The bankrupt’s accountants had been paid their fees by standing order. Arrears mounted and the sum was increased. On the bankruptcy, the trustee sought to recover the increased payment. The court considered whether they had been given a preference.
Held: The accountants had continued to act, and therefore were not in a better position than they would have been had they stopped work and not been paid. To be a preference, there had to be shown evidence of a ‘preference in fact’. Morritt J said that: ‘it may be that pressure does not displace desire in the way that it formerly displaced a dominant intention to prefer but it can certainly affect the question of desire.’
and ‘The phrase ‘will be better’ in relation to the event of the individual’s bankruptcy used in Section 340(3)(b) envisages a bankruptcy after the doing of the thing in question. It also predicates that the position will be better, not may be.’
Judges:
Morritt J
Citations:
[1993] BCLC 635
Statutes:
Jurisdiction:
England and Wales
Cited by:
Cited – Quickson (South and West) Limited v Stephen Mark Katz, John Stephen Kelmanson (As Joint Liquidators of Buildlead Limited) ChD 25-Aug-2004
Various applications were made in the insolvency, including for removal of the liquidators and declarations that certain payments were a fraudulent preference on the creditors.
Held: No prejudice had been shown by any procedural irregularity. . .
Lists of cited by and citing cases may be incomplete.
Company, Insolvency
Updated: 07 February 2022; Ref: scu.216394