Unfair Preference Claim Lawyers in Melbourne

A liquidator’s letter asking for money back is stressful, especially when you only got paid for work you did or goods you supplied. Our lawyers can check the claim, test the figures and put your defences forward before you decide what to do.

Hendersons Legal is a Melbourne law firm established in 2001, and our debt recovery and insolvency lawyers act for creditors, company directors and liquidators. If you are looking for an unfair preference claim lawyer in Melbourne, this page explains how we help and what to do first.

This page is mainly for suppliers, contractors and other creditors who have received a liquidator’s demand to repay money. Liquidators are covered further down. For the legal background, read our full guide to unfair preference claims. If you are chasing a customer who owes you money, see our debt recovery lawyers page instead. Our principal, David Henderson, has more than 30 years’ experience.

What a liquidator’s letter means

When a company goes into liquidation, the liquidator can look at payments the company made to its creditors shortly before. A payment can be an unfair preference if it was made on an unsecured debt the company owed you. The test is whether you received more than you would have got by claiming in the winding up (section 588FA of the Corporations Act).

Generally, the company must also have been insolvent when it paid you, meaning it could not pay its debts as and when they fell due (section 95A). If the liquidator is right, the court can order you to pay the company an amount equal to some or all of the money it paid you (section 588FF(1)).

The letter is a demand, not a court order. Do not ignore it, because the liquidator can apply to the court if you do. Do not simply pay it either. The dates or the figures may be wrong, or you may have a defence.

How our insolvency lawyers help

When you instruct us, our insolvency lawyers will:

• check the relation-back day and the date of every payment against the period the claim covers;
• check the liquidator’s figures against your own records;
• assess the defences open to you;
• explain why set-off is not available;
• negotiate with the liquidator and, if a settlement makes sense, record it in a written release;
• defend court proceedings if the liquidator starts them, through our court representation and litigation work.

The dates matter

A payment falls inside the claim period if it was made in the six months ending on the relation-back day. One made after that day but on or before the day the winding up began does too (section 588FE(2)). Different periods apply to other kinds of transaction. Because the exact date of each payment matters, we check how the liquidator worked out the relation-back day and test every payment against it.

Defences we assess

• Good faith. Under section 588FG(2), three things must be proved. You dealt with the company in good faith. You had no reasonable grounds to suspect it was insolvent or would become insolvent, and nor would a reasonable person in your position. And you gave value or changed your position in reliance on the transaction. What you knew at the time matters, so your emails and notes count.
• Running account. Under section 588FA(3), if your payments were an integral part of a continuing business relationship, such as a running account, and the balance owing went up and down over time, they are looked at together as a single transaction. That can change the numbers. The High Court considered this rule in Bryant v Badenoch Integrated Logging Pty Ltd [2023] HCA 2.
• Secured debts. Under section 588FA(1) and (2) the rule applies to unsecured debts. A secured debt is treated as unsecured only to the extent it is not covered by the value of the security.
• Solvency. The claim generally depends on the company being insolvent when it paid you. We look at what the evidence shows about its position at that time.

Why set-off does not help

A common hope is to deduct what the company still owes you. In Metal Manufactures Pty Ltd v Morton [2023] HCA 1, the High Court decided that statutory set-off cannot be used against an unfair preference claim. So we look at the other grounds and at the figures instead.

Settlement and court

Some claims can be settled by agreement. We negotiate the amount and the payment terms with the liquidator, and record the outcome in a written release so the claim is closed. If the liquidator starts court proceedings, we act for you in them. We cannot promise a particular result, but we will tell you plainly where your position is strong and where it is weak.

What to gather now

Keep everything and delete nothing. These documents help most:

• the liquidator’s letter and any schedule of payments, with the date you received it and any reply deadline;
• your full account history with the company, including invoices, credit notes and statements;
• delivery records, purchase orders and proof of the goods or work you supplied;
• emails, texts and notes showing what you knew about the company’s finances, and when;
• any security, retention of title clause or PPSR registration you hold over the company’s assets.

Send them to us before you reply to the liquidator. What you put in writing about what you knew can matter later.

How long the liquidator has to sue

The liquidator’s time limit is the later of three years after the relation-back day and 12 months after the first appointment of a liquidator. The court can allow a longer period if the liquidator applies for it within that first period (section 588FF(3)). A letter can therefore arrive a good while after the payment, so do not assume an older payment is out of reach.

Building and trade suppliers

ASIC reports that 14,153 companies entered external administration for the first time in 2025-26. Construction made up 24.5% of appointments (ASIC Corporate Insolvency Update, October 2026). That makes this a live issue for building and trade suppliers. Our building and construction page explains the other legal work we do in that industry.

For liquidators

We also act for liquidators recovering unfair preferences. That includes reviewing the company’s payments, preparing demands, negotiating with creditors and running the proceedings if a claim does not settle. We appear in the Supreme Court’s winding up list ourselves, and our winding up applications page has more. Because we act for creditors, directors and liquidators, we check for conflicts before discussing the details of any matter.

When to call an unfair preference claim lawyer in Melbourne

• You have received a letter from a liquidator asking you to repay money the company paid you.
• A liquidator has asked for your account records or an explanation of payments.
• A liquidator has started court proceedings against you.
• A customer has gone into liquidation and you are unsure which of your payments could be challenged.
• You are a liquidator who wants to recover an unfair preference.

This is general information, not legal advice. Every situation is different, so get in touch about yours.

Send us the details

Use our online enquiry form to describe the matter briefly and upload the liquidator’s letter and any payment schedule. If the letter sets a deadline, call (03) 9629 2211 as well, because an enquiry does not stop time running.

Questions creditors ask us about preference claims

How it works

1. Call (03) 9629 2211 or send us the details through our online enquiry form. Tell us you have received a liquidator’s letter and send whatever you have, such as the letter, any payment schedule and your account statements.
2. We clarify your instructions and take a first look at the documents.
3. We send you a costs agreement and disclosure statement setting out the scope of the work and our fees.
4. Once you accept, we start work and keep you posted.