Re Allen, G.D. v Ex parte Everton Hills Nominees P/L

The case of Re Allen, G.D. v Ex parte Everton Hills Nominees P/L involved the bankrupt, Allen, and the respondent, Everton Hills Nominees P/L. The dispute centred on a payment made by the bankrupt to the respondent for rental arrears, which the trustee in bankruptcy sought to have declared void as a preference. The matter was heard in the Federal Court of Australia.

The primary legal issues before the court were whether the payment in question constituted a preference under the Bankruptcy Act 1966, and if so, whether the respondent could be required to repay the amount to the trustee in bankruptcy. The court had to determine the nature of the transaction, the timing of the payment in relation to the bankruptcy, and whether the payment was made with the intention of preferring the respondent over other creditors.

In its decision, the court found that the payment made by the bankrupt to the respondent was indeed a preference. The court held that the payment was made within six months before the bankruptcy and was intended to prefer the respondent over other creditors. Consequently, the court declared the payment void and ordered the respondent to repay the amount to the trustee in bankruptcy, along with interest. Additionally, the court ordered the respondent to pay the trustee's costs of the proceeding.

The final orders of the court required the respondent to pay the trustee the sum of $30,697.50 with interest at 10% per annum from a specified date, and also to cover the trustee's costs of the application. The court's ruling underscored the importance of ensuring that payments made by a debtor shortly before bankruptcy are not preferences that unfairly benefit certain creditors over others.