Gunning for it: Peak Indebtedness in the spotlight

In significant news for the insolvency industry, the High Court will hear the long-awaited Gunns Group preference claim appeal in Bryant & Ors v Badenoch Integrated Logging (A10/2022) on 18 October 2022. 

Johnson Winter & Slattery act for PwC, the appellant liquidators of the Gunns group, in the proceeding. 

Briefly stated, the grounds for the appeal are:

1. whether the Full Court incorrectly concluded that the peak indebtedness rule is not available to a liquidator in establishing an unfair preference under s 588FA(1) of the Corporations Act; and
2. whether the Full Court incorrectly set aside the primary judge’s finding that certain payments were not part of a continuing business relationship by disapproving of the “predominant purpose” test stated in Sutherland v Eurolinx[1] (i.e. that there will be no continuing business relationship where the predominant purpose of a payment is recovering past indebtedness).

Material filed by the parties in the Proceeding to date can be viewed here.  

Our previous articles on the insolvency trial, the trial, the appeal, the special leave application, and the grant of special leave can be accessed at the relevant links.