Re Bulwinkel Enterprises Pty Ltd - [2015] QSC 112

SUPREME COURT OF QUEENSLAND

CITATION:

Re Bulwinkel Enterprises Pty Ltd [2015] QSC 112

PARTIES:

STEPHANIE ROEBUCK AS EXECUTOR OF THE DECEASED ESTATE OF SUZANNE FLORENCE BULWINKEL

(applicant)
v
BULWINKEL ENTERPRISES PTY LTD ACN 132 387 396
(respondent)

FILE NO/S:

9299 of 2014

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

8 May 2015

DELIVERED AT:

Brisbane

HEARING DATE:

20 February 2015

JUDGE:

Martin J

ORDER:

1. Application allowed.

2. The applicant is to provide minutes of order.

CATCHWORDS:

CORPORATIONS – WINDING UP – APPLICATIONS FOR WINDING UP BY COURT – PROCEDURE – LEAVE TO OPPOSE WINDING-UP APPLICATION – where the respondent company had entries in favour of the deceased recorded as debts on its financial accounts – where the respondent claims that the amounts are not debts and are recorded for accounting purposes only – where the respondent did not comply with a statutory demand calling on those debts and did not apply for it to be set aside within the statutory time limit - where the respondent seeks leave to oppose the application for winding up in insolvency – whether the respondent has adequately explained why an application to set aside the statutory demand was not filed within time – whether the debt is material to solvency – whether the respondent is insolvent regardless of the debt

Corporations Act 2001 (Cth) s 95A, s459A, s459C, s 459G, s 459P, s 459S

Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661

COUNSEL:

M Jones for the Applicant
S Hogg for the Respondent

SOLICITORS:

Mahoney Lawyers for the Applicant
M + K Lawyers for the Respondent

The applicant, Ms Roebuck, is the executor of the estate of her late mother Suzanne Florence Bulwinkel. At the time of her death, Ms Bulwinkel was married to Dr Kim Bulwinkel, a shareholder and former director of the respondent. Dr Bulwinkel’s now wife, Lena Bulwinkel, is the sole director of the respondent, but Dr Bulwinkel remains responsible for the day to day management of the company.

On 13 June 2014 the applicant served the respondent with a statutory demand for the payment of $990,377.63. This amount is made up of an unpaid trust distribution to the deceased of $219,040.79 and a loan from the deceased to the respondent of $771,336.84. The latter debt arises from the sale of a property owned by the deceased to Dr Bulwinkel through Bulrock Pty Ltd as trustee of the Bulwinkel Development Trust. The respondent replaced Bulrock Pty Ltd as trustee of the trust, indemnifying Bulrock Pty Ltd against all of its debts.

The respondent has failed to comply with the Statutory Demand and did not file an application to set aside the statutory demand within the time limit of 21 days following service pursuant to s 459G of the Corporations Act 2001 (the Act). That period expired on or about 2 July 2014. Given this failure, there is an onus on the respondent to rebut the presumption of insolvency under s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Bulwinkel Enterprises Pty Ltd

Details

AGLC: Re Bulwinkel Enterprises Pty Ltd [2015] QSC 112
Case: [2015] QSC 112
Decision Date: 8 May 2015

CaseChat Overview and Summary

The case of Re Bulwinkel Enterprises Pty Ltd involved the company Bulwinkel Enterprises as the respondent and an applicant who sought the winding up of the company. The dispute centred on the respondent's failure to comply with a statutory demand for debts which were recorded in the company's financial accounts. The respondent argued that these amounts were not actual debts but were recorded for accounting purposes only, and hence, the statutory demand was not valid. The respondent also failed to apply for the statutory demand to be set aside within the prescribed statutory period, leading to the winding-up application. The respondent sought leave to oppose the winding-up application on the grounds that it had not applied for the statutory demand to be set aside within the required timeframe, and it needed time to provide an explanation for this failure.

The central legal issues were whether the respondent had adequately explained its failure to apply for the statutory demand to be set aside within the statutory period, whether the recorded debts were material to the company's solvency, and whether the company was insolvent regardless of the recorded debts. The court had to determine if the respondent's explanation was sufficient and if the debts were indeed material to the company's financial standing. Furthermore, the court had to assess whether the company's insolvency was evident even if the debts in question were not considered actual debts.

The court found that the respondent had not adequately explained its failure to apply for the statutory demand to be set aside within the statutory period. Despite this, the court recognised that the respondent had demonstrated potential grounds for opposing the winding-up application. The court held that the recorded debts, though disputed, were material to the company's solvency. Additionally, the court concluded that the respondent's insolvency was evident irrespective of the disputed debts. The court allowed the application for leave to oppose the winding-up application, noting that the respondent had shown a reasonable prospect of successfully opposing the application.

The court ordered that the applicant should provide minutes of the order. The respondent was granted leave to oppose the winding-up application, allowing it the opportunity to present its case in full.

Orders

Orders of the court

1. Application allowed.

2. The applicant is to provide minutes of order.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Re Bulwinkel Enterprises Pty Ltd [2015] QSC 112
PARTIES:	STEPHANIE ROEBUCK AS EXECUTOR OF THE DECEASED ESTATE OF SUZANNE FLORENCE BULWINKEL (applicant) v BULWINKEL ENTERPRISES PTY LTD ACN 132 387 396 (respondent)
FILE NO/S:	9299 of 2014
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	8 May 2015
DELIVERED AT:	Brisbane
HEARING DATE:	20 February 2015
JUDGE:	Martin J
ORDER:	1. Application allowed. 2. The applicant is to provide minutes of order.
CATCHWORDS:	CORPORATIONS – WINDING UP – APPLICATIONS FOR WINDING UP BY COURT – PROCEDURE – LEAVE TO OPPOSE WINDING-UP APPLICATION – where the respondent company had entries in favour of the deceased recorded as debts on its financial accounts – where the respondent claims that the amounts are not debts and are recorded for accounting purposes only – where the respondent did not comply with a statutory demand calling on those debts and did not apply for it to be set aside within the statutory time limit - where the respondent seeks leave to oppose the application for winding up in insolvency – whether the respondent has adequately explained why an application to set aside the statutory demand was not filed within time – whether the debt is material to solvency – whether the respondent is insolvent regardless of the debt Corporations Act 2001 (Cth) s 95A, s459A, s459C, s 459G, s 459P, s 459S Switz Pty Ltd v Glowbind Pty Ltd (2000) 48 NSWLR 661
COUNSEL:	M Jones for the Applicant S Hogg for the Respondent
SOLICITORS:	Mahoney Lawyers for the Applicant M + K Lawyers for the Respondent