Nilant v Plexipack Packaging Services Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA) ) SOUTH AUSTRALIA DISTRICT REGISTRY) No. SG 13 of 1997 ) GENERAL DIVISION ) IN THE MATTER OF EMANUEL (NO. 14) PTY LTD (IN LIQUIDATION) (ACN 008 080 206) PETER IVAN MACKS and EMANUEL (NO 14) PTY LTD (IN LIQUIDATION) (ACN 008 080 206) Appellants BLACKLAW & SHADFORTH PTY LIMITED (ACN 010 474 736) Respondent COURT: O'LOUGHLIN, BRANSON, FINN JJ PLACE: ADELAIDE DATE: 23 July 1997 REASONS FOR JUDGMENT The issue in this appeal falls within a narrow compass. It is this. 'A' contracts with 'B' that in settlement of all claims between them B will (inter alia) make payments both to A and, at A's direction, to 'C'. C is A's creditor and the payment to C, if made and accepted, will result in a partial discharge of A's debt to C. If that payment is made to and accepted by C, can it properly be said that A and C are parties to a "transaction" deemed an unfair preference by s588FA of the Corporations Law? The Parties and the Appeal The appeal is brought both by the liquidator of Emanuel (No 14) Pty Ltd (In Liquidation) ("Emanuel") and by the company itself against a judgment of a judge of this Court dismissing their application for an order that the respondent, Blacklaw & Shadforth Pty Ltd ("Blacklaw"), pay to them the sum of $322,313.54. It was alleged that the payment to Blacklaw of that sum, being an unfair preference, was recoverable by Emanuel's liquidator from Blacklaw under s588FF. The Statutory Provisions and Their Provenance Section 588FA(1) provides: "588FA(1) A transaction is an unfair preference given by a company to a creditor of the company if, and only if: (a) the company and the creditor are parties to the transaction (even if someone else is also a party); and (b) the transaction results in the creditor receiving from the company, in respect of an unsecured debt that the company owes to the creditor, more than the creditor would receive from the company in respect of the debt if the transaction were set aside and the creditor were to prove for the debt in a winding up of the company; even if the transaction is entered into, is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency." For its part s9 of the Corporations Law defines "transaction" in the following way: "'transaction', in Part 5.7B, in relation to a body corporate or Part 5.7 body, means a transaction to which the body is a party, for example (but without limitation): (a) a conveyance, transfer or other disposition by the body of property of the body; and (b) a charge created by the body on property of the body; and (c) a guarantee given by the body; and (d) a payment made by the body; and (e) an obligation incurred by the body; and (f) a release or waiver by the body; and (g) a loan to the body; and includes such a transaction that has been completed or given effect to, or that has terminated;" Section 588FA is contained in Part 5.7B. That Part was enacted in 1992 in the Corporate Law Reform Act 1992 (Cth) so bringing to an end the prior legislative practice of importing into the Corporations Law and its predecessors those provisions of the Bankruptcy Act 1966 (Cth) that enabled a trustee in bankruptcy, hence a liquidator, to attack certain preferential and other transactions entered into before liquidation that reduced the pool of property available for distribution to creditors: see Bankruptcy Act 1966, ss120-122 as at 1992. As the Explanatory Memorandum to the 1992 Act indicates (para 20), the legislation implemented the recommendations of the Australian Law Reform Commission, Report No 45: General Insolvency Inquiry (1988) (the "Harmer Report"). That Report in its recommendations in relation to the avoidance of antecedent transactions did not seek to deviate from the "broad policy" evident in the Bankruptcy Act provisions it sought to replace: Harmer Report, para 630. It doubtless is the case that decisions on those provisions will often provide useful guidance in the interpretation of aspects of Part 5.7B. Care, though, will need to be taken to ensure that proper account is taken of the significant textual differences between the old and the new regimes. For the purposes of this appeal it is important to note one of these. The then Bankruptcy Act 1966, s122 - there was a major amendment to it in 1996 - particularised the types of transaction (eg "a conveyance or transfer of property") which, if satisfying other specified conditions, would constitute a preference and for that reason would be void as against the trustee. In consequence, if a transaction was to be impugned, it had to be shown to be of one of the types specified. In contrast to this, s588FA refers only, and generically, to a "transaction" possessing certain characteristics. The s9 definition, while exemplifying "transactions", makes no attempt to define the word itself. We emphasise this for this reason. A benefit might well be conferred on a creditor in a dealing that would not have been caught by any one of the types of transaction specified in s122. The dealing might, nonetheless, constitute a "transaction" for the purposes of s588FA. The Factual Setting On 26 October 1993, ELFIC Ltd ("ELFIC") - a company in what will be referred to as the EFG group - offered Emanuel finance (subject to security) for the construction of a road (the "Haul Road") on Bribie Island in Queensland. That offer, which was accepted, envisaged that the work would be done by sub-contractors who would seek progress payments from Emanuel and that Emanuel, on authorising payment in a given instance, would forward claims to ELFIC for its approval and direct payment to the sub-contractors. Emanuel contracted Blacklaw to construct the road on 19 August 1994. Blacklaw commenced work and, though a "stop order" was imposed by a local government authority in late September 1994, Blacklaw later issued (12 October 1994) a progress claim for that work. We would note in passing that the stop order was not lifted until mid-1995. The consultant engineers who were to certify the claim, after discounting retention moneys, a deposit, and a $14,700 claim which was disallowed, authorised payment to Blacklaw of $322,313.54. By the terms of its contract with Blacklaw, that sum then became payable by Emanuel. On 30 November 1994, Blacklaw lodged a second progress claim. This was for $79,509.20 and comprised in the main the retention money and deposit deducted from the first progress claim. Two days later Blacklaw served a statutory demand on Emanuel. On 21 December 1994 a director of Emanuel informed Mr Shadforth, a director of Blacklaw, that Emanuel's solicitors were writing to the solicitors of a company in the EFG group calling upon it to advance funds for the purpose of meeting the progress payment. A letter of that date to Clayton Utz solicitors, was put in evidence. It indicated that Emanuel did not have the financial capacity to pay Blacklaw the $322,000 odd it owed it. It acknowledged that ELFIC was not obliged to make advances under the terms of its 26 October 1993 contract because of the stop order. Emanuel nonetheless sought reassurance that funds would be advanced to pay Blacklaw's account if the "conditions precedent to [the] loan facility" were fulfilled. At much the same time Mr Shadforth had communications with EFG which Blacklaw asserted - but the trial judge rejected - resulted in an agreement with EFG that it would pay Blacklaw directly for the sums outstanding under the latter's contract with Emanuel. There had previously been significant secured loan transactions between the Emanuel group and the EFG group. After default on loans and then litigation between them the two groups compromised their claims upon the terms of a Deed of Forbearance and Release ("the Deed") of 17 March 1995. Under the Deed the Emanuel group covenanted (inter alia) to transfer properties to nominees of the EFG group. Amongst those properties were properties of Emanuel. For its part, the EFG group covenanted: "6.1to pay: (a) to the Emanuel Group the sum of $650,000 on the Settlement Date by cheque drawn in favour of Messrs Johnson Winter & Slattery whose receipt for and on behalf of the Emanuel Group shall be a sufficient discharge to EFG group for such payment; and (b) to Messrs Johnson Winter & Slattery the sum of $50,000 on the Settlement Date on account of that firm's legal costs of and incidental to acting for the Emanuel Group; ... 6.7 to pay, at the direction of the Emanuel Group, to Blacklaw & Shadforth Pty Ltd ACN 010 474 736 the sum of $322,313.54 for work performed for the Emanuel Group in relation to the construction of the Haul Road on Bribie Island." Two days before the Deed, Clayton Utz for the EFG group wrote to Messrs Johnson Winter & Slattery for Emanuel enclosing an "Authority to Disburse" for signature. As the letter indicated: "This authority relates to the payment of the amount of $322,313.54 to Blacklaw & Shadforth Pty Ltd for work performed in relation to the construction of the Haul Road;" On 17 March 1995 Emanuel executed the following document: "AUTHORITY TO DISBURSE MONIES TO: ELFIC LIMITED ACN 007 606 206 Level 20 Waterfront Place 1 Eagle Street BRISBANE QLD 4000 AND TO: CLAYTON UTZ Solicitors Santos House 215 Adelaide Street BRISBANE QLD 4000 We, the undersigned hereby request, authorise and direct you to pay for and on our behalf the amount of $322,313.54 to BLACKLAW & SHADFORTH PTY LTD ACN 010 474 736 for work performed by Blacklaw & Shadforth Pty Ltd in relation to the construction of the Haul Road on Bribie Island. In consideration of payment by you of the said sums we agree not to make any claim against you relating to the disbursement of the said sums and to indemnify you against any claim, demand or action arising from or in relation to the above disbursement." Whatever else its legal effect, it would seem the document was treated by Clayton Utz as the direction to EFG group envisaged by para 6.7 of the Deed. We note in passing that on the same date Clayton Utz received in its trust account the sum of $4,722,313.54 from Fosters Brewing Group Ltd ("Fosters") on behalf of the EFG group. By letter dated 21 March 1995, Clayton Utz wrote to Blacklaw as follows (omitting formal parts): "Emanuel Group Construction of Haul Road on Bribie Island We refer to our telephone conversation of this morning and enclose in accordance with the instruction of the Emanuel Group of companies a cheque in the sum of $322,313.54 in full and final settlement of all claims which your company may have against the Emanuel Group of companies. Please acknowledge receipt of the cheque on the duplicate of this letter attached." Blacklaw banked the cheque and on 23 March wrote to Clayton Utz accepting the $322,313.54 but only as part payment of the amounts owed under the Haul Road contract. On the same day Emanuel entered into voluntary administration under Part 5.3A of the Corporations Law. Six days later Blacklaw lodged a claim with the administrator of Emanuel for $72,266.91 being the balance of the amount due under the Haul Road contract. Emanuel was placed in liquidation on 24 January 1996. On 7 February 1996 the liquidator of Emanuel wrote to Blacklaw demanding repayment of the $322,313.54 on the ground that it was "a voidable unfair preference". The Applicants' Claim The question before the trial judge that is now raised in this appeal, was whether there was in the circumstances a "transaction" to which both Emanuel and Blacklaw were parties as required by s588FA(1)(a). Emanuel contended at the trial that the "transaction" was one of the following: "(1) a contract between Emanuel and Blacklaw for the payment of the sum of $322,313.54, evidenced by and limited to the Clayton Utz letter of 21 March 1995 in the context of Emanuel's authority dated 17 March 1995 and the acceptance and banking of the Clayton Utz cheque, or (2) the payment by Emanuel to Blacklaw of the sum of $322,313.54, either on the basis that that payment was procured by and so was made by Emanuel pursuant to the original contract between Emanuel and Blacklaw of 19 August 1994 under which Emanuel was indebted to Blacklaw in that amount or on the basis that it was a discrete payment by Emanuel from its funds, being funds made available to it pursuant to the DOFR, or (3) the payment to Blacklaw by Clayton Utz pursuant to the DOFR, being a payment procured by Emanuel as part of the Emanuel Group reflected in clause 6.7 of the DOFR, and under which Emanuel procured that payment (and other promises) from EFG in consideration of the Emanuel Group granting to EFG a release in respect of claims the Emanuel Group had or might have had against EFG and agreeing to other action including the transfer of properties over which EFG had been granted security." (The acronym "DOFR" referred to the Deed of Forbearance and Release which is elsewhere referred to in these reasons as "the Deed".) His Honour rejected all three contentions. Put shortly, his reasons for so doing were as follows. (i) The alleged Emanuel-Blacklaw contract. His Honour was unprepared to find that there was such an agreement: (a) because Clayton Utz was, on the evidence, acting for the EFG group in the matter; and (b) because the relevant arrangement under which the payment was made was the Deed and Blacklaw was not a party to it. His Honour expressly rejected the contention that the 21 March letter evidenced an agency relationship between Clayton Utz and Emanuel in relation to the making of the payment. (ii) The alleged payment procured by Emanuel. This characterisation of the relevant "transaction" was rejected by his Honour on the alternate bases (a) that the payment was not made by Emanuel but by EFG; or (b) if it be said that the Deed was the "transaction", that Blacklaw was not a party to it. In reaching this conclusion his Honour accepted the correctness of, and followed, the decision of R D Nicholson J in Nilant v Plexipack Packaging Services Pty Ltd (1996) 14 ACLC 1559. It will be necessary to refer to that decision below. (iii) The alleged payment procured under the Deed para 6.7. This again was rejected for reasons similar to those in (ii) above: (a) insofar as the "transaction" related to the Deed, Blacklaw was not a party to, or in any way involved in it; (b) insofar as the payment itself was concerned, it was not made by Emanuel. Importantly his Honour was unprepared to aggregate these two "steps", Emanuel being a party to one, Blacklaw to the other, for the purpose of finding "as a matter of fact" that together they constituted the transaction. The Appeal The appellant has advanced as its principal contention in this appeal that the transaction was: (i) the payment of $332,313.54 to Blacklaw in respect of the Emanuel debt on 21 March 1995 under cover of the letter from Clayton Utz to Blacklaw of that date; or (ii) the arrangement pursuant to which Blacklaw was paid $322,313.54 in respect of the Emanuel debt on 21 March 1995 under cover of the letter from Clayton Utz of that date. Acknowledging that, for s588FA(1)(a) purposes, both Emanuel and Blacklaw must be shown to be parties to the "transaction", the appellant has submitted that in effecting the payment Clayton Utz was acting as agent for Emanuel (whether or not the firm was acting as well for EFG in the matter). The respondent for its part has submitted that no basis exists for disturbing any of his Honour's findings - including that Clayton Utz was not acting as Emanuel's agent - and that his Honour's construction and application of the word "transaction" were unexceptionable and were supported by Nilant's case. Nilant's case Because of its significance both in his Honour's reasons and to the respondent's submissions, it is appropriate at the outset to refer to Nilant's case - the more so because we consider that it has led the trial judge into error. The circumstances of that case were these. A company (A) sold its business to a third party (B) on terms (inter alia) that part of the purchase price was to be paid to a creditor of the company (C). That payment was made at a time when A was insolvent. A's liquidator sought a declaration that the payment was an unfair preference. This was refused. It was held that the contract of sale of itself was not relevantly a "transaction" within s588FA(1)(a) for the reason that C was not a party to that contract. This characterisation of the contract was correct in our view. It equally was held, more questionably in our view, that for the purposes of the definition of "transaction" in s9 of the Corporations Law, the payment to C was not "a payment made by [A]". In reaching that conclusion, R D Nicholson J followed the decision of the Full Court of the Supreme Court of Victoria in Ramsay v National Australia Bank Limited [1989] VR 59. In that case, in construing the words "a payment made ... by" in s451(1) of the Companies (Victoria) Code, the Full Court (at 63) rejected the proposition that: "... a payment out of his own moneys by B to C, pursuant to a contractual obligation to discharge A's debt to C, an obligation imposed upon B by a contract between A and B, can be said to be a payment made by A to C. The words of s.451 must be given their ordinary, natural meaning." We have, with respect, some difficulty with this conclusion. Before a payment made by B to C can be effective to discharge A's debt to C, ordinarily it must be made with A's authorisation or ratification: see Mason and Carter, Restitution Law in Australia,para 846, (Butterworths, Sydney, 1995); Goff and Jones, The Law of Restitution, 17, (4th ed, Sweet and Maxwell, London, 1993); and see generally on payment of another's debt, Beatson, The Use and Abuse of Unjust Enrichment, Ch 7, (Clarendon Press, Oxford, 1991). Where a payment is so made it can properly be said that it is A's act that makes B's payment efficacious at law to discharge the debt to C. This, of itself, does not provide reason for saying that the payment itself is made by A. Nonetheless where that payment constitutes part of the consideration B furnished and A required in the A-B contract and where (inter alia) that consideration is in the final settlement of the obligations inter se of A and B, then we see no compelling reason for not concluding that A has made the payment to C albeit by using B as its instrument for the purpose. It is, though, unnecessary to consider either this matter or Ramsay's case further for reasons we give below. Returning to Nilant's case, finally R D Nicholson J considered the question whether the "transaction" was properly to be seen as involving the contract of sale, the payment and the extinguishment of the debt so that, by being a party to the contract, the company (A) was "a party to the other elements of the transaction". His Honour rejected this on this basis. The acts of payment and extinguishment could not individually qualify as a "transaction" within s9, and so should not be joined to the contract which was a s9 transaction. In declining to allow such joining, his Honour said (at 1, 565): "In my view that course is not open because the subparagraphs of the definition of "transaction" in s9 are each specifically qualified by use of the words "by the body". Each type of transaction exemplified in those subparagraphs must be one in which "the body" is the active party. The words "but without limitation" do not have the effect of qualifying as a "transaction" actions by others as transactions to which the body is a party. If it was intended by the draftsperson that the definition should have the wider compass, I do not consider that intention has been accomplished." We cannot agree with his Honour's reasoning for two reasons, one specific, one general. The specific reason is this. Insofar as it is suggested that A was not party to the extinguishment of C's debt brought about by B's payment, we note again that A's authorisation of B's payment is necessary to discharge the debt, save in exceptional cases of no present relevance: see generally Beatson, above, ch 7; Goff and Jones, above, 17 and esp fn 2. In this way A is a party to the extinguishment even if it be said A is not a party to the payment itself. The general reason is that we do not see the language of s9 (which exemplifies but does not define "transaction") as precluding a finding of a transaction to which the debtor A is a party merely because that transaction itself is made up of a composite of dealings in not all of which A participates. It is not necessary for the purpose of this appeal to determine in any exhaustive fashion when a composite of dealings can together be said to constitute a s9 transaction notwithstanding that not all of its component parts considered in isolation could rightly be said individually to be transactions. While s9 does not define "transaction", it does through the process of exemplification typify the forms of conduct or dealing engaged in by a company that will be characterised as a transaction for its purposes - "a conveyance ... of property", "an obligation incurred", "a release or waiver", etc. Common to the examples is the characteristic that the conduct or dealing engaged in by the debtor company has the consequence of effecting a change in the rights, liabilities or property of the company itself. We confine our observations for present purposes simply to a course of dealing initiated by a debtor for the purpose of, and having the effect of, extinguishing a debt. It is not apparent to us why it should not be said that, where a debtor so acts and extinguishes a debt, the relevant "transaction" is the totality of the dealings through which the debtor procures the intended outcome, irrespective of whether one or more of the dealings in the sequence in question does not involve or require the participation of the debtor but does require that of a third party. The transaction, in other words, is the totality of the dealings initiated by the debtor so as to achieve the intended purpose of extinguishing the debt. Such a conclusion is consonant with standard dictionary meanings given "transaction". It finds some support in decisions on the Bankruptcy Act provisions dealing with voidable transactions and, most notably, Richardson v Commercial Banking Co of Sydney Ltd (1952) 85 CLR 110 which recognised that a discrete dealing (eg the payment of money) may itself merely be part of an "entire" or "whole transaction": ibid, 129. And, given the characteristics we have identified as being integral to the forms of "transaction" envisaged by s9, it is consistent with the burden of the statutory "definition" itself. We conclude, then, that a course of dealing initiated by a debtor that is intended to, and does, extinguish a creditor's debt can in its totality be a transaction for the purposes of Part 5.7B of the Corporations Law notwithstanding that the achievement of that end can only be realised through the participation of a third party in a particular dealing (or dealings) within the overall transaction, being a particular dealing (or dealings) to which the debtor is not or may not be a party. To this extent we consider the reasoning in Nilant's case to be incorrect and, correspondingly, so is the reasoning of the trial judge to the extent that he followed Nilant's case. The conclusion that such a composite of dealings can be a s9 "transaction" does not of itself lead to the result that an unfair preference was given in this case. The particular transaction must fall, nonetheless, within para (a) of s588FA(1) and must have the consequence identified in para (b). To these matters we now turn. Section 588FA(1)(a) We have already noted that, while the appellant has described the relevant "transaction" as the payment of (or else the agreement to pay) Blacklaw in respect of the Emanuel debt, it has sought to make both Emanuel and Blacklaw parties to this transaction by contending that when Clayton Utz made the payment it was acting as Emanuel's agent. The trial judge rejected the agency argument on the facts and we see no reason to disagree with this finding. Clayton Utz may well have sought to protect its own position by obtaining the authority to make the disbursement from Emanuel. But when it made that disbursement it was performing a ministerial function for EFG (its client) in furtherance of EFG's contractual obligation to Emanuel under the Deed. Consistent with what we have said concerning Nilant's case, though, it is unnecessary for the appellant to rely upon agency to establish a transaction falling within s588FA(1)(a). On the facts as found by the trial judge, Emanuel sought to and did procure the partial extinguishment of Blacklaw's debt through action it took, both in entering into, and under, the Deed. Its entry into the Deed; its direction under para 6.7 for a payment to be made to Blacklaw; and the payment so made with Emanuel's authorisation (with the result it produced when Blacklaw accepted the payment as partial satisfaction of the debt) constituted the relevant transaction. Clearly both Emanuel and Blacklaw were parties to that transaction even though neither was a party to all of its component elements. It is the case that this transaction was not identified in this precise way by the appellant in its appeal. This characterisation of it was, though, raised by the Court at the hearing. It involves no more than a consideration of the composite of the two "transactions" alleged by the appellant - a composite which his Honour was unprepared to accept because of Nilant's case. In these circumstances we do not consider that any unfairness to the respondent has resulted from its being raised on the appeal in the form it has. Finally we should indicate that in written supplementary submissions the respondent has contended that the Deed on its proper construction created a trust for the payment of creditors of a type similar to that considered in Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567: on the so-called "Quistclose" trust see Re Australian Elizabethan Theatre Trust; Lord v Commonwealth Bank of Australia (1991) 30 FCR 491 esp at 499ff. While it is the case that a trust fund was created and that the moneys in that fund were to be used to pay some particular creditors of Emanuel, that trust was created by Fosters transferring funds to the EFG group's solicitors, Clayton Utz, for the purpose of their being put in funds to effect the contractually stipulated payments. There was no requirement in the Deed that such a trust be created. There is no evidence in the Deed from which it properly could be inferred that the parties to the Deed intended to create such a trust as the respondent alleges. And it has not been suggested that Fosters unilaterally created a trust for the benefit (inter alia) of Emanuel: cf Re Kayford Ltd [1975] 1 All ER 604. Even if, contrary to our conclusion, trusts of the Quistclose or Kayford forms were created there would, in the circumstances, be a very real question as to in whom the beneficial interest in the funds in Clayton Utz's hands resided until the payment was made to Emanuel. But answering that question would not have any actual bearing on whether the transaction between the parties was as we have identified it to be. All that a trust finding would do would be to change the machinery employed by the parties in extinguishing Emanuel's debt to Blacklaw. Section 588FA(1)(b) The question here is whether the transaction resulted in Blacklaw "receiving from the company" more than it would have if the transaction were set aside and Blacklaw was to prove in the winding up of Emanuel. It is clear that what Blacklaw received from the transaction was the partial satisfaction of its debt at the rate of 100 cents in the dollar and that this was more than it would receive in satisfaction of its debt as a creditor in the winding up. But did it receive what it did from the company as the sub-section requires? There is no doubt that, if the money received by Blacklaw had been required under the Deed (i) to be paid first to Emanuel and then paid on to Blacklaw as Emanuel's money, or (ii) to be held by EFG on trust for Emanuel pending the latter's direction to pay Blacklaw, then the financial benefit accruing to Blacklaw would, relevantly, have been received from the company. Does it make an operative difference that, rather than adopting such expedients, the Deed provided for direct payment to Blacklaw? In our view it does not and it would be surprising if it did. What Blacklaw received from the company was the actual benefit of a valuable chose in action (ie para 6.7 of the Deed) owned by Emanuel. Whether or not Blacklaw was a trust-beneficiary or a contract-beneficiary of that chose: as to which see Trident General Insurance Co Limited v McNiece Bros Pty Ltd (1988) 165 CLR 107 - and it is unnecessary for present purposes to determine the rights, if any, that Blacklaw had against EFG - what Emanuel provided to Blacklaw, and what Blacklaw received from Emanuel was the actual enjoyment of the benefit secured to Emanuel by its contractual provision with EFG. That actual benefit took the form of a monetary payment which partially discharged Emanuel's debt. If it be thought that the chose was without value to Emanuel so that it could not in consequence be said that Emanuel was giving a benefit of value to Blacklaw, it is the case that if EFG failed to make the payment as directed, Emanuel could have recovered from it the sum agreed to be paid to Blacklaw: Ashdown v Ingamells (1880) 5 ExD 280. This merely illustrates why a direct payment such as occurred vin this case should not be treated differently from either the trust or the payment on contingencies to which we earlier referred. Accordingly we conclude that, the provisions of s588FA(1) having been satisfied, an unfair preference was given by Emanuel to Blacklaw. In these circumstances and for the reasons set out above, the appeal is allowed with costs. I certify that this and the preceding 23 pages are a true copy of the Reasons for Judgment of the Court. Associate : Dated : 23 July 1997 Counsel for the appellant : Mr M.F. Blue Solicitors for the appellant: Fisher Jeffries Counsel for the respondent : Mr N. Samios Solicitors for the respondent : Andersons Solicitors Date of hearing : 8 May 1997 Date of judgment : 23 July 1997