Supangat v Byrnes

In *Supangat v Byrnes*, the Full Federal Court of Australia considered a dispute between the applicant, Mr. Supangat, and the respondent, Mr. Byrnes, who was the liquidator of a company. The core of the disagreement concerned the liquidator's entitlement to recover certain funds from Mr. Supangat, which the liquidator alleged were improperly paid to him by the company prior to its liquidation.

The primary legal issues before the Full Federal Court were whether the liquidator had established a claim for the recovery of moneys paid to Mr. Supangat under section 588FF of the *Corporations Act 2001* (Cth) as an unfair preference, and alternatively, whether the payments constituted an uncommercial transaction under section 588FB of the *Corporations Act 2001* (Cth). The court also had to determine whether the liquidator had properly exercised his discretion in commencing proceedings.

The Full Federal Court found that the primary judge had erred in concluding that the payments to Mr. Supangat were unfair preferences. Their Honours held that the evidence did not establish that the company was insolvent at the time of the payments, nor that Mr. Supangat had received the payments in the ordinary course of business. Crucially, the court determined that the liquidator had failed to discharge the onus of proof required to establish the elements of an unfair preference claim. The court also found that the transactions were not uncommercial. Consequently, the Full Federal Court allowed Mr. Supangat's appeal.