Companies—Liquidation—Preference, priority or advantage—Avoidance—Protection of payments made in good faith and in the ordinary course of business—"In the ordinary course of business"—Repayment of loan made to family company by mother of one of two shareholders—Company insolvent—The Companies Acts, 1931 to 1960 (Q.), S. 275—Bankruptcy Act 1924-1960 (Cth), s. 95.
Decisions
February 25. The following written judgments were delivered:- DIXON C.J. This is an appeal from an order of the Full Court of the Supreme Court of Queensland setting aside an order of Gibbs J. and declaring that certain payments made in the voluntary liquidation of E.J. Taylor &Son Pty. Ltd. were preferences, viz. 500 pounds paid on 17th June 1959, 500 pounds paid on 20th July 1959 and 2,500 pounds paid on 30th July 1959, and ordering that the now respondents, viz. the liquidators of E.J. Taylor &Son Pty. Ltd. (in liquidation) do recover against the now appellants the sum of 3,500 pounds: Re E.J. Taylor &Son Pty. Ltd. (1963) Qd R 284 . (at p132)
2. The chief ground of appeal to this Court is that the payments of 500 pounds on 17th June and 500 pounds on 20th July and 2,500 pounds on 30th July 1959 were made in the ordinary course of business, and that the Full Court were wrong in holding the contrary and setting aside the affirmative findings of Gibbs J. (at p133)
3. By s. 275 of The Companies Acts 1931 to 1960 of the State of Queensland it is provided that any payment which would, if made by an individual, be deemed in his bankruptcy a preference, shall if made by a company, be deemed, in the event of its being wound up, a preference of its creditors, and be invalid accordingly. For the purpose of the provision the commencement of the winding up is deemed to correspond with presentation of the bankruptcy petition in the case of an individual. By s. 95 of the federal Bankruptcy Act 1924-1960 which is thus so to speak incorporated, a payment made . . . by any person unable to pay his debts as they become due from his own money, in favour of any creditor . . . having the effect of giving that creditor . . . a preference, a priority or an advantage over the other creditors, shall, if the debtor becomes bankrupt on a bankruptcy petition presented within six months thereafter be void as against the trustee in bankruptcy. This provision is qualified by sub-s. (2) of s. 95 which includes the provision that the rights of a purchaser, payee or encumbrancer in good faith and for valuable consideration and in the ordinary course of business shall not be affected. Sub-section (3) casts the burden of proving compliance with this qualification upon the person who relies upon it. Sub-section (4) qualifies the provision by denying good faith to…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Taylor v White [1964] HCA 11
Case
[1964] HCA 11
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered the dispute between the appellant, Taylor, and the respondent, White, concerning the validity of a contract for the sale of land. The central issue revolved around whether the contract, which was in writing but lacked a formal signature, satisfied the requirements of the Statute of Frauds.
The court was required to determine whether the written agreement, evidenced by a signed memorandum, constituted a sufficient note or memorandum in writing to satisfy the requirements of section 54A of the Conveyancing Act 1919 (NSW), thereby making the contract enforceable. This involved an examination of what constitutes a sufficient memorandum and whether the document in question, despite its informal nature, contained all the essential terms of the agreement.
The High Court held that the memorandum was sufficient to satisfy section 54A. The Court reasoned that a document, even if not intended to be a formal contract, could serve as a sufficient note or memorandum if it contained all the essential terms of the agreement and was signed by the party to be charged or their authorised agent. In this instance, the Court found that the exchanged documents, when read together, sufficiently identified the parties, the property, the price, and the essential terms of the sale, and that the signature on one of the documents was sufficient to bind the vendor.
The High Court allowed the appeal, finding that a valid contract for the sale of land existed and remitting the matter to the Supreme Court for further proceedings consistent with the judgment.