In the matter of Pacific Plumbing Group Pty Limited (in liquidation)

The case involved Pacific Plumbing Group Pty Limited, a company in liquidation, and two creditors. The dispute arose from payments made by the company to two creditors, with a third creditor subsequently receiving payment from a third party. The question before the court was whether the payments received by the third creditor constituted "payments made by the company" within the meaning of section 588FA(1)(b) of the Corporations Act 2001 (Cth). This section allows for the recovery of unfair preferences if a company has made a payment to a creditor within a certain period before entering liquidation.

The central legal issue was whether the payments made by the third party to the third creditor constituted payments "from the company" as defined by the statute. The court needed to determine if the act of the third party in paying the third creditor could be attributed to the company, thereby rendering the payment an unfair preference. The court had to consider whether the third party acted as an agent or intermediary for the company in making the payment to the third creditor.

The court held that the payments made by the third party to the third creditor were not payments "from the company" within the meaning of section 588FA(1)(b) of the Corporations Act. The court found that the third party acted independently and did not owe a duty to the company in relation to the payment. The court reasoned that the third party's actions did not constitute a payment made by the company. As such, the liquidator's claim for the recovery of the payments was dismissed. The court emphasised the need for a direct connection between the company and the payment for it to be considered an unfair preference.