Trenfield & Ors v HAG Import Corporation (Australia) Pty Ltd  QDC 107
Creditors with unperfected security interests may still succeed in defending liquidators’ unfair preference claims on the basis that payments received are in relation to a secured debt.
In Trenfield & Ors v HAG Import Corporation (Australia) Pty Ltd  QDC 107, the Qld District Court considered a preference claim in which the defendant, HAG Import Corporation (Australia) Pty Ltd (‘HAG’), asserted that all payments alleged to be preferential by the liquidators were in respect of a secured debt. The court was therefore required to examine whether HAG’s debt was secured (either in full or in part), the value of its security and the extent of recoverable preferences.
The court subsequently ruled that, in determining the security value, the court will value the security based on what security assets are available at the time of the payment.