Mutton v Living Australia Pty Ltd, in the matter of Living Australia Pty Ltd

The case of Mutton v Living Australia Pty Ltd, in the matter of Living Australia Pty Ltd, involved the plaintiffs seeking to substitute themselves as the applicant for winding up a company after the original petitioning creditor's judgment debt was set aside. The legal issues the court had to decide included whether the plaintiffs were "contingent of prospective creditors" for the purpose of s 465B of the Corporations Act 2001 (Cth), whether there was a contingent or prospective debt at the time in which the application to wind up was made, and whether the Court should exercise its discretion to refuse the winding up of the company. Additionally, the court had to determine if the defendant company could establish its solvency.

The court held that the orders of the Registrar granting substitution and refusing leave to oppose the winding up application were set aside. The court found that the setting aside of the default judgment was material to the Court’s discretion to make the winding up order. The court also considered the presumption of insolvency and noted that if the company does not apply to set aside the statutory demand within the period of 21 days, then the presumption of insolvency is applicable. The court further held that leave is not to be granted unless the Court is satisfied that the ground is material to proving that the company is solvent. The court found that the plaintiffs were not contingent of prospective creditors and that there was no contingent or prospective debt at the time in which the application to wind up was made.

The court affirmed the Registrar’s orders otherwise and granted leave to oppose the winding up. The court dismissed the interlocutory applications filed by the plaintiffs and ordered that the costs of Rans Consulting Group Pty Ltd ACN 613 674 749 on the review, including the costs of the application for the stay, be taxed if not agreed and be reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). The court also ordered that Mr and Mrs Mutton were to bear their own costs of their interlocutory application of 28 May 2019, including the costs of the hearing before the Registrar and the costs on the review and were to pay the costs of Living Australia Pty Ltd in respect of the hearing on 13 November 2019. The court further ordered that any issue concerning costs will, subject to any further order of the Court, be determined on the papers.