Rupert & Bernstein Pty Ltd in Liquidation

The Supreme Court of Queensland was presented with a case involving Rupert & Bernstein Pty Ltd in liquidation, seeking to void certain payments made to Fast Proof Press Pty Ltd as undue preferences under s.451 of the Companies (Qld) Code. The primary issues revolved around whether the payments were made when the company was unable to pay its debts as they became due and if these payments constituted a preference over other creditors. Additionally, the court had to determine whether Fast Proof Press Pty Ltd could rely on the defence of good faith, valuable consideration, and ordinary course of business, as provided under s.122(2) of the Bankruptcy Act.

The liquidators argued that the company was unable to pay its debts as they fell due, evidenced by substantial negative cash flows and an excess of current liabilities over assets. The payments in question were made within six months prior to the winding-up application, which supported the claim of undue preference. Regarding the defence, Fast Proof Press Pty Ltd contended that the payments were made in good faith, for valuable consideration, and in the ordinary course of business. The court, however, found that the payments were made after a series of demands and at a time when payments to other creditors had largely ceased, concluding that the payments were not made in the ordinary course of business.

The court ruled that the liquidators had sufficiently proved that the payments were undue preferences. Consequently, the payments made to Fast Proof Press Pty Ltd were declared void. The court also ordered Fast Proof Press Pty Ltd to repay the amounts with interest from the date of the initial demand by the liquidators. Finally, Fast Proof Press Pty Ltd was ordered to pay the costs of the application.