In the matter of Pacific Plumbing Group Pty Ltd (in liq) [2024] NSWSC 34

In the matter of Pacific Plumbing Group Pty Ltd (in liq) [2024] NSWSC 34

The Company was insolvent throughout the period from 31 March 2020 up to and including 7 September 2020 because it had suffered significant trading losses before and during the period, its asset position had deteriorated to a significant deficiency, its liquidity ratio was significantly less than one, it had overdue Commonwealth taxes and unpaid trade debts, it defaulted on payment arrangements with the ATO and numerous trade creditors, and it had no apparent capacity to borrow money or raise additional capital, so it could not meet debts then due to creditors.

Jurisdiction
Australia
Judgment Date
01 February 2024
Procedural Posture
Corporations List Proceeding Seeking Recovery of Unfair Preferences Under the Corporations Act 2001 (cth) / Separate Question as to Whether the Company Was Insolvent During the Period From 31 March 2020 Up to and Including 7 September 2020
Outcome
First Plaintiff found to have been insolvent for the whole of the period from 31 March 2020 up to and including 7 September 2020.
Legal Topics
['winding Up' 'voidable Transactions' 'unfair Preferences' 'solvency and Insolvency' 'separate Question']
['corporations' 'insolvency'] ['winding Up' 'voidable Transactions' 'unfair Preferences' 'solvency and Insolvency' 'separate Question']

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Procedural Posture

Corporations List Proceeding Seeking Recovery of Unfair Preferences Under the Corporations Act 2001 (cth) / Separate Question as to Whether the Company Was Insolvent During the Period From 31 March 2020 Up to and Including 7 September 2020

Legal Issues

  1. 1 ['Whether Pacific Plumbing Pty Ltd (in liq) was insolvent within the meaning of s 95A of the Corporations Act 2001 (Cth) for the whole of the period from 31 March 2020 up to and including 7 September 2020.']

Ratio Decidendi

The Company was insolvent throughout the period from 31 March 2020 up to and including 7 September 2020 because it had suffered significant trading losses before and during the period, its asset position had deteriorated to a significant deficiency, its liquidity ratio was significantly less than one, it had overdue Commonwealth taxes and unpaid trade debts, it defaulted on payment arrangements with the ATO and numerous trade creditors, and it had no apparent capacity to borrow money or raise additional capital, so it could not meet debts then due to creditors.

Court Disposition

First Plaintiff found to have been insolvent for the whole of the period from 31 March 2020 up to and including 7 September 2020.

Orders

  • ['The Company was insolvent, within the meaning of s 95A of the Corporations Act 2001 (Cth), for the whole of the relevant period.' 'Costs of the application reserved.' 'The Plaintiffs are to bring in short minutes of order to give effect to the judgment within 7 days.']