With this statement Barton J. entirely agreed whilst Isaacs J. said: "The Act requires the debtor to be able to pay his debts as they become due. This does not mean that he is always bound to keep by him in cash a sum sufficient to meet all his outstanding indebtedness however distant the date of payment may be. If at the time he makes the assignment, the debtor's position is such that he has property either in the form of assets in possession or of debts, which if realized would produce sufficient money to pay all his indebtedness, and if that property is in such a position as to title and otherwise that it could be realized in time to meet the indebtedness as the claims mature, with money thus belonging to the debtor, he cannot be said to be unable to pay his debts as they become due from his own moneys. In other words, if the debtor can, by sale or mortgage of property which he owns at the time of the assignment, change the form of the property into cash wholly or partly but sufficient for the purpose of paying his debts as they become due, that requirement of the section is satisfied" [3] . In the light of these pronouncements it was, to my mind, clearly proved that the company was at all material times unable to pay its debts as they became due. Indeed, for some time prior to 1st December 1960 its own transactions plainly demonstrated that fact and, indeed, it is virtually conceded in Connor's report of 5th April 1961 that the company was insolvent in the second half of 1960. In this report he points out that on figures supplied by Hennessy both in June and December 1960 the company had an excess of assets over liabilities of approximately £60,000. But he goes on to point out that Hennessy had overstated the company's stock position and that he had grossly understated its trade debts. In particular, he mentions two debts of which the respondent was said to have been unaware and which totalled nearly £52,000. It would seem that when appropriate adjustments are made to Hennessy's figures a substantial excess of liabilities over assets would be disclosed. However, the main question is whether the arrangement was made, and the subsequent transactions between the company and the respondent took place, under such circumstances as to lead to the inference that the respondent knew or had reason to suspect that the company was unable to pay its debts as they became due and that the effect of the various transactions would be to give the respondent a preference, priority or an advantage over the creditors. To my mind the answer to this question must be in the affirmative for the evidentiary matters which so plainly establish that the company was unable to pay its debts as they became due were matters within the knowledge of the respondent's responsible officers. It was conceded in evidence that it was found to be "impracticable" for the company to observe the instruction given in September 1960 to reduce its overdraft by £3,000 per month and that instead of the company's indebtedness to the respondent being reduced to £17,000 by the end of October 1960 it had risen to £22,655. Then, in the circumstances already related, it further increased to £41,316 on 21st November 1960 and the company's promise to reduce the indebtedness by £10,000 within a week or ten days was not honoured. Instead, by 1st December 1960 the overdraft had risen to £44,694 and this occurred notwithstanding the dishonour of cheques drawn on the account in November for a total amount approximating £35,000. These cheques had obviously been drawn to pay trade debts and it was about as clear as it could be that the company was unable to meet its debts out of its resources. It was about this time that the arrangement in question was made and from then onward the chief manager required a daily return to be made as to the state of the account. From 1st December 1960 onward there was constant consultation between the respondent and Hennessy as to which of the company's cheques should be honoured and which should be dishonoured. It must, I think, have been apparent by 1st December 1960 that the company was quite unable to meet its debts as they became due but the learned trial judge found that the respondent held the opinion at this time that "behind these cheques there was a very substantial margin of realizable stock". No doubt this belief, if it existed, was induced, as his Honour found, by mis-statements by Hennessy as to the value of stock in hand from time to time and by its lack of knowledge of two trade debts aggregating nearly £52,000. But we do not know what Connors believed as to the value of the stock on hand for he was not called as a witness. We do know, however, that promises from time to time to provide him with copies of the company's accounts were not kept, and this, in the circumstances of the case, afforded some grounds for apprehension. Further the features of the case upon which the learned judge founded his decision sink into comparative insignificance when regard is had to the failure on the part of the company, obviously through inability, to meet the respondent's demands to reduce its overdraft by £3,000 as from October 1960 and the further failure of the company to make good its promise of 21st November to reduce its overdraft by £10,000 within a week or ten days. When there is added to these matters the evidence concerning the inability of the company to provide funds to meet the cheques which were dishonoured in November 1960 no doubt can exist that the payments made to the account between 1st December 1960 and 8th February 1961, and which were made subject to the arrangement in question, were made under such circumstances as to lead to the inference that the respondent knew or had reason to suspect that the debtor was unable to pay its debts as they became due and that the effect of the payments would be to give it a preference over other creditors to the extent which the arrangement envisaged.