''Re Sarflax Ltd''

979 Year 979 ( CMLXXIX) was a common year starting on Wednesday (link will display the full calendar) of the Julian calendar. Events By place Byzantine Empire * March 24 – Second Battle of Pankaleia: An Ibero-Byzantine expeditionary ...

Ch 592;

1 All E.R. 529 is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

case concerning voidable preferences and

fraudulent trading In company law, fraudulent trading is doing business with intent to defraud creditors. Law Where during the course of a winding-up, it appears to the liquidator that fraudulent trading has occurred, the liquidator may apply to the court for an or ...

, now in the

Insolvency Act 1986 The Insolvency Act 1986c 45 is an Act of the Parliament of the United Kingdom that provides the legal platform for all matters relating to personal and corporate insolvency in the UK. History The Insolvency Act 1986 followed the publication and ...

. It concerns the definition of "intention to defraud", which is found in a number of legal provisions.

Facts

Sarflax Ltd was in

liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...

. It incurred another debt after a judgment that it had delivered unsatisfactory goods. The liquidator moved for a declaration that the delivery of these unsatisfactory goods was evidence of fraudulent trading. It also argued Sarflax had preferred other creditors over the {{not a typo, deliveree, knowing it was unable to pay its debts in full.

Judgment

Oliver J held that "intention to defraud" in the voidable preference section (now Insolvency Act 1986, section 239) did not cover a case where a debtor merely knew or had grounds to think he had no sufficient funds to pay creditors in full.

References

*Gary Scanlan (2003) ''Company Lawyer'' 234 United Kingdom insolvency case law High Court of Justice cases 1979 in United Kingdom case law

Facts

Judgment

See also

References