Actual knowledge or subjective suspicion of insolvency by a creditor does not of itself preclude the running account defence under s 588FA(3), provided there remains a substantive mutual purpose of continued supply not subordinated to a predominant purpose of recovering past indebtedness. Where a creditor grants an informal indulgence extending payment terms, the good faith defence under s 588FG(2) is tested by reference to the extended period, but the fact that an indulgence was sought may itself be weighed as a factor pointing to suspicion of insolvency. The preference under a running account is measured by the highest amount owing during the relation-back period compared to the amount owing on the last day.
The full text is available to signed-in members, including the 43 later cases that cite this judgment.
6 of the 43 citing cases carry a classified treatment. How each court treated it is available to signed-in members.