Defend Yourself Against Unfair Preference Payment Claims

When it comes to the world of liquidation, we would all ideally like some kind of balance to be maintained. Creditors, liquidators, and those paying one or both parties need to be able to find a way to work with one another. Unfortunately, claims involving the liquidation of property and creditors can often get messy. This is in no small part due to the fact there are any number of different perspectives on a given claim, which can in turn lead to different interpretations of the law and confusion as to whom should be paying whom, when, and the amount that is to be paid.

One of the most common of such cases in Australia law is what is known as an unfair preference payment. This refers to an incident in which one or more parties claim that the creditor has received more payments than they might otherwise have had legal right to due to the nature of their actions. In these situations, the burden of proof is typically seen as being with the creditor.

Here, then, is a broad overview as to what you can and should do if you are a creditor forced into defending unfair preference payment claims.

Your Role

First and foremost, it is vital that your role within the case be clarified. Unfair preference payment claims can only be brought against an unsecured creditor. If your creditor status is different, you might well already be in the clear. You will also want to make clear the nature of the agreement between yourself and the other parties involved, the timeline of the payments, and any other aspects of the agreement that might be pertinent.

Good Faith

A good example of this is the concept of a “good faith agreement. Proving that your actions were undertaken in good faith can be vital for clearing your name. Some of the most important aspects for establishing good faith in such a case include:

  • Documentation demonstrating the transaction occurred in good faith
  • Documentation demonstrating that the creditor had no reason at the time of transaction to suspect anything untoward on the party of other parties, if illegal or illicit action is part of the basis for this charge
  • Documentation demonstrating that the creditor gave the company or other parties involved all due consideration before and during the transaction period

Experience on Your Side

That said, unfair preference payment claims can, as stated, be particularly messy to have to deal with. This is due in no small part to just how complicated they can become. As such, one of the most important steps that you can take as a creditor to protect yourself is to hire a legal team that has experience in this regard. The best unfair preference payment claims legal teams in Australia can typically point to decades’ worth of experience defending claims just like yours. Take the time to review their records and select a team that fits your particular legal needs.

Defend yourself against unfair preference payment claims today with a qualified team of legal experts.