Wage-related overdraft advances can attract statutory priority when, on the facts, they were made to meet wage commitments.

Bank overdraft advances drawn within the general borrowing limit and used to meet wages were treated as advances made for the statutory purpose of paying wages under section 319(4) of the Companies Act 1948. The court rejected a rigid requirement that the bank must exercise a separate discretion for each advance, holding instead that the question is whether the money was in fact advanced to enable the debtor to meet wage commitments. The provision was treated as a benevolent priority founded on subrogation. On the facts, the arrangement was directed to wages alone, so the bank ranked in priority.

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Issues: Whether the bank's overdraft advances, drawn within the general borrowing limit and used to meet wages, were advanced for the purpose of paying wages so as to attract priority under section 319(4) of the Companies Act, 1948.

Analysis: The relevant test was whether the advances were in fact made for the statutory purpose of paying wages. A narrow requirement that the bank must have exercised a specific discretion for each advance was rejected as too rigid. The section was treated as conferring a benevolent priority founded on subrogation, and the question was treated as one of fact. On the facts, the bank's purpose in advancing money was to enable the company to meet its commitments, and the arrangement at Alston was directed to wages alone.

Conclusion: The advances were made for the purpose of paying wages, and the bank was entitled to priority under section 319(4).

Final Conclusion: The claim for preferential treatment succeeded because the wages-related advances satisfied the statutory purpose required for priority.

Ratio Decidendi: For the purpose of statutory priority, an advance may be treated as made for wages if, on the facts, it was advanced to enable the debtor to meet wage commitments, even without a separate express arrangement or a discrete exercise of discretion for each payment.

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