ARL2 Pty Ltd v Flex-Realty Pty Ltd

ARL2 Pty Ltd (the applicant) sought to wind up Flex-Realty Pty Ltd (the respondent) on the grounds of insolvency, specifically alleging a failure to comply with a statutory demand. The application was heard by the Supreme Court of Queensland.

The primary legal issue before the Court of Appeal was whether the primary judge erred in finding that the respondent had failed to discharge its onus of proving solvency. This involved determining whether the respondent had demonstrated its ability to pay its debts as and when they fell due, despite the presumption of insolvency arising from its failure to respond to the statutory demand.

The Court of Appeal affirmed the primary judge's decision, finding no error in the assessment of the evidence. The court reiterated the principle that once a statutory demand is served and not satisfied or set aside within the prescribed period, a presumption of insolvency arises. The onus then shifts to the respondent company to prove its solvency. The primary judge had considered the respondent's financial position and concluded that it had not discharged this onus, a conclusion with which the Court of Appeal agreed.

The appeal was dismissed.