Re Parkway One Pty Ltd (in liq)

Parkway One Pty Ltd was wound up in insolvency, with the liquidator subsequently applying to the court for termination of the winding up. The company, which held substantial real property assets, argued that it had demonstrated solvency. The primary legal issue for the court was whether the liquidator could prove that the company was insolvent at the time of the winding up, and if the winding up should be terminated on the basis of commercial morality. The court had to consider the company's cash flow projections, the authenticity of its financial records, and the conduct of its directors, particularly in relation to other companies.

The court found that the liquidator was unable to reach a concluded view on the solvency of the company due to unverified cash flow projections and payments of rent unsupported by primary documents. The company's failure to pay trade creditors when due and the lack of cooperation from the director in other matters further undermined the company's argument. Additionally, there were significant and unexplained cash transactions, and the director had a history of non-payment of trade creditors and failure to keep proper books and records. The court concluded that the company had not adequately supported its claim of solvency and that the director's conduct did not justify terminating the winding up.

The court dismissed the liquidator's application to terminate the winding up. The decision highlighted the importance of maintaining proper books and records, meeting financial obligations to creditors, and demonstrating solvency in the context of corporate insolvency. The company's failure to provide adequate evidence and the director's lack of cooperation played a critical role in the court's decision not to terminate the winding up.

No further orders were made by the court.