Bankruptcy Act 1966
View history note
Hide history noteNotwithstanding anything contained in this Act, a payment of money or delivery of property (including a security or a negotiable instrument) to, or in accordance with the order or direction of, a person who becomes, or has become, a bankrupt or a person claiming by assignment from him or her is a good discharge to the person paying the money or delivering the property: (a) if, in the case of a payment or delivery made before the day on which the first-mentioned person becomes a bankrupt - it is made in good faith and in the ordinary course of business; or (b) if, in the case of a payment or delivery made on or after the day on which the first-mentioned person became a bankrupt - it is made in good faith, in the ordinary course of business and without negligence.
[ CCH Note: Modification Declaration FRLI No F2021L00261 ( Bankruptcy Regulations 2021 : FRLI No F2021L00261, registered on 19 March 2021 and effective from 1 April 2021.)
Subsection 124(1) of the Act is modified by substituting " has died, and the person ' s estate has become subject to administration under Part XI " for " becomes, or has become, a bankrupt " , inserting " on or " after " made " in para (a), substituting " dies " for " becomes a bankrupt " in para (a), omitting " on or " in para (b) and substituting " died " for " became a bankrupt " in para (b).]
124(2)
The burden of proving the matters referred to in subsection (1) lies upon the person who relies on the validity of the payment or delivery of property.
124(3)
For the purposes of this section, a payment or delivery of property shall not be deemed not to have been made in good faith and in the ordinary course of business by reason only that, at the time of the payment or delivery, the person by whom it was made: (a) knew or had reason to suspect that the person to whom, or in accordance with whose order or direction, it was made was unable to pay his or her debts as they became due from his or her own money; or (b) had notice of the commission of an act of bankruptcy by that person or of the presentation of a creditor ' s petition against that person.
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