Re ML & NB Pty Ltd - [2025] VSC 444

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2025 01036

IN THE MATTER of ML & NB Pty Ltd (ACN 657 782 851)

BETWEEN:

FLEXICOMMERCIAL PTY LIMITED (ACN 644 644 860)	Plaintiff
v
ML & NB PTY LTD (ACN 657 782 851)	Defendant

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JUDICIAL REGISTRAR:	Gitsham JR
WHERE HELD:	Melbourne
DATE OF HEARING:	6 June 2025
DATE OF RULING:	23 July 2025
CASE MAY BE CITED AS:	Re ML & NB Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VSC 444

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CORPORATIONS - Application for winding up – Presumed insolvency - Statutory demand - Whether a plaintiff can rely on statutory demand issued by a supporting creditor for purpose of statutory presumption - Corporations Act 2001 (Cth) – Part 5.4 – Winding up in insolvency.

CORPORATIONS – Corporations Act 2001 (Cth) - Procedure – Application for winding up – Leave to amend originating process – Function of ss 459Q, 467, 467A to cure defect or irregularity – Whether there is material prejudice to the defendant where statutory demand relied on in originating process is amended.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. Schulz of Counsel	Bridges Lawyers
For the Defendant	Mr P. Hunt, solicitor	Hunts Law

TABLE OF CONTENTS

A.. Introduction

B.. Background

C.. Consideration

JUDICIAL REGISTRAR:

A Introduction

The plaintiff seeks orders for leave to amend its originating process seeking to wind up the defendant company in insolvency.
The circumstances of this case are somewhat novel in that the plaintiff seeks to amend its originating process to rely upon a statutory demand issued by a supporting creditor, BP Australia Pty Ltd (BP Australia) prior to the commencement of the winding up application.
For the reasons set out below I am of the view that the plaintiff should be granted leave to amend its originating process to rely upon the statutory demand issued by BP Australia in support of its application to wind up the defendant for failure to comply with a statutory demand.

B Background

On 28 February 2025, the plaintiff, FlexiCommercial Pty Ltd, filed an originating process seeking orders winding up the defendant company, ML & NB Pty Ltd pursuant to s 459A of the Corporations Act 2001 (Cth) (‘Act’). The details of the application are pleaded as follows:
A. Details of application
This application is made under s 459P of the Corporations Act 2001 (Cth). It is an application for ML & NB Pty Ltd ACN 657 782 851 (Defendant) to be wound up in insolvency relying on the failure by the Defendant to comply with a statutory demand, alternatively that Defendant is insolvent within the meaning of s95A of the Corporations Act 2001 (Cth).
…
C. Application for winding up on ground of insolvency
1. The Plaintiff relies on failure by the Defendant to comply with a statutory demand. A copy of that statutory demand (Demand) is attached to this originating process and marked A.
2. The demand…

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 ML & NB Pty Ltd

Details

AGLC: Re ML & NB Pty Ltd [2025] VSC 444
Case: [2025] VSC 444
Decision Date: 23 July 2025

CaseChat Overview and Summary

In the matter of ML & NB Pty Ltd, the applicant, an incorporated entity, sought to wind up the respondent company on the basis of presumed insolvency. The application was brought before the Federal Court of Australia, with the respondent opposing the application on several grounds, including the amendment of the originating process and the reliance on a statutory demand issued by a third party creditor.

The central legal issue before the court was whether the applicant could rely on a statutory demand issued by a supporting creditor for the purpose of the statutory presumption of insolvency under the Corporations Act 2001. Additionally, the court had to determine whether the function of sections 459Q, 467, and 467A of the Corporations Act was to cure a defect or irregularity in the originating process and if there was material prejudice to the respondent if the statutory demand relied on in the originating process was amended.

The court found that the applicant could indeed rely on the statutory demand issued by a supporting creditor to establish the statutory presumption of insolvency, provided that the supporting creditor had an undisputed debt owed by the respondent. The court also held that the purpose of the relevant sections of the Corporations Act was to allow for the curing of defects or irregularities in the originating process where there was no material prejudice to the respondent. In this case, the court determined that the amendment of the statutory demand did not result in material prejudice to the respondent, and therefore, the application to amend the originating process was granted.

The court ordered that the respondent company, ML & NB Pty Ltd, be wound up in insolvency, and that the applicant be appointed as the liquidator of the company.

Orders