Debtor's Welcome to their Brother
Debtor's Welcome to their Brother
This draft chapter highlights the types of translation that might be said to be an invalid disposal.
Then,it deals with the doctrine of ‘fraudulent preferences’, which it calls ‘ voidable preferences’, and compares and contrasts its case law definition with its statutory one.
It then discusses the relevant period of avoidance of preferences, and advocates for a regularised position across all three modes of insolvency proceedings, whereby all transactions that qualify as ‘voidable preferences’ should be voidable whether made before or after the petition.
An extension of the 6-month-period during a transaction should be liable is also recommended on justice grounds.
The chapter reflects on the findings of The Blagden committee on the burden of proof.
Particularly, it considers the principle of a period of absolute preference as a mitigation to the difficulty of proving an intent to prefer, and it concludes that it would have consequences discussed on pages 16 and 17 of the PDF document.
The report does not find it desirable nor easy to define what transactions are ‘bona fide’. If there was pressure to proceed with a transaction, it is advised that the nature of such pressure be examined in order to determine whether the transaction was in fact ‘bona fide’.
It is also relevant to ask whether a transaction that, on the face of it, gives rise to preference, was done as an ordinary course of business and in the ordinary way of life.
In all cases, reference should be made to the surrounding circumstances, which the committee believes, if they gave rise to a recognisable ‘nexus’ of behaviour, would enable the court to infer an intention to prefer.