Johnson as trustee of Bankrupt Estate of Portellos v J.S.J & a Nominees Pty Ltd

The proceeding before Heffernan J of the Supreme Court of New South Wales concerned a dispute between the trustee of the bankrupt estate of Mr. Portellos and J.S.J & a Nominees Pty Ltd. The trustee sought to recover a payment made to the respondent, alleging it constituted an unfair preference given to the respondent over other creditors of the bankrupt.

The central legal issues before the court were whether the payment made to J.S.J & a Nominees Pty Ltd was made by the bankrupt from his own funds, and if so, whether this payment amounted to a preference that favoured the respondent over other creditors of the bankrupt estate.

Heffernan J determined that the payment in question was indeed made from the bankrupt's own funds. Applying the principles of bankruptcy law concerning antecedent transactions, the court found that the payment constituted a preference. Consequently, the court made a declaration in favour of the trustee.