ID - 146 Applications To Wind Up Corporations

Applications to Wind Up Corporations
Jarrod White
Barrister, Seven Wentworth
Important note: This paper has been prepared for educational purposes only.
It does not constitute legal advice and should not be relied upon as legal advice.
INTRODUCTION
The aim of this paper is to provide an introduction to the basic legal framework
and procedures which govern the winding up jurisdiction provided for in the
Corporations Act 2001 (Cth). The paper focuses upon the most common
applications which invoke the winding up jurisdiction of the Courts, namely
applications to wind up a debtor corporation in insolvency, as a result of the
failure of the debtor corporation to comply with a statutory demand.
This paper has been prepared as a procedural guide, rather than an in-depth
analysis of the law (by detailed reference to case-law developments) in particular
areas of the winding up jurisdiction.
I have approached the legal and procedural issues involved from the perspective
of the creditor-plaintiff. This provides the basis for a comprehensive “check list”
type approach to the winding up jurisdiction.
SOURCES OF LAW
A good working knowledge of Parts 5.4, 5.4A and 5.4B of the Corporations Act
2001 (Cth) is essential. The winding up process is, quite intentionally, driven by
procedure. The provisions referred to above set out the framework for the
operation of that procedure. All references to section numbers in this paper are to
the Corporations Act 2001, unless otherwise indicated.
The Corporations Law Rules (especially Division 5 – Winding Up Proceedings),

govern court procedure in all winding up applications and other insolvency-
related procedures of the court. The Corporations Law Rules are enacted on a
state-by-state basis (and, in the case of the Federal Court, by the
Commonwealth) but are substantially identical in each jurisdiction. All references
to rule numbers in this paper are to the Corporations Law Rules, unless
otherwise indicated.
You will find the Corporations Law Rules extracted at the back of the “Supreme
Court” tab to Ritchie's Uniform Civil Procedure NSW. Note that the Corporations
1
Law Rules replace Part 80A of the Supreme Court Rules, which you will still find
set out in the Ritchie’s Supreme Court Procedure loose leaf practice.
THE WINDING UP JURISDICTION

Both the Supreme Courts of the states, and the Federal Court, exercise winding
up jurisdiction. In the High Court's decision in Re Wakim; Ex Parte McNally
(1999) 198 CLR 511, the Commonwealth’s cross vesting legislation was held to
be constitutionally invalid. With this decision, the Federal Court' s power to deal
with the Corporations jurisdiction was lost. The situation was remedied by the
passing of the Corporations Act 2001 (Cth), and the Federal Court continues to
determine winding up applications.
Traditionally, most winding up applications in New South Wales are filed in the
Supreme Court, and it appears that this practice will continue. Particularly given
the enactment of the Supreme Court (Corporations) Rules 1999, the procedures
applicable to a winding up application in the Federal Court will be substantially
the same as those which apply in the Supreme Court.
There are, in fact, a number of bases upon which a corporation may be wound
up. Not all of these relate to the corporation' s insolvency, however this is the
most common basis upon which corporations are wound up, and is the exclusive
focus of the paper. This paper covers only the most frequent basis for conducting
winding up applications against insolvent companies.. Important related topics
(such as provisional liquidation) are not dealt with in this paper.
Further, a company can be wound up in insolvency, on one of five further specific

grounds, which are:
• Proved insolvency, pursuant to application under section 459P (section

459A)
• Where the Court is "satisfied" as to the insolvency of a corporation, upon
application to the Court pursuant to sections 260, 462 or 464 of the Act
(section 459B.)
• In the event of a resolution of creditors of a corporation subject to

voluntary administration, that the company should be wound up (section
446A);
• Upon the failure of a company to execute a deed of company
arrangement within 21 days of a meeting of creditors, in which the
creditors resolved to accept the deed (section 444B, section 446A); and
• Where the creditors of a company the subject of a deed of company
arrangement, resolve that the deed of company arrangement be
terminated (section 445E, section 446 A)
Applications to Wind Up Corporations 2

This paper deals exclusively with winding up applications brought under the first
point indicated above, namely pursuant to section 459P. Specifically, this paper
is concerned with applications made by creditors to wind up a debtor corporation
in insolvency. This is by far the most common basis upon which winding up
applications are brought.
Of those applications brought under section 459P, the vast majority of these are
brought after the debtor company has failed to comply with a statutory demand
prepared in accordance with section 459E of the Corporations Act. This is
because of the presumption of insolvency, on which the creditor is entitled to rely,
in the event of such failure.
Accordingly, this paper focuses exclusively upon applications which seek to rely
upon the failure to comply with a statutory demand. Section 459C provides:
459C Presumptions to be made in certain proceedings

(1) This section has effect for the purposes of:
(a) an application under section 234, 459P, 462 or 464; or
(b) an application for leave to make an application under section 459P.
(2) The Court must presume that the company is insolvent if, during or after the 3 months
ending on the day when the application was made:
(a) the company failed (as defined by section 459F) to comply with a statutory demand; or
(b) execution or other process issued on a judgment, decree or order of an Australian
court in favour of a creditor of the company was returned wholly or partly unsatisfied; or
(c) a receiver, or receiver and manager, of property of the company was appointed under
a power contained in an instrument relating to a floating charge on such property; or
(d) an order was made for the appointment of such a receiver, or receiver and manager,
for the purpose of enforcing such a charge; or
(e) a person entered into possession, or assumed control, of such property for such a
purpose; or
(f) a person was appointed so to enter into possession or assume control (whether as
agent for the chargee or for the company).
(3) A presumption for which this section provides operates except so far as the contrary is
proved for the purposes of the application.
This brings us to the statutory demand itself, which forms the basis of the vast
majority of winding up applications. The following section examines the statutory
demand and its crucial significance to the winding up process: issues of form,
substance and service are all examined below.
THE STATUTORY DEMAND

Most difficulties in the applications to wind up a debtor company are caused by
defects in the statutory demand. Great care must be taken to ensure that the
statutory demand complies with the matters of form and substance provided for

in the legislation. Although this may sound trite, it is remarkable how many
demands filed in support of winding up application are defective, causing
problems in any attempt to proceed to wind up the company, many of them fatal
to the application. The nature and number of defects is even more remarkable
given the existence of a prescribed form, and a very clear statutory list of
requirements, which are set out below. Defects in statutory demands are the
subject of a voluminous case law, which has arisen largely from completely
avoidable failures to comply with some fairly simple requirements.
Section 459E relevantly provides:
459E Creditor may serve statutory demand on company

(1) A person may serve on a company a demand relating to:
(a) a single debt that the company owes to the person, that is due and payable and whose
amount is at least the statutory minimum; or
(b) 2 or more debts that the company owes to the person, that are due and payable and
whose amounts total at least the statutory minimum.
(2) The demand:
(a) if it relates to a single debt—must specify the debt and its amount; and
(b) if it relates to 2 or more debts—must specify the total of the amounts of the debts; and
(c) must require the company to pay the amount of the debt, or the total of the amounts of
the debts, or to secure or compound for that amount or total to the creditor's reasonable
satisfaction, within 21 days after the demand is served on the company; and
(d) must be in writing; and
(e) must be in the prescribed form (if any); and
(f) must be signed by or on behalf of the creditor.
(3) Unless the debt, or each of the debts, is a judgment debt, the demand must be
accompanied by an affidavit that:
(a) verifies that the debt, or the total of the amounts of the debts, is due and payable by
the company; and
(b) complies with the rules.
The form of statutory demand

Note paragraph 459E(2)(e). There is a prescribed form of statutory demand,
which is Form 509H to the Corporations Regulations. Many of the most basic
errors which affect statutory demands can be avoided simply by copy typing the
prescribed form from the legislation, proofing it closely to ensure that it complies
strictly with the original, and using the copy document as a template.
Substantive issues
The creditor must have a debt (at least one), which is “due and payable” by the
debtor company at the time that the statutory demand is issued. Contingent or
prospective debts cannot be the subject of a statutory demand. However, unlike
bankruptcy, the debt need not be a judgment debt.

It is commonplace for creditor clients to provide scant instructions as to the
existence of a debt, and leave the solicitor to find out only later that the terms for
payment are either in dispute, or provide for more generous terms as to payment
than you were initially instructed. As a general rule, insist upon receipt of copies
of any trade contracts, invoices and purchase orders. Beware of “standard terms”
which often appear on the back of invoices issued by creditors. You must also
take into account the “battle of the forms” problem, whereby the terms of trade
set out in the debtor company’s purchase order provide more generous terms for
payment than those set out in the creditor’s invoices.
The “statutory minimum” is $2,000.00 (section 459E, definition of “statutory

minimum” in section 9). Note that the amounts of the debts (if there is more than
one) must together equal or exceed the statutory minimum, and need not
independently exceed that amount.
The statutory demand must be signed “by or on behalf of the creditor.” If you sign
the demand on as a solicitor on behalf of the creditor, ensure that you have a
written authority from the creditor (which, in the case of a corporate creditor,
should comply with any prescribed delegations of authority) to do so.
Debts other than judgments debts

Note subsection (3) above. Unless the creditor relies upon a judgment debt as
the basis for the statutory demand, it is essential that the existence of the debt be
verified by affidavit of the creditor. The failure to do so is fatal to any subsequent
winding up application (Victor Tunevitsch Pty Limited v Farrow Mortgage (1994)
14 ACSR 565).
The “rules” which govern the form of the affidavit, are set out at paragraph 5.2 of
the Corporations Rules.
5.2 Affidavit accompanying statutory demand (s 459E (3) of the Law) Form 7
For the purposes of subsection 459E (3) of the Law, the affidavit accompanying
a statutory demand relating to a debt, or debts, owed by a company must:
(a) be in accordance with Form 7 and state the matters mentioned in that Form, and
(b) be made by the creditor or by a person with the authority of the creditor or creditors,
and
(c) not state a proceeding number, or refer to a Court proceeding, in any heading or title to
the affidavit.
In essence, the Form 7 affidavit provides for:

• comprehensive verification of the existence of the debt;
• the person swearing the affidavit to have the requisite knowledge of the
circumstances which gave rise to the debt; and

• an assurance by the creditor that there is “no genuine dispute” about the
existence of the debt upon which the creditor relies.
Form 7 contains samples of information to be inserted into the text of the

affidavit, in relation to the deponent's authority, where the creditor is a
corporation. Examine the form of the affidavit closely. Note also rule 2.5, which
provides that affidavits sworn on behalf of corporate creditors may be sworn by
“a director, secretary, or other principal officer of the corporation, or by a person
employed by the corporation who is authorised to make the affidavit on its
behalf”.
Again, the existence of the relevant “authority” is a specific requirement of the

rule, and the subject of proof. Verify the existence of any relevant delegation of
authority (including anything which may be contained in the creditor's
Constitution) and that the delegation has been made in accordance with the
prescribed procedure.
It is only safe to assume that the affidavit cannot predate the statutory demand.
Although there is authority that a premature affidavit will not necessarily
invalidate the demand (Dolvelle Pty Ltd v Australian MacFarms Pty Ltd (1998) 43
NSWLR 717), that decision has experienced a very mixed response. The recent
decision of Higgins CJ in Chadmar Enterprises Pty Ltd v IGA Distribution Pty Ltd
(2005) 53 ACSR 645; [2005] ACTSC 39 reviews the various authorities, and
distinguished Dolvelle, referring especially to the decision of the Wildtown
Holdings Pty Ltd v Rural Traders Co Ltd (2002) 172 FLR 35; [2002] WASCA 196,
a decision of a Full Court of the Supreme Court of Western Australia (Steytler,
Templeman and Miller JJ) and which, therefore, he regarded as determinative on
the issue.
It is an abuse of process to issue a statutory demand in relation to any debt

about which the creditor knows there is a genuine dispute (Createc Pty Ltd v
Design Signs Pty Limited [2009] WASCA 85; Roberts v Wayne Roberts Concrete
Constructions Pty Ltd [2004] NSWSC 734; Pacific Communications Rentals Pty
Ltd v Walker (1993) 12 ACLC 5).
The issue of a statutory demand is not the commencement of a proceeding, and

in no way carries the imprimatur of the Court. Note that neither the statutory
demand itself, nor the affidavit verifying the demand (if one is required) bears a
proceeding number nor any indication that they constitute court process.
Issues of form
Note the requirement to specify the debt, or, in the case of two or more debts, the
“total of the amounts of the debts”. This should be set out in the text of the

statutory demand as clearly and specifically as possible. An example is set out
below:
Description of the Debts Amount of the Debts
Invoice #321 dated 4 September 2002, for widgets $1,400.00

ordered by the Company pursuant to Purchase Order
#678 dated 1 September 2002, and delivered by the
Creditor on 3 September 2002
Invoice #349 dated 20 September 2002, for widgets $1,300.00

ordered by the Company pursuant to Purchase Order
#721 dated 15 September 2002, and delivered by the
Creditor on 19 September 2002.
Total of the amounts of the debts: $2,700.00
Service
The Corporations Act contains its own service provision, in the form of section
109X. That provision provides that service of a document may be effected upon
the company by “leaving it at, or posting it to, the company's registered office” or
“delivering a copy of the document personally to a director of the company who
resides in Australia or in an external Territory.” It is a good practice to take a
fresh company search in relation to the debtor company at this stage, even if you
know the address of the debtor. Remember that you cannot take advantage of
the presumption provided for in section 109X if you merely serve the statutory
demand at the customary place of business of the debtor company. It is not
uncommon for the registered address and the place of business, to be different.
The onus lies upon the creditor to prove service. If you wish to rely upon postage
of a statutory demand, consider how you will actually prove that the demand was
sent by post, and have the court infer that it was served. Unless you personally
post the demand, you should have in place a procedure whereby the relevant
administrative staff can verify the fact of postage (by reference to date, time, and
the document posted) in an appropriate affidavit. Prepare a pro forma “record of
service” document, the details of which can be transcribed into an affidavit of
service if and when the need rises. Also, consider the benefits of the different
types of postage available. Sending a statutory demand by Express Post allows
you to retain an adhesive receipt, which allows you to track the location of the
document in the event of a subsequent challenge to service. Australia Post also
guarantees next day delivery of Express Post items (within the specified

locations).Of course, nothing is better than an affidavit from a process server
deposing to the fact of service of the statutory demand at the registered office of
the debtor company.
A full 21 days, subsequent to service of the statutory demand upon the debtor
company, must elapse before the creditor is entitled to take any further action in
relation to the statutory demand. Like the requirements for service of most other
court documents, the date of service cannot be counted. Unlike most other
cases, the Christmas and New Year periods are not excluded for the purposes of
calculating time.
Ensure that you nominate an address for service within the State or Territory in
which the statutory demand is served. In the case of an interstate debtor
company, you may proceed on a winding up application in your own jurisdiction.
However, an interstate debtor company which files an application to set aside the
statutory demand is entitled to proceed in the State in which the debtor company
is located. As noted above, the statutory demand does not commence any court
proceeding, so the debtor company wishing to apply to set aside the demand is
not bound to the court of the creditor’s jurisdiction. It is common for the creditor’s
solicitor to make arrangements with an interstate firm to act as a local agent (and
provide, effectively an address for service).
Failing an application by the debtor company to set aside the demand, court
involvement in the winding up process commences only upon the failure of the
debtor to comply with a statutory demand within the 21 day period.
APPLICATION TO SET ASIDE A STATUTORY DEMAND

A debtor company may make an application to set aside a statutory demand on
the following grounds, and only on the following grounds:
• a “genuine dispute” about the existence or amount of the claim contained
in the statutory demand;
• the existence of an offsetting claim by the debtor against the creditor;
• where a “substantial injustice” would be caused to the debtor company as

a result of a defect in the statutory demand; or
• for “some other reason” the demand should be set aside.
The relevant provisions of the Corporations Act are extracted below:
459G Company may apply

(1) A company may apply to the Court for an order setting aside a statutory demand
served on the company.
(2) An application may only be made within 21 days after the demand is so served.

(3) An application is made in accordance with this section only if, within those 21 days:
(a) an affidavit supporting the application is filed with the Court; and
(b) a copy of the application, and a copy of the supporting affidavit, are served on the
person who served the demand on the company.
459H Determination of application where there is a dispute or offsetting claim

(1) This section applies where, on an application under section 459G, the Court is
satisfied of either or both of the following:
(a) that there is a genuine dispute between the company and the respondent about the
existence or amount of a debt to which the demand relates;
(b) that the company has an offsetting claim.
459J Setting aside demand on other grounds

(1) On an application under section 459G, the Court may by order set aside the demand if
it is satisfied that:
(a) because of a defect in the demand, substantial injustice will be caused unless the
demand is set aside; or
(b) there is some other reason why the demand should be set aside.
(2) Except as provided in subsection (1), the Court must not set aside a statutory demand
merely because of a defect.
Section 459J is complemented by section 467A, which provides:
467A Effect of defect or irregularity on application under Part 5.4 or 5.4A

An application under Part 5.4 or 5.4A must not be dismissed merely because of one or
more of the following:
(a) in any case—a defect or irregularity in connection with the application;
(b) in the case of an application for a company to be wound up in insolvency—a defect in
a statutory demand;
unless the Court is satisfied that substantial injustice has been caused that cannot
otherwise be remedied (for example, by an adjournment or an order for costs).
These provisions should be read in conjunction with section 459S, which

provides:
459S Company may not oppose application on certain grounds

(1) In so far as an application for a company to be wound up in insolvency relies on a
failure by the company to comply with a statutory demand, the company may not, without
the leave of the Court, oppose the application on a ground:
(a) that the company relied on for the purposes of an application by it for the demand to be
set aside; or
(b) that the company could have so relied on, but did not so rely on (whether it made such
an application or not).
(2) The Court is not to grant leave under subsection (1) unless it is satisfied that the
ground is material to proving that the company is solvent.
Time for making an application

Note carefully the requirements of section 459G. It is essential that any
application to set aside a statutory demand be made by the debtor company

within the 21 day period provided for by section 459G. Compliance with the
section goes the very jurisdiction of the court to consider the application to set
aside the statutory demand. The High Court has determined, in David Grant &
Co Pty Ltd v Westpac Banking Corporation (1995) 18 ACSR 225 that section
1322 (which operates to prevent non-compliance with procedures or time
stipulations from invalidating certain actions) of the Corporations Law [Act]
cannot be employed to extend the time for filing an application.
The ‘Graywinter’ principle

In Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund
(1996) 70 FCR 452, Sundberg J was dealing with an application to set aside a
statutory demand on the basis that there was a genuine dispute as the existence
of the debt. His Honour observed:
"In a s459H(1)(a) case, the affidavit must in my view disclose facts showing there is a
genuine dispute between the parties. A mere assertion that there is a genuine dispute is
not enough. Nor is a bare claim that the debt is disputed sufficient. It follows from the fact
that the affidavit need not go into evidence, which is the customary function of affidavit,
that it may read like a pleading."
A corollary of the reasoning in Graywinter and the decisions which have applied it
is that if the affidavit discloses certain grounds only, the plaintiff should be limited
to those grounds at the hearing. That is, the filing of a further affidavit, raising
fresh grounds for “genuine dispute” about the existence of the debt, is
inadmissible if it is not filed and served within the stipulated 21 day period.
What is left less certain is the law in relation to the form and content of the
affidavit required to satisfy the requirements of the section. There remains some
disagreement as to the extent to which the detail of basis for the dispute, and the
legal conclusions which flow from such detail, must appear (if at all) in the
affidavit. Detailed analysis of this issue is beyond the scope of this paper, though
see POS Media v B Family (2003) 31 ACLC 533; [2003] NSWSC 147 (per Austin
J), which reviews the case law (And see also Karimbla Construction Services Pty
Ltd v Alliance Group Building Services Pty Ltd [2003] NSWSC 617, and South
Australian Buying Corp v Clarke [2003] NSWSC 801, in which Barrett J
described the Graywinter principle as “firmly established.”
There has, however, been a significant debate in the authorities about the extent
to which a ground of dispute requires express articulation in the supporting
affidavit, before that ground is “raised.” Barrett J’s decision in Saferack v
Marketing Heads Australia (2007) 214 FLR 393 is an important one, as it
contains an acknowledgment that the proper approach is to regard as “raised” a
ground which appears on the face of an exhibit or annexure, though not
articulated in the text of the affidavit. This is contrary to the position previously

adopted in Process Machinery Australia v ACN 057 262 590 [2002] NSWSC 45
(and see also Soldatic v Inverness [2008] NSWSC 734)
Genuine Dispute about the existence or amount of the debt/offsetting

claims
A generally accepted formulation which satisfies the meaning of “genuine
dispute” appears in the judgment of McClelland CJ in Eyota Pty Ltd v Hanave Pty
Ltd (1994) 12 ACSR 785 at 787:
In my opinion that expression connotes a plausible contention requiring investigation, and

raises much the same sort of considerations as the “serious question to be tried” criterion
which arises on an application for an interlocutory injunction or for the extension or
removal of a caveat. This does not mean that the court must accept uncritically as giving
rise to a genuine dispute, every statement in an affidavit” however equivocal, lacking in
precision, inconsistent with undisputed contemporary documents or other statements by
the same deponent, or inherently improbable in itself, it may be” not having “sufficient
prima facie plausibility to merit further investigation as to [its] truth” (cf Eng Mee Yong v
Letchumanan [1980] AC 331 at 341), or “a patently feeble legal argument or an assertion
of facts unsupported by evidence”: cf South Australia v Wall (1980) 24 SASR 189 at 194
But it does mean that, except in such an extreme case, a court required to determine
whether there is a genuine dispute should not embark upon an inquiry as to the credit of a
witness or a deponent whose evidence is relied on as giving rise to the dispute. There is a
clear difference between, on the one hand, determining whether there is a genuine
dispute and, on the other hand, determining the merits of, or resolving, such a dispute.
(See also John Shearer Ltd v Gehl Co (1995) 60 FCR 136 at 143; Chase
Manhattan Bank Australia Ltd v Oscty Pty Ltd (1995) 17 ACSR 128 at 135-6; and
POS Media v B Family [2003] NSWSC 147, per Austin J (12 March 2003)).
One should consider carefully the following:
• a mere assertion that a debt is not owed by the debtor company, lacking
substance, will not fall within the definition of a “genuine dispute”;
however
• the court is not concerned to make a determination on the merits as to

whether the debt is in fact owed – the test is “genuine dispute” about the
debt, not “genuine existence” of the debt; and
• where the matter is one involving an off setting claim, and that claim is for
unliquidated damages or economic loss, the Court will not be able to
determine whether the amount claimed is claimed in good faith unless the
plaintiff adduces some evidence to show the basis upon which the loss is
said to arise and how that loss is calculated. If such evidence is entirely
lacking, the Court cannot find that there is a genuine offsetting claim for
the purposes of s459H(1) and (2): Macleay Nominees Pty Ltd v Belle
Property East Pty Ltd [2001] NSWSC 743 per Palmer J.
The court will consider any matter which sheds some light on the bona fides of
the debtor company in claiming the existence of a dispute. Whether you are

acting for the debtor company, or the creditor, seek and consider any evidence
which indicates that the debt was in dispute before the issue of the statutory
demand, and any attempts made by the debtor company to negate the debt
referred to in the demand. For example, if the debt referred to in the demand is a
judgment debt, did the debtor company promptly act to set aside judgment, and
on what basis? If the debtor company asserts the existence of an offsetting
claim, when did the basis for that claim arise, and did the debtor company
promptly act to secure its interests in relation to that claim?
If you are acting for the creditor, you must think ahead when settling the statutory
demand, and consider the prospect of any offsetting claim. Particularly in
statutory demands of some magnitude, where it is unlikely that the debtor
company can afford to satisfy the amount claimed, consider carefully the merits
of deducting the amount of any potential offsetting claim from the demand, even
if you think the creditor could defend an application brought by the debtor
company under section 459G. The creditor is not estopped from pursuing a
subsequent claim for the balance (either by issue of a fresh statutory demand, or
by the commencement of separate court proceedings) in the event that the
debtor company pays the amount set out in the demand.
In the event that the court is satisfied about the existence of a genuine dispute
about the debt, or that the debtor company has an offsetting claim against the
creditor, the court then proceeds to determine the amount (if any) that the
creditor is entitled to claim in the statutory demand (“substantiated amount”). In
the event that the substantiated amount exceeds the statutory minimum of
$2,000.00, the court is then entitled to vary the statutory demand accordingly,
and declare the demand to have effect (as varied) from the date of service upon
the debtor company. If the substantiated amount does not exceed the statutory
minimum, the statutory demand must be set aside (section 459H(4)).
Defective Demands
Any failure to comply with any requirement of Form 509H, or of the rules which
apply to the verifying affidavits, may constitute a “defect”. However, as section
459J(1)(a) makes abundantly clear, the real question is that defect is of a
character to cause “substantial injustice” to the debtor company, if the statutory
demand were not set aside.
Section 459J has spawned a voluminous case law, and it is not possible to deal
with every instance in which an alleged defect of the alleged defect has been
considered by the courts. Suffice to say, there are two primary views as to the
identification of a defect which is sufficient to warrant the setting aside of a
statutory demand:

1. the demand cannot be set aside if the demand was a statutory demand
within the meaning of the Corporations Law [Act] and merely contained a
“defect” as provided for in the definitions section of the legislation (a
“defect” is defined to include an irregularity, a misstatement of an amount
or total, a misdescription of a debt or other matter, and a misdescription of
a person or entity.) (per Hill J in Kalamunda Meat Wholesalers Pty Ltd v
Reg Russell & Sons Pty Ltd (1994) 12 ACLC 391);
2. the demand can be set aside under the “some other reason” head, (that
is, in the absence of any injustice) if the defects are of such a magnitude
as to constitute good reasons why the demand should be set aside under
subparagraph (b) (per Lockhart J. in Topfelt Pty Ltd v State Bank of New
South Wales Ltd (1994) 12 ACLC 15).
There has been judicial support for both approaches, though the former probably
represents the better view.
Procedural issues
If application is brought to set aside the statutory demand, this will be the
application which first brings before the Court issues relating to the debt claimed
in statutory demand. Accordingly, the debtor company’s application is one
brought by Originating Process, in accordance with the Corporations Law Rules.
Note rule 2.4A of the Corporations Law Rules which provides:
2.4A Application for order setting aside statutory demand

(1) This rule applies, and subrule 2.4 (2) does not apply, to an application by a
company under section 459G of the Law for an order setting aside a statutory
demand served on the company.
(2) The plaintiff must file with the originating process seeking the order a copy of the
statutory demand and a copy of any affidavit that accompanied the statutory
demand.
(3) The plaintiff must:
(a) no earlier than 7 days before the originating process is filed, and not
later than the day before the hearing of the application, carry out a
search of the records maintained by the Commission in relation to the
plaintiff, and
(b) either:
(i) annex the record of the search to the affidavit in support of the
originating process, or
(ii) file the record of the search before, or tender it on, the hearing
of the application.

FAILURE TO APPLY TO SET ASIDE THE DEMAND: SECOND
CHANCES
Grounds not relied upon in a (timely) application to set aside the

demand: section 459S
In Chief Commissioner of Stamp Duties v Paliflex Pty Limited (1999) 149 FLR
179; (1999) 17 ACLC 467; (1999) 42 ATR 309; [1999] NSWSC 15; BC9900218,
Austin J (at [49]) identified three key considerations when the Court is
considering granting leave under section 459S, namely:
“(i) a preliminary consideration of the defendant’s basis for disputing the debt which was
the subject of the demand;
(ii) an examination of the reason why the issue of indebtedness was not raised in an
application to set aside the demand, and the reasonableness of the party’s conduct at that
time; and
(iii) an investigation of whether the dispute about the debt is material to proving that the
company is solvent.”
(And for a recent application of this approach, see Shakespeares Pie Co Australia Pty Ltd
v Multipye Pty Ltd [2005] NSWSC 1338 per Barrett J at [13]; D.A.G. International Pty Ltd v
D.A.G. International Group Pty Ltd [2005] NSWSC 1036 per Brereton J at [5]. See also
Bennell v Netlink Australia Pty Ltd (2002) 42 ACSR 680; [2002] NSWSC 822;
BC200205302 at [47]).
In the latter case, Brereton J held that, in circumstances where the defendant’s
solicitor has by oversight neglected to serve the section 459G application on the
creditor within time, leave could be granted under section 459S. It was significant
to the decision to grant leave that the matters giving rise to the genuine dispute
as to indebtedness were raised in writing by the defendant company promptly,
and well within the 21 day period.
Critical to the examination of the effect of section 459S is the decision of the
Court of Appeal in Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661;
(2000) 155 FLR 282; (2000) 33 ACSR 723; (2000) 19 ACLC 532; [2000] NSWCA
37; BC200000957.
A statutory demand was served upon the defendant company, and an application
to set aside the demand failed because of incorrect service of that application.
When the Originating Process for winding up the defendant was filed, the
defendant filed a notice of motion for leave to oppose the motion on the ground
that the plaintiff’s debt was disputed. The defendant company had adduced
expert evidence as to the valuation of the company, which tended to show that
the equity in the defendant would substantially exceed the amount required to be
paid under the plaintiff’s statutory demand and, ultimately, that the defendant was
solvent whether or not the debt described in the demand was owing to the
plaintiff. At first instance, Austin J – following the approach taken by Master
Sanderson in the Supreme Court of Western Australia in Zan Holdings Pty Ltd v

Bay View Holdings Pty Ltd (1997) 15 ACLC 1238 – held that the dispute about
the plaintiff’s debt was not “material” to the Court’s conclusion that defendant
company was, or was not, insolvent (Switz Pty Ltd v Glowbind Pty Ltd [1999]
NSWSC 1296).
Notably, the Full Court of the Supreme Court of Western Australia had indicated
in the appeal from Master Sanderson’s decision in Zan Holdings (obiter dictum)
that the determination of Master Sanderson was incorrect: BayView Holdings Pty
Ltd (in liq) v Zan Holdings Pty Ltd (unreported, SC(WA), Full Court, No FUL 127
of 1997, 19 October 1998, BC9805541).
The Court of Appeal in Switz (Spigelman CJ, with whom Handley and Giles JJA
agreed) upheld Austin J’s strict construction of the subsection, consistent with the
policy apparent within Part 5.4 of the Act, that the resolution of issues as to a
company’s solvency should be made quickly, with any issues as to underlying
debts to be raised by the debtor company promptly.
The Court stated:
“[53] By the time an application under s459S is made, the company will be presumed
to be insolvent and will have the burden of proving that it is not. In my opinion
s459S(2) directs attention, in part, to what it is that the company intends to prove
and how it intends to prove it. If the company is not prepared to contemplate the
possibility that its assertion of solvency is subject to qualification, then the Court
cannot be "satisfied" of the mandatory pre- condition in s459S(2). An objective
element is introduced by the word "material" but that can only be determined
after identifying the company's contentions.
[54] If, as here, the company intends to prove that it is solvent whether or not a debt
is payable, then with respect to a ground based on dispute about the debt, the
test of materiality to it "proving" its solvency, cannot be satisfied.
[55] The process of proving solvency is not some kind of forensic game. Solvency is a
matter peculiarly within the knowledge of the company. The primary source of
information on the solvency of the company must be the company itself.
[56] It may well prove to be the case that whether or not a particular debt is owing is
material, indeed crucial, to a company being able to establish its solvency.
However, if the company itself is not prepared to mount a case which
contemplates that as a possibility, then it is not open to the Court to be "satisfied"
in the sense required by s459S(2) on the basis that the company should be
protected from itself. As I have said, the fact that the company does intend to so
contend would not determine the issue of whether the disputed debt is "material",
let alone whether leave should be granted under s459S(1). On the submissions
made to this Court, these issues do not arise. The appeal should be dismissed.”
The impact of the construction was demonstrated starkly in the remaining aspect
of the proceeding that was the subject of the appeal. Pending determination of
the section 459S application, Hodgson CJ In Eq (as his Honour then was)
considered the plaintiff’s application to extend time, under section 459R, for
determining the application to wind up the defendant. His Honour determined that
it was unjust that the plaintiff intended to rely upon evidence to the effect that the
defendant was insolvent if the debt was owing, though solvent in the event that

the debt was not owing. His Honour accordingly imposed a condition on the
plaintiff, requiring it to consent to the defendant’s 459S application or,
alternatively, to determine the issue of the defendant’s solvency at the final
hearing on the assumption that the plaintiff’s debt was not owed. The plaintiff
appealed against the orders made.
The Court of Appeal held that a condition of the type imposed by Hodgson CJ in
Eq under section 459R was not permissible: section 459S (and subsection
459S(2), in particular) was intended to be a comprehensive statement of the
circumstances in which leave to oppose the winding up application could occur.
The general power to make conditions under section 459R should be read down
(see paragraphs [67], [68]).
It remains to be seen whether the Federal Court will follow the decision of the
Court of Appeal in Switz, or adopt the reasoning of Full Court of the Supreme
Court of Western Australia in Bay View, however French J has recently accepted
the force of the statements of Spigelman CJ in the former case: HVAC
Construction (Qld) Pty Ltd v Energy Equipment Engineering Pty Ltd (2002) 44
ACSR 169; (2003) 21 ACLC 163; [2002] FCA 1638; BC200208137 at [53].
Subsequently, in Biron Capital v Velowing [2003] NSWSC 1181, Barrett J

considered the application of the principle in Switz in a very different context. The
defendant wished to challenge the quantum of alleged indebtedness described in
the statutory demand, by reference to a sale of certain assets by a receiver at an
undervalue. The events giving rise to that off setting demand occurred some time
after the latest time at which an application under section 459G of the Act could
legally have been made. Referring to Switz and the strict regime it represents,
Barrett J determined that leave to raise this claim was not required under section
459S, stating:
“[11] It is not the statutory intention, however, that a defendant should be shut out from
advancing a defence to the winding up application, based on genuine dispute as
to the debt the subject of the statutory demand or the existence of an offsetting
claim, unless circumstances are such that the defendant has either not
succeeded in an attempt to have the demand set aside on that ground or failed to
take the opportunity to make such an attempt. Where the circumstances giving
rise to the asserted dispute as to the existence or amount of the debt or as to the
existence of the offsetting claim did not exist during the period of 21 days
referred to in s459G, the defendant neither had nor failed to take advantage of
the opportunity.”
A stay on enforcement of the judgment which underpins a statutory demand,

obtained within the 21 days after service of the demand, is a matter which could
have been relied upon to set aside the demand, and does not become otherwise
simply because the stay remains in force after the conclusion of the 21 day
period: Goman v Scope Data Systems Pty Ltd [2004] NSWSC 314 at [26]. The

principle identified in Biron Capital will not assist the debtor company in these
circumstances.
Perhaps the most striking application of the approach to section 459S which
Barrett J adopted in Biron Capital, is the decision of Austin J in Perpetual
Nominees Ltd v Masri Apartments Pty Ltd; Perpetual Nominees Ltd v AUS
Constructions Pty Ltd (2004) 49 ACSR 719; (2004) 22 ACLC 975; [2004]
NSWSC 551; BC200403809. Due to a change in the registered office of the
defendant companies, the statutory demands did not come to the attention of the
directors, although a contention that proper service was never affected, failed.
This is not an unusual situation in the winding up list. Austin J held, referring to
Biron Capital by way of analogy, that the circumstances before the Court were
not such that section 459S would prevent their being raised at hearing. His
Honour stated:
“[12] In my opinion, to construe s 459S(1)(b) in the way that I have outlined is not to
contradict or undermine the legislative policy standing behind the section, as
explained by Gummow J in David Grant & Co Pty Ltd v Westpac Banking Corp
(1995) 184 CLR 265; 131 ALR 353; 18 ACSR 225 and by Spigelman CJ in Switz
Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661; 33 ACSR 723. The legislative
policy is that the provisions relating to the setting aside of a statutory demand are
to be a complete code for the resolution of disputes about the subject matter of
the demand, thereby preventing disputes about the underlying debt from being
contested at the hearing of the winding-up application: Switz, at NSWLR 672,
[39]; ACSR 732–3. But that policy assumes that the debtor company has the
opportunity to make an application, within the prescribed time limit, to set the
demand aside. Such an opportunity will exist if the statutory demand is both
properly served and comes to the notice of the company’s directors in a timely
fashion. Arguably, the opportunity will also exist if, although the directors did not
in fact discover the existence of the statutory demand within the time limit, they
would have done so if they had acted reasonably in the superintendence of the
collection of mail from the company’s registered office. Where, however, it is
established on the evidence that the directors of the company did not become
aware of the existence of the statutory demand until after the expiration of the 21-
day period, and they have acted reasonably with respect to superintendence of
the collection of mail from the company’s registered office, the case is one where
the company could not, in a factual sense, have relied on any of the grounds
available to challenge the demand within the time period. In such a case, fairness
requires that the company be permitted to raise those issues at the only hearing
available to it, namely the final hearing of the application for winding up, even
though to that extent one reverts to the old practice which the Harmer reforms
were intended to reverse.”
Abuse of process
As noted above, it is an abuse of process to issue a statutory demand in relation
to any debt about which the creditor knows there is a genuine dispute (Createc
Pty Ltd v Design Signs Pty Limited [2009] WASCA 85; Roberts v Wayne Roberts
Concrete Constructions Pty Ltd [2004] NSWSC 734; 208 ALR 532 Pacific
Communications Rentals Pty Ltd v Walker (1993) 12 ACLC 5).
Bear in mind that the court, in hearing an application to wind up a corporation in

insolvency, is not a court of debt recovery. A winding up order operates in favour

of all creditors and contributories of the debtor company, “as if [the winding up
order] had been made on the joint application of all the creditors and
contributories”: section 471 (and see also Expile Pty Ltd v Jabb’s Excavations
Pty Ltd (2004) 22 ACLC 667 per Palmer J at [56]).
There remains a jurisdiction to restrain or dismiss a winding up application, when

the proceeding has been pursued for an improper purpose in the technical sense
explained in Williams v Spautz (1992) 174 CLR 509: David Grant & co v Westpac
(1995)184 CLR 265, per Gummow J, that is where the purpose is to achieve
ends foreign to which the available process is directed. Thus, the unilateral
attempt by the plaintiff creditor claiming a debt against the defendant company,
being a debt owned jointly with another, and which is the subject of property
settlement proceedings in the Family Court, is a clear case of abuse: Roberts v
Wayne Roberts Concrete Constructions Pty Ltd, above. An alternative claim in
the same case, that the plaintiff was not properly considered a creditor was
rejected, as it amounted to a dispute about the amount or existence of the debt,
which needed to be made in a timely application under s459G.
The line is less clearly drawn in other cases, such as Createc (where the WA
Court of Appeal was plain that circumstances of a clear offsetting claim and
genuine dispute were such as to make the proceeding an abuse of process, quite
apart from the cause of action available to set aside the demand itself: at [56].
That case, however, was an application to set aside a demand, rather than a
winding up application. The question of some importance in a winding up
proceeding, because the question of whether the allegation of abuse is, in reality,
an impermissible attempt to raise a matter that ought to have been the subject of
proceedings to set aside the demand, looms large. In House of Tan Pty Limited v
Beachiris (1996) 21 ACSR 527, Brownie J held that the enactment of Part 5.4
has the effect of limiting the exercise of the power to restrain an abuse of
process, with small exceptions, to cases where section 459S would apply. In
Pacific Communications v Walker (1993) 12 ACSR 287 it was the threat to resort
to winding up proceedings to ensure satisfaction of the creditor’s claim, without
affording the opportunity to take advantage of the time made available by the
demand procedure, that resulted in an abuse permitting an injunction to restrain
the commencement of winding up proceedings (and see also Old Kiama Wharf
Co v DCT (2005) NSWSC 929).
An actual or foreshadowed stay on the enforceability of the debt upon which the
creditor relies, is not a sufficient basis to establish an abuse of process:
Australian Beverage Distributors v Evans & Tate Premium Wines (2007) 69
NSWLR 374.

THE WINDING UP APPLICATION
The Originating Process

Once the statutory 21 day period since service of the demand upon the debtor
company has expired, you may then take instructions to commence proceedings
to have the debtor company wound up in insolvency. The basic preconditions to
the commencement of winding up proceedings have been set out at the
commencement of this paper. Note that the Originating Process must be filed
within three months of the expiry of the statutory demand (section 459C (2)). The
application must also be determined within a period of six months (section
459R(2). Diarise the date, as the Originating Process is automatically dismissed
after the elapse of six months, unless the court has extended the period.
Unless an application has been made by the debtor company to set aside the
statutory demand under section 459G, the creditor must commence proceedings
with an Originating Process, in accordance with the Corporations Law Rules. The
Originating Process will seek orders to the following effect:
1. An order that the Defendant be wound up.
2. An order that a liquidator of the Defendant be appointed.
3. An order that the costs of this Originating Process be paid out of

the assets of the Defendant.
4. Such further or other order as this honourable Court deems fit.
A copy of the statutory demand, including the affidavit verifying the demand (if
one was required) must be annexed to the Originating Process.
Grahame Berecry, who for some years presided as Registrar over the winding up
list, suggests that a return date three weeks from the date of filing should be
sought (to allow for the necessary advertising, referred to below) and on a day
other than a Monday, the busiest day in the Corporations list (Berecry and Wood,
Statutory Demands, Winding up and the New Corporations Law Rules, paper
presented at a Young Lawyers CLE Seminar, 7 February 2001).
Note the provisions of section 470 of the Corporations Act, which provides:
470 Certain notices to be lodged

(1) An applicant (other than ASIC) for the winding up of a company must:
(a) lodge, not later than 10.30 am on the next business day after the filing of the
application, notice of the filing of the application and of the date on which the application
was filed; …

(The relevant form is an ASIC Form 519). Such notice is essential to ensure that
other creditors of the debtor company do not separately commence winding up
proceedings, in the mistaken belief that none are on foot. Note that fines apply
for late lodgment.
The Supporting Affidavit

The Originating Process must be verified by an appropriate affidavit. Note the
terms of rules 2.4 and 5.4 of the Corporations Law Rules (the former applies to
proceedings generally under the Rules, and the latter, to winding up proceedings
in particular). Acquire a good working knowledge of Divisions 1, 2 and 5 of the
Corporations Law Rules.
2.4 Supporting affidavits

(1) Unless the Court otherwise directs, an originating process, or interlocutory
process, must be supported by an affidavit stating the facts in support of the
process.
(2) Subject to rule 2.4A, an affidavit in support of an originating process must annex
or exhibit a record of a search of the records maintained by the [ASIC], in relation
to the company that is the subject of the application to which the originating
process relates, carried out no earlier than 7 days before the originating process
is filed.
…
5.4 Affidavit in support of application for winding up (s 459P, s 462, s 464 of
the Law)
(1) The affidavit in support of an originating process seeking an order that company
be wound up must be made by the plaintiff or by a person with the authority of
the plaintiff or plaintiffs.
(2) If the application is made in reliance on a failure by the company to comply with a
statutory demand, the affidavit must:
(a) verify service of the demand on the company, and
(b) verify the failure of the company to comply with the demand, and
(c) state whether and, if so, to what extent the debt, or each of the debts, to
which the demand relates is still due and payable by the company at the
date when the affidavit is made.
…
(4) The affidavit must be made within 7 days before the originating process is filed.
Affidavit of search
The preliminary ASIC company search is an important part of the process. If the
debtor company is insolvent, chances are there will be other creditors who are in
the process of pursuing the debtor for outstanding payments. Alternatively, the
directors of the debtor company may have appointed a Voluntary Administrator to
the company, which provides the company with a moratorium on the
commencement or continuation of proceedings against it (section 440D). The
ASIC search should disclose the commencement of any other winding up

proceedings against the debtor company, or the appointment of a voluntary
administrator.
The filing of an Originating Process for the winding up of the debtor company in
such circumstances is redundant, and the plaintiff is likely to bear an adverse
costs order. It is a good practice to conduct a separate search of the Supreme
Court records when the ASIC search is conducted. This will disclose the
commencement of the winding up proceedings against the debtor company,
even if the previous applicant creditor has failed to file the necessary notification
with the ASIC.
Although not prescribed as part of the supporting affidavit, recite in the text of the
affidavit:
• the fact that the searches have been conducted, and when they were
conducted;
• the registered office of the company, as it appears from the ASIC search;
• the fact that no voluntary administrator has been appointed to the

company, and that the company is not already the subject of a winding up
order or application.
The Liquidator's Consent

Under section 532(9) of the Corporations Act, a person who acts as a liquidator
must consent in writing, prior to his or her appointment. Rule 5.5 of the
Corporations Law Rules prescribes the form of the consent (Form 8), and the
requirements for filing and service of the consent. The consent must be filed prior
to the hearing, and must be served upon the debtor company at least one day
before hearing.
In practice, the registry will nominate a liquidator from the official liquidator's list
at the time of filing the Originating Process, if the consent is not filed at that time.
The name of the nominee is endorsed on the Originating Process. The applicant
creditor may still nominate a liquidator of its choosing, but appropriate notice
(including service of the consent) needs to be given to the debtor company that
the applicant will seek the appointment of a person other than the liquidator
indicated on the Originating Process.
Service of documents prepared to date

Arrange for prompt service of the Originating Process, the main supporting
affidavit, the liquidator's consent and the affidavit of search as soon as possible
after filing. Rule 2.7 of the Corporations Law Rules (extracted below) requires
you to do so, and early compliance with this requirement assists you to discharge

the applicant creditor's obligation to advertise the winding up application. Rule
2.7 of the Corporations Law Rules provides:
2.7 Service of originating process or interlocutory process and supporting affidavit

(1) As soon as practicable after filing an originating process and, in any case, at least 5
days before the date fixed for hearing, the plaintiff must serve a copy of the originating
process and any supporting affidavit on:
(a) each defendant (if any) to the proceeding, and
(b) if the corporation to which the proceeding relates is not a party to the proceeding the
corporation.
Affidavit of publication
As noted above, a winding up application is a proceeding brought in the interests
of creditors generally (s471). Any number of creditors may have an interest in the
outcome of a winding up proceeding and accordingly, the Corporations Law
Rules require that notice of the application be advertised. Discharge of the
advertising requirement is essential to ensure that creditors may:
• refrain from pursuing wasted recovery proceedings against the debtor;
• support the winding up application and/or apply to be substituted as the

applicant on the Originating Process, in the event that the applicant
creditor is paid in full by the debtor company.
Substitution is a topic dealt with separately below. The relevant provisions of the
Corporations Law Rules are extracted below:
5.6 Notice of application for winding up Form 9

(1) Unless the Court otherwise orders, the plaintiff must publish a notice of the
application for an order that a company be wound up.
(2) The notice must be:
(a) in accordance with Form 9, and
(b) published in accordance with rule 2.11:
(i) at least 3 days after the originating process is served on the
company, and
(ii) at least 7 days before the date fixed for hearing of the
application.
As I pointed out above, prompt service of the Originating Process (and the
supporting documents) makes compliance with Rule 5.6 much easier. The nature
of the notice, and proof of its publication, is provided for in Rules 2.11 and 2.12:
2.11 Publication of notices

If a rule requires a notice in relation to a body to be published in accordance with
this rule, the notice must be published once in a daily newspaper circulating
generally in the State or Territory where the body has its principal, or last known,
place of business.

2.12 Proof of publication
(1) This rule applies in relation to any matter published in connection with a
proceeding.
(2) Unless these Rules otherwise provide, or the Court otherwise orders,
the person responsible for the publication of the matter, or the person's
legal practitioner, must file:
(a) an affidavit made by the person, or the person's legal
practitioner, that states the date of publication and to which is
annexed or exhibited a copy of the published matter, or
(b) a memorandum signed by the person, or the person's legal
practitioner, that states the date of publication and refers to
and annexes a copy of the published matter.
(3) The affidavit or memorandum is prima facie evidence that the
publication took place on the date and otherwise as stated in the
affidavit or memorandum.
If you place an advertisement with a large daily newspaper such as the Sydney
Morning Herald, a tear sheet is provided which can be conveniently annexed to
the affidavit required by Rule 2.12.
Affidavit of debt
Be careful to prepare a brief affidavit of debt, which must be sworn by a person
who knows the circumstances of the debt and, most importantly, would have
knowledge of any full or part payment of the debt between the date of issue of
the statutory demand, and the date of hearing of the winding up application. The
reason for care is that you will not find any requirement for such affidavit set out
in either the Corporations Act or the Corporations Rules. This is a specific
requirement of the Equity Division. The requirement for the affidavit of debt can
be rationalised as being essential to the applicant's standing to bring the
application. After all, the applicant is seeking to bring about the liquidation of the
debtor company, on the basis that the debtor has not paid a debt which is owed
to the applicant. The applicant must therefore verify the existence of the debt as
at the time of hearing the application.
A standard formulation of the affidavit of debt
• recite the fact that he or she is familiar with, and has access to the books
and records of the applicant; and
• confirms that, having perused those books and records, the debt upon
which the plaintiff relies, remains owing.
The affidavit should be sworn shortly before the hearing, and certainly less than 3
days before the hearing. Given the timeframe involved, the registrar will accept a
faxed copy of the affidavit of debt, provided that an undertaking is made to file
the original.

THE WINDING UP HEARING
In many cases, the first return date will in fact be the date on which the
application to wind up the debtor company is finally determined. Subject to active
opposition by the debtor company, there is no reason why the application should
not be determined on the first return date, if all of the requirements set out above
have been complied with.
The registrar will call all winding up matters in accordance with the list for that
particular day. If you are ready to proceed, simply make this indication to the
Registrar, who will then stand the matter down. All winding up applications ready
to proceed are heard at the end of the list.
The practice of the Court is for winding up applications to be determined by

examination of the documents. Practitioners generally remain seated at the bar
table whilst the Registrar examines the documentation (including any further
material which you need to hand up on the morning of the hearing). Generally,
the solicitor for the applicant is not called upon to address the Court unless there
is a problem with the documentation in some respect.
Practitioners should be frank about disclosing defects in the documents, even if

the defect is not one that would cause "substantial injustice" to the debtor
company. This applies particularly if the application proceeds in the absence of
the debtor company's appearance. In most cases, and unless the defect is a
substantial one affecting the statutory demand, the application will simply be
adjourned so that the problem can be remedied.
Of course, all practitioners have an ethical duty of honesty and candour to the
Court. Furthermore, bringing problems with one's application squarely to the
Court's attention is likely to engender the trust of the Court when you appear on
future occasions.
Prepare a "Notice to Liquidator of Appointment" in triplicate while you are waiting

for the matter to be called for hearing, unless you have prepared one beforehand
from your own precedents. These documents are available on the bar table. Note
the terms of rule 5.11 of the Corporations Law Rules, which provides:
5.11 Notice of winding up order and appointment of liquidator Form 11

(1) This rule applies if the Court orders that a company be wound up and an official
liquidator be appointed as liquidator of the company.
(2) Not later than the day after the order is made, the plaintiff must inform the
liquidator of the appointment.
(3) As soon as practicable after being informed of the appointment, the liquidator
must publish a notice of the winding up order and the liquidator's appointment.

(a) in accordance with Form 11, and
(b) published in accordance with rule 2.11.
(5) In this rule:
liquidator does not include a provisional liquidator.
Notice of making a winding up order

The applicant creditor’s solicitor has two further obligations to provide notice, in
the event that a winding up order is made. Apart from the necessity to
immediately notify the liquidator of the appointment, it is essential to lodge a
further ASIC Form 519 (which simply recites the making of the winding up order
against the company) within two days of the order (section 470 (1) (b)).
Further, an office copy of the winding up order must be filed with the ASIC (Form
105) within seven days of entry of the winding up order (section 470 (2)). The
order must be served upon the company and the liquidator.
Winding up orders are one of the few which the Court will prepare itself. The
practice of the Equity Division registry is to forward a sealed copy of the winding
up order to the solicitor on the record for the applicant creditor, within a few days
of the order being made.
Opposition to the making of a winding up order at hearing

It has already been noted above that the basis upon which a debtor company
can challenge the making of a winding up order, other than through the process
laid down by section 459G, is very restricted. Note the terms of section 459S
(extracted above) which effectively confine the debtor company to a defence of
actual solvency, in the absence of a timely application to set aside the statutory
demand. To this end, the Corporations Act and the Corporations Law Rules
prescribe that the debtor company notify the applicant of the nature of any
proposed defence to the winding up application:
465C Applicant to be given notice of grounds for opposing application

On the hearing of an application under section 459P, 462 or 464, a person may
not, without the leave of the Court, oppose the application unless, within the
period prescribed by the rules, the person has filed, and served on the applicant:
(a) notice of the grounds on which the person opposes the application; and
(b) an affidavit verifying the matters stated in the notice
2.9 Notice of appearance (s465C of the Law) Form 4
(1) A person who intends to appear before the Court at the hearing of an
application must, before appearing:
(a) file:
(i) a notice of appearance in accordance with Form 4,
and

(ii) if appropriate an affidavit stating any facts on which
the person intends to rely, and
(b) serve on the plaintiff a copy of the notice of appearance and
any affidavit not later than:
(i) if the person is named in an originating process 3
days before the date fixed for hearing, or
(ii) if the person is named in an interlocutory process 1
day before the date fixed for hearing.
(2) If the person intends to appear before the Court to oppose an
application for winding up, the person may include in the notice of
appearance the notice of the grounds on which the person opposes the
application required by section 465C of the Law.
(3) The period prescribed for filing and serving the notice and affidavit
required by section 465C of the Law is the period mentioned in
subparagraph (1) (b) (i).
It should be noted, however, that the defence of solvency is not one to which the
requirement to obtain leave under section 459S applies: Aust Yieh Stainless Pty
Ltd v Horans Steel Pty Ltd [2000] NSWSC 244 per Santow J.
Running a defence of actual solvency is a serious undertaking, and many

attempts to run the defence founder because of inadequate preparation. To
actually prove the solvency of a company can be very difficult, and should be the
subject of expert evidence, that is, evidence on oath by an insolvency
practitioner. The correct approach to this task has been recently and
authoritatively by the Court of Appeal (Santow JA, with whom Meagher and
Handley JJA agreed) in Expile Pty Ltd v Jabb's Excavations Pty Ltd (2003) 45
ACSR 711; (2003) 21 ACLC 1354; [2003] NSWCA 163; BC200303456, which
adopted the statements of principle of Weinberg J in Ace Contractors & Staff Pty
Ltd v Westgarth Development Pty Ltd [1999] FCA 728; BC9902928, as follows
(at [16]):
“The authorities which govern the operation of s459G of the Corporations Law seem to me
to establish the following propositions:
• The respondent is presumed to be insolvent and as such bears the onus of
proving its solvency: s459C(2) and (3); Elite Motor Campers Australia v
Leisureport Pty Ltd (1996) 22 ACSR 235 per Spender J; In the matter of
Simionato Holdings Pty Ltd (1997) 15 ACLC 477 per Mansfield J.
• In order to discharge that onus the Court should ordinarily be presented with the
“fullest and best” evidence of the financial position of the respondent:
Commonwealth Bank of Australia v Begonia (1993) 11 ACSR 609; 11 ACLC
1075 at 1081 per Hayne J.
• Unaudited accounts and unverified claims of ownership or valuation are not
ordinarily probative of solvency. Nor are bald assertions of solvency arising from
a general review of the accounts, even if made by qualified accountants who
have detailed knowledge of how those accounts were prepared: In the matter of
Simionato Holdings Pty Ltd (above); Re Citic Commodity Trading Pty Ltd v JBL
Enterprises (WA) Pty Ltd [1998] 232 FCA (unreported, Fed C of A, Heerey J, No
VG3172 of 1997, 16 March 1998, BC980078) per Heerey J; Leslie v Howship
Holdings Pty Ltd (1997) 15 ACLC 459 at 463 per Sackville J.
• There is a distinction between solvency and a surplus of assets. A company may
be at the same time insolvent and wealthy. The nature of a company’s assets,

and its ability to convert those assets into cash within a relatively short time, at
least to the extent of meeting all its debts as and when they fall due, must be
considered in determining solvency: Rees v Bank of New South Wales (1964)
111 CLR 210; [1965] ALR 139; Re Tweeds Garages Ltd [1962] Ch 406 at 410
per Plowman J; In the matter of Simionato Holdings Pty Ltd (supra); Melbase
Corporation Pty Ltd v Segenhoe Ltd (1995) 13 ACLC 823 at 832 per Lindgren J;
Leslie v Howship Holdings Pty Ltd (supra) at 465–6.
• The adoption of a cash flow test for solvency does not mean that the extent of
the company’s assets is irrelevant to the inquiry. The credit resources available
to the company must also be taken into account: Sandell v Porter (1966) 115
CLR 666 at 671 per Barwick CJ (with whom McTiernan and Windeyer JJ
agreed); Leslie v Howship Holdings Pty Ltd (supra) at 466; Taylor v ANZ Banking
Group Ltd (1988) 6 ACLC 808 at 812; 13 ACLR 780 per McGarvie J.
• The question of solvency must be assessed at the date of the hearing. However,
this does not mean that future events are to be ignored: Leslie v Howship
Holdings Pty Ltd (supra) at 466–467.
• It is no abuse of process for an applicant to seek to wind up a company
presumed to be insolvent by reason of its failure to comply with a statutory
demand merely because that company contends that it is solvent, or because
there may be alternative means available to the applicant to vindicate its rights:
Elite Motor Campers Australia v Leisureport Pty Ltd (supra).
The “fullest and best” evidence in support of the contention of solvency, is

required (Leveraged Equities Ltd v Finance and Equity Pty Ltd [2007] NSWSC
1197 (at [21]). Practitioners are now clearly on notice that the hasty tender of
assorted books and records of the company, apparently indicating an excess of
assets over liabilities, is simply not adequate.
In Consolidated Constructions Pty Ltd; Re Satellite Group Ltd (2000) 35 ACSR

565; [2000] NSWSC 984; BC200006543, Santow JA expressed the view (in the
context of an attempt to rebut the presumption of insolvency in an application
under section 459S) that management accounts, and aged debtors ledger and
accompanying analysis, together with an independent auditor’s substantiation of
the company’s debt position, should be provided by the company.
In Leveraged Equities Ltd v Finance and Equity Pty Ltd [2007] NSWSC 1197,
Barrett J recently considered a defence of solvency which was in essence
founded upon the (asserted) financial viability of the corporate group to which the
defendant-debtor was a member. The decision is a timely reminder of the pitfalls
associated with such a defence. The failure to comprehensively identify the
nature of the support provided, the obligation of the other companies to provide
it, or the precise position of the debtor with in the ‘group’, was fatal to the
defence.
Fundamentally, the appropriate test is the "cash flow" test which has been
restated countless times by the courts, including the following passage from the
reasons of Young J. in Kekatos v Holmark Construction Coy Pty Limited
(unreported, Supreme Court of New South Wales, 24 November 1995):

“Solvency is, for present purposes, the state of being able to pay one's debts out of one's
own money as they fall due, though the debtor's resources are not limited to its cash
resources but extend to moneys which the debtor can procure by realization of assets
within a relatively short time: Sandell v Porter (1966) 115 CLR 666. It is not sufficient that
the debtor given time to realize its assets would be able to pay 100 cents in the dollar: Re
Attiwill (1932) 5 ABC 54
However, it does not appear that section 459S is any barrier to advancement of
the contention that the creditor’s conduct of the winding up proceeding is an
abuse of process: TS Recoveries Pty Ltd v Sea-Slip Marinas (Aust) Pty Ltd
[2007] NSWSC 1074 (and as to the nature of an abuse of process which will
justify a refusal to make the winding up order, see the recent decision of the
Court of Appeal in Australian Beverage Distributors Pty Ltd v Evans & Tate
Premium Wines Pty Ltd (2007) 61 ACSR 441; (2007) 25 ACLC 230; [2007]
NSWCA 57.
Consider also the potential costs implications for unmeritorious intervention in the
winding up process by persons interested in the fate of the debtor company:
2.13 Leave to creditor, contributory or officer to be heard

(1) The Court may grant leave to any person who is, or who claims to be:
(a) a creditor, contributory or officer of a corporation, or
(b) an officer of a creditor, or contributory, of a corporation, or
(c) any other interested person,
to be heard in a proceeding without becoming a party to the proceeding.
(2) If the Court considers that the attendance of a person to whom leave
has been granted under subrule (1) has resulted in additional costs for
any party, or the corporation, which should be borne by the person to
whom leave was granted, the Court may:
(a) direct that the person pay the costs, and
(b) order that the person not be heard further in the proceeding
until the costs are paid or secured to the Court's satisfaction.
Applications for an adjournment: the commencement of a voluntary

administration
Not infrequently, the directors of the defendant-debtor will appoint a voluntary
administrator to the company after the winding up summons has been filed.
Often, this occurs very shortly before the winding up summons is returnable, and
the defendant seeks to adjourn the summons so the administration may take its
course. Section 440A of the Corporations Act requires the Court to adjourn the
application for a winding up order, but only if it is “satisfied that it is in the
interests of the company’s creditors for the company to continue under
administration rather than be wound up.”
First, a winding up application is not a “proceeding in a court against the

company” for which leave is required before proceeding, once the administration
has commenced, for the purposes of section 440D of the Act: Australian

Prudential Regulation Authority v Rural & General Insurance Limited [2004] FCA
185.
The mandatory adjournment applies only where the Court is so satisfied: the
provision has no application where the court is not satisfied, and the ordinary
discretion to grant or refuse an adjournment comes into play: Nortel v Coretel
[2002] NSWSC 799; DCT v Bradley Keeling Management [2003] NSWSC 47.
The application for adjournment by the company (now acting through its
administrator) is usually accompanied by some kind of proposal for a deed of
company arrangement, and a request for time so that the creditors may consider
it. A good starting point is the decision of Campbell J in DCT v Bradley Keeling
Management [2003] NSWSC 47, where the Court considered such a request,
and reviewed the relevant principles.
The onus on the adjournment application (when it is made under the section)
rests upon the defendant company. Obviously, the question of which form of
administration (voluntary administration or liquidation) is likely to produce the
larger dividend is of great significance (see Creevey & Anor v Deputy
Commissioner of Taxation (1996) 19 ACSR 456), though it would not appear to
be sole consideration. As Hamilton J stated in TCS Management Pty Limited v
CTTI Solutions Pty Limited [2001] NSWSC 830 (extracted by Campbell J in
Bradley Keeling Management):
“... it is dangerous, as in so many cases, to place any gloss upon the statute. The sole
consideration posited as the criterion for the Court’s decision in section 440A(2) is the
interests of the company’s creditors. It is clear that the onus is on the person seeking the
adjournment to establish to the satisfaction of the Court that the adjournment is in the
interests of those creditors. In general terms, that will be difficult to do unless there is a
good case that there will be a greater or more accelerated return from the course
contended for. But considerations beyond mere quantum may be relevant to take into
account in determining what is in the interests of the creditors and whether it is
established that an adjournment may be said to be in the creditors’ interests. Where there
are advantages in either course, in general terms it may well be the proper course to give
such adjournment as will allow the creditors themselves to vote upon the proposal and
determine which course they prefer.”
The proximity of the adjournment application to the appointment of the

administrator is an important consideration. Comparatively little material may be
required to secure the adjournment where the application is made very shortly
after the commencement of the administration. However, the amount of evidence
required to satisfy the burden of persuasion increases over time: Bradley Keeling
Management at [18]; ASIC v Maxwell [2004] NSWSC 221).
Campbell J concluded (at [39]):
“However, in carrying out the exercise under s440A(2), a question of prejudice, or lack of
it, to the creditors only becomes relevant if there is some advantage to the creditors which

might derive from continuation of the administration. If there is some advantage to the
creditors which might derive from the continuation of the administration, the Court’s task is
to then compare that advantage with any possible prejudice there might be. In the present
case, though, I am not satisfied that there has been any advantage to the creditors
demonstrated.”
In that case, the application failed because of the vagueness of the proposal,
which did not identify the entities which would make contributions to the deed
fund (or agree to waive claims upon the company), nor did it explain how the
proposed fund would be paid. The decision underlines the importance of
providing evidence which allows the Court to identify with precision the proposal
to be placed before creditors, and to form some reasonably based expectation
that the proposal can be carried through to completion.
An important consideration for the petitioning creditor in such applications is the

costs often thrown away in the event that the adjournment application is
successful. In McDonald v Deputy Commissioner of Taxation (2005) 187 FLR
461; (2005) 23 ACLC 324; (2005) 58 ATR 418; [2005] NSWSC 2; BC200500413,
Barrett J recently concluded that an order for costs against a company in
administration in favour of a creditor that had sought its winding up in insolvency
was not provable in the company’s subsequent creditors’ voluntary winding up: it
was neither an expense properly incurred by the administrators or liquidators in
terms of ss566(1)(a) or s556(1)(d) of the Act, nor was it a debt the circumstances
giving rise to which occurred before the commencement of the administration in
terms of s553(1).
Nonetheless, where a creditor would otherwise be entitled to statutory priority,

the Court does not, as a general rule approve an alternative regime of distribution
to creditors that would disturb that priority: In Expile Pty Ltd v Jabb’s Excavations
Pty Ltd (2004) 22 ACLC 667 per Palmer J (at 677) (And see also Commonwealth
of Australia v Rocklea Spinning Mills Pty Ltd (Receivers and Managers
Appointed) (Subject To A Deed of Company Arrangement) [2005] FCA 902 at
[23]).
In Re Tony Michael Mechanical Pty Ltd (under administration) [2003] QSC 141, a
creditor had filed an application to wind up the company in insolvency. Shortly
before the application came on for hearing, the creditor’s debt was paid but
another creditor was substituted and the application was adjourned. Early on the
day of the adjourned hearing the company appointed administrators and the
winding up application was further adjourned. A creditors’ meeting resolved that
a deed of company arrangement be executed but when the winding up
application next came before the Court the deed had not yet been executed. The
draft deed did not provide priority for the substituted creditor’s costs of the
winding up application and the creditor sought an order under s447A or s447E
that the deed, when executed, must make such provision.

A costs order would have been made in favour of the substituted creditor under s
467 if the winding up application were dismissed consequent upon a deed of
company arrangement being entered into. However, the costs order would be
made subsequent to the commencement of the administration and, therefore,
after the commencement date of the deed. Following Young J’s decision in FAI
Workers Compensation (NSW) Ltd v Philkor Builders Pty Ltd (1996) 21 ACSR
532; (1996) 14 ACLC 1574; BC9604289, Fryberg J held (at para 10) that the
costs order would not be provable under the deed of company arrangement and
would not be caught by s444D(1) or s444E. However, his Honour held that the
Court had power under s447A to order that the deed to be entered into must
specify that the costs order which he proposed to make in favour of the
substituted creditor upon dismissal of the winding up application be paid in
priority to all other creditors’ claims.
Fryberg J’s reasoning has been followed in New South Wales. In Bidald
Consulting v Miles Special Builders [2005] NSWSC 171 at [19], Gzell J held
(following Re Tony Michael Mechanical Pty Ltd (under administration) [2003]
QSC 141) that section 447A of the Act could be used such that the deed of
company arrangement specified that the creditor’s costs of the winding up be
paid by the administrators of the deed in priority to all other amounts payable by
them
In Expile Pty Ltd v Jabb's Excavations Pty Ltd and Anor (2004) 22 ACLC 667;
[2004] NSWSC 284, Palmer J reviewed a number decisions (including Philkor
and Coventry Auto Parts), and concluded that “the Courts do not permit deeds of
company arrangement to be used as a means of frustrating the priority given by
s556(1)(b) to costs of a winding up application.” In so holding, his Honour stated
further that whether this was the company’s intention is irrelevant, if the action
taken had the effect of denying the petitioning creditor’s priority to costs under
s556(1)(b) of the Act.
Substitution
I have referred above to the fact that winding up proceedings are notionally
brought on behalf of all of the creditors of an insolvent company. This is an
important consideration in the (fairly frequent) case where a debtor company
pays out the applicant creditor prior to the winding up at hearing. It is not
uncommon to see one or more creditors represented during the course of the
winding up proceeding, although not formally parties to those proceedings. Leave
to appear is granted as a matter of course to creditors who wish to support the
winding up application. Winding up proceedings cannot be discontinued as of
right: leave to discontinue is a specific requirement (Rule 5.8).

In the event that the applicant creditor seeks to discontinue the proceedings, the
Court will generally permit a supporting creditor to proceed on the same
Originating Process, providing it has standing to do so. Note the following
provisions of the Corporations Act and the Corporations Law Rules:
465B Substitution of applicants

(1) The Court may by order substitute, as applicant or applicants in an application
under section 459P, 462 or 464 for a company to be wound up, a person or
persons who might otherwise have so applied for the company to be wound up.
(2) The Court may only make an order if the Court thinks it appropriate to do so:
(a) because the application is not being proceeded with diligently enough;
or
(b) for some other reason.
(3) The substituted applicant may be, or the substituted applicants may be or
include, the person who was the applicant, or any of the persons who were the
applicants, before the substitution.
(4) After an order is made, the application may proceed as if the substituted
applicant or applicants had been the original applicant or applicants.
5.10 Order substituting plaintiff in application for winding up (s 465B of the Law)
Form 10
(1) If the Court makes an order under section 465B of the Law, the Court may also
order that the substituted plaintiff or plaintiffs publish a notice stating that the
substituted plaintiff or plaintiffs intend to apply for an order that the company be
wound up.
(a) in accordance with Form 10, and (b) published in accordance with rule
2.11 or as otherwise directed by the Court.
Just as a defendant company cannot challenge the standing of a creditor without

resort either to a timely 459G application, or an application for leave under
section 459S, nor can such a challenge be made to the standing of a substituting
creditor, at least being a creditor which has itself served a statutory demand
which has not been satisfied or set aside: Bibby Financial Services v Wolf
Industries Australia Pty Ltd (2004) 182 FLR 49; (2004) 49 ACSR 45; [2004]
NSWSC 134; BC200400878.
The substitution process is very cost-effective and efficient for a supporting

creditor, which can substantially rely upon the documents prepared and filed by
the creditor who brought the winding up proceedings. Remember that a
substituting creditor will also be bound by the defects in the documents which
have been filed by the original applicant. It is wise to obtain copies of all of the
documentation at the earliest opportunity. In this connection, note the terms of
Rule 5.7, which provides:
5.7 Applicant to make copies of documents available

A copy of any document filed in a proceeding to which this Division applies must be
available at the plaintiff's address for service for inspection by a creditor, contributory or
officer of the company, or an officer of a creditor or contributory of the company.

As a matter of form, an application for substitution is an attempt to move the
Court for orders and should be the subject of an Interlocutory Process, to be
handed up with leave on the day that the supporting creditor wishes to apply to
the substituted. However, it is customary for the application to be made orally.
Like winding up orders, orders effecting the substitution of a plaintiff are generally
typed by the equity division registry and provided to the applicant.
PROCEDURE AND PRECEDENTS

It should be clear from the information set out above that the winding up
jurisdiction depends upon the mastery of documents and procedure. Particularly
if you are acting for an applicant-creditor, most of the issues which arise in the
case law about defects in the demands and other Court documents should be
substantially irrelevant provided that you are familiar with the provisions of the
Corporations Act and the Corporations Rules, and have carefully prepared your
documents.
By far the best way to manage the technical procedure is to have in place a
system of thoroughly prepared (and proof-read) precedents. A well-prepared
precedents library provides you with the following advantages:
• very effective risk management tool;
• prompts the practitioner to the next step in the process;
• high efficiency, in a jurisdiction where cost effectiveness is at a premium;
• an excellent training tool for new solicitors, or solicitors who are not
familiar with the winding up jurisdiction;
• in the case of "repeat players", Court familiarity (and trust in) your
documentation.
If you spend any significant amount of time in this jurisdiction, it often pays to
integrate alternative formulations of orders and other information into your
system, so that you may quickly and efficiently access the information you
require in a particular case.
You can also enhance the risk management aspect of your precedents system
by having supplementary documents "piggy back" on a principal document which
you are preparing at any given time (e.g. set the system to automatically print the
Form 519 when the Originating Process is printed).
A good set of precedents can be complemented by a thorough checklist, to

ensure that all of the steps necessary to obtain a winding up order have been
met in a timely fashion. The varying time restrictions which apply throughout the
winding up process can sometimes make it difficult to keep track of the
procedure in any given matter, without a good checklist.

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Applications to Wind Up Corporations

The Corporations Law Rules (especially Division 5 – Winding Up Proceedings),

THE WINDING UP JURISDICTION

Further, a company can be wound up in insolvency, on one of five further specific

• Proved insolvency, pursuant to application under section 459P (section

• In the event of a resolution of creditors of a corporation subject to

Applications to Wind Up Corporations 2

459C Presumptions to be made in certain proceedings

THE STATUTORY DEMAND

Applications to Wind Up Corporations 3

Section 459E relevantly provides:

459E Creditor may serve statutory demand on company

The form of statutory demand

Applications to Wind Up Corporations 4

The “statutory minimum” is $2,000.00 (section 459E, definition of “statutory

Debts other than judgments debts

In essence, the Form 7 affidavit provides for:

Applications to Wind Up Corporations 5

Form 7 contains samples of information to be inserted into the text of the

Again, the existence of the relevant “authority” is a specific requirement of the

It is an abuse of process to issue a statutory demand in relation to any debt

The issue of a statutory demand is not the commencement of a proceeding, and

Applications to Wind Up Corporations 6

Description of the Debts Amount of the Debts

Invoice #321 dated 4 September 2002, for widgets $1,400.00

Invoice #349 dated 20 September 2002, for widgets $1,300.00

Total of the amounts of the debts: $2,700.00

Applications to Wind Up Corporations 7

APPLICATION TO SET ASIDE A STATUTORY DEMAND

• the existence of an offsetting claim by the debtor against the creditor;

• where a “substantial injustice” would be caused to the debtor company as

• for “some other reason” the demand should be set aside.

The relevant provisions of the Corporations Act are extracted below:

459G Company may apply

Applications to Wind Up Corporations 8

459H Determination of application where there is a dispute or offsetting claim

459J Setting aside demand on other grounds

Section 459J is complemented by section 467A, which provides:

467A Effect of defect or irregularity on application under Part 5.4 or 5.4A

These provisions should be read in conjunction with section 459S, which

459S Company may not oppose application on certain grounds

Time for making an application

Applications to Wind Up Corporations 9

The ‘Graywinter’ principle

Applications to Wind Up Corporations 10

Genuine Dispute about the existence or amount of the debt/offsetting

In my opinion that expression connotes a plausible contention requiring investigation, and

One should consider carefully the following:

• the court is not concerned to make a determination on the merits as to

Applications to Wind Up Corporations 11

Applications to Wind Up Corporations 12

2.4A Application for order setting aside statutory demand

Applications to Wind Up Corporations 13

Grounds not relied upon in a (timely) application to set aside the

Applications to Wind Up Corporations 14

The Court stated:

Applications to Wind Up Corporations 15

Subsequently, in Biron Capital v Velowing [2003] NSWSC 1181, Barrett J

A stay on enforcement of the judgment which underpins a statutory demand,

Applications to Wind Up Corporations 16

Bear in mind that the court, in hearing an application to wind up a corporation in

Applications to Wind Up Corporations 17

There remains a jurisdiction to restrain or dismiss a winding up application, when