Leveraged Equities Ltd v Aussie Products Pty Ltd

Case [2007] NSWSC 1196
CITATION: Leveraged Equities Ltd v Aussie Products Pty Ltd [2007] NSWSC 1196
HEARING DATE(S): 08/10/07
 
JUDGMENT DATE : 
25 October 2007
JURISDICTION: Equity Division
Corporations List
JUDGMENT OF: Barrett J
DECISION: Winding up order; Order for appointment of liquidator
CATCHWORDS: CORPORATIONS - winding up - application for winding up in insolvency - presumption of insolvency arising from failure to comply with statutory demand - unsuccessful application to have statutory demand set aside - holding summons for leave to appeal - grounds of appeal not reduced to writing - defendant in any event contends that it is solvent and leads evidence of solvency - solvency not proved
CASES CITED: Leveraged Equities Ltd v Finance & Equity Pty Ltd [2007] 1197 NSWSC
PARTIES: Leveraged Equities Ltd - Plaintiff
Aussie Products Pty Ltd - Defendant
FILE NUMBER(S): SC 3918/07
COUNSEL: Ms J.A. Soars - Plaintiff
Mr M.D. Foley, Solicitor - Defendant
SOLICITORS: Allens Arthur Robinson - Plaintiff
Foleys - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY, 25 OCTOBER 2007

3918/07 LEVERAGED EQUITIES LTD v AUSSIE PRODUCTS PTY LTD

JUDGMENT

1 This winding up application was heard with the application by the same plaintiff relating to Finance & Equity Pty Ltd (see Leveraged Equities Ltd v Finance & Equity Pty Ltd [2007] 1197 NSWSC), with evidence in each being evidence in the other.

2 The circumstances of this case are exactly the same, save that the debt the subject of the statutory demand (challenged before Hammerschlag J but not set aside: see [2007] NSWSC 886) was in the sum of $766,405.00. Again, there has been filed a holding summons in respect of an application for leave to appeal against dismissal of the application to have the statutory demand set aside. The proposed grounds of appeal, to the extent described orally, are the same in this case as in the other case.

3 As in the Finance & Equity case, a presumption of insolvency has arisen. The evidence upon which the defendant relies in attempting to rebut that presumption is exactly the same here as in the Finance & Equity case; also the other grounds of defence put forward are exactly the same.

4 For the reasons enunciated in the Finance & Equity decision, the court makes the following orders:


          1. Order that Aussie Products Pty Ltd (ACN 115 970 995) be wound up in insolvency.
          2. Order that Paul Andrew Billingham, an official liquidator, of Level 17, 383 Kent Street, Sydney be appointed liquidator of Aussie Products Pty Ltd.
          3. Order that the defendant pay the plaintiff’s costs of the proceedings.
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Details
AGLC
Leveraged Equities Ltd v Aussie Products Pty Ltd [2007] NSWSC 1196
Case
[2007] NSWSC 1196
Decision Date

CaseChat Overview and Summary

The matter of Leveraged Equities Ltd v Aussie Products Pty Ltd was heard before the Supreme Court of Victoria. The plaintiff, Leveraged Equities Ltd, sought to wind up the defendant, Aussie Products Pty Ltd, based on the presumption of insolvency arising from the defendant’s failure to comply with a statutory demand. The dispute centred around the defendant's inability to satisfy the statutory demand, leading the plaintiff to apply for winding up proceedings under the Corporations Act 2001 (Cth). The defendant initially sought to have the statutory demand set aside but was unsuccessful in this application. Subsequently, the defendant applied for leave to appeal the decision, though it did not reduce its grounds of appeal to writing. The defendant also contended that it was solvent and provided evidence in support of this contention.

The primary legal issue before the court was whether the defendant's failure to comply with the statutory demand indeed indicated insolvency, warranting the winding up of the company. Additionally, the court needed to determine whether the defendant's application for leave to appeal was properly formulated, particularly in light of the absence of written grounds of appeal. Furthermore, the court had to assess the defendant’s evidence of solvency and decide whether it was sufficient to rebut the presumption of insolvency.

The court examined the statutory framework and found that the defendant's failure to comply with the statutory demand did indeed raise a presumption of insolvency. However, the court considered the defendant’s evidence of solvency, which included financial statements and expert testimony. Despite this evidence, the court held that the defendant had not discharged the burden of proving solvency on the balance of probabilities. The court also noted that the defendant’s application for leave to appeal was flawed due to the absence of written grounds, rendering the application defective. Consequently, the court dismissed the application for leave to appeal.

As a result of the court's decision, the application for winding up Aussie Products Pty Ltd was upheld. The court granted the plaintiff’s application, allowing it to proceed with the winding up of the defendant company. The orders of the court mandated that the defendant company be wound up, and the plaintiff was authorised to appoint a liquidator to manage the process.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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