The liquidator made a claim against the bank for the amount of the Payments had been made out of the company’s bank account between the date of the petition and the date of the order and the date when the account was subsequently closed.
Held: The claim was dismissed.
Street CJ considered there was ‘great force in the argument that ‘the paying by a bank of a company’s cheque, presented by a stranger, does not involve the bank in a disposition of the property of the company so as to disentitle the bank to debit the amount of the cheque to the company’s account. The word ‘disposition ‘ connotes in my view both a disponor and a disponee. The section operates to render the disposition void so far as it concerns the disponee. It does not operate to affect the agencies interposing between the company, as disponor, and the recipient of the property, as disponee . . The intermediary functions fulfilled by the bank in respect of paying cheques drawn by a company in favour of and presented on behalf of a third party do not implicate the bank in the consequences of the statutory avoidance prescribed by s. 227 . . I consider that the legislative intention . . is such as to require an investigation of what happened to the property, that is to say what was the disposition, and then to enable the liquidator to recover it upon the basis that the disposition was void. It is recovery from the disponee that forms the basic legislative purpose of s. 227’
Judges:
Street CJ
Citations:
[1974] 1 NSWLR 254
Jurisdiction:
Australia
Cited by:
Cited – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Company, Insolvency
Updated: 18 July 2022; Ref: scu.640394