In the matter of Cullen Group Australia Pty Ltd (in liq)

Cullen Group Australia Pty Ltd, in liquidation, was the applicant in proceedings against 29 respondents, seeking declarations that certain payments made by the first applicant were unfair preferences. The court was asked to determine whether the first applicant was insolvent on and from 23 June 2016 to 22 December 2016. This was a preliminary question ordered to be determined before the trial of the principal proceedings. The respondents were given an opportunity to make an election as to whether to admit the preliminary question by 13 November 2020. The third and fifth respondents admitted the preliminary question within the allocated time. The liquidator changed his position a number of times regarding costs, and the applicants sought an order that the third and fifth respondents pay the applicants’ costs of determining the preliminary question up until the date on which the third and fifth respondents admitted the first applicant’s insolvency.

The court found that the list set out by Mandie J in [386] of his Honour’s reasons is not a complete set of indicia of insolvency, but rather a useful aide memoire. The court accepted the evidence of the liquidator, Mr Caspaney, who concluded that the company was insolvent from at least 1 April 2016 and during the relation back period between 23 June 2016 and 22 December 2016. The court found that the report of Mr Caspaney accurately and adequately sets out the financial position of the company at the relevant time. The company was not able to pay all of its debts, as and when they became due and payable, during the period from 23 June 2016 to 22 December 2016.

The court found that the answer to the preliminary question was that Cullen Group Australia Pty Ltd was insolvent on and from 23 June 2016 to 22 December 2016. The court also found that the costs of determining the preliminary question should be the applicants’ costs in the cause, with respect to the third and fifth respondents. The first, second, fourth, seventh, eighth, tenth, twelfth, fourteenth, sixteenth, seventeenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-second, twenty-third, twenty-fourth, twenty-sixth, twenty-seventh, twenty-eighth and twenty-ninth respondents should pay the applicants’ costs of determining the preliminary question.

The court ordered that the answer to the preliminary question was that Cullen Group Australia Pty Ltd was insolvent on and from 23 June 2016 to 22 December 2016. The court also ordered that with respect to the third and fifth respondents, the costs of determining the preliminary question be the applicants’ costs in the cause. The court further ordered that the first, second, fourth, seventh, eighth, tenth, twelfth, fourteenth, sixteenth, seventeenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-second, twenty-third, twenty-fourth, twenty-sixth, twenty-seventh, twenty-eighth and twenty-ninth respondents pay the applicants’ costs of determining the preliminary question.