Breaking news: are unfair preference mothership proceedings dead?

Justice Jackson from the WA Federal Court had just poured ice cold water on mothership proceedings for unfair preference claims.

Despite many cases backing mothership proceedings (including SVP’s very own Bias Boating case in the NSW Supreme Court), Jackson J, in effect, says that if the plaintiff Liquidators do not take steps to validate the mothership quickly enough, then the court may exercise its discretion to not validate the proceedings.

As each of the 17 defendant creditors obviously had their own dealings with the insolvent company, and were paid their own monies due, the Court found that the case as brought (akin to joinder) was an irregularity under the Rules and not curable.


The Court though in realising that the 3 year time period for commencing fresh proceedings had lapsed, has given the Liquidator another chance to raise further arguments under s51 Federal Court Act (or others).

It is time for Commonwealth Treasury to make large scale unfair preference claims cheaper and easier to commence!

insolvency auslaw svvoidables

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