Zomojo Pty Ltd v Zeptonics Pty Ltd [2013] FCA 1131

Zomojo Pty Ltd v Zeptonics Pty Ltd [2013] FCA 1131

Zomojo had standing as a contingent creditor and established a prima facie case for leave because the respondents' own evidence showed that they were not trading, had no income stream, no foreseeable revenue stream, no available credit and, apart from Zeptonics, no assets. The contingent debts arising from the judgment and costs orders were relevant to solvency, and the respondents had no capacity to pay those debts once quantified. Zeptonics was also insolvent because its asserted non-recourse related-party loans were not proved to be non-repayable and could not be repaid. The applications were not an abuse of process merely because a winding up order might give Zomojo a tactical...

Jurisdiction
Australia
Judgment Date
31 October 2013
Procedural Posture
Application by Contingent Creditor for Leave to Apply to Wind Up Companies in Insolvency and for Winding Up Orders / Final Determination of Application
Outcome
Leave to apply to wind up each respondent in insolvency granted; each respondent wound up in insolvency; liquidators appointed; order stayed for 7 days.
Legal Topics
['winding Up in Insolvency' 'contingent Creditor Standing' 'cash Flow Insolvency Test' 'abuse of Process']
['corporations Law' 'insolvency'] ['winding Up in Insolvency' 'contingent Creditor Standing' 'cash Flow Insolvency Test' 'abuse of Process']

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Procedural Posture

Application by Contingent Creditor for Leave to Apply to Wind Up Companies in Insolvency and for Winding Up Orders / Final Determination of Application

Legal Issues

  1. 1 ['Whether Zomojo, as a contingent creditor, should be granted leave under s 459P(2) of the Corporations Act 2001 (Cth) to apply to wind up the respondents in insolvency.' 'Whether the respondents were insolvent within the meaning of s 95A of the Corporations Act 2001 (Cth).' 'Whether the winding up applications were an abuse of process because they were allegedly brought to prevent the respondents from exercising rights in other proceedings.']

Ratio Decidendi

Zomojo had standing as a contingent creditor and established a prima facie case for leave because the respondents' own evidence showed that they were not trading, had no income stream, no foreseeable revenue stream, no available credit and, apart from Zeptonics, no assets. The contingent debts arising from the judgment and costs orders were relevant to solvency, and the respondents had no capacity to pay those debts once quantified. Zeptonics was also insolvent because its asserted non-recourse related-party loans were not proved to be non-repayable and could not be repaid. The applications were not an abuse of process merely because a winding up order might give Zomojo a tactical...

Court Disposition

Leave to apply to wind up each respondent in insolvency granted; each respondent wound up in insolvency; liquidators appointed; order stayed for 7 days.

Orders

  • ['The applicant has leave pursuant to s 459P(2) of the Corporations Act 2001 (Cth) to apply to the Court to wind up each of the respondents in insolvency.' 'Zeptonics Pty Ltd ACN 141 647 716, Crosswise Pty Ltd ACN 140 717 317, MD Hammer Pty Ltd ACN 149 869 189, Zepto Markets Pty Ltd ACN 150 529 301, Zepto Fabrics...