MacLeod v Australian Securities Commission P39/2000

The Australian Securities Commission (ASC) sought to wind up MacLeod, a company, on the grounds that it was unable to pay its debts. The company, MacLeod, resisted the application, arguing that the ASC had not established that it was unable to pay its debts. The matter came before the Full Federal Court of Australia.

The primary legal issue before the Full Federal Court was whether the ASC had discharged its onus of proving that MacLeod was unable to pay its debts within the meaning of s 459E(2) of the Corporations Law. This involved determining whether the evidence presented by the ASC was sufficient to establish insolvency, particularly in light of MacLeod's contention that it possessed substantial uncalled capital.

The Court considered the principles governing applications for winding up on the grounds of insolvency. It noted that the onus rests on the applicant to prove inability to pay debts. While the existence of uncalled capital is a relevant consideration, it does not automatically preclude a finding of insolvency. The Court examined the evidence regarding MacLeod's financial position, including its liabilities and the likelihood of calls on its uncalled capital being met. The Court ultimately found that the ASC had not discharged its onus of proof.

Consequently, the Full Federal Court dismissed the ASC's application for the winding up of MacLeod.