In the matter of Wetherill Park Holdings Pty Ltd [2021] NSWSC 282

In the matter of Wetherill Park Holdings Pty Ltd [2021] NSWSC 282

There is no abuse of process in proceeding with a winding up application based on a statutory demand where the default judgment is later set aside, as long as the statutory demand was not set aside and leave under s 459S was not sought or granted; the presumption of insolvency stands. The defendant failed to discharge the onus to prove solvency, both on a cash flow and balance sheet test, even considering purported support from secured lenders. The orders are for the defendant to be wound up and a liquidator appointed.

Jurisdiction
Australia
Judgment Date
25 March 2021
Procedural Posture
Winding Up Application / Final Judgment
Outcome
Application granted; defendant wound up on grounds of insolvency.
Legal Topics
['statutory Demand' 'default Judgment' 'winding Up' 'insolvency' 'vendor Finance' 'liquidator Appointment' 'abuse of Process']
['corporations' 'equity'] ['statutory Demand' 'default Judgment' 'winding Up' 'insolvency' 'vendor Finance' 'liquidator Appointment' 'abuse of Process']

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Procedural Posture

Winding Up Application / Final Judgment

Legal Issues

  1. 1 ['Whether the winding up application is an abuse of process because the default judgment on which the statutory demand was based has been set aside' 'Whether the defendant is solvent given purported financial support from secured creditors']

Ratio Decidendi

There is no abuse of process in proceeding with a winding up application based on a statutory demand where the default judgment is later set aside, as long as the statutory demand was not set aside and leave under s 459S was not sought or granted; the presumption of insolvency stands. The defendant failed to discharge the onus to prove solvency, both on a cash flow and balance sheet test, even considering purported support from secured lenders. The orders are for the defendant to be wound up and a liquidator appointed.

Court Disposition

Application granted; defendant wound up on grounds of insolvency.

Orders

  • ['The defendant, Wetherill Park Holdings Pty Ltd, is to be wound up on grounds of insolvency under s 459A of the Corporations Act 2001 (Cth).' 'Giles Geoffrey Woodgate appointed as liquidator.' "Plaintiff's costs of and incidental to the proceedings to be paid out of the assets of the defendant." 'Directions for...