Barrett Group Pty Ltd v Kenik Pty Ltd - [2025] QSC 25

SUPREME COURT OF QUEENSLAND

CITATION:

Barrett Group Pty Ltd v Kenik Pty Ltd [2025] QSC 25

PARTIES:

BARRETT GROUP PTY LTD

(Applicant)

v
KENIK PTY LTD

(Respondent)

FILE NO/S:

3963/24

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

20 February 2025

DELIVERED AT:

Brisbane

HEARING DATE:

5 February 2025

JUDGE:

Martin SJA

ORDER:

1. That Kenik Pty Ltd be wound up in insolvency.

2. I will hear the parties on the appointment of a liquidator and on costs.

CATCHWORDS:

CORPORATIONS — Winding up in insolvency — Presumed insolvency from failure to comply with statutory demand — Discretion to dismiss or adjourn winding up application — Whether discretion should be exercised to allow insolvent company to pursue litigation — Winding up order made.

Corporations Act 2001 (Cth), s 467(1)

Bungey v Magnate Projects Pty Ltd [2006] NSWSC 734, distinguished
Deputy Commissioner of Taxation v TD Preece Pty Ltd [2013] FCA 1365, distinguished
Reform Projects Pty Ltd v Macarthur Projects Pty Ltd [2022] NSWSC 672, considered

COUNSEL:

H Somerville for the applicant
M Clarke for the respondent
D Kissane for a supporting creditor
T Edwards for a supporting creditor
D Locke for a supporting creditor
K Kannan (solicitor) for a supporting creditor

SOLICITORS:

Rostron Carlyle Rojas Lawyers for the applicant
Colin Biggers & Paisley for the respondent
Muscat Tanzer for a supporting creditor
Hopgoodganim Lawyers for a supporting creditor
Robinson Locke Litigation Lawyers for a supporting creditor
Broadley Rees Hogan for a supporting creditor

Barrett Group seeks an order that Kenik be wound up in insolvency for failing to comply with a statutory demand. Kenik seeks a stay of this application.
The events leading to this application
In August 2020, Kenik, as the contractor, and Taringa Property Group Pty Ltd (TPG), as the principal, entered into a contract for the construction of a large shopping complex in Taringa. The construction took much longer than had been programmed for under the contract. Consequently, the cost of construction claimed by Kenik was substantially higher than the contract price for the original scope of works.
In September 2023, Kenik made a payment claim for $9,689,767. TPG’s solicitors responded with a payment schedule with a scheduled amount of nil.
In October 2023, Kenik made an adjudication application. The adjudication decision was released in February 2024. It was in Kenik’s favour in the sum of $4,218,787.
In February 2024, Kenik obtained judgment in this court in respect of the adjudicated amount (the judgment debt).
Soon after that, TPG commenced proceedings seeking to have the adjudication decision declared void in whole or in part as a consequence of alleged jurisdictional error. Related relief was also sought. Other proceedings were instituted by TPG and another party which, effectively, sought a finding that Kenik is not entitled to retain the adjudicated amount.
In late February 2024, Kenik undertook not to enforce the judgment debt and TPG agreed to pay the adjudicated amount into court.
In March 2024, Barrett filed this winding-up application based…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] QSC 25
Decision Date: 20 February 2025

CaseChat Overview and Summary

Barrett Group Pty Ltd brought an application to wind up Kenik Pty Ltd in insolvency, based on a failure to comply with a statutory demand. The case was heard in a relevant Australian court. The primary issue for the court was whether Kenik Pty Ltd was presumed to be insolvent due to its non-compliance with the statutory demand and whether the court should exercise its discretion to allow Kenik Pty Ltd to pursue litigation, potentially delaying the winding up process.

The court examined the circumstances of the case and concluded that Kenik Pty Ltd was indeed insolvent as it had failed to comply with the statutory demand. Despite the fact that Kenik Pty Ltd argued for the stay of the winding up application to pursue litigation, the court found that doing so would only further delay the creditors' ability to recover their debts. The court emphasised that the creditors would be left waiting even longer if the litigation was allowed to proceed. As a result, the court decided not to exercise its discretion in favour of Kenik Pty Ltd.

In its judgment, the court ordered that Kenik Pty Ltd be wound up in insolvency. The court also noted that there was a disagreement between the parties regarding the appointment of a liquidator. As a result, the court decided to hear the parties on this matter, as well as on the issue of costs. The final orders were that Kenik Pty Ltd be wound up in insolvency and that the parties would be heard regarding the appointment of a liquidator and the costs associated with the proceedings.

Orders

Orders of the court

1. That Kenik Pty Ltd be wound up in insolvency.

2. I will hear the parties on the appointment of a liquidator and on costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Kenik requires all the dominoes to fall in its favour and, even if they did, the creditors would be left waiting even longer. Kenik has not demonstrated a case for staying this application.Conclusion Kenik is insolvent. There is no basis for staying the prosecution of this application. I order that Kenik Pty Ltd be wound up in insolvency. As there is disagreement about who should be appointed as the liquidator I will hear the parties on that matter. I will hear the parties on costs.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Barrett Group Pty Ltd v Kenik Pty Ltd [2025] QSC 25
PARTIES:	BARRETT GROUP PTY LTD (Applicant) v KENIK PTY LTD (Respondent)
FILE NO/S:	3963/24
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	20 February 2025
DELIVERED AT:	Brisbane
HEARING DATE:	5 February 2025
JUDGE:	Martin SJA
ORDER:	1. That Kenik Pty Ltd be wound up in insolvency. 2. I will hear the parties on the appointment of a liquidator and on costs.
CATCHWORDS:	CORPORATIONS — Winding up in insolvency — Presumed insolvency from failure to comply with statutory demand — Discretion to dismiss or adjourn winding up application — Whether discretion should be exercised to allow insolvent company to pursue litigation — Winding up order made. Corporations Act 2001 (Cth), s 467(1) Bungey v Magnate Projects Pty Ltd [2006] NSWSC 734, distinguished Deputy Commissioner of Taxation v TD Preece Pty Ltd [2013] FCA 1365, distinguished Reform Projects Pty Ltd v Macarthur Projects Pty Ltd [2022] NSWSC 672, considered
COUNSEL:	H Somerville for the applicant M Clarke for the respondent D Kissane for a supporting creditor T Edwards for a supporting creditor D Locke for a supporting creditor K Kannan (solicitor) for a supporting creditor
SOLICITORS:	Rostron Carlyle Rojas Lawyers for the applicant Colin Biggers & Paisley for the respondent Muscat Tanzer for a supporting creditor Hopgoodganim Lawyers for a supporting creditor Robinson Locke Litigation Lawyers for a supporting creditor Broadley Rees Hogan for a supporting creditor