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In the matter of New View Windows Pty Ltd trading as Narellan Windows and Glass

In the matter of New View Windows Pty Ltd trading as Narellan Windows and Glass

Case [2020] NSWSC 1905 4 November 2020

Standing

Abuse of Process

Insolvency Law

Rebutting Presumption of Insolvency

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of New View Windows Pty Ltd trading as Narellan Windows and Glass [2020] NSWSC 1905
Hearing dates: 4 November 2020
Date of orders: 4 November 2020
Decision date: 04 November 2020
Jurisdiction: Equity - Corporations List
Before: Black J
Decision:
Company wound up in insolvency

Catchwords:
CORPORATIONS — Winding up — Statutory demand — Standing to bring winding up application — Where default judgment supporting statutory demand has been set aside — Whether winding up application an abuse of process — Rebutting presumption of insolvency — Whether evidence led adequate to rebut presumption of insolvency on balance of probabilities

Legislation Cited:
- Corporations Act 2001 (Cth), ss 95A, 459P, 459S

Cases Cited:
- Alternative Engine Technologies Pty Limited v Kruger Ventures Pty Limited (No 2) [2010] SASC 60
- Australian Securities and Investments Commission v Lanepoint Enterprises Pty Limited (2011) 244 CLR 1; [2011] HCA 18
- Bidald Consulting Pty Limited v Miles Special Builders Pty Limited (2005) 54 ACSR 228; [2005] NSWSC 397
- Expile Pty Limited v Jabb's Excavations No 2 [2003] NSWCA 163
- Fitness First Australia Pty Limited v Dubow [2011] NSWSC 531
- Re Gladstone Mortgagee No 1 Pty Limited [2015] NSWSC 1551
- The Owners - Strata Plan No 17572 v Nomak Holdings Pty Limited [2009] NSWSC 1412
- TS Recoveries Pty Limited v Sea-Slip Marinas (Aust) Pty Limited [2007] NSWSC 1410

Category: Principal judgment
Parties: Aluminium Specialties Group Pty Ltd t/as Alspec (Plaintiff)
New View Windows Pty Ltd t/as Narellan Windows and Glass (Defendant)
Representation:
Counsel:
J R B Pearson (Plaintiff)
W M Finch (Solicitor) (Defendant)
Solicitors:
Aston Reid Lawyers (Plaintiff)
Rostron Carlyle Rojas (Defendant)

File Number(s): 2020/79760

Judgment – ex tempore (Revised 5 November 2020)

Background and affidavit evidence

By Originating Process filed 12 March 2020 the Plaintiff, Aluminium Specialties Group Pty Limited ("ASG"), applies to wind up New View Windows Pty Limited ("NVW") trading as Narellan Windows and Glass.
A significant amount of evidence was led in respect of the application, both in respect of contentious matters and also by way of formal evidence in respect of the winding up application. Before turning to that evidence, I should identify a critical issue in respect of the chronology of events, which raises issues which I will address below. On 29 January 2020, ASG issued a creditor's statutory demand (“Demand”), relying on a default judgment issued in the District Court. That Demand was neither complied with nor set aside, and a subsequent application by NVW for leave to raise issues under section 459S of the Corporations Act 2001 (Cth), which could have been but were not raised within the 21 day period specified in s 459G of the Act in opposition to the Demand was unsuccessful. On 12 March 2020, in reliance on the presumption of insolvency which arises from the Demand not having been satisfied or set aside, ASG applied to wind up NVW. The judgment in the District…

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

AGLC: In the matter of New View Windows Pty Ltd trading as Narellan Windows and Glass [2020] NSWSC 1905
Case: [2020] NSWSC 1905
Decision Date: 04 November 2020

CaseChat Overview and Summary

In the Federal Court of Australia, the case involved New View Windows Pty Ltd, trading as Narellan Windows and Glass, and the liquidator appointed to the company. The central dispute centred on the liquidator's application to wind up the company, which was based on a statutory demand that had previously been the subject of a default judgment, subsequently set aside. The court was tasked with determining whether the liquidator's winding up application constituted an abuse of process and whether the evidence provided was sufficient to rebut the presumption of insolvency on the balance of probabilities.

The primary legal issues before the court were whether the winding up application should be considered an abuse of process, given that the default judgment supporting the statutory demand had been set aside, and whether the evidence presented was adequate to rebut the presumption of insolvency. The court had to examine the statutory provisions governing winding up applications, the circumstances leading to the setting aside of the default judgment, and the sufficiency of the evidence provided to address the presumption of insolvency.

The court found that the winding up application was not an abuse of process. It held that the setting aside of the default judgment did not preclude the liquidator from proceeding with the winding up application. The court further determined that the liquidator had adequately rebutted the presumption of insolvency on the balance of probabilities. The evidence presented demonstrated that the company was unable to pay its debts as they fell due, fulfilling the statutory criteria for winding up. The court acknowledged the liquidator's diligence and the procedural safeguards in place to prevent abuse of the winding up process.

As a result of the court's decision, the winding up application was upheld, and the company was placed into liquidation. The orders granted by the court mandated that the liquidator take control of the company's assets and affairs, oversee the liquidation process, and distribute the proceeds to the company's creditors in accordance with the law.

Orders