taken off “big block” on 9 January 2006 but was immediately placed back on “big block” the same day.
[10] The account was taken off “big block” on 24 May 2006 but was immediately placed back on “big block” the following day.
[11] Mr Murch’s notes indicated that “big block” was placed on the account on 16 June 2006 and that it was taken off on 28 July 2006. He agreed with this in his evidence. However, Mr Murch did not agree with the proposition that the account would therefore have been on “big block” for that whole period, as his notes did not always record when “big block” was deactivated. He stated that just because there were no orders between the period 16 June and 20 July 2006, that did not mean that “big block” was activated for that period; it may have been because AFPL did not place an order during that period. This is confirmed by the print out of the SAP System that showed that AFPL’s account was taken off “big block” on 19 July 2006 but was re-activated two days later. It also shows that “big block” was activated and then immediately deactivated on the day of 27 July 2006.
[12] The print out of the SAP System indicates that “big block” was activated and deactivated seven times on 11 August 2006 with the final result being that it remained on “big block”. The account was taken off “big block” on 24 August 2006 but then reactivated that same day. There is no entry showing that the account was taken off “big block” after that. Mr Murch agreed in cross-examination that the net effect of this was that AFPL’s account remained on “big block” from 11 August 2006 until the appointment of administrators.
The company’s trading pattern until its winding up

From the time AFPL entered into the credit agreement with CSR on 2 June 2005, AFPL always paid its account only after 30 days and often after 45 days. The company’s trading pattern until its winding up was as follows:
·July 2005 account – payment at 49 days
·August 2005 – 54 days
·September 2005 – 62 days
·October 2005 – 71 days
·November 2005 – 47 days
·December 2005 – 51 days
·January 2006 – 49 days
·February 2006 – 51 days
·March 2006 – 65 days
·April 2006 – part at 80 days, and the remainder at 88 days
·May 2006 – 68 days
The June, July and August 2006 accounts were never paid.
The first impugned payment: 20 April 2006
In assessing whether CSR has made out the “good faith” defence in respect of the first payment of 20 April 2006, it is necessary to examine the facts surrounding AFPL’s trading account up to that date.
By 20 April 2006, AFPL’s account with CSR, which had only been running for nine months, had already been placed on the manual “big block” in the SAP system in October 2005, again in November 2005 and then again in December 2005.
Murch gave evidence that once an account got out to 60 or 90 days the “alarm bells” started to ring. At the time of the first payment, AFPL had traded well beyond its terms of the credit agreement, with one payment paid at 62 days and another at 71 days. There had been one post-dated cheque and two separate dishonoured cheques.
On 15 December 2005, AFPL’s account with CSR went on automatic “block” because October’s account was 45 days overdue and was placed on manual “big block” that same day. Murch, refreshing his memory from his account notes, said that he contacted Stephanie at AFPL on 16 December 2005 and advised her that the account was on “big block”. Murch received a cheque for $29,150.82 on 23 December 2005. On 30 December 2005, CSR was notified that that cheque had been dishonoured. On 9 January 2006, Stephanie from AFPL rang Murch to discuss “supply”. Murch advised that CSR would need three to five working days to allow for a personal cheque to be cleared and told Stephanie that if AFPL needed supply urgently it would need to give CSR a bank cheque for the payment of the October account. The October account was eventually paid on 11 January 2006 and the account was taken off “big block”.
Mr Ower, put to Murch at trial that “alarm bells would have been ringing” when the October account was at 60 days on 1 January 2006 and also on 11 January 2006 when the account was at 71 days. Mr Murch agreed that this was the case.
The accounts of November and December 2005 and January and February 2006 were each paid between 47 and 51 days after their due dates. The February 2006 account, the first impugned payment currently under consideration, was paid on 20 April 2006, 20 days after it was due.
It was put to Murch that as at February 2006 the following established matters were enough to cause him to suspect that AFPL was having trouble paying its debts when they fell due, and therefore that AFPL was insolvent, namely: the account had gone to 62 days and then subsequently to 71 days; that the AFPL account had been placed on manual “big block” on two occasions; that Murch had received a post-dated cheque, an unsigned cheque, two dishonoured cheques; and had been told by AFPL staff that “we need to check with the bank”.
Murch agreed that these were indications of insolvency but stated that although the account might have gone out to 62 and 71 days, this was only on a few occasions and that it was generally paid at around 45-50 days. He stated that Schnaars would “always come good” and that he would doubt that any business would run smoothly all the time – there were always going to be financial difficulties. He accepted that in hindsight the indications of insolvency were there, but said that at the time he was not privy to other information, such as AFPL’s balance sheet, how much money it was owed, what assets were in the company that could be liquidated quickly etc.
The first question that arises is whether CSR has established that it had no reasonable grounds for suspecting that AFPL was insolvent at the time of this first payment or would have become insolvent.
I find that that CSR has failed to prove that it had no reasonable grounds for so suspecting. While it is true that bounced and post-dated cheques do not necessarily mean per se that a company is insolvent, particularly where they are a practice in the industry,[13] as at February 2006 there were other substantial indicators that the situation was serious and Murch conceded that this was so.
[13] Wily (as liquidator) v Easter Elevators Pty Ltd [2003] NSWSC 377.
I find in the light of the cumulative effect of all of the indicators of insolvency that CSR has not proven that at that time it had no reasonable grounds for suspecting that the company was insolvent or would have become insolvent.
I should mention that CSR’s continued supply of goods to AFPL does not discharge the onus on the basis that CSR could therefore have had no reasonable grounds to suspect insolvency. Rather, CSR’s continued trading likely indicates that it was prepared to accept a significant level of risk with the AFPL account. Indeed, Murch at trial stated that although AFPL had cash flow difficulties, there was no point in either party ceasing the commercial relationship because AFPL needed to continue its construction projects and, importantly, CSR needed to get paid. In the light of such evidence it was most unlikely that CSR did not at least suspect that if they ceased supply they would not get their outstanding debt paid.
In any event, it has not been proven that a reasonable person in the circumstances of CSR would have had no reasonable grounds for so suspecting.
The second impugned payment: 5 June 2006
The second alleged unfair preference was a payment made by AFPL to CSR on 5 June 2006 for the account of March 2006, it being paid 38 days after it was due.
As at 1 May 2006, the only account that remained outstanding was that of the March account. On 12 May 2006, according to the notes he made at the time, Murch rang Stephanie at AFPL. At that stage the March account was at 42 days, 12 days over the terms agreed in the credit agreement. It was approaching 45 days – the period at which the automatic “block” would be placed on AFPL’s account, and also the point at which Murch had to seek the authority of Smith for the account to continue trading. Stephanie informed Murch that she would discuss the account with Schnaars and said that the account would be paid the following week. On 15 May 2006, Murch entered a note as follows:
Spoke to Stephanie cheq not received at 45 days as agreed in supply contract account placed on “big block”.
Murch placed the account on manual “big block”, the effect being that no orders could go through the account. He explained at trial that he did this because AFPL had $84,412.92 outstanding on its account, which was above its $70,000 credit limit under the supply agreement and he did not want any more product going out which would increase it further. The following interchange at trial then occurred between Mr Ower and Mr Murch:[14]
Q:But why would you do that? Only one payment was overdue at 45 days at that point?
A:Yes, well we were only prepared to risk 70,000. Like, it’s just getting a bit high. I’m just trying to be diligent and not trying to let another 20 or 30,000 go through and push it up to 110, 120 grand. That would be irresponsible if I didn’t.
Q:The events of November and December were in your mind, weren’t they, when you placed it on the big block on 15 May?
A:That may have some bearing on it, but my main concern was if he wanted to put through another big order, he could order 10 or 20 grand in one hit, it goes to 84 to 104 to 105.
(Emphasis added)
[14] T195.
One can see from the above that Murch was prepared to accept that the previous events of November and December 2005 did have a bearing on his decision to place AFPL’s account on the manual “big block” on 15 May 2006.
In addition to the factors that had occurred in the lead up to the first payment that have been addressed above, further indicators that would have led CSR to have had reasonable grounds to suspect the insolvency of AFPL continued to emerge. Before the second impugned payment on 5 June 2006, a personal cheque drawn on AFPL’s company account dated 29 May 2006 was drawn in relation to the March 2006 account but was dishonoured on 2 June 2006. It was a bank cheque then presented on 5 June 2006 that constituted the second impugned payment which was therefore made at 38 days after falling due, well over the agreed credit terms and apparently beyond the point where even Mr Smith could negotiate with AFPL to continue trading.[15]
[15] Murch’s evidence was that approval would need to be sought from the national credit manager or the CFO of CSR to allow a customer to trade beyond 60 days.
At trial Murch was asked whether he considered that Mr Schnaars may have been using the mechanism of sending CSR a cheque which it knew would or might be dishonoured, in order to achieve supply. Mr Murch said that this did occur to him:[16]
Q:Did you form a belief at about this time that Mr Schnaars might be using the mechanism of sending you a cheque which he knew or suspected might not be honoured so as to get through for immediate purposes an order that he wished to place? Did that occur to you?
A:That did occur to us and that’s part of the reason we got the bank cheque. We wanted to make sure that he had the funds there and given us three days grace so he didn’t have that three days grace to put up anymore product.
[16] T197.
Mr Ower then asked Mr Murch whether he was concerned whether AFPL was insolvent at that time:[17]
[17] T197.
Q:    You were worried that he wasn’t able to pay his debt to CSR at that time?
A:    Like I said before, not unduly worried, no.
Q:     But you were worried.
A:    A little concerned.
Q:The account was taken off big block on 5 June. A cheque was received on 5 June so it was payed at 65 days.
A:    Yes.
(Emphasis added)
I find that a combination of the earlier events together with the events after the first impugned payment to CSR on 20 April 2006 leads to the conclusion that CSR have failed to prove that, at the time of the second payment, it had no reasonable grounds to suspect that CSR was insolvent or would become insolvent. I am also of the view that CSR has not proven that a reasonable person in the circumstances of CSR would have had no such grounds for so suspecting at the time of the second payment.
Third, fourth and fifth impugned payments: 20 July, 3 and 8 August 2006
By the time of the third, fourth and fifth payments, the grounds for suspecting insolvency were overwhelming. Not only was there the previous history as discussed above, but there existed further indications which would, or should, have led CSR to suspect the insolvency of AFPL. They included the following matters.
First, the account remained on manual “big block” from 16 June to 28 July 2006, because of AFPL’s failure to pay the outstanding accounts of April and May 2006. That was a significant period of time and no supplies were made to AFPL during this period apart from on 19 July 2006 and 21 July 2006. Those two supplies were only made after a payment by way of bank cheque on delivery and an urgent plea for supply from AFPL respectively.
Secondly, on 14 July 2006, Mr Murch had sent a letter to Mr Schnaars requesting payment of outstanding invoices from April and May totalling $56,361.13. At this date, April’s account was 44 days overdue and May’s account was 14 days overdue. The letter read as follows:
Dear Allan,
Following our numerous phone calls to you requesting payment of your account, we note that your account still remains overdue.
Outstanding invoices from April and May 2006 totalling $56,361.13 remain overdue and we request your payment within 14 days.
Please note that it is our intention to bring a claim against you if we have not received your payment by close of business on 31 July 2006.
Failure to pay by that time will cause us to instruct our solicitors to institute legal proceedings against you.
Please note that this letter serves as notice to you for the purposes of Section 20A of the Magistrates Court (SA) Rules 1992.
If you have any questions in relation to this issue, please contact me on (08).... …. .
Yours sincerely,
[Signed]
Ron Murch
On 19 July 2006, Mr Schnaars rang Mr Murch to request the delivery of more product for the following day stating that he had a crane lift and needed approximately $7,000 of product for the job. Mr Murch’s log recorded that after contacting Mr Smith on his mobile telephone and discussing the matter with him, CSR agreed to delivery on condition that part payment of April’s account in the amount of $20,000 was made. A hand written note on the original letter which was tendered in evidence at trial, recorded the conversation that Mr Schnaars had with Mr Murch. Murch said that he did not know whether this was Schnaars’ hand writing or that of another staff member of AFPL but accepted that the note reflected the conversation accurately. The note stated:
19/7/06
SPOKE TO RON
AGREED TO PAY 20,000 BANK CHQ TODAY
THEN HE WILL LET LOAD OUT FOR 10.00
Murch indicated that the reference to “LET LOAD OUT FOR 10.00” was probably a reference to letting the load out for 10 o’clock in the morning at the Martin’s Tower project on North Terrace. Murch’s log also recorded that CSR was only to accept a bank cheque and an agreement for AFPL to pay the balance of the April and May accounts in full by Friday, 21 July 2006, which was two days later. Significantly, the log recorded a conversation that Murch had with Mr Karl Grisbrook, who was in charge of CSR’s distribution and transport section and stated that Murch had spoken to Grisbrook and advised him that no product was to leave Mawson Lakes without the bank cheque in hand and that Grisbrook was to organise a courier to pick up the bank cheque.
I find that CSR has not proven that it had no reasonable grounds for suspecting that the company was insolvent or would become insolvent at the respective times of the third, fourth and fifth payments.
I also find that CSR has not proven that a reasonable person in the circumstances of CSR would have had no such grounds for so suspecting at the respective times of the third, fourth and fifth payments.
Were the five payments part of a “running account”?
Having come to the conclusion that the defendant has not been successful on the “good faith” defence with respect to any of the five payments, the question then arises whether a “running account” existed during part or all of the six month relation back period and if a defence is afforded to CSR in relation to which, if any, of the impugned payments.
Overview of the “running account” defence
The “running account” defence is found in s 588FA(3) of the Act which provides:
588FA Unfair preferences
…
(3)     Where:
(a)     a transaction is, for commercial purposes, an integral part of a continuing business relationship (for example, a running account) between a company and a creditor of the company (including such a relationship to which other persons are parties); and
(b)     in the course of the relationship, the level of the company’s net indebtedness to the creditor is increased and reduced from time to time as the result of a series of transactions forming part of the relationship;
then:
(c)     subsection (1) applies in relation to all the transactions forming part of the relationship as if they together constituted a single transaction; and
(d)     the transaction referred to in paragraph (a) may only be taken to be an unfair preference given by the company to the creditor if, because of subsection (1) as applying because of paragraph (c) of this subsection, the single transaction referred to in the last‑mentioned paragraph is taken to be such an unfair preference.
The running account defence is essentially a statutory embodiment of what was previously known as the “running account doctrine”[18] and much of the language in the section comes from the common law. As Nettle JA (with whom Neave and Redlich JJA agreed) said in Sutherland v Lofthouse:[19]
[34]As Ormiston JA explained in V R Dye & Co v Peninsula Hotels Pty Ltd (in liq) & Anor [[1999] 3 VR 201, 210], the section represents an application to the winding up of companies in insolvency of the implied exception as to running accounts to s 122 of the Bankruptcy Act 1966 (C’th). As such it embodies the principles reflected in Richardson v Commercial Banking Co of Sydney Ltd [(1952) 85 CLR 110], Queensland Bacon v Rees [(1966) 115 CLR 266] and Airservices Australia v Ferrier [(1996) 185 CLR 483]. That means that, in determining whether a payment constitutes a preference for the purposes of s 588FA(3), the effect of a payment on the other creditors must be ascertained objectively, such that:
If a payment is part of a wider transaction or a ‘running account’ between the debtor and the creditor, the purpose for which the payment was made and received will usually determine whether the payment has the effect of giving the creditor a preference, priority or advantage over other creditors. If the sole purpose of the payment is to discharge an existing debt, the effect of the payment is to give the creditor a preference over other creditors unless the debtor is able to pay all of his or her debts as they fall due. But if the purpose of the payment is to induce the creditor to provide further goods or services as well as to discharge an existing indebtedness, the payment will not be a preference unless the payment exceeds the value of the goods or services acquired. In such a case a court, exercising jurisdiction under s 122 of the Bankruptcy Act, looks to the ultimate effect of the transaction. Whether the payment is or is not a preference has to be ‘decided not by considering its immediate effect only but by considering what effect it ultimately produced in fact.’ [Air Services v Ferrier (1996) 185 CLR 483, 502 (Dawson, Gaudron and McHugh JJ), emphasis added].
(Citations, appearing in footnotes in original, have been inserted)
[18] Olifent v Australian Wine Industries Pty Ltd (1996) 14 ACLC 510, 517.
[19] (2007) 214 FLR 157, 166 [34].
Although it is often referred to as a “defence”, it is now settled that the plaintiff must negate such defence as an essential element of the cause of action in an unfair preference claim. Thus in Sutherland v Eurolinx[20] Santow J stated:[21]
[167]Finally, the codification of the so-called running account has become definitional of what is an “unfair preference”. That means that, in terms of onus, what was once merely a defence is now an ingredient or element of that which the Plaintiff liquidator must prove in establishing whether it is a preference (and its dimension). The onus in that sense has shifted to the party attaching the payments.
[20] (2001) 37 ACSR 477.
[21] Ibid 508 [167].
In Airservices Australia v Ferrier,[22] Dawson, Gaudron and McHugh JJ explained the operation of the running account defence in the following way:[23]
If a payment is part of a wider transaction or a “running account” between the debtor and the creditor, the purpose for which the payment was made and received will usually determine whether the payment has the effect of giving the creditor a preference, priority or advantage over other creditors. If the sole purpose of the payment is to discharge an existing debt, the effect of the payment is to give the creditor a preference over other creditors unless the debtor is able to pay all of his or her debts as they fall due. But if the purpose of the payment is to induce the creditor to provide further goods or services as well as to discharge an existing indebtedness, the payment will not be a preference unless the payment exceeds the value of the goods or services acquired. In such a case a court, exercising jurisdiction under s 122 of the Bankruptcy Act, looks to the ultimate effect of the transaction. Whether the payment is or is not a preference has to be “decided not by considering its immediate effect only but by considering what effect it ultimately produced in fact”.
As a consequence, a payment made during the six month period cannot be viewed in isolation from the general course of dealing between the creditor and the debtor before, during and after that period. Resort must be had to the business purpose and context of the payment to determine whether it gives the creditor a preference over other creditors. To have the effect of giving the creditor a preference, priority or advantage over other creditors, the payment must ultimately result in a decrease in the net value of the assets that are available to meet the competing demands of the other creditors.
…
If at the end of a series of dealings, the creditor has supplied goods to a greater value than the payments made to it during that period, the general body of creditors are not disadvantaged by the transaction – they may even be better off. The supplying creditor, therefore, has received no preference. Consequently, a debtor does not prefer a creditor merely because it makes irregular payments under an express or tacit arrangement with the creditor that, while the debtor makes payments, the creditor will continue to supply goods. In such a situation, the court does not regard the individual payments as preferences even though they were unrelated to any specific delivery of goods or services and may ultimately have had the effect of reducing the amount of indebtedness of the debtor at the beginning of the six month period. If the effect of the payments is to reduce the initial indebtedness, only the amount of the reduction will be regarded as a preferential payment.
(Footnotes omitted)
[22] (1996) 185 CLR 483.
[23] Ibid 501-502; 503-504.

Essential elements of the running account defence are therefore a continuing relationship of debtor and creditor and that payments are made in the mutual expectation that the creditor will continue to supply the debtor.[24] In order to determine whether such an expectation exists, it is necessary to look at the particular circumstances from which it may be inferred since usually there will be no express statement that a payment is being made in the expectation that the supplier will continue to supply. As Barwick CJ said in Queensland Bacon Pty Ltd v Rees:[25]
In my opinion, it is enough if, on the facts of any case, the court can feel confident that implicit in the circumstances in which the payment is made is a mutual assumption by the parties that there will be a continuance of the relationship of buyer and seller with the resultant continuance of the relation of debtor and creditor in the running account, so that, to use the expressions employed in Richardson’s case (1952) 85 CLR 110 at 113: “it is impossible” – I interpolate, in a business sense – “to pause at any payment into the account and treat it as having produced an immediate effect to be considered independently of what followed …”
[24] Tectron v Taylor [2006] SASC 175, [40] (White J).
[25] (1966) 115 CLR 266, 286.
There was a running account between the parties until 13 July 2006
I find that from the start of the relation back period on 3 April 2006 until 13 July 2006, there was a running account between CSR and AFPL. I do so notwithstanding my previous findings that CSR had reasonable grounds for suspecting the insolvency of AFPL during that same period. I respectfully agree with the view expressed by Santow J in Sutherland v Eurolinx,[26] that it is possible to have a running account despite the presence of a suspicion of insolvency. His Honour said:[27]
[163]… If it be put that actual knowledge of insolvency must invariably terminate the necessary business relationship then I would not accept that proposition. That would presuppose, incorrectly, that a subjective suspicion of insolvency cannot coexist with an assumption of a continuing business relationship between creditor/payee and debtor/payer. That is incorrect as an invariable proposition, on the authority of Airservices Australia. Knowledge of insolvency in that case did coexist for all the payments, including the nine not set aside. The statements of principle by the High Court clearly do admit of that coexistence of knowledge and running account; they make no distinction between subjective and objective knowledge.
[164]However, the Plaintiff's qualification may legitimately be put somewhat lower. One may accept that a level of actual suspicion, if it finally reaches actual subjective knowledge of insolvency, may, but not necessarily, lead to the termination of that continuing business relationship and its associated mutual purpose of payment to induce further supply. Thus the fact of such actual knowledge may (but need not necessarily) rebut, as even one of two purposes, that purpose of inducing the creditor to maintain the relationship by providing further supply. An example of the latter case is to be found in the circumstances surrounding the last payment in Airservices Australia itself. There, as I have explained, the latter purpose was subordinated to getting the creditor’s money back.
(Emphasis in italics in original; emphasis in bold added)
[26] (2001) 37 ACSR 477.
[27] Ibid, 507.
Despite there being reasonable grounds for CSR to suspect the insolvency of AFPL at the time of the first two payments, and despite the particular problems that CSR had had with AFPL in the payment of the October 2005 account in December 2005 and January 2006, I consider that there was still a relationship based on mutual benefit subsisting up to 13 July 2006.
Mr Ower submitted that there could not be a continuing business relationship between the parties because AFPL’s account had been placed on manual “big block” for three periods of time by January 2006, totalling 45 days, and then again in May and June for a period totalling 18 days. However, I consider that the “big block” system was merely an accounting procedure in CSR’s accounting system; certainly, it was more stringent than the automatic “block” feature of the SAP system but it was merely a mechanism that CSR used to manage risk. It is not the case that a consequence of a customer being placed on “big block” was that CSR considered the business relationship to be over and that further debits and credits would necessarily not be made on the account. It must be remembered that the mere fact that payments to CSR had a dual purpose (discharging existing indebtedness and ensuring further supply of product) does not deny the availability of the running account defence.[28]
[28] Sutherland v Eurolinx (2001) 37 ACSR 477, 504-505 [147]-[148].
The lack of the requisite running account from 14 July 2006 onwards
However, I find that as from 14 July 2006, the running account between the parties was interrupted and there ceased to be a continuing business relationship of the type required by the running account defence. This cessation started with the issuing of a legal letter of demand on that date and the position was then further exacerbated by other events soon after which have been considered in detail in the context of an examination of the “good faith” defence in relation to the third, fourth and fifth payments. I will not repeat them here.
I consider, in accordance with the decision of Santow J in Sutherland v Eurolinx,[29] that the point at which a running account ceases to exist is when the mutual purpose of inducing further supply is subordinated to a predominant purpose of recovering past indebtedness. As his Honour there said:[30]
[147]That is, the basis of a running account is a continuing relationship between the debtor and creditor with an expectation that further debits and credits will be so incurred.
[148]For that defence to be maintained, there are some essential prerequisites. First, there must be no cessation of that mutual assumption of payment and reciprocal supply throughout the relevant period. Second, those payments must continue to have as at least one operative, mutual purpose, namely inducing further supply. I would add that such purpose must not come to be subordinated to a predominant purpose of recovering past indebtedness. As the decision in Airservices Australia makes clear (see for example the majority judgment at 510), knowledge or even actual suspicion, though it be such as to negate the good faith defence, does not of itself preclude reliance upon the running account defence for a payment so received. What still requires explanation is the implication flowing from the majorities’ conclusion that the last payment, and only the last, fell outside the running account defence. This was said to be because the payee in Airservices had demanded payment and received it with knowledge of insolvency. It was therefore held to be “looking backwards rather than forwards, looking to the partial payment of the old debt rather than the provision of continuing services”. And this was so, notwithstanding that the supply of services did continue thereafter, probably influenced by safety considerations.
(Emphasis added)
[29] (2001) 37 ACSR 477.
[30] Ibid 504-505.
In the present case, the matters referred to above, show that the inducement of supply became subordinated to CSR’s predominant purpose of recovering the value of the April and May accounts. In my view, the agreement for delivery of $7,000 worth of product only on payment of $20,000 towards past liability (together with the extraction of the promise to pay April and May’s overdue accounts totalling $36,361.12 in full two days later on Friday, 21 July 2006) was not made in the context of a mutual assumption of a continuing business relationship, but was rather a tactic employed by CSR to obtain payment of at least part of the larger outstanding debt. The strict requirement that the product not be released until Mr Grisbrook had the bank cheque in hand strongly reinforces that view.
Of course, it is not the case that a total cessation of supply must occur before the continuing business relationship ceases; there can be some business carried out between the parties without the existence of the “continuing business relationship” of which s 588FA(3) speaks. Support for this proposition can be found in the decision of Santow J in Sutherland v Eurolinx,[31] where his Honour said:[32]
[165]It is conceivable the actions of the payee/creditor could be such as to indicate that it has no continued confidence in the ability of the debtor to continue to trade, and therefore it has abandoned any assumption of a continuing business relationship. But if that were so, one would expect no further supply, unless cash on delivery. That was not the case here.
(Emphasis added)
[31] (2001) 37 ACSR 477.
[32] Ibid 507.
One can see that his Honour envisaged a situation where a running account could cease because of a condition that upon delivery of the supply of product, the payee required immediate payment in cash and, of course, this was the exact situation here of CSR requiring the $20,000 bank cheque before releasing the goods.
I consider that the predominant purpose of reducing CSR’s indebtedness continued after the events described above and the situation did not subsequently change. I therefore find that the running account that existed between the parties ceased on 14 July 2006 and this situation remained until the end of the relation back period on 3 October 2006.
Did the absence of a running account from 14 July 2006 retrospectively negate the running account prior to that date?
During the course of final submissions, Mr Ower submitted that even if the “big blocks” did not constitute a termination of the assumption of continuing supply, the definitive cessation of the requisite “continuing business relationship” at least from 10 August 2006 negated the existence of a running account for any of the preceding portion of the six month relation back period. Mr Ower submitted that s 588FA(3) was to be interpreted as requiring there to be a running account for the whole of the period of the relation back period and that if at any time during the relation back period the running account is terminated, this termination operates to extinguish the existence of such running account for the entire period of the relation back period.
I found this submission quite surprising since this rather bald proposition does not appear to have been suggested, let alone discussed, in any authority of which I am aware.
Mr Ower sought to rely upon Maxsted v HP Launder Holdings Australia Pty Ltd,[33] a decision of the District Court of South Australia of 2006, as authority for his proposition. In that case, the relevant relation back period was from 3 October 2000 to 3 April 2001, the date of the impugned payments being 20 and 27 October 2000, 11 December 2000 and 29 March 2001. His Honour first concluded that the good faith defence had not been established. He then held that there was a cessation of the mutual supply and payment arrangement between Harris Scarfe and the defendant by late February 2001. His Honour gave judgment for the plaintiff in the sum of the total of the four payments of which the plaintiff sought recovery. Mr Ower submitted that the fact that his Honour gave judgment for the total sum of the four payments indicated that he had found that the fact that the running account ceased in February 2001 operated to negate a running account for the entire period of the relation back period including, in particular, payments apparently made on the running account prior to February 2001.
[33] [2006] SADC 130.
During the course of final submissions, I asked counsel to prepare supplementary submissions on this particular aspect of the running account defence. In its supplementary written submissions, the plaintiff maintained its reliance upon the decision of the District Court in Maxsted and reiterated that it had not found any other authority where similar reasoning had been applied. The plaintiff did concede that one possible explanation for the decision in Maxsted was that his Honour might have implicitly inferred from the circumstances of the cessation of supply in February 2001 that, at all times during the relation back period, Harris Scarfe did not have any assumption or expectation of continuing supply and thus the requisite “continuing business relationship” was absent at all relevant times. This may be the explanation of the decision and, if so, this would be entirely consistent with my present decision. However, in any event, it appears to me that his Honour did not turn his mind to the precise question now under consideration in the present case and this is likely because his Honour’s attention was simply not drawn to the matter by counsel.
Counsel for the plaintiff in his supplementary submissions properly referred me to a decision of Young J in Julzar Pty Ltd v Rodgers[34] which he agrees is against his present contention. In that case the impugned payments made during the six month relation back period consisted of one payment made on 10 February 1995 and then a later group of payments all between 3 April to 2 June 1995. Young J held that the payment made on 10 February 1995 was made as part of a running account pursuant to a “continuing business relationship” but by 1 April 1995 there was no longer any factual basis for a running account as there was no intention of continuing to supply the company on credit, the point having been reached where everything owing had to be paid before any further supply would be made. In those circumstances his Honour found that the payments made between 3 April and 2 June 1995 were preferences but that the earlier payment on 10 February 1995 (within the relation back period) was not a preference, the running account defence applying to it.
[34] [1999] NSWSC 199.
The approach of Young J is in accordance with the view I take as to the correct interpretation of the relevant provisions and the correct application of the running account defence generally.
I might just add that while a number of the cases might appear to refer to the running account period as being the same as the relation back period, that is simply because the running account in those cases happened to have existed for the whole of the relation back period. Section 588FA(3) does not refer to the term “relation back period” but rather refers to a “continuing business relationship” – the critical period is obviously the period in which a genuine running account functions as part of a “continuing business relationship”. Thus in Sutherland v Eurolinx,[35] Santow J specifically referred to the running account period as being referrable to the actual period in which the relevant transactions occurred:[36]
[140]… I would measure the preference, if any, by reference to the period of the relevant transactions constituting the running account, within the 6 months relation back period. I would do so by reference to the highest amount owing during the relation back period, not necessarily “at the beginning”, compared to the amount owing on the last day, following Rees; see also Barlow “Voidable Preference – the High Court Re-considers” (1998) 26 ABLR 82 at 92.[37]
(Emphasis in italics in original; emphasis in bold added)
[35] (2001) 37 ACSR 477.
[36] Ibid 503.
[37] It is, of course, true that in calculating the amount of the preference, his Honour looked at the highest amount owed during the relation-back period, but that was because that was also the period of the continuing business relationship.
Similarly, later in his judgment, Santow J emphasised that a continuing business relationship existed and that it existed throughout the relevant period:[38]
[168]That leads me to sum up the present case. I am satisfied that, however the onus is placed, there was here a continuing business relationship. Further that it subsisted throughout the relevant period uninterrupted, despite actual suspicion of insolvency. And finally that the relevant transactions of payment for goods supplied were rendered “an integral part” of that relationship within s 588FA(3). That is, the parties had as a purpose not subordinated to recovery of the past debt, inducing continued supply of the relevant goods. I so conclude, notwithstanding the degree of actual suspicion entertained by the payee as to the payer’s insolvency and notwithstanding departures from the permitted scope of any indulgence. …
(Emphasis in italics in original; emphasis in bold added)
[38] Sutherland v Eurolinx (2001) 37 ACSR 477, 508.
Thus it would appear clear that his Honour considered that there were two quite separate questions: first, whether there was a continuing business relationship and, second, when that relationship existed. In my view, it would be quite inconsistent with his Honour’s approach to suggest, as the present plaintiff does, that a defendant must establish that a continuing business relationship existed throughout the whole of the relation back period.
Conclusion
I find that the defendant has not proved that the “good faith” defence existed for any of the five payments in question. However, I find that the defendant’s liability is to be reduced by virtue of a running account which existed between the parties from (prior to) the start of the relationship back period on 3 April 2006 until 13 July 2006 when, for the reasons stated above, the “continuing business relationship” came to an end.
I therefore find that the final three of the five payments made by AFPL to CSR, on 20 July, 3 August and 8 August 2006, were unfair preferences and the plaintiffs are entitled to the recovery of the total of these payments, being the amount of $56,361.13.
I also find that the plaintiffs are entitled to the difference between the highest amount AFPL owed to the defendant during the period of the running account from 3 April to 13 July 2006 (namely $108,797.76) and the amount that it owed on 13 July 2006, the last day of that period (namely $74,973.08) which difference is the amount of $33,824.68.
There will therefore be judgment for the plaintiffs for the total of those two amounts of $56,361.13 and $33,824.68, namely the sum of $90,185.81.
Orders, interest and costs
I will hear the parties on the question of the final orders, interest and costs.

Date presented	Cheque number	Date drawn	Amount
20 April 2006	1335	18 April 2006	$57,926.64
5 June 2006	1392	2 June 2006	$27,739.39
20 July 2006	1453	19 July 2006	$20,000.00
3 August 2006	1466	3 August 2006	$19,385.05
8 August 2006	1469	8 August 2006	$16,976.08
TOTAL	$142,027.16