OUTER HOUSE, COURT OF SESSION
 CSOH 179
OPINION OF LORD JONES
In the cause
(FIRST) EILEEN BLACKBURN; and (SECOND) ECHELON WEALTH MANAGEMENT LIMITED (IN LIQUIDATION)
(FIRST) BARNETT ALEXANDER; and (SECOND) QUARTERS TRUSTEES LIMITED
Pursuers: MacDougall; Halliday Campbell WS
First Defender: Roxburgh; TLT LLP
23 December 2015
 The first pursuer is the liquidator of the second pursuer (“Echelon”). She seeks declarator that a payment of £200,000, which was made on or about 27 May 2008 by Echelon to the first defender’s SIPP, was a gratuitous alienation, and she seeks payment of that sum. The first and second defenders are trustees of the SIPP. In his answers to the condescendence, the first defender avers that, on or about 10 October 2008, the £200,000 was repaid to Echelon. The case came before the court on 24 and 25 April 2015 for a preliminary proof, on the question whether the £200,000 was repaid to Echelon as the first defender avers.
 The following facts were admitted or agreed. The first defender and Steven Alexander were directors and shareholders of Echelon. Echelon’s business involved trading contracts for differences. The nature of such contracts was explained in evidence, but it is unnecessary to record that explanation in this opinion. In January 2007, Echelon began doing business with IG Markets Ltd (“IG”). The terms of the parties’ agreement are documented in a contract (“the white label agreement”) dated 17 and 23 January 2007, which is at tab 4 of the joint inventory of productions, number 23 of process. In terms of the white label agreement, IG opened a trading account with Echelon (the “head account”). IG also opened designated sub‑accounts for Echelon in relation to transactions with its clients (the “trading accounts”).
 The trading accounts were each designated with four digit codes which were unique to a particular client of Echelon, for example E4123, E4124, and so on. Echelon was liable to IG for any net debit balance on the trading accounts and the head account taken together (“the accounts”). I refer to that as “the pooling arrangement”. IG would only effect an electronic funds transfer to one of Echelon’s bank accounts with the Royal Bank of Scotland (“RBS”) if there was a net credit balance on Echelon’s accounts with IG.
 On or about 27 May 2008, four cheques, each for £200,000, were drawn on one of Echelon’s bank accounts with RBS. These cheques were payable to the first defender, Steven Alexander, and two other individuals. The first defender’s cheque was paid into his SIPP account. The other three cheques were cancelled. The circumstances are explained later.
 On 9 October 2008, the sum of £250,000 was transferred from the first defender’s trading account to Steven Alexander’s trading account. £250,000 was transferred from Stephen Alexander’s trading account to the head account on 10 October 2008. That series of transactions is referred to in this opinion as “the transfer”. The net effect of the transfer was that the balance of the first defender’s trading account was reduced by £250,000, and the balance of the head account was increased by £250,000. It had no effect on the balance of the overall position between Echelon and IG.
 A provisional liquidator was appointed to Echelon on 17 October 2008.
 The pursuers aver that the payment of £200,000 which was put into the SIPP account was a gratuitous alienation. The first defender maintains that £200,000 of the transfer represented repayment of that sum. The pursuers rely on the provisions of section 242 of the Insolvency Act 1986 (“the Act”) which, so far as is relevant to this action, provides as follows:
“242.— Gratuitous alienations (Scotland).
(1) Where this subsection applies and—
(a) the winding up of a company has commenced, an alienation by the company is challengeable by—
(ii) the liquidator;
(2) Subsection (1) applies where—
(a) by the alienation, whether before or after 1st April 1986 (the coming into force of section 75 of the Bankruptcy (Scotland) Act 1985), any part of the company's property is transferred or any claim or right of the company is discharged or renounced, and
(b) the alienation takes place on a relevant day.
(3) For the purposes of subsection (2)(b), the day on which an alienation takes place is the day on which it becomes completely effectual; and in that subsection ‘relevant day’ means, if the alienation has the effect of favouring—
(a) a person who is an associate (within the meaning of the Bankruptcy (Scotland) Act 1985) of the company, a day not earlier than 5 years before the date on which—
(i) the winding up of the company commences, …
(4) On a challenge being brought under subsection (1), the court shall grant decree of reduction or for such restoration of property to the company's assets or other redress as may be appropriate; but the court shall not grant such a decree if the person seeking to uphold the alienation establishes—
(b) that the alienation was made for adequate consideration,”
 The first defender admits that he was an associate of Echelon, within the meaning of the Bankruptcy (Scotland) Act 1985, at the relevant time. The action is defended on the first defender’s assertion that the £200,000 that was paid into the SIPP account was repaid to Echelon, in the circumstances narrated in paragraph  of this opinion.
 The only witness called on behalf of the pursuers was David McGinness. He is currently employed as a senior manager in the Glasgow office of French Duncan LLP. He spoke to various qualifications which he had gained, and said that he joined French Duncan as an external consultant in August 2009, specifically to deal with the liquidation of Echelon. He became a full‑time employee in May 2012.
 Mr McGinness adopted his witness statement as his evidence. He explained the relationship between Echelon and IG, and the agreed facts reflect his evidence on that matter. He narrated the circumstances in which the four cheques were drawn in May 2008. Of the transfer, Mr McGinness expressed the view that it did not have the effect of increasing Echelon’s assets “by any amount whatsoever”, and that it cannot be said that the £200,000 paid into the first defender’s SIPP account was repaid.
 The first witness called on behalf of the first defender was Stephen Alexander. He had sworn an affidavit, which he adopted as his evidence. I set out those passages in his evidence, which are relevant to the resolution of the dispute between the parties, later in this opinion, as I do with the evidence of the first defender, who was the second and final witness called by his counsel.
Submissions for the pursuers
 The pursuers advance two propositions in support of their case. The first is that the transfer of funds from the first defender’s trading account to the head account was not intended to be a repayment. The second is that, even if it was, the transfer had no material or patrimonial value and, therefore, cannot constitute a repayment.
 Mr MacDougall, who appeared for the pursuers, submitted that, in the circumstances of this case and having regard to the terms of section 242 of the 1986 Act, the only possible basis on which it could be held that the payment to the SIPP account was not a gratuitous alienation is if it was made for “adequate consideration”. “Consideration”, said counsel, is not defined in the Act but has “an approved judicial definition”, to be found in MacFadyen’s Trustee v MacFadyen 1994 SC 416 (“MacFadyen’s Trustee”).
 That case arose out of a dispute between a trustee in bankruptcy and the bankrupt. The bankrupt agreed with a lender to be named as the owner of a joint pro indiviso share in a house, together with his mother, in order to satisfy a condition of the mortgage. He paid no sum towards the mortgage or any other cost associated with the purchase. Once the mortgage was paid off, the bankrupt transferred his joint pro indiviso share to his mother. On bankruptcy, the trustee argued that the transfer was a gratuitous alienation. The judge at first instance allowed a proof, restricted to ascertaining the value of the property. The defender reclaimed.
 The reclaiming motion came before an Extra Division. Lord McCluskey delivered the opinion of the court and, at page 421F, said this:
“The word ‘consideration’ is not defined in the Act and we consider that it must be given its ordinary meaning as something which is given, or surrendered, in return for something else. If something is given without any return being demanded or expected or obtained and at the time of giving is not intended to be regarded as a consideration of some past, present or future return — which appears to have been the position in regard to the gratuitous services in Dawson v. Thorburn — that which is given cannot later be converted into a consideration just because at the later date the giver and receiver chose so to describe it. A consideration appears to us to acquire its character as a consideration not later than the time when the giving or surrendering takes place. In the context of bankruptcy law, the bankrupt debtor must be regarded as a trustee for the creditors in respect of such of his assets as are under his control. In that context, it is our view that a consideration must mean something of material or patrimonial value which could be vindicated in a legal process, whether by being claimed or possibly by being pled in answer to another's claim. A principal purpose of the Bankruptcy (Scotland) Act 1985 is to regulate intromissions by a debtor with his material assets in order to safeguard the interests of his creditors… These interests are patrimonial and able to be vindicated by legal process. It would be curious if the very section, sec. 34, which is specifically intended to safeguard these patrimonial interests against gratuitous alienation to associates of the debtor were to allow alienations to be made by him to such associates gratuitously, i.e. without some material, patrimonial consideration or return in exchange, and simply in recognition of some non-patrimonial obligation. In our opinion, sec. 34 of the 1985 Act uses the term ‘consideration’ to mean something which has a patrimonial worth at the time when it is given.”
MacFadyen’s Trustee was followed, and the definition of “consideration” applied, in the context of a dispute concerning the application of section 242(4)(b) of the 1986 Act, in Joint Administrators of Oceancrown Limited v Stonegale Limited  CSOH 189.
 Mr MacDougall submitted that the payment of £200,000 to the first defender’s SIPP account on 27 May 2008 constituted an “alienation” within the meaning of section 242 of the 1986 Act, and that the “alleged consideration” was the transfer from the first defender’s trading account into the head account. But, contended counsel, the transfer could constitute consideration for the purposes of the Act only if (i) the transfer was intended to be a repayment and (ii) the transfer had some material or patrimonial worth at the time it was made. The pursuers submit that the transfer was not intended to be a repayment to Echelon.
 Counsel contended that the first defender’s evidence that, as a client of Echelon, he believed that his funds would be separate from other clients’ money and from Echelon’s own funds, could only be true if he was unaware of the terms of the white label agreement. The first defender’s evidence, to the effect that he had not seen and did not know the terms of the white label agreement should, argued Mr MacDougall, be rejected as incredible. The first defender had every reason to check the terms of the agreement. He was a director, shareholder and client of Echelon. He had a vested interest in the company succeeding. He was an experienced trader well aware of the risks of trading in contracts for difference. The entire business of Echelon was predicated on its relationship with IG, their prime broker.
 Even if it were true that the first defender had no knowledge of the precise terms of the white label agreement, his evidence about the pooling arrangement conflicts with the evidence of Steven Alexander that Echelon’s customers “gave up all client money protection rights and were made aware that their money would be pooled with other clients”. Counsel submitted that it is important to emphasise the word “would”, because the white label agreement provided only that client money could be pooled. That was a key feature of the business model.
 Steven Alexander also said in evidence that all directors “would have had access to the information about the overall account positions and should have been aware that the overall position had to be positive to get money out.” That was a reference to the daily emails sent to Echelon by IG, containing the update on Echelon’s overall position, which are to be found at tab 8 of the joint inventory of productions. It was a clear implication from those updates, contended Mr MacDougall, that funds were pooled. If the funds were not pooled there would no need to confirm the overall position.
 Counsel for the pursuer submitted that the sequence of events is such as to point away from the first defender’s assertion that the transfer was intended to be a repayment. The chronology begins in April 2008. It is averred on record that the directors of Echelon resolved that the company make a contribution of £200,000 to each of its directors’ pension schemes. The cheque issued to the first defender, which is at tab 6 of the joint inventory, is dated 27 May 2008. The first defender’s evidence in cross‑examination was that he cashed it soon after.
 Echelon then took further financial advice which confirmed that the distributions would not be tax efficient, as had been believed. That was confirmed by a letter to Echelon some months later, on 28 August 2008. (Joint inventory, tab 7) By the time when the advice was given, the first defender had cashed his cheque. The three other directors cancelled theirs. The first defender did not instruct a repayment at that time.
 On 8 October 2008, the first defender sent Steven Alexander an email. (Joint inventory, tab 10) The instruction contained in the email was: “Can you send £250,000 in my CFD [trading] account by CHAPs to Northern Rock.” In his affidavit he depones that he was concerned that RBS was about “to go bust”. In evidence, he said that his concern had triggered the thought that he should protect his investments by taking £250,000 from his trading account, repaying the £200,000 to Echelon and placing the remainder in gilts. It is submitted on behalf of the pursuers that the first defender’s explanation “does not make sense”. If the intention were to use £200,000 to repay Echelon, contended Mr MacDougall, the email would simply have said “please transfer £200,000 to the Echelon RBS account”. Concerns about the stability of RBS aside, they were Echelon’s bank and would have been the ultimate destination of the funds. Further, it seems strange, argued counsel, that someone who claims to be so astute as to take protective measures in anticipation of the collapse of an established financial institution would be completely unaware of the basis on which his own company traded in a very high risk sector. Mr MacDougall contended that the timing of the email is also of significance. It was sent on 8 October 2008. Accepting the first defender’s evidence of cashing the SIPP cheque straight away, that is approximately 20 weeks after receipt of the funds. It is also a little over a week prior to liquidation. The first defender’s evidence is that he was completely unaware of the impending liquidation. Counsel submitted that, given his status within the company and the timing of the email, that is an incredible position to adopt.
 Mr MacDougall submitted that the first defender’s evidence on the purpose of and intention behind the email of 8 October is not to be believed. It was a clear and unqualified attempt to cash in his position by extracting funds from his trading account and moving them to an external source. Echelon was on the verge of insolvency, counsel contended, and the first defender wanted his money out. In cross‑examination, Steven Alexander confirmed that the attempt to extract funds failed because IG would not release any funds having regard to the overall position at that time. Echelon did not have any cash in the bank. (Joint inventory of productions, tab 11) Echelon did not have any credit with IG. It was only after the failed attempt to extract funds that the transfer from the first defender’s trading account to Steven Alexander’s trading account and from there to the head account occurred. The day after these transfers, the daily email confirmed that Echelon owed IG in excess of £3.9 million. (Joint inventory of productions, tab 8, pages 12‑22) About a week later, Echelon was put into liquidation. Mr MacDougall argued that, in these circumstances, the transfer cannot be said to have been intended as a repayment of the alienation.
 It is submitted on behalf of the pursuers that the transfer did not have any material or patrimonial worth at the date it was made. The factual outcome following the transfer is that the first defender still had £200,000 plus interest in his SIPP account and Echelon had precisely the same liability to IG as it had prior to the transfer. That is a “curious position” of the type referred to by the court in MacFadyen’s Trustees.
 Mr MacDougall contended that the situation would be different if the first defender had instructed the transfer of the funds into one of Echelon’s RBS bank accounts. That would have had a “material and patrimonial” worth. All the transfer achieved was moving a credit balance to add to another credit balance within a spreadsheet. In doing so, there was a corresponding debit entry which cancelled out the net effect of the transfer. It was basic double entry bookkeeping, and of no benefit to Echelon’s creditors.
 The fact that the transfer had no material or patrimonial worth is well illustrated by the failed attempt by the first defender to extract funds from his trading account. He could not do so because the credit balance in that trading account had no material or patrimonial worth. It was only given such a worth if Echelon had cash in the bank or had an overall credit position with IG. Echelon had neither of these things as at the date of transfer.
Submissions for the first defender
 Miss Roxburgh, who appeared on behalf of the first defender, invited me to find both Mr McGinness and the first defender credible and reliable. She extended the same invitation in respect of Steven Alexander, with the exception of evidence which he gave about the information provided to Echelon’s clients. She accepted that Mr Alexander initially suggested that the clients would have been aware that Echelon was trading with IG on a “principal to principal” basis, but submitted that he also acknowledged that Echelon’s accounts were prepared on the basis that Echelon was acting as an agent only, and that Echelon was authorised to act only as an agent, and not as a principal. She argued that Stephen Alexander had day to day responsibility for Echelon’s business and he had signed the white label agreement. Consequently, submitted Ms Roxburgh, he may well have had some concerns about incriminating himself in relation to the question of the basis on which Echelon’s clients traded. That should not, however, be viewed as tainting his evidence as a whole.
 Counsel contended that, on the evidence of the first defender and Stephen Alexander, the four cheques which were drawn on 27 May 2008 were intended to be used by each of the payees to invest in a SIPP. At that time, the directors believed that there were tax benefits to the company in doing so. They subsequently were advised by Ernst & Young that there would be no such benefit, and it was in these circumstances that three of the cheques were not cashed. The first defender’s evidence was that, the money already having been paid into his SIPP account, he would incur tax penalties and charges if it were to be repaid to Echelon. On 8 October 2008, his trading account with IG stood at £284,107.88, and he decided to withdraw £250,000, of which £200,000 would be repaid to Echelon, and £50,000 invested in gilts.
 In cross‑examination, said Ms Roxburgh, Mr McGinness confirmed that a debit balance on a client’s trading account represented a sum due by the client to Echelon. When that occurred, Echelon ought to make a call on the client. A credit balance on a client’s trading account represented a sum due to the client by Echelon, who would be under an obligation to make payment of that sum to the client when called upon to do so. Counsel contended that, in these circumstances, on 8 October 2008, Echelon had an obligation to make payment of £284,107.88 to the first defender. Echelon could comply with that obligation by making a payment of cash to, or to the order of, the first defender, or by arranging for an account transfer.
 Miss Roxburgh disputed the pursuers’ assertion that the transfer had no material or patrimonial value. She submitted that the pursuers’ contention ignores the fact that the first defender was a creditor of Echelon at the time that the transfer was made. Consequently, while accepting that the transfer did not increase Echelon’s assets, counsel contended that it did decrease Echelon’s liabilities, because it reduced the sum due by Echelon to the first defender, without creating any increase in the sum due by Echelon to IG.
 Turning to the question of adequate consideration, counsel said that the first defender’s “primary position” is that “repayment” is a different concept from “adequate consideration”. If an alienation is either returned or repaid to a company prior to liquidation, there is no longer an alienation to be challenged. Ms Roxburgh gave, as an example, an item of movable property which is transferred by a company to a third party but is re‑conveyed to the company prior to liquidation. In those circumstances, she argued, the alienation would, in effect, be undone, and the question of whether or not adequate consideration was given for the original transfer is irrelevant. That analysis, she contended, is supported by the wording of section 242(4) of the 1986 Act, which sets out the remedies which the court may grant and the defences available to a person “seeking to uphold the alienation”. A person who has repaid an alienation of money cannot be said to be seeking to uphold the alienation.
 Counsel submitted, further, that section 242(4) provides that the court will grant decree of reduction or for such restoration of property to the company’s assets or other redress as may be appropriate. Where money earlier alienated has been repaid, the remedy sought “would already appear to have been provided voluntarily.” In any event, argued Ms Roxburgh, if the defence of adequate consideration has to be made out, that has been done in this case.
 Under reference to MacFadyen’s Trustee at page 421, counsel submitted, as had Mr MacDougall, that consideration means something of material and patrimonial value which could be vindicated in a legal process. Ms Roxburgh contended that, as at 8 October 2008, Echelon had an obligation to make payment of around £284,000 to the first defender. That was a claim which the first defender could have vindicated against Echelon in a legal process. The effect of the transfer from the first defender’s trading account to Echelon’s head account was to reduce Echelon’s indebtedness to the first defender by £200,000. Extinguishing Echelon’s liability to make payment to the first defender, to that extent, could properly be treated as the granting of consideration at the time that the liability was extinguished. In support of that submission, Ms Roxburgh cited MacFadyen’s Trustee, at page 422C-E. The consideration was adequate, because the liability extinguished was equal in value to the original alienation.
Decision and reasons
 I am in agreement with the first defender’s counsel on a number of matters. The first is that, in the circumstances of this case, the question whether the first defender gave adequate consideration for the payment of £200,000 which went into the SIPP account in May 2008 does not arise. That was the issue which fell to be determined in MacFadyen’s Trustee. What the court was looking for, as Lord McCluskey put it, was something which was “given, or surrendered, in return for” the transfer of property from the son to the mother. Here, the £200,000 was something given “without any return being demanded or expected or obtained and at the time of giving (was) not intended to be regarded as a consideration of some past, present or future return”. (MacFadyen’s Trustee, page 421) On that approach, the May 2008 distribution was a gratuitous alienation, and Ms Roxburgh does not contend otherwise.
 I also agree with the contention advanced by counsel for the first defender that the issue of repayment is separate from the defence of adequate consideration. In his affidavit, the first defender says that, when it became known that the May 2008 distributions would not be tax efficient, and three of the four cheques were cancelled, he decided to keep the funds in his SIPP “and repay the £200,000 to echelon by other means.” The first defender explains that, as a higher rate taxpayer, he would be entitled to a contribution from HMRC of 40% of the gross pension contribution and that, if he withdrew the money from the SIPP account, there could be tax charges and penalties. I accept that evidence. It is clear, therefore, that the first defender regarded himself as owing Echelon £200,000.
 In his affidavit, Stephen Alexander depones that, when the transfer of £250,000 was made from the first defender’s trading account to the Echelon head account, he understood that £200,000 was “to be put towards repayment of the pension payment which (the first defender) received” and the balance of £50,000 was to be invested in gilts. In his affidavit, the first defender testifies that he agreed with Stephen Alexander that the transfer of £250,000 would be split, with £200,000 being internally transferred to Echelon’s head account and £50,000 used to buy gilts. Mr MacDougall did not contend that Stephen Alexander should be disbelieved on that matter. Counsel’s attack was on the credibility of the first defender in respect of his explanation for the earlier instruction to pay £250,000 into a Northern Rock account. Had it been necessary for me to do so, I would not have found that explanation credible, for the reasons advanced by Mr MacDougall. That external transfer could not, however, be made, for the reasons set out earlier in this opinion. I accept the evidence that, when the transfer was made, it was the intention of both the first defender and Stephen Alexander that £200,000 of it should represent repayment of the May 2008 distribution.
 As Ms Roxburgh submits, by effecting the transfer from his trading account to the head account, the first defender discharged £200,000 of the debt owed to him by Echelon. It does not follow from that, however, that the transfer represented repayment of the £200,000 which was paid into the SIPP. That is because the value of a debt may not be the same as the nominal amount due. If A lends £100 to B, for example, and, at some time before the debt is due for repayment, B loses all of his assets and is unable to repay anything, B continues to owe A £100, but the debt is worthless. Closer to the circumstances of this case, discharging a nominal debt of £200,000 which is worth, say, £100 to the creditor does not constitute repayment of an alienation with a real value of £200,000. Although this case is not concerned with “adequate consideration” within the meaning of section 242, it is for the first defender to establish that he has repaid the full amount which was paid into the SIPP account in May 2008. To do that, again borrowing the words of Lord McCluskey in MacFadyen’s Trustee, he would have to demonstrate that the transfer had a material or patrimonial value equal to £200,000. In my judgment, he has failed to do so. The final transaction in the transfer took place on 10 October 2008. At 8:41 am on that date, IG emailed Stephen Alexander attaching the daily update, which showed that there was a debit balance overall in Echelon’s accounts of £3.9 million. (Tab 8 of the joint inventory, at page 12) Echelon went into liquidation seven days later.
 I shall put the case out by order to discuss further procedure.