Squirrel Limited v Cadmon Advisory Pty Ltd

Squirrel Limited took Cadmon Advisory Pty Ltd to the Federal Court. The dispute centred around an undertaking given to the Court and an application for an interlocutory injunction to prevent the appointment of a receiver. Squirrel sought to be released from the undertaking given to the Court on 15 April 2019, arguing there had been a material change in circumstances, making it unjust for the undertaking to continue. The change in circumstances referred to the winding up application filed by DCF Asset Management Pty Ltd, which sought to wind up Squirrel for failing to comply with a statutory demand. Cadmon argued that Squirrel's failure to inform it about the winding up application constituted a material change in circumstances. The court had to decide whether there had been a material change in circumstances such that the continuation of the undertaking would be unjust and whether the applicant had made out a prima facie case for an interlocutory injunction and if the balance of convenience favoured granting the injunction.

The court found that the winding up application constituted a material change in circumstances that affected the position of Cadmon and the noteholders it represented as creditors of Squirrel. It held that the winding up application was a material change in circumstances because it directly impacted the financial position of Squirrel and thereby affected Cadmon's position as a creditor. The court further noted that the applicant's confidence in resolving the winding up application did not justify its failure to inform Cadmon of the application. Additionally, the court dismissed the interlocutory application for an injunction to restrain the appointment of a receiver, finding that Squirrel had not made out a prima facie case. The balance of convenience did not favour the grant of an injunction as the evidence suggested that the winding up application would likely be resolved and dismissed.

The court granted the application to release the parties from the undertakings given to the Court on 15 April 2019. It dismissed the interlocutory application to restrain the appointment of a receiver. The parties were ordered to file written submissions on the costs of the applications by 19 July 2019.