Re Sarflax Ltd Ch 592; 1 All E.R. 529 is a UK insolvency law case concerning voidable preferences and fraudulent trading, now in the Insolvency Act 1986. It concerns the definition of "intention to defraud", which is found in a number of legal provisions.
Facts
Sarflax Ltd was in liquidation. It incurred another debt after a judgment that it had delivered unsatisfactory goods. The liquidator moved for a declaration that the delivery of these unsatisfactory goods was evidence of fraudulent trading. It also argued Sarflax had preferred other creditors over the , knowing it was unable to pay its debts in full.
Judgment Oliver J held that "intention to defraud" in the voidable preference section (now Insolvency Act 1986, section 239) did not cover a case where a debtor merely knew or had grounds to think he had no sufficient funds to pay creditors in full.
See also R v. Grantham QB 675 Re Augustus Barnett & Son Ltd BCLC 170 Re a Company (No 001418 of 1988) BCC 526
References Gary Scanlan (2003) Company Lawyer 234