Attention to detail results in significant benefit to client

Prior to engaging Jack Lindgren

The client, a company, had a customer which was significantly behind with its payments for goods supplied to it. The client chased the customer up on a number of occasions, and ultimately the customer brought its payments up to date. A short time later, liquidators were appointed to the customer (being a company itself).

The liquidator of the customer sent a letter of demand to the client, alleging that the payments made by the customer to bring its account up to date represented “unfair preferences” – a form of voidable transaction under the Corporations Act 2001 (Cth) – and demanded repayment of the amounts received by the client. The amount demanded to be repaid by the liquidator was approximately $130,000.00.

The liquidator ultimately commenced proceedings against the client claiming payment of this amount, following which the client sought legal advice.

Our role

An comprehensive investigation was carried  which showed that there was a technical deficiency in the statement of claim filed by the liquidator. The liquidator’s Solicitors had incorrectly commenced proceedings in the name of the customer company, rather than in the liquidator’s own name.

Further, since the filing of the statement of claim the limitation period to commence proceedings in the liquidator’s own name had expired. The effect was that the statement of claim filed was fatally flawed, and the liquidator could no longer bring the claim against the client.

Outcome

Rather than paying the $130,000.00 sought by the liquidator, the matter was swiftly settled on terms requiring the liquidator to pay the client’s legal costs.