In the matter of ENA Development Pty Ltd [2022] NSWSC 54

In the matter of ENA Development Pty Ltd [2022] NSWSC 54

The unpaid and unset-aside statutory demand founded on the Supreme Court costs order gave rise to a presumption that ENA Development Pty Ltd was insolvent. ENA adduced no admissible evidence establishing cashflow solvency, could not raise disputes, offsetting claims or temporary restructuring relief without satisfying the statutory requirements and obtaining leave where required, and showed no good discretionary reason to defer or refuse winding up. The company was therefore ordered to be wound up in insolvency.

Jurisdiction
Australia
Judgment Date
27 January 2022
Procedural Posture
Corporations Winding Up Application Based on Failure to Comply With Creditor's Statutory Demand / Final Hearing; Ex Tempore Judgment Ordering Winding Up
Outcome
Defendant company wound up in insolvency; liquidator appointed; Plaintiffs' costs ordered to be costs in the winding up.
Legal Topics
['winding Up in Insolvency' "creditor's Statutory Demand" 'presumption of Insolvency' 'temporary Restructuring Relief' 'court Discretion to Adjourn or Refuse Winding Up']
['corporations Law' 'insolvency'] ['winding Up in Insolvency' "creditor's Statutory Demand" 'presumption of Insolvency' 'temporary Restructuring Relief' 'court Discretion to Adjourn or Refuse Winding Up']

Case Brief

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Procedural Posture

Corporations Winding Up Application Based on Failure to Comply With Creditor's Statutory Demand / Final Hearing; Ex Tempore Judgment Ordering Winding Up

Legal Issues

  1. 1 ["Whether ENA Development Pty Ltd failed to comply with a creditor's statutory demand so that a presumption of insolvency arose." 'Whether ENA Development Pty Ltd rebutted the presumption of insolvency by proving solvency on a cashflow basis.' 'Whether ENA Development Pty Ltd could rely on temporary restructuring relief, a dispute about the debt, an offsetting claim, or review of the costs order without having applied to set aside the statutory demand or obtained leave under s 459S of the Corporations Act 2001 (Cth).' 'Whether there was any discretionary reason to defer or refuse a winding up order.']

Ratio Decidendi

The unpaid and unset-aside statutory demand founded on the Supreme Court costs order gave rise to a presumption that ENA Development Pty Ltd was insolvent. ENA adduced no admissible evidence establishing cashflow solvency, could not raise disputes, offsetting claims or temporary restructuring relief without satisfying the statutory requirements and obtaining leave where required, and showed no good discretionary reason to defer or refuse winding up. The company was therefore ordered to be wound up in insolvency.

Court Disposition

Defendant company wound up in insolvency; liquidator appointed; Plaintiffs' costs ordered to be costs in the winding up.

Orders

  • ['ENA Development Pty Ltd be wound up in insolvency.' 'Mr Peter Krejci be appointed as liquidator of ENA Development Pty Ltd.' "The Plaintiff's costs of and incidental to the winding up application be costs in the winding up."]