When considering whether a transaction is challengeable as a preference it is important to analyse when the decision by the insolvent company was made. This analysis will be critical in determining whether the insolvent company had the required desire to prefer the creditor in question.

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This case is helpful in confirming that it is only the point of an operative decision to repay that is relevant for these purposes; an agreement or understanding to do so, or a decision which was conditional on board approval (or ratification) was not sufficient; nor was an inference that repayment was, essentially, inevitable. The fact that a creditor puts pressure on a debtor to repay a debt does not mean that the debtor has decided to repay it. Even if the new board had little choice but to accept the terms on offer at the completion board meeting on 3 February 2012, it does not follow that Comet had already made a decision in November 2011, when the Sale and Purchase Agreement was signed.

The judgment is also a rare example of the Court of Appeal overturning a finding of a fact by a trial judge.