Muir Hunter’s note on fraudulent preferences

On page 3, you will find a brief for the meeting, in which Muir Hunter makes a number of observations regarding fraudulent preferences. He then makes a number of proposals. He concludes by saying that the current system is grossly inadequate because of the location and weight of the burden of proof.

37th Meeting report

The topic that took the bulk of the meeting was fraudulent preferences. The meeting starts by discussing what terminology to use. The meeting then refers to the discussion on periods of absolute avoidance.

There is a brief discussion on the meaning of good faith in Australian law, which concerned the state of mind and attitude of the creditor rather than the debtor.

Due to the large number of transactions, there has to be a simple rule with the onus on the creditor. The general consensus was that it was not in good faith if the creditor knew that the debtor was unable to pay his debt, and that the effect of the transaction would be to give him/her a preference over other creditors.

The final part was devoted to the issue of whether there should be a time limit during which an action to avoid preference should be brought.

The second half of the meeting deals with a number of issues related to wrongful trading.

Minutes of the 38th Meeting

The matters discussed in this report include sureties and guarantors, fraudulent conveyances and the administrator.

Meeting37 - 18th January 1980