Plaintiff v Defendant

2 On 1 February 2012, the plaintiff made application under ss 459A and 459P of the Act for orders that the defendant be wound up in insolvency. The application relied on the failure by the defendant to comply with a statutory demand which had been served on it by post on 7 October 2011.

3 The originating process, in segment C contended as follows:

The defendant has failed to pay the amount of the debt demanded or to secure or compound for that amount to the Plaintiff's reasonable satisfaction within 21 days after the demand was served on the Defendant as the period of compliance with the demand.

4 The originating process and the affidavit in support of it did not make reference to the fact that, in a separate proceeding, the defendant, as plaintiff, had made application pursuant to s 459G of the Act to set aside the statutory demand and that on 31 January 2012 the parties filed consent orders that the application be dismissed with no order as to costs.

5 Section 459F of the Act provides:

When company taken to fail to comply with statutory demand

(1) If, as at the end of the period for compliance with a statutory demand, the demand is still in effect and the company has not complied with it, the company is taken to fail to comply with the demand at the end of that period.

(2) The period for compliance with a statutory demand is:

(a) if the company applies in accordance with section 459G for an order setting aside the demand:

(i) if, on hearing the application under section 459G, or on an application by the company under this paragraph, the Court makes an order that extends the period for compliance with the demand--the period specified in the order, or in the last such order, as the case requires, as the period for such compliance; or

(ii) otherwise--the period beginning on the day when the demand is served and ending 7 days after the application under section 459G is finally determined or otherwise disposed of; or

(b) otherwise--21 days after the demand is served.

6 By operation of s 459F(2)(a)(ii), the period for compliance with the statutory demand in these circumstances ended seven days after 31 January 2012, that is, 7 February 2012. Thus, the application for winding up in insolvency was commenced prior to the expiry of time for compliance with the statutory demand but, by the return date of the originating process on 7 March 2012, it had.

7 Mr Bell of Counsel for the plaintiff submitted that two conflicting lines of authority have emerged on the question. In Pinn v Barroleg Pty Ltd,[1] a statutory demand was served on the company on 6 August 1996. The company made application to set the demand aside but that application was dismissed on 4 October 1996. On 24 December 1996, an application was made to wind up the company and a winding up order was made on 7 April 1997. The appellant appealed from the making of the order. It contended that the time for compliance with the statutory demand expired on 27 August 1996[2] and as this was more than three months before 24 December 1996, when the winding up application was made, no presumption of insolvency could arise under s 459C(2)(a).

8 Section 459C(2)(a) provides:

The court must presume that the company is insolvent if, during or after the three months ending on the day when the application was made:

(a) the company failed (as defined by s 459F) to comply with a statutory demand; ...

The issue which arises in this case is whether the relevant event (failure to comply with a statutory demand within the time proscribed by s 459F(2) fell, as required by s 459C(2), "during or after the three months ending on the day when the application [for winding up] was made".

There was some argument on the construction of this particular provision. It was argued by the respondent that the words "or after", meant that the application could be made after three months from the relevant event - though this might be years later. However, despite its somewhat puzzling reference to the words "or after", I am satisfied that the section means:

(a) that the section 459C(2) event relied upon goes stale after three months as the basis for a winding up application ["proposition (a)"]; but

(b) where the application is made at a date preceding the event, but based on it, it may still be granted, provided of course the event actually occurs before the winding up order is made; for example if the application were made before expiry of the 21 days after notice of demand. ["proposition (b)"]

Thus - giving practical effect to the words "or after", a concerned creditor may immediately lodge an application to wind up the company, knowing that 21 days for compliance with a statutory demand has still to expire, but on a basis that the 21 days will expire after (but before the application is heard). This would give a purpose to the words "or after" in the clause above. Without those words, an application made before the s 459C(2) event could not satisfy the three months requirement, as it was not made during the three months. The sense of the section is seen more clearly when the syntax is therefore rearranged to read:

during the three months ending on the date the application was made, or after the day the application was made.

Such interpretation avoids patent absurdity because otherwise the words "or after", would give no sense to the three months limitation. It would mean that in reality there was no time limitation at all - that a winding up application could be brought even years after the relevant event. [words in square parentheses added]

10 Pinn was concerned with the question of whether or not the subject demand was "stale" in the sense that the date of compliance with the demand had expired more than three months before the filing of the winding up application, as described in proposition (a) of the above passage. It was not a case in which the period of compliance with the statutory demand expired after the filing of the winding up application, which is the subject of proposition (b). Although obiter, it is a clear statement that a winding up application may still be granted notwithstanding that the period for compliance with the statutory demand expired after the filing of the application.

11 Pinn has been referred to in a number of subsequent decisions.

12 In Sim and anor v Ravenswood Resort Pty Ltd (receivers and managers appointed),[4] Master Newnes, while agreeing generally with the construction of the section by Santow J, did not elaborate in his reasons his basis for doing so.

13 The event giving rise to the presumption in Sim was the appointment of a receiver and manager to the defendant company[5] on 5 November 2002. The application for winding up was made on 4 April 2003 and the first question to be considered was whether it was made within the time period specified in s 459C(2). The Master considered that that question depended on the meaning of the words "after the three months ending on the day when the application was made". Counsel for the plaintiffs had argued that the words "or after" meant that the application could be made after three months from the relevant event and, accordingly could succeed by reliance on the presumption which arose under s 459C(2)(c). The case was therefore one concerned with whether one could rely on a presumption mentioned under s 459C(2) which had occurred more than three months before the date of the filing of the application, not with whether an application could be filed before the occurrence of the event giving rise to the presumption, as here. Master Newnes considered that the relevant event in the case before him, the appointment of the receiver or manager, did not give rise to a presumption of insolvency by reason of the fact that it had occurred more than three months before the filing of the application.

14 In Sheslow v Diamond Rose NL,[6] Barrett J considered an application by the defendant that a winding up application against it be dismissed by reason that, inter alia, the timing specified in s 459C(2)(a) of the Corporations Act was not satisfied. Sheslow was also concerned with whether a demand which had expired more than three months before the winding up application was "stale" or not. Barrett J observed:[7]

1. The "day when the application was made" is, in this case, 17 May 2005, being the date of the filing of the plaintiff's originating process. The period of 3 months to which section 459C(2)(a) refers therefore began on 17 February 2005. Failure to comply with a statutory demand could therefore be relied upon for the purposes of the current winding up application only if the failure - that is, the elapsing of the period of 21 days after service without payment, securing or compounding in conformity with the demand - had occurred on or after 17 February 2005. This demand, as I have said, was served in August 2004 which is well outside the relevant period. The case is accordingly one in which comments by Santow J in Pinn v Barrowleg Pty Ltd (1997) 23 ACSR 541 apply. As his Honour there noted, s.459C is intended to confine the applicable time period for the winding up application so that the evidence relied upon for a presumption of insolvency "would not go stale". Statutory staleness of an unsatisfied statutory demand occurs, in this sense, after three months and 21 days have passed from its service.
2. Had the demand upon which the plaintiff relies been a "statutory demand" as defined by s.9 of the Corporations Act, non-compliance with it would, in light of s.459C(2)(a), have given rise to no presumption of insolvency. No attempt is made by the plaintiff to adduce any other evidence of insolvency.

15 Again, while Barrett J follows Pinn, it is not a case concerned with whether or not an application could be based on a statutory demand for which time for compliance had not yet arisen. While Barrett J adopted the views of Santow J in Pinn when properly analysed, it was only in the context of "stale" statutory demands which are the subject of proposition (a) in Pinn.

16 In The Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd,[8] White J applied Pinn by quoting Santow J's analysis[9] at paragraph 9 above and stating that a presumption of insolvency which arises by reason of non compliance with a statutory demand which occurs after the filing of the application can still give rise to the basis for a winding up application.[10] It is in fact the only decision which relies on proposition (b) in Pinn as ratio.

17 In Gryst v Dromana Estate Limited,[11] Finn J followed Pinn and held that the plaintiff in that case could not rely on the presumption of insolvency.[12] The defendant had made an unsuccessful application to set aside a statutory demand which was dismissed for being out of time. The time for compliance with the demand expired on 20 December 2007 but it was not until 10 June 2008 that the application for winding up was made. It is therefore yet another application of the principle set out in proposition (a) of Santow J's reasons in Pinn, that a presumption as to insolvency goes "stale" three months after the expiry of the time for its compliance and cannot be the basis of grounds for a winding up application.

18 Finally, Mr Bell referred me to the decision of the High Court of Australia in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Limited,[13] to support his submission that the plaintiff was entitled to rely on the statutory demand as a ground for winding up in this case. The central question in Aussie Vic was whether an order may be made extending the period for compliance with the statutory demand after the period of compliance has expired. As part of a survey of Part 5.4 of the Act, Gleeson CJ, Hayne, Crennan and Keifel JJ observed at paragraphs 21-23:

1. The temporal focus of s 459C is upon a period which commences three months before the date of the application for winding up, but the period does not terminate upon which the winding up application commences. The question for a court is whether any of the identified events has occurred at any time after the commencement of the relevant period. The Act does not require any further consideration of whether the event persists at the date of the application for winding up.
2. If one of the specified events has occurred at any time during the identified period, the court must presume that the company is insolvent. But the presumption may be rebutted. Section 459C(3) provides that:

A presumption for which this section provides operates except so far as the contrary is proved for the purposes of the application.

1. On its face, s 459F(1) is engaged if the time for compliance with a statutory demand expires and the company has not then complied with it. The demand was in force; the time expired; the company did not comply with the demand.

19 These statements in Aussie Vic are in my view obiter and do not directly address the issue for consideration here. There is no specific advertence as to whether a demand which had not expired could ground a winding up application. I note however that the final sentence of paragraph 21 speaks of the notion of whether the event "persists at the date of application for winding up" but there is no development of the issue in the reasons of the Court as it was not necessary to do so.

20 As against this line of authority are two decisions of single judges the Supreme Court of New South Wales.

21 The first of these is the decision of Palmer J in Woodgate (as trustee for the bankrupt estate of Fenton) v Garard.[14] In Woodgate, Palmer J considered the construction of s 459C(1). He had made a finding earlier in his judgment that service of the demand had occurred at a date such that the winding up application in that case was filed after the time for compliance with the statutory demand had expired and that the applicant was clearly entitled as of that date to rely upon the presumption of insolvency in s 459C(2)(a). Because the point was argued and his Honour thought it appropriate to give his views for the assistance of the Court of Appeal, Palmer J then proceeded to give detailed consideration to the question as to whether a winding up application relying on failure to comply with a statutory demand could be filed before noncompliance with that demand had occurred. Although lengthy, it is appropriate to set out his Honour's elaborate and detailed analysis.

1. A difficult problem arises in applying to the provisions of subs (2)(a) [of s 459C] the introductory words of the subsection - "if, during or after, the 3 months ending on the day when the [winding up] application was made". There is no difficulty if the debtor has failed to comply with a statutory demand "during the three months ending on the day when the application was made": if the creditor serves a statutory demand, waits until time for payment or the making of a s 459G application has expired and then files a winding up application not later three months after the expiry date, it can rely on the presumption of insolvency. However, if the creditor waits longer than three months from the expiry date before making the winding up application, then the presumption grows "stale" and cannot be invoked. This is in accordance with the intention of the Harmer Report (Law Reform Commission, Report No 45, General Insolvency Inquiry). Volume 1, para 154 of the Report, which is the origin of s 459C, states:

The Commission proposed ... that no presumption of insolvency should arise if more than three months has elapsed after the last day for compliance with a statutory demand and no application for the winding-up of the company based upon that non-compliance has been filed ... Views were put to the Commission that three months was too short ... The Commission is not convinced that the time limits put forward in DP 32 should be changed. Non-compliance with a statutory demand is supposed to provide contemporaneous evidence of insolvency at the time of or within a reasonably short time after non-compliance - not up to six months after that event.

1. But how can the Court, consistently with the policy of the presumption of insolvency growing "stale" three months after non-compliance with a statutory demand, presume insolvency if non-compliance occurs "after the three months ending on the day when the application was made"?
2. In such a case, the three months "limitation period" has no meaning because nothing is required to happen within it and no specific consequence relating to a statutory demand or presumed insolvency will occur when the three month period ends. The whole phrase can, therefore, only mean "at any time after the application was made the company failed to comply with the Statutory Demand". Bearing in mind that, under s 459R(1) a winding up application can be heard up to six months after it is made - and even later if an extension of time is granted under s 459R(2) - one can see that a literal reading of s 459C(2)(a) could produce the result that a winding up application could be filed, the creditor could then serve a statutory demand and six months or more after the company fails to pay, the creditor can rely upon presumed insolvency at the hearing.
3. Such a result is inconsistent with the recommendations in the Harmer Report. Even more importantly, however, it is repugnant to s 459Q, which provides:

Application relying on failure to comply with statutory demand

If an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the application:

(a) must set out particulars of service of the demand on the company and of the failure to comply with the demand; and

(b) must have attached to it:

(i) a copy of the demand; and

(ii) if the demand has been varied by an order under subsection 459H(4) - a copy of the order; and

(c) unless the debt, or each of the debts, to which the demand relates is a judgment debt - must be accompanied by an affidavit that:

(i) verifies that the debt, or the total of the amounts of the debts, is due and payable by the company; and

(ii) complies with the rules.

1. The requirements of s 459Q are mandatory, not permissive, facultative or discretionary - "must" must mean "must". It is impossible for a creditor to file an application relying upon s 459C(2)(a) which complies with s 459Q(a) by setting out "particulars of the failure to comply with the demand" if the creditor serves the demand after the winding up application is filed or if the time for compliance with the demand has not already expired.
2. How, then, does one read s 459C(2), according to Lord Wensleydale's "golden rule", in a manner which is consistent with, rather than repugnant to, s 459Q: Grey v Pearson [1857] EngR 335; (1857) 10 ER 1216 at 1234; Re Bolton; Ex parte Beane [1987] HCA 12; (1987) 162 CLR 514 at 546.
3. One can only make consistent sense of ss 459C and 459Q if one reads s 459C, which deals with an evidentiary presumption in a variety of different circumstances, as qualified by, and subject to, s 459Q, which deals with a particular matter of procedure in one of those circumstances. One then reads the phrase "during or after" in subs (2) distributively amongst the six events that follow, so that "during or after" does not apply to all six events equally but, rather, "during" and "after" apply respectively only to such of those events as can be relied upon having regard to the provisions of s 459Q.
4. The result is that, consistently with s 459Q, one can rely upon failure to comply with a statutory demand only if time for compliance has expired during the three months ending on the day when the application was made, but one can rely on any one of the other five insolvency events specified in s 459C(2)(b) to (f) if the event has occurred either during the three month period before the winding up application is filed or after filing and before the hearing.
5. Such a result does no violence to the words of s 459C(2) and it is in conformity with the recommendations in the Harmer Report. Further, it avoids absurdity and inconvenience. If time for compliance with a statutory demand could expire after filing of the winding up application, a creditor who is "in a hurry" could first file a winding up application relying upon failure to comply with a statutory demand, then serve the statutory demand and set the twenty-one day period running, in the expectation that the winding up application would not come on for hearing in less than twenty-one days. The debtor would then immediately move to have the application summarily dismissed because, at the date of filing and at the date of hearing of the Motion, no presumption of insolvency could possibly be available. The creditor would respond with an application for an adjournment of the Motion to a day after the twenty-one day period had expired. This kind of manoeuvring - at great expense to the parties and placing pressure on the resources of the Court to deal with the spate of urgent applications - is inimical to the ordered and predictable regime of dealing with statutory demands contemplated in Pt 5.4: see generally David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265; Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; (2008) 232 CLR 314.
6. In support of the construction of s 459C(2) which I favour, I observe that the events of presumed insolvency stipulated in s 459C(2) can be relied upon in winding up applications made under s 234 (oppressive conduct), s 459P (general insolvency), s 462 (grounds under s 461 other than insolvency including the just and equitable ground) and s 464 (applications by ASIC under s 462): s 459C(1). Obviously, many of the grounds for winding up under those sections may have nothing to do with insolvency - eg s 234 or s 461(1)(a) to (g), (h)(ii), (k) - so that an application to wind up on those grounds would not be application "for a company to be wound up in insolvency" to which s 459Q applies.
7. In my opinion, s 459C is intended to operate so that if a person with standing under any of the sections stipulated in s 459C(1) files an application for winding up on any of the grounds of those sections - including the general insolvency ground in s 459P - that person may take advantage of the presumption of insolvency afforded by s 459C(2) if the insolvency event occurs within three months before the application. So, for example, if a member of a company files a winding up application on the ground of oppression or the just and equitable ground, he may also rely upon presumed insolvency in support of the discretionary remedy if any of the six presumed insolvency events in s 459C(2) occurs in the three months before the application is filed. If the insolvency event relied upon is failure to comply with a statutory demand, he will be able to, and must, include in his application at the time of filing the particulars and attachments required by s 459Q - which means that the time for compliance with the statutory demand must have expired before filing of the application.
8. However, if the presumed insolvency event is one specified in s 459C(2)(b) to (f) the applicant may rely upon it not only if it occurs during the three months before the winding up application is filed but also if it occurs after filing and before the hearing because the application, not relying upon non-compliance with the statutory demand, is not caught by s 459Q.

23 His Honour went onto consider[15] the several authorities to which I have referred above, being Pinn, Sim, Sheslow, Missing Link, and Gryst. He concluded at [80] as follows:

Upon analysis, therefore, it appears that there is only one other decision which directly supports proposition (b) in Pinn, that is Missing Link Network. Pinn and Missing Link Network are first instance decisions but I would not depart from them unless I were convinced that the proposition for which they are authority is incorrect.

[81] In proposition (a) in Pinn, Santow J refers to a "s 459C(2) event" - that is, any of the six specified events, including noncompliance with a statutory demand. His Honour says that each of such events goes "stale" for the purpose of the presumption of insolvency if a winding up application relying on it is filed more than three months after its occurrence. I respectfully agree with that construction of s 459C(2).

[82] In proposition (b), his Honour refers to a winding up application "made at a date preceding the event but based on it". While "event" here could have the same meaning as in proposition (a) - that is, any of the six specified events, including noncompliance with a statutory demand or, for example, the appointment of a receiver or entry into possession - his Honour could not really have intended that meaning. One could not file a winding up application "based on" the appointment of a receiver or the entry into possession when the appointment or entry had not yet occurred. The words of proposition (b) read as a whole and the example of its application which his Honour immediately gives make it clear that his Honour in proposition (b), was contemplating only a "s 459C(2) event" which has two constituent elements, one of which has occurred before the application is filed and one which has occurred after filing, so that the application is "based on" the event because the first constituent element occurred before filing and the remaining constituent element occurred after filing. In short, clearly his Honour was contemplating in proposition (b) the case where a statutory demand is served before filing the winding up application and the time for compliance with it expires after filing.

[83] In my opinion, proposition (b) in Pinn applies only to noncompliance with statutory demands. For the reasons I have given, I am unable to agree with that proposition. Pinn is the only case which gives reasoned consideration to the proposition and I think that the decision was per incuriam of s 459Q. Accordingly, and with great respect, I decline to follow Pinn and Missing Link as authority for proposition (b).

[84] Proposition (b), correctly understood, is not intended to refer to s 459C(2)(b) to (f) event occurring after the filing of a winding up application. As explained in [59], I conclude that if a s 459C(2)(b) to (f) event occurs after filing of a winding up application, it can be relied upon for presumed insolvency at the hearing, even if the hearing occurs more than three months from the event. Section 459C(3) protects against injustice or absurdity in such cases because the presumption cannot be invoked if the s 459C(2)(b) to (f) event is no longer current at the date of the hearing, such as if the company is no longer in receivership, or a mortgagee who has gone into possession has been discharged in full.

[85] To summarise: s 459C(2) must be construed consistently with s 459Q, so that:

- the presumption of insolvency afforded by s 459C(2)(a) arises only where failure to comply with a statutory demand has occurred during the three months before the winding up application is filed;

- the presumption of insolvency afforded by s 459C(2)(b) to (f) arises where the insolvency event occurs either during the three months before the winding up application is filed or occurs after the filing date and before the hearing date;

- if an insolvency event referred to in s 459C(2)(b) to (f) occurs between the filing date and the hearing date, it does not go "stale" if the hearing takes place more than three months after the occurrence of the event.

24 His Honour went on to state that if he had found that the statutory demand was served on a date upon which compliance would not have expired by the time of the filing of the winding up application, he would have dismissed the application on the grounds that the plaintiff had not proved that the defendant had failed to comply with the statutory demand "within the three months ending on the day when the application was made" so that the presumption of insolvency was unavailable. In Woodgate, there was no other evidence of insolvency and if the plaintiff wished to rely on noncompliance with the statutory demand served in September 2009 he would have to file a new winding up application. Such an application would necessarily be dismissed because it relied upon a statutory demand which would be "stale" by expiry of the presumption afforded by s 459C(2)(a).

25 In Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd; KCL Developments Pty Ltd v TQM Design and Construct Pty Ltd,[16] Barrett J considered whether the plaintiff in a winding up application had the benefit of a presumption of insolvency under s 459C(2)(a) of the Corporations Act upon which it could ground a winding up application under s 459P against the defendant. Earlier, in separate proceedings, the defendant had made application to set aside the statutory demand but Barrett J had dismissed that application by reason that it was not a valid and effectual application. As such, the defendant was considered to have failed to comply with the statutory demand 21 days after service rather than, as the plaintiff in the winding up application had contended, seven days after dismissal of the application to set aside the statutory demand.[17] At [31] of the judgment his Honour observed:

As Palmer J pointed out in Woodgate v Garard Pty Ltd [2010] NSWSC 508; (2010) 239 FLR 339, a creditor petitioning for winding up on the basis of non-compliance with a statutory demand is required by s 459Q(a) to set out in the originating process "particulars of ... the failure to comply with the demand", with the result that it is impermissible to file an originating process on that basis until the failure has occurred and particulars of it can be stated. I respectfully agree with his Honour that, to the extent that Pinn v Barroleg Pty Ltd (1997) 138 FLR 417 and Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd [2007] NSWSC 1377 suggest otherwise, they do not recognise the effect of s 459Q(a) and should not be followed (this observation applies also to the course of action suggested in Leveraged Capital Pty Ltd v Modena Imports Pty Ltd (above) at paragraph [10]). As Palmer J also observed, a presumption of insolvency arising under s 459C(2)(a) from failure to comply with a statutory demand after filing of the winding up application is, however, available to the plaintiff in cases where the winding up application, when filed, is based otherwise than on such failure.

26 In my respectful opinion, I prefer the analysis of Palmer J in Woodgate (which is supported by Barrett J in Golden Plantation Pty Ltd) to that of Santow J in Pinn and White J in Missing Link. The terms of s 459Q(a) state that an applicant for a winding up in insolvency must specify details of noncompliance with the demand. Obviously, that cannot occur if no such event has occurred when the winding up application is filed. The other presumptions mentioned in s 459C(2) do not cut across s 459Q and are capable of grounding a winding up application even if they occur "after the three months ending on the day when the application was made". To allow applicants seeking an order for winding up in insolvency relying on failure to comply with statutory demands to file such applications before those demands have expired has the obvious potential to give rise to an abuse of the statutory demand regime. In addition, the dates of filing of winding up applications have significance to the fixing of the relation back day under s 513A and s 9 of the Act. A company is only presumed to be insolvent after the 21 day period has expired or a valid application under s 459G has been determined adversely to the company and a further 7 days passes without the demand being complied with. To allow an applicant to commence a proceeding prior to the event giving rise to the presumption amounts to permission to commence an application in the Court which has no grounds.

27 As Palmer J remarks in Woodgate,[18] Santow J's attention was obviously not drawn to s 459Q and there is no reference at all to it in the judgment. In my view, the only manner in which the s 459Q requirements (the provisions of which are mandatory) and s 459C(2)(a) can be reconciled is on an application of Palmer J's reasoning in Woodgate.

28 In the circumstances, I consider that the plaintiff is not in a position to prove that the defendant in this case has failed to comply with a statutory demand "within the three months ending on the day when the application was made" so that the presumption of insolvency mentioned in s 459C(2)(a) is not available.

29 Mr Bell, in an alternative submission, invited me to conclude that in the circumstances of the debt the subject of the statutory demand, being a judgment debt and by reason of the fact that the defendant had (i) not put up any opposition to the application and (ii) in the s 459G application had submitted to a consent order that the application be dismissed by consent, I could conclude on the balance of probabilities that the defendant was insolvent. I do not accept that submission. The application relies on the presumption of insolvency arising from noncompliance with the statutory demand which ground has not been made out. No additional evidence was put on to establish that the company was unable to pay its debts as and when they fell due. No doubt the failure to pay a judgment debt might be a strong indicator of this, but, standing alone, I do not consider that it establishes that in the absence of the ability to rely upon noncompliance with a statutory demand that the company is insolvent.

30 In the circumstances, the application must be dismissed.

[1] (1997) 23 ACSR 541 ("Pinn"). Santow J considered the meaning of the words "during or after" where they appear in s 459C(2) of the Act.

[2] The reasons do not reveal why the application was dismissed but appear that it was made more than 21 days after service of the demand and was out of time.

[3] Pinn (1997) 23 ACSR 541, 544.

[4] [2003] WASC 121 ("Sim").

[5] Section 459C(2)(c).

[6] [2005] NSWSC 492; (2005) 54 ACSR 376 ("Sheslow").

[7] Sheslow [2005] NSWSC 492; 54 ACSR 376, [10]-[11].

[8] [2007] NSWSC 1377 ("Missing Link").

[9] Pinn (1997) 23 ACSR 541, 544.

[10] Missing Link [2007] NSWSC 1377 17 to 21.

[11] (2008) FCA 1148 ("Gryst").

[12] Gryst (2008) FCA 1148, [13].

[13] [2008] HCA 9; (2008) 243 ALR 207 ("Aussie Vic").

[14] [2010] NSWSC 508; (2010) 78 ACSR 468 ("Woodgate").

[15] At [64] and following of the judgment.

[16] [2010] NSWSC 1453.

[17] See s 459F(2)(a)(ii) - Barrett J had considered that the company had not "made" an application in accordance with s 459G for an order setting aside the demand so as to activate the statutory extension of time for compliance under s 459F(2)(a)(ii). See paragraphs [17] - [22] of the judgment.

[18] Woodgate [2010] NSWSC 508; (2010) 78 ACSR 468, [68].