On & On (No. 11)

The applicant, On & On (No. 11) Pty Ltd, sought an order for the winding up of the respondent, On & On Pty Ltd, on the grounds of insolvency. The dispute centred on whether the respondent was in fact unable to pay its debts as they fell due. The application was heard by Guest J in the Supreme Court of Victoria.

The primary legal issue before the court was to determine whether the respondent company was insolvent for the purposes of s 459E of the Corporations Act 2001 (Cth). This required an assessment of the respondent's financial position, including its ability to meet its liabilities as they became due and payable, and whether there was a deficiency of assets.

Guest J considered the evidence presented by both parties regarding the respondent's financial state. His Honour applied the principles of insolvency law, which require a company to be unable to pay its debts as they become due. This involves an examination of the company's cash flow and its overall financial position. The court found that the respondent was indeed unable to pay its debts, having regard to its liabilities and the limited availability of liquid assets.

Consequently, Guest J made orders for the winding up of the respondent company.