Master Paving Pty Ltd v Heading Contractors Pty Ltd (Appellant) No. Scgrg-96-2380 Judgment No. 6250 Number of Pages 10 Corporations

Master Paving Pty Ltd applied for an order for the winding up of Heading Contractors Pty Ltd in the Supreme Court of South Australia. The application was made pursuant to s459Q of the Corporations Law based on the defendant's failure to comply with a statutory demand. Heading Contractors applied for leave to oppose the winding up on the ground that it was never indebted to Master Paving, that the debt had been compromised, and that it was solvent. The Master refused leave. Heading Contractors appealed, arguing that the Master erred in finding that the affidavits did not raise matters that could have been relied upon in setting aside the statutory demand, failed to consider the defendant's solvency, and did not properly consider the purpose of the winding up provisions. The Court found that the defendant could oppose the winding up on the ground that it was not indebted to the plaintiff, as this ground was material to proving solvency and was arguable. The Court also found that the defendant had provided sufficient explanation for its failure to raise this ground earlier. The appeal was allowed, the Master's order was set aside, and the defendant was granted leave to oppose the winding up application on the ground that it was not indebted to the plaintiff.