In the matter of Edifice Australia Pty Limited

Edifice Australia Pty Limited applied for an adjournment of winding up proceedings to allow time for the administrators to complete a proposal for a deed of company arrangement (DOCA). The application was made in the Federal Court of Australia, with the opposing party being the company's creditor. The nature of the dispute was whether the court should adjourn the winding up to permit the administrators to work on a DOCA proposal or whether it should proceed with the winding up due to the company's insolvency.

The legal issues before the court were whether the application to adjourn the winding up proceedings could be granted under the Corporations Act 2001 (Cth), and whether the presumption of insolvency arising from the company's failure to comply with a statutory demand could be rebutted. The court had to consider the evidence provided by the administrators, which indicated that the company was clearly insolvent, and the nascent DOCA proposal that had not yet been finalised.

The court found that the test in s 440A(2) was not satisfied as the evidence did not show that it was likely the company would be able to pay its debts if the winding up was adjourned. The court also noted that the company's evidence was insufficient to rebut the presumption of insolvency arising from the failure to comply with the statutory demand. Consequently, the application for adjournment was refused, and a winding up order was made in favour of the creditor.