Plaintiff v Defendant

1 Before the Court are two applications brought under Pt 5.4 of the Corporations Act 2001 (Cth) ('the Act'). The first is a proceeding commenced on 23 May 2022 by Mr Luke Warren in which he seeks to wind up Efficient Pure Plumbing Pty Ltd ('the Company') under s 459P of the Act ('the winding up proceeding').[1] Mr Warren relies upon the statutory presumption of insolvency contained within s 459C(2)(a) of the Act arising from the Company's alleged failure to comply with a statutory demand dated 22 April 2022 ('the statutory demand' or 'the demand'). By originating process dated 7 June 2022, the Company applies to set aside the statutory demand purportedly served on it by Mr Warren, in addition to seeking other declarations and orders in connection with the demand ('the statutory demand proceeding').[2] Because of the overlap in subject matter and evidence, the two proceedings have been managed and listed for hearing together.

2 The background to these proceedings is somewhat convoluted. On 16 February 2022, orders were made in the Magistrates' Court of Victoria at Melbourne that Mr Warren pay the Company the total sum of $12,045.46 in relation to a dispute concerning work and labour performed and materials supplied in connection with the installation of a heating system. On 11 March 2022, Mr Warren filed a notice of appeal in this Court pursuant to s 109 of the Magistrates' Court Act 1989 (Vic) seeking to appeal the orders made in the Magistrates' Court ('the appeal proceeding'). A month later, on 11 April 2022, Mr Warren filed a summons for a stay of enforcement of the Magistrates' Court orders pending the resolution of the appeal proceeding. Because Mr Warren did not serve his summons and supporting affidavit in support on the Company, that application was adjourned to a later date. Then, on 11 May 2022, the Company applied to have the appeal proceeding dismissed pursuant to r 58.10(8) of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules'). That application was made returnable before the Court on 13 July 2022. On that day, Barrett AsJ made timetabling orders in respect of further material to be filed by the parties in the appeal proceeding. Mr Warren's summons for the stay, a separate summons for directions and the Company's application for dismissal of the appeal proceeding were all adjourned to a date to be fixed before his Honour.

3 Separately, on 1 April 2022, the Company caused to be issued and served upon Mr Warren a bankruptcy notice in respect of the Magistrates' Court orders for the amount of $12,190.67, including interest ('the bankruptcy notice'). On 21 April 2022, Mr Warren filed an application in the Federal Court of Australia to set aside the bankruptcy notice ('the bankruptcy proceeding') on the basis that the appeal proceeding was on foot. Various orders have been made in the bankruptcy proceeding, including extending time for compliance with the bankruptcy notice and providing for the filing of affidavit material by the parties. On 31 May 2022, the Federal Court ordered that the further hearing of the bankruptcy proceeding be adjourned to 21 July 2022. The Court is informed by the parties that the bankruptcy proceeding has since been adjourned for further hearing on 25 August 2022.

4 As previously mentioned, Mr Warren issued the statutory demand on 22 April 2022. The statutory demand claims the sum of $5,335.00 which purports to relate to unpaid costs in the appeal proceeding and the bankruptcy proceeding. In the winding up proceeding, Mr Warren claims to be a creditor of the Company in respect of this alleged debt.

5 The winding up proceeding and the statutory demand proceeding were initially returnable before the Court on 22 June 2022. Various timetabling orders were made, including for the filing and service of further affidavit material and the exchange of written submissions by the parties and the filing and service of clear grounds of opposition by the Company in the winding up proceeding. Orders were also made that the evidence filed in each proceeding stand as evidence in the other proceeding. The matters were listed for final hearing today.

6 The Company sought and obtained an expedited final hearing of the matters because the winding up proceeding is apparently adversely affecting the business and reputation of the Company with some suppliers requesting the Company provide financial disclosure, and others seeking to change or reduce credit terms or to ask for pre-payment.

7 On 12 July 2022, the Company filed an interlocutory process seeking leave pursuant to s 495S of the Act to oppose the winding up proceeding on the grounds there is a genuine dispute between Mr Warren and the Company about the existence of the debt the subject of the demand; that the Company has an offsetting claim in relation to the debt the subject of the demand; and that there is some other reason why the demand should be set aside.

8 By its amended notice of appearance and grounds of opposition dated 13 July 2022, the Company opposes the winding up proceeding on the following bases:

(a) Mr Warren does not have standing to seek a winding up order because:

(i) the Company does not owe any debt to Mr Warren; or

(ii) further and in the alternative, the statutory demand was not served on the Company;

(b) the Company is solvent;

(c) in the alternative, the Company seeks leave pursuant to s 495S of the Act to oppose the winding up proceeding (on the grounds set out above);

(d) the winding up proceeding is an abuse of process; and

(e) it is the proper exercise of the Court's discretion to dismiss the winding up proceeding.

9 Despite the Company identifying solvency as a ground of opposition to the winding up proceeding, no evidence as to the Company's solvency has been filed. Further, there is no material in support of the Company's interlocutory process under s 459S of the Act. In its written submissions, the Company submits that if the Court finds that the statutory demand proceeding was filed out of time, it seeks an adjournment of the winding up proceeding so it can file further evidence in support of its s 459S application.

10 In the statutory demand proceeding, the Company seeks to set aside the demand pursuant to ss 459G, 459H and 459J of the Act. In addition, the Company seeks declarations and orders under s 36 of the Supreme Court Act 1986 (Vic) and r 23.05 of the Rules that:

(a) there is no debt due and owing by the Company to Mr Warren; and

(b) Mr Warren by himself, his servants and agents be restrained from commencing or causing to be commenced any proceedings seeking an order that the Company be wound up in insolvency based upon its alleged failure to comply with the statutory demand.[3]

11 For reasons which I will explain shortly, regardless of whether the statutory demand was properly served, the Court is unable to consider the aspects of the statutory demand proceeding relating to ss 459G, 459H and 459J of the Act.

12 In the two proceedings before the Court, Mr Warren relies upon the following documents: the affidavit and exhibits of Luke Warren in support of the winding up proceeding affirmed 23 May 2022; the further affidavits and exhibits of Luke Warren affirmed on 20 May 2022, 26 May 2022, 21 June 2022, 28 June 2022 and 1 July 2022;[4] and written submissions dated 19 July 2022.

13 The Company relies on the following documents in the two proceedings: the affidavit and exhibits of Michael Krause in support of the statutory demand proceeding affirmed 7 June 2022; the affidavit and exhibits of Joshua Felix Gladwin in support of the statutory demand proceeding affirmed 7 June 2022; the affidavits and exhibits of Michael Krause affirmed 21 June 2022 and 12 July 2022; the affidavit and exhibits of Joshua Gladwin affirmed 12 July 2022; the affidavit of Jennifer Koulaginis affirmed 12 July 2022; and written submissions filed 19 July 2022.

14 There are a number of statutory provisions that are relevant to the two proceedings before the Court.

15 Section 459A of the Act provides that '[o]n an application under section 459P, the Court may order that an insolvent company be wound up in insolvency'.

16 Section 459C(2)(a) of the Act relevantly states that 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 ... the company failed ... to comply with a statutory demand'.

(1) A person may serve on a company a demand relating to:

(a) a single debt that the company owes to the person, that is due and payable and whose amount is at least the statutory minimum;

(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within the statutory period after the demand is so served.

19 Section 459P(1)(b) of the Act allows a creditor to apply to the Court for a company to be wound up in insolvency (even if the creditor is only a contingent or prospective creditor). Section 459P(2)(a) of the Act further provides that an application by a person who is a creditor only because of a contingent or prospective debt may only be made with the leave of the Court.

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

(i) a copy of the demand; 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

21 Rule 5.4(2)(c) of the Supreme Court (Corporations) Rules 2013 (Vic) ('Corporations Rules') relevantly requires that an affidavit in support of a winding up application made under s 459P 'state whether and, if so, to what extent the debt, or each of the debts, to which the demand relates is still due and payable by the company at the date when the affidavit is made'.

(1) In so far as 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 company may not, without the leave of the Court, oppose the application on a ground:

(a) that the company relied on for the purposes of an application by it for the demand to be set aside; or

(b) that the company could have so relied on, but did not so rely on (whether it made such an application or not).

(2) The Court is not to grant leave under subsection (1) unless it is satisfied that the ground is material to proving that the company is solvent

... on hearing a winding up application the Court may:

(a) dismiss the application with or without costs, even if a ground has been proved on which the Court may order the company to be wound up on the application; or

(b) adjourn the hearing conditionally or unconditionally; or

(c) make any interim or other order that it thinks fit.

An application under Part 5.4 or 5.4A must not be dismissed merely because of one or more of the following:

(a) in any case--a defect or irregularity in connection with the application;

(b) in the case of an application for a company to be wound up in insolvency--a defect in a statutory demand;

unless the Court is satisfied that substantial injustice has been caused that cannot otherwise be remedied (for example, by an adjournment or an order for costs).

25 It is appropriate to firstly deal with the question of whether service of the demand was effective. At the hearing, the parties agreed with the following analysis on the question of service:

(a) in the event the evidence establishes proper service of the demand, the Company's statutory demand proceeding would have been initiated and served after the expiration of the 21 day statutory period contemplated by s 9 of the Act and regulation 5.4.01AAA of the Corporations Regulations 2001 (Cth) and would be out of time for the purpose of s 459G(3)(b) of the Act. As a consequence, the Court would not have jurisdiction to determine the statutory demand proceeding to the extent it is made under s 459G;[5] or

(b) if the Company is able to displace the presumption of service under s 29(1) of the Acts Interpretation Act on the basis that was not served the demand at any time_,_ the Court will still not have jurisdiction to determine the proceeding under s 459G because the provision only enables a company to apply to the Court for an order setting aside a statutory demand which has been served on the company_._

26 However, the question of service of the demand remains critical to the determination of the winding up proceeding. In the absence of evidence of proper service of the demand, no statutory presumption of insolvency can arise in that proceeding in respect of the Company pursuant to s 459C(2)(a) of the Act.

27 Pursuant to s 109X(1)(a) of the Act, a document, including a statutory demand, may be served on a company by leaving it at, or posting it to, the company's registered office.

28 Section 29 of the Acts Interpretation Act 1901 (Cth) ('Acts Interpretation Act') states the following:

(1) Where an Act authorises or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then the service shall be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

(2) This section does not affect the operation of section 160 of the Evidence Act 1995.

29 Section 160 of the Evidence Act 2008 (Vic) relevantly provides:

(1) It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the seventh working day after having been posted.

30 To invoke the presumption of service under s 29(1) of the Acts Interpretation Act, an applicant for a winding up order must prove the following matters either by way of direct evidence or by inference:

(a) the envelope bore the correct name and address;

(b) the envelope enclosed the relevant document to be served;

(c) the correct cost of postage was used to send the envelope; and

(d) the envelope was placed in the post.[6]

31 In order to negate the statutory presumption of service, a defendant company must adduce admissible evidence to establish non-delivery of the demand.[7] The evidentiary burden faced by a defendant company in seeking to displace the presumption of service under s 29(1) of the Acts Interpretation Act was further explained by Sifris J (as his Honour then was) in Re Kornucopia Pty Ltd (No 1),[8] where his Honour extensively reviewed the relevant authorities on that question:

The Company bears the onus of establishing 'proof to the contrary' pursuant to s 29(1) of the AIA Act [RE AXF Group [2019] VSC 671 [42]]. It does so by proving non-delivery of the statutory demand to the premises of the company's registered office, or delivery to some address other than the registered office. If the company successfully proves alternative delivery or non-delivery, the presumption does not apply, and proof of non-delivery is effective as proof of non-service [That is, unless the plaintiff can then establish service on the company by alternative means without relying on the presumption, such as through effective informal service by email or some other means]. However, 'if there is no evidence of actual delivery or non-delivery, then the presumption will apply and the item will be deemed to be delivered in the ordinary course of post' [Formosa House Pty Ltd v Chang [2010] VSC 474 [11] (Ferguson J) (Formosa House)].

In a case recently before me where a demand had been sent to a registered office by post, Re AXF Group [[2019] VSC 671], the only piece of evidence tending to suggest whether or where a statutory demand had been delivered was the absence of a notice from Australia Post indicating that the statutory demand had been returned to the plaintiff marked 'undelivered', 'returned to sender', or 'not at this address'. I referred to A/S Cathrineholm v Norequirement Trading Ltd [[1972] 2 QB 314, 320-2 (Lord Denning) citing London Country Quarter Sessions Appeals Committee, Ex parte Rossi [1956] 1 QB 682, 694 (Salmon LJ)], and Fancourt v Mercantile Credits Ltd [(1983) [1941] ArgusLawRp 85; 48 ALR 1, 7 (Mason, Murphy, Wilson, Deane and Dawson JJ) (Fancourt)], where the postal articles had similarly not been returned to the serving party [See also von Risefer v Mainfreight International Pty Ltd [2009] VSCA 179; (2009) 25 VR 366, 374 [21] (Ashley JA)], which could be distinguished from CGU Workers' Compensation [(1999) [1999] VSC 227; 151 FLR 270, 278 [74]-[77]] and Commonwealth Broadcasting Corporation Pty Ltd v Pacific Mobile Phones Pty Ltd [(2008) [2008] QSC 210; 219 FLR 422, 423 [1], 425 [11], 429 [23] (White J) (Commonwealth Broadcasting Corporations)], where the statutory demands had been returned by Australia Post to the serving party marked 'return to sender' or 'left address' [See discussion of authorities in Re AXF Group [2019] VSC 671 [67]-[86]. See also Deputy Commissioner of Taxation v Melking Holdings Pty Ltd [2019] FCA 988; (2019) 137 ACSR 411, 425-6 [54] (Colvin J) (Melking Holdings)]. As I observed in Re AXF Group, 'the absence of a notice from Australia Post marking the Demands as undeliverable is a significant indication as to whether or not delivery had occurred' [[2019] VSC 671 [84]]. To this, I would add the observation of Colvin J in Melking Holdings:

it is a question of fact in each case whether the circumstances indicate that there has been non-delivery at the relevant place (as distinct from an unwillingness to receive the documents at the place where they were delivered or a failure for the documents to be brought to the attention of a particular person despite being delivered to that place) [(2019) [2019] FCA 988; 137 ACSR 411, 426 [56]].

Furthermore, as Colvin J also said in Melking Holdings, '[t]he registered office of a company must be a location that accommodates the possibility of service by post [Ibid 425 [52]]. In Partners of Piper Alderman v Sharjade Pty Ltd, Barrett J said there is, implicit in the statutory regime, 'an expectation that there will be in place at the registered office a system for the safe and secure reception of documents delivered by post' [[2011] NSWSC 6 [18]]. In that case, the defendant company's mailbox was located outside the confines of the registered office itself and of the relevant building, such that it were accessible by anyone passing by and that 'anything might happen to documents put into a letter box situated on the public walkway' [Ibid [19]]. Non-receipt of the statutory demands would not, therefore, have been a solid foundation upon which an inference of non-delivery could have been drawn. The demand might not have been delivered, or it might have been and then removed from the letter box by any person passing by. There were there, as I said in relation to the scenario in Re AXF Group, 'an infinite number of possibilities' and each of which was 'equally likely' [Re AXF Group [2019] VSC 671 [83]]. Where there are numerous such possibilities, but no evidence tending to suggest which is most likely, the Court may inevitably hold that service (that is, delivery) has been effective, for that is the default position by virtue of the presumption, and no evidence has been adduced to suggest that it has not occurred.

I reiterate that it is incumbent on the company to adduce proof of non‑delivery. If there is only proof that the statutory demands have not been received by the Company, the presumption is not displaced and service has been effective according to s 29(1) [Ibid [42]]. While proof of non-receipt does not prove non-delivery [Fancourt (1983) HCA 25; (1983) 154 CLR 87, 96-7; Re Rustic Homes Pty Ltd (1988) 49 SASR 41, 44; Dwyer v Canon Australia Pty Ltd [2007] SASC 100 [8]-[9] (Debelle J); Deputy Commissioner of Taxation v Contract Synergies Administration Pty Ltd [2011] FCA 743 [5]-[18] (Jacobson J)], proof of non-receipt at a place by its occupant, as distinct from non-receipt by a person who is not an occupant, may prove non-delivery at that place for the purpose of s 29(1) of the AIA Act [Scope Data Systems Pty Ltd v Goman [2007] NSWSC 278; (2007) 70 NSWLR 176, 188 [49] (White J). That is, however, subject to what was said by McKerracher J in Josway:

while mere denial of non-receipt by the addressee would scarcely, if ever, suffice to prove 'non-delivery', evidence of non-receipt at a place by an appropriate occupant, depending on the cogency of the evidence, may be sufficient to create a doubt for the purposes of s 160 of the Evidence Act. While such evidence needs to be sufficient to create a 'doubt' it does not need to be proof to the civil standard of fact finding at trial as to actual non-delivery. A 'doubt' ought not to be assimilated with proof or demonstration [Josway [2018] FCA 466 [2] (McKerracher J) citing Deputy Commissioner of Taxation v Manta's on the Beach Pty Ltd [2012] FCA 417; (2012) 88 ATR 193, 196 [12] (Logan J)].

...

In Panimo Nominees Pty Ltd v Vasiliki Lobsters Melbourne Pty Ltd (Vasiliki Lobsters), Gardiner AsJ said, that while the company disputing service 'bears the onus of proving non delivery, the defendant is not required to prove a negative.' In cases of this kind, there will usually be no direct evidence which can positively prove that delivery has or has not occurred. The company must usually, and necessarily, bring an inferential case, based upon circumstantial evidence, and the permissible, probable inferences which may be drawn from such evidence. The company does not need to adduce evidence that would exclude an inference of delivery, but must upon the evidence, establish that delivery is the most improbable inference to be drawn or conversely, that non-delivery is the most probable. In other words, the operative question may be phrased as follows: Has the company established actual non-delivery to the registered office address, actual delivery to some alternative address, or any other competing possibility which is more probable than the demand having been delivered to the registered office?[9]

32 Mr Warren claims to have effected service of the statutory demand upon the Company in accordance with s 109X(1)(a) of the Act by sending it to the Company's registered office by ordinary post. He argues that he has put forward sufficient evidence to enliven the statutory presumption of service under s 29(1) of the Acts Interpretation Act. In his affidavit affirmed on 20 May 2022, Mr Warren deposes to having posted the statutory demand and accompanying affidavit on 22 April 2022 at 3:20pm by ordinary prepaid post using a post box at Stud Park Shopping Centre, 1101 Stud Road, Rowville, Victoria, in an envelope addressed to the Company at its registered office. He does not separately exhibit a copy of the demand and its accompanying affidavit but appears to mistakenly exhibit the originating process in the winding up proceeding and the associated documents, which include the statutory demand and accompanying affidavit. In his supplementary affidavit of service affirmed on 1 July 2022, he re-states this evidence and exhibits a photograph of the envelope he says he posted to the Company containing the demand and supporting affidavit. The photograph purports to show the envelope being placed into a post box and is addressed to the Company at Unit 4, 19 Stephen Road, Dandenong South, Victoria, 3175, which was the Company's registered office at all relevant times according to an Australian Securities and Investments Commission company extract for the Company dated 23 May 2022. He also exhibits a screenshot from an iPhone which records a date and time stamp for the photograph which corresponds with the date and time Mr Warren says he posted the envelope.

33 Although Mr Warren did not ultimately exhibit a separate copy of the demand and its affidavit in support to either of his affidavits of service of the demand, he gives unequivocal evidence of having placed the demand and the affidavit in the envelope and having posted it to the Company at its registered office. The demand and affidavit that he says he posted can nevertheless be located in the bundle of material he mistakenly exhibited to his first affidavit of service of the demand in the winding up proceeding. In the circumstances, I am prepared to infer that the statutory demand and accompanying affidavit Mr Warren says he posted is the same statutory demand and affidavit found in that bundle. There is no other statutory demand in issue in these proceedings. I am also prepared to infer that the envelope he says contained the demand and affidavit bore the correct postage amount because he says he sent it by ordinary prepaid post and because the photograph of the envelope shows two stamps affixed to it (although the denomination of the stamps is obscured). Nevertheless, he was not challenged under cross-examination in relation to any of these matters.

34 In his affidavit affirmed on 12 July 2022, Mr Michael Krause, managing director of the Company, observes that the screenshot which purports to show the date and time for the relevant photograph of the envelope includes a button labelled 'adjust'. It was submitted by the Company that this feature permits the user of the iPhone to adjust the date and time on which a photograph is taken and that it might be inferred that this has occurred. The basis for such an inference is unclear. Further, the Company has not called for the original photograph to examine its metadata or led any technical expert evidence about the photograph and its metadata. Nor has it cross-examined Mr Warren in relation to his evidence concerning the photograph of the envelope and, specifically, whether he altered the date and time on which it was taken.

35 On the totality of Mr Warren's evidence, I am satisfied that the plaintiff has put forward sufficient material, either by way of direct evidence or by implication, to raise the presumption of service of the statutory demand under s 29(1) of the Acts Interpretation Act.

36 Subject to evidence to the contrary, in accordance with s 160(1) of the Evidence Act 2008 (Vic), the demand is therefore taken to have been received at the Company's registered office on 4 May 2022 (allowing for the public holiday on ANZAC Day on 25 April 2022).

37 In his affidavit of 7 June 2022, Mr Krause deposes that the Company did not receive the statutory demand and that he only discovered that a statutory demand had purportedly been served by Mr Warren at around 2:00pm on 25 May 2022 when the Company's operations coordinator, Ms Jennifer Koulaginis informed him that she had received an unsolicited call from someone at the firm Kingsford Lawyers who stated that a winding up notification had been lodged in relation to the Company. Mr Krause also briefly describes the mail collection process at the Company's registered office. He says that all of the Company's mail is deposited via a mail slot in the showroom door at the Company's premises located at Unit 4, 19 Stephen Road, Dandenong South. Any mail is usually delivered before 10:00am on a day when mail is delivered and remains on the showroom floor until Mr Krause collects it that same morning. Mr Krause says he opens all letters and any other correspondence and has never received an envelope from Mr Warren containing a statutory demand.

38 In his affidavit of 12 July 2022, Mr Krause elaborates upon the Company's mail system. He deposes that:

(a) all ordinary prepaid post or express post sent to the Company's registered address is delivered by a person on an Australia Post motorcycle stopping at the front door of the registered office and putting the mail in the mail slot located in the front door cut-out;

(b) mail is usually delivered between the hours of 8:00am and 10:00am each weekday;

(c) because most correspondence is received electronically, the Company only receives one or two items of physical mail each week on average. Consequently, he takes special notice each morning if a physical item of mail is received by the Company;

(d) given the location of the mail slot in the office's front door and the surrounding internal areas, if mail is delivered through the mail slot there is no way the mail could be pushed through the mail slot and 'subsequently slide under any internal objects'. Any mail pushed through the mail slot would drop onto the internal doorway area and would be immediately noticed when a person tried to open the front door;

(e) Mr Krause is responsible for collecting and administering the mail distribution process for the Company. The process entails the following:

(i) each weekday, he usually arrives at work at approximately 5:00am, works for between two to two and half hours and then leaves the office to collect his children from home and take them to school;

(ii) whenever he arrives at work, he enters the building via the front door;

(iii) when he returns after taking his children to school, the first thing he does, after entering the office, is to look to see if any mail has been delivered to the Company;

(iv) if any mail has been delivered, he collects the mail and goes through the mail to see if anything is urgent. After he goes through the mail, he leaves the mail on the desk of Ms Koulaginis for sorting;

(v) once the mail is sorted by Ms Koulaginis, she places the mail into one of two plastic folders. One folder is made from black plastic and is used for all items scheduled for payment. The second folder is made from clear plastic and is utilised for all other mail. The mail which is placed in the black plastic folder is then sent to the accounts department for payment. Following payment, the mail is removed from the black plastic folder and is placed into the clear plastic folder for filing;

(vi) approximately every six months, Ms Koulaginis disposes of all physical mail which is no longer required to be retained;

(f) at all relevant times, Mr Krause and Ms Koulaginis have had sole custody and control of the Company's mail collection and distribution process. There is no other person in the Company's office who has custody or control of the Company's mail; and

(g) neither he nor Ms Koulaginis took any leave from work during the period between 22 April 2022 and 22 May 2022. During this period, there was no one else in the office who would have collected the mail addressed to the Company.

39 The details of the Company's mail system are corroborated by the affidavit of Ms Koulaginis affirmed on 12 July 2022. Neither Mr Krause nor Ms Koulaginis were cross-examined in relation to their evidence concerning the Company's mail system.

40 Further, in his affidavit of 12 July 2022, Mr Krause deposes that he is familiar with statutory demands and is aware that a failure to respond to a statutory demand can have very serious consequences for a company. He reiterates that the Company did not receive an envelope via the post (or in any other manner) enclosing the statutory demand and that had a statutory demand been received, he would have immediately contacted the Company's solicitors. Mr Krause says the Company has been at its current location for approximately 18 months and there has never been any previous controversy in respect of receiving mail at its registered office. He made inquiries of the businesses located near the Company's registered office and has apparently been advised that none of those businesses have received any mail addressed to the Company, including an envelope purportedly sent to the Company enclosing the statutory demand.

41 Mr Krause also gives evidence that the Company was served with the winding up proceeding on 1 June 2022 and exhibits screenshots from the Company's security footage showing him retrieving an envelope containing the winding up proceeding and supporting material from the showroom floor inside the Company's premises on the other side of the door containing the mail slot.

42 Also before the Court is evidence that Mr Warren did not properly attend to service of documents in the appeal proceeding and that there was some delay between the filing of the winding up proceeding (on 23 May 2022) and service of the relevant material on the Company by express post to its registered office (on 1 June 2022). Further, it was submitted that the reason for Mr Warren's use of express post in respect of service of the winding up proceeding documents when contrasted with his use of ordinary prepaid post for the statutory demand was unexplained. Counsel for the Company submits that these matters, when taken together with the evidence adduced by Mr Krause and Ms Koulaginis in relation to the Company's mail system, mean an inference can be drawn that the demand and accompanying affidavit were not delivered.

Is service of the statutory demand effective?

43 The Company's evidence on the question of service of the statutory demand is extensive, however, it is not comprehensive. There are significant gaps. There is no direct evidence as to whether the Company's usual process of locating and sorting its mail was adhered to during the relevant period in which the demand was presumably served, being 22 April 2022 to 4 May 2022, or the period between 22 April 2022 to 22 May 2022 when Mr Krause and Ms Koulaginis say they did not take leave. As Mr Warren correctly submits, there is no evidence of what mail, if any, was received by the Company following the date the demand was said to be posted on 22 April 2022 until the end of that month or, more particularly, until 4 May 2022 when it would otherwise be deemed to have been delivered. Further, although the Company was able to access its security footage to confirm the time and date of service of the winding up proceeding, there is no evidence that the Company's security footage was ever reviewed to determine whether any envelope was received at its premises following the purported posting of the statutory demand on 22 April 2022.

44 I also observe that neither Mr Krause nor Ms Koulaginis say that they have made inquiries of the Company's other employees (including those in the accounts department) to ascertain whether any of them sighted the relevant envelope containing the statutory demand at any time. There is no evidence as to the number of other persons employed by the Company or their working hours and manner of entering the Company's building. Whilst Mr Krause and Ms Koulaginis depose that they have sole custody and control of the Company's mail collection and distribution process, the system of mail does not appear to be especially elaborate. Mail is simply placed through a mail slot built into the front door of the premises and left on the showroom floor until collected and then sorted. It is also unclear why Mr Krause states that during the period 22 April 2022 to 22 May 2022 there was no one else in the Company's office aside from himself and Ms Koulaginis who would have collected the mail addressed to the Company. For example, it is uncertain whether other employees were specifically instructed not to retrieve mail sitting on the floor of the building until Mr Krause collected it himself or whether other employees were simply absent from work during this period.

45 The available evidence permits the inference that another employee of the Company may have collected the envelope containing the statutory demand when entering the front door of the Company's building before Mr Krause could himself sight the envelope, for example, during the time he regularly leaves work to take his children to school. There is a possibility that the statutory demand was delivered to the registered office but not brought to the attention of Mr Krause. Given the gaps in the Company's evidence concerning its mail system, including during the relevant time, it seems that this possibility is no less probable than the possibility that the demand was not delivered at all. Although there is evidence that Mr Warren did not properly attend to service of documents in the appeal proceeding and that he used a different mode of postal delivery in attending to service of the winding up proceeding, I am unpersuaded that this evidence makes it more likely that the statutory demand was not delivered to the Company's registered office, even when taken in combination with the other evidence adduced by the Company on the question of service.

46 The Court is then left with two equally likely possibilities in relation to the issue of service of the statutory demand. It is therefore appropriate to revert to the default position which arises by virtue of the presumption under s 29(1) of the Acts Interpretation Act that service of the demand has occurred.[10] I therefore find that the statutory demand was delivered to the Company's registered office in the ordinary course of post by no later than 4 May 2022. Accordingly, the Company's statutory demand proceeding is incompetent to the extent it relies on s 459G of the Act because it was filed and served on 7 June 2022 which was after the expiration of the 21 day statutory period. It also follows that Mr Warren is able to rely upon the statutory presumption of insolvency found in s 459C(2)(a) of the Act by virtue of the Company's non-compliance with the demand.

47 I turn then to the question of whether Mr Warren has standing as a creditor to seek the winding up of the Company.

48 In order for the Court to wind up a company in insolvency under s 459A of the Act, it must be satisfied of two critical matters: firstly, that the applicant has standing to bring the application under s 459P(1)(b) as a creditor; and secondly, that the company is insolvent (which may be presumed under s 459C(2)(a) of the Act following the company's non-compliance with a statutory demand). As explained by the learned author of the text Assaf's Winding Up in Insolvency, an applicant's standing to apply for the winding up of a company in insolvency is a statutory right provided by s 459P of the Act.[11]

49 An applicant who presents an application to wind up a company in insolvency following non-compliance with a statutory demand may be regarded as a creditor if they are a person to whom the company owes a debt, either in law or equity, that is due and payable.[12] For the purpose of s 459E(1) of the Act, a debt is due and payable when it is ascertainable, immediately payable and presently recoverable or enforceable by action.[13] A debt which is not legally enforceable does not qualify as a debt.[14]

50 In Re Simmoll Pty Ltd,[15] I made the following comments in relation to the nature of a debt for the purposes of the Act:

Although the term 'debt' is not defined in the Corporations Act, it should be construed in a practical and common sense manner, consistent with its context and the underlying statutory purpose.[16] In Rothwells Ltd v Nommack (No 100) Pty Ltd,[17] a case which involved an application to restrain a winding up proceeding, McPherson J succinctly described a debt as 'a liquidated sum in money presently due, owing and payable' by a debtor to a creditor.[18] A debt can therefore be distinguished from a claim of damages for breach of contract or any other unliquidated claim.[19] ... Similarly, there is abundant authority for the proposition that an obligation to pay unliquidated damages is not a debt capable of supporting a statutory demand.[20] This is consistent with the legislative policy underpinning Part 5.4 of the Corporations Act that the statutory presumption of insolvency in s 459C(2)(a) should be available only in clear cases of indebtedness where the reason for non-compliance with a statutory demand is an inability of the debtor company to pay and where no other inference for non-payment can be drawn, such as the debt being presently unrecoverable or unenforceable.[21]

51 In Bonnyview Pty Ltd v David Deave and Associates Pty Ltd,[22] Mullins J considered whether a cost order was a debt for the purpose of a statutory demand. Her Honour held that although an obligation to pay costs arose on the making of the relevant order in favour of the respondent, until the costs had been assessed by the court and ascertained by reference to an order made by the court, it could not be said that the costs were due and payable and capable of supporting a statutory demand.[23] In other words, quantification of the entitlement to costs is essential.

52 According to the statutory demand in this case, the debt is described as follows:

Unpaid costs of Supreme Court Proceeding No. S ECI 2022 000889 and Federal Circuit Court Proceeding No. VID208/2022 between Luke Thomas Warren and Efficient Pure Plumbing Pty Ltd

53 The proceedings referred to in the description of the debt are the appeal proceeding and the bankruptcy proceeding, respectively.

54 In his affidavit of 7 June 2022, Mr Krause explains that the Company instructed its solicitors to undertake a review of each order made in the appeal proceeding and the bankruptcy proceeding. All of the orders, which are exhibited to the affidavit, contemplate that costs have been reserved as between the parties. Further, neither proceeding has been finally determined.

55 On 22 June 2022, at the first return of the statutory demand proceeding and the winding up proceeding, there was the following exchange between the Court and Mr Warren about how the amount claimed in the statutory demand had been calculated:

HIS HONOUR: ... so how have you calculated your costs?

MR WARREN: Ah, with the (indistinct). I had to, ah, do a set aside application which I did within the time period for the bankruptcy notice. Ah, I was ‑ ‑ ‑

HIS HONOUR: So you've incurred the filing fees.

MR WARREN: Filing fees I had to pay, um, obviously professional fees from lawyers and counsel to help me draft. I'm a lay person; I am not a legal, um, person by any means just to make this perfectly clear.

HIS HONOUR: No, I understand that. So does that mean - so you've paid lawyers in connection with these other proceedings.

MR WARREN: That is correct, yeah.

HIS HONOUR: But have you got any order from the court to say that, yes, you're entitled to an order for your legal costs at a particular point in time?

MR WARREN: Well - well, no in short. Ah, no. No, in short, but, um, obviously costs have been reserved in both of the, oh, both of the courts, especially the bankruptcy one, um, because this was brought up in the bankruptcy matter where, um, it did get set aside and it did rule in my favour, but it must, ah, be on hold or must wait until the Supreme Court, um, appeal had completed before ‑ ‑ ‑

HIS HONOUR: But the - sorry to interrupt ‑ ‑ ‑

MR WARREN: That's okay.

HIS HONOUR: ‑ ‑ ‑ the bankruptcy proceeding is adjourned; is that right?

MR WARREN: That is correct, yes.

HIS HONOUR: All right. So there's been no final costs order made ‑ ‑ ‑

MR WARREN: No.

HIS HONOUR: ‑ ‑ ‑ or any costs order made other than to reserve costs; is that correct?

MR WARREN: Well, that is correct, yeah.

HIS HONOUR: And, similarly, with the Magistrates' Court appeal, would you accept that there's only been orders reserving costs to date, but there's no order determining who should pay whose costs in that proceeding?

MR WARREN: That is correct, yes. Yes. [24]

56 In summary, Mr Warren conceded that whilst he had incurred filing fees and legal fees in dealing with both the appeal proceeding and the bankruptcy proceeding, costs have been reserved to date in both proceedings and no costs order had been made in his favour.[25] He made the same concessions at the hearing today.

57 The statutory demand is therefore based upon purported 'unpaid costs' incurred by Mr Warren in the appeal proceeding and the bankruptcy proceeding in circumstances where there has been no cost order made in Mr Warren's favour against the Company, let alone an assessment of costs following any such costs order. Plainly, the sum claimed in the statutory demand is not due and payable for the purpose of s 459E(1) of the Act. It is not ascertainable, immediately payable and presently recoverable or enforceable. The amount claimed simply represents what Mr Warren says he has incurred by way of filing fees and legal costs. The burden of those fees and costs currently rests with Mr Warren unless and until a costs order is made in his favour.

58 Because the Company's statutory demand proceeding is out of time, the Court does not have jurisdiction under the machinery of Pt 5.4 of the Act to set aside the statutory demand on the basis that the sum claimed in the demand is not due and payable. However, it is important to consider the implications of the conclusion I have reached about the statutory demand for the purpose of the winding up proceeding itself.

59 The requirements of s 459Q of the Act are important. As that provision makes clear, an originating process to wind up a company in insolvency must not only provide particulars of service of the relevant statutory demand upon the defendant company and the failure of the company to comply with the demand but, except in the case of a judgment debt, be accompanied by an affidavit that 'verifies that the debt, or the total of the amounts of the debts, is due and payable by the company'. As earlier noted, r 5.4(2)(c) of the Corporations Rules further provides that the supporting affidavit must 'state whether and, if so, to what extent the debt, or each of the debts, to which the demand relates is still due and payable by the company at the date when the affidavit is made'. The relevant form for the supporting affidavit can be found in Note 2 of Schedule 3 to the Corporations Rules which relevantly requires that the deponent swear or affirm that:

1. the defendant was on [state date of statutory demand or other relevant date] indebted to the plaintiff in the sum of $ for [state concisely the consideration, for example, goods sold and delivered etc.] which sum was then due and payable.

...

1. The sum demanded remains due and payable by the defendant to me [ or the plaintiff].

60 The affidavit in support of the winding up proceeding affirmed by Mr Warren on 23 May 2022 relevantly states:

1. The Defendant was on 22 April 2022 indebted to the Plaintiff in the sum of $5,335.00 for Unpaid costs of Supreme Court Proceeding No. S ECI 2022 00889 and Federal Circuit Court Proceeding No. VID208/2022 between Luke Thomas Warren and Efficient Pure Plumbing Pty. Ltd.

8. The sum demanded remains due and payable by the Defendant to the Plaintiff.

[emphasis added]

61 It is apparent that Mr Warren's affidavit in support of the winding up proceeding is inadequate. Firstly, he does not properly confirm or explain how the Company was indebted to him at the time the statutory demand was issued, in compliance with the relevant form in Schedule 3 to the Corporations Rules. Secondly, and more critically, I do not accept Mr Warren's verification that the debt is, and remains, due and payable by the Company for the purpose of s 459Q and r 5.4(2)(c) of the Corporations Rules. He has not attempted to prove or confirm the existence and basis of the debt. He has merely asserted it. Nor has he explained how the sum he claims has been calculated. Moreover, it is not possible for Mr Warren to properly verify that the amount claimed in the originating process is due and payable. For reasons already discussed, the sum claimed in the demand is not, as a matter of law or equity, due and payable. There is simply no valid debt.

62 I accept the Company's submission that the problems with Mr Warren's supporting affidavit and the winding up proceeding itself are defects and irregularities which are causative of substantial injustice to the Company under s 467A of the Act and which cannot be cured by remedial order (such as by the filing of a supplementary affidavit).[26] In this regard, I do not accept Mr Warren's submission that to the extent there are defects and irregularities, he should be afforded an opportunity to better verify the debt he claims by putting on a supplementary affidavit which would annex the legal bills he has received and the filing fees he has incurred. This would not correct the position that there is no debt owing or overcome the problem that there are no costs orders that have been made or assessed.

63 As a consequence, Mr Warren does not have standing as a creditor to seek the winding up of the Company. Whilst it has been held that a party to a proceeding who has been awarded costs may be regarded as a contingent creditor, even in the absence of taxation or assessment of those costs,[27] a contingent creditor must still seek leave to make a winding up application under s 459P(2)(a) of the Act. Regardless, as previously explained, Mr Warren does not have the benefit of any extant cost order and therefore cannot be regarded as a contingent creditor either.

64 Whilst s 459S of the Act operates to preclude a defendant company from challenging the plaintiff's standing as a creditor or disputing the debt relied upon,[28] this is an exceptional case where the facts clearly indicate that Mr Warren's verification of the debt that he claims cannot be relied upon by the Court. The Court will not look favourably upon abuses of the statutory regime, including where a winding up application is filed without an adequate supporting affidavit which verifies the debt claimed.[29] A putative creditor must give close and serious attention to the existence of the debt claimed before instituting winding up proceedings because of the serious ramifications for the defendant company,[30] including the effect of s 459S and the grave consequences of a winding up order.

65 Mr Warren's lack of standing to bring the winding up proceeding is sufficient reason to dismiss it.

Discretion under s 467(1)(a) of the Corporations Act

66 Further and in any event, I am satisfied that the winding up proceeding should be dismissed under s 467(1)(a) of the Act as a matter of discretion.

67 Even though Mr Warren has made out a ground on which the Court may order that the Company be wound up (ie the presumed insolvency of the Company under s 459C(2)(a) of the Act), s 467(1)(a) makes clear that the Court may dismiss the winding up proceeding, with or without costs.

68 The Court's discretion under s 467(1) must be exercised judicially, taking into account all relevant considerations, including the interests of justice, fairness to the parties and the interests of creditors.[31] The interests of justice and considerations of fairness dictate that an applicant who cannot verify they are owed a debt by the defendant company that is due and payable, and cannot establish standing as a creditor, should not be able to obtain a winding up order. That is the situation here.

69 The position in relation to the winding up proceeding can be summarised as follows. Because the statutory demand was not complied with by the Company and its application to set aside the demand was out of time, the statutory presumption of insolvency arises under s 459C(2)(a) of the Act. Despite its grounds of opposition to the winding up proceeding, the Company has not led any evidence of solvency to rebut the statutory presumption nor formally obtained leave under s 459S to raise grounds relating to the statutory demand. Nevertheless, Mr Warren has not, and cannot, properly verify the debt claimed and therefore lacks standing as a creditor to bring the application. Further, there is no supporting creditor who appears and seeks to be substituted as plaintiff under s 465B of the Act in order to make use of the existing presumption of insolvency. It follows that the Court must dismiss the winding up proceeding.

70 There are a number of remaining issues to briefly address.

71 The Company contends that it can be inferred that the winding up proceeding has not been presented for the purpose of obtaining a winding up order but for collateral purposes including attempting to curtail the Company's opposition to the appeal proceeding; 'as retribution' for the Company serving the bankruptcy notice on Mr Warren; and to prevent the filing of a creditor's petition against Mr Warren. In those circumstances, the Company submits the winding up proceeding should be dismissed as an abuse of process. There is no evidence of these matters before the Court. Accordingly, the Company cannot discharge the heavy onus of demonstrating an abuse of process in the 'technical sense' as articulated by the High Court in Williams v Spautz,[32] namely that the proceeding was instituted for the predominant purpose of obtaining a collateral advantage outside the proper purpose for which a proceeding is designed.

72 Although counsel for the Company also suggested at the hearing that there is authority for the proposition that a person who fails to establish standing to bring a winding up proceeding commits an abuse of process,[33] this argument was not fully developed. Given there is a separate basis to dismiss the winding up proceeding for lack of standing, it is unnecessary to investigate this issue further.

73 Lastly, given my disposition in relation to the winding up proceeding, it is unnecessary for the Court to make the relevant declarations sought in the statutory demand proceeding.

74 For the reasons I have given, both the winding up proceeding and the statutory demand proceeding will be dismissed.

75 Following the delivery of these ex tempore reasons, I heard the parties on the question of costs and made a ruling to the following effect.

76 I have previously noted the operation of s 467(1) of the Act which permits the Court to dismiss an application for winding up with or without costs, even if a ground has been proved on which the Court may order the company to be wound up. I also note that s 24 of the Supreme Court Act 1986 (Vic) relevantly provides that 'the costs of and incidental to all matters in the Court ... is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid'. Moreover, r 63.04 of the Rules allows the Court to make an order for costs in relation to a particular question or a particular part of the proceeding. Accordingly, the Court is entitled to consider the realities of the case and will attempt to do 'substantial justice' as between the parties on matters of costs.[34]

77 The Court clearly has a wide discretion in relation to costs.[35] However, there is a general rule that, in the absence of good reason to the contrary, a successful litigant should recover their costs.[36] Where a winding up application is dismissed, the Court will usually order the applicant to pay the respondent company's costs in accordance with the principle that costs follow the event[37] but each case ultimately turns upon its own facts.[38]

78 The Company submits that the Court should make no order in relation to costs in the statutory demand proceeding or in relation to the interlocutory process seeking leave under s 459S of the Act in the winding up proceeding, but otherwise seeks its costs in the winding up proceeding on a standard basis. Conversely, Mr Warren submits that each party should bear their own costs in the two proceedings.

79 In my view, it is appropriate that Mr Warren should pay 70% of the Company's costs on a standard basis in the winding up proceeding, such costs to be taxed in default of agreement. In reaching this view, I note that whilst the Company ultimately succeeded in resisting the winding up proceeding it did not succeed in all aspects, in particular on the question of service of the statutory demand. Significant time and expense was expended on this point. I also note that whilst the interlocutory process under s 459S of the Act was filed in the winding up proceeding, no material was devoted to this aspect of the case. At the same time, as is apparent from my reasons, Mr Warren should never have brought the winding up proceeding in the first place because he is not a creditor of the Company.

80 Whilst there is a real question of whether the statutory demand proceeding had any real utility in light of my finding that the Court did not have jurisdiction to set aside the demand under s 459G on any view, most of the work was undertaken by the parties in the winding up proceeding. I agree with the parties that the appropriate order in the statutory demand proceeding is that there be no order as to costs.

[3] Given the nature of the declarations sought in the statutory demand proceeding, on 20 June 2022 Connock J made an order that the originating process filed on 7 June 2020 be referred to an Associate Judge for hearing and determination pursuant to r 77.05 of the Rules and, if required, also pursuant to r 16.1(3) of the Supreme Court (Corporations) Rules 2013 (Vic).

[4] These affidavits, in their order above, relate to service; lodgement; publication; and two further affidavits in support of service of the originating process, respectively.

[5] David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265. See also Carinda Homes Pty Ltd v Highlands Pty Ltd [2003] FCA 275; Renegade Rigging Pty Ltd v Hanlon Nominees Pty Ltd [2010] VSC 385, [2] (Ferguson J) ('Renegade Rigging'); Autumn Solar Installations Pty Ltd v Solar Magic Australia Pty Ltd [2010] NSWSC 463 [4] (Barrett J).

[6] See Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216 [12] (Brereton J); Pearlburst Pty Ltd v Summers Resort Group Pty Ltd; Landmark Leisure Group Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 and the authorities cited in that case_; Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd_ [2010] FCA 1223 [24] (Logan J); Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869 [13] (Barrett J); Renegade Rigging [22]; In the matter of Kornucopia Pty Ltd (No 1) (2019) 59 VR 305, 316 [43] (Sifris J, as his Honour then was); Re Slodyczka & Farren Pty Ltd [2022] VSC 19 [15] (Hetyey AsJ) ('Re Slodyczka').

[7] Farid Assaf, Assaf's Winding Up in Insolvency (3rd ed, Lexis Nexis, 2021) ('Assaf's Winding Up in Insolvency') [4.83] citing Fancourt v Mercantile Credits Limited (1983) HCA 25; (1983) 154 CLR 87, 95‑7; CGU Workers' Compensation (Vic) Ltd v Carousel Bar Pty Ltd [1999] VSC 227; (1999) 151 FLR 270, 278 [73]-[77] (Gillard J); and Re AXF Group [2019] VSC 671 [67]-[77] (Sifris J) ('Re AXF Group'); Re Slodyczka [16].

[8] (2019) 59 VR 305 ('Kornucopia (No 1)').

[9] Ibid 317-9 [44]-[49] (emphasis in original).

[11] Assaf's Winding Up in Insolvency [10.9].

[12] Ibid [10.13]. See also Vehicle Wash Systems Pty Ltd v Mark VII Equipment Inc (1997) 80 FCR 571, 573 (Finkelstein J) citing Re United Club and Hotel Co Ltd (1899) 60 LT 655.

[13] Re Elgar Heights Pty Ltd [1985] VicRp 67; [1985] VR 657, 669, 671 (Ormiston J) ('Re Elgar Heights'); Remuneration Data Base Pty Ltd v Pauline Goodyer Real Estate Pty Ltd [2007] NSWSC 59 [39]-[42] (White J) ('Remuneration Data Base'); NA Investments Holdings Pty Ltd v Perpetual Nominees Ltd [2010] NSWCA 210; (2010) 79 ACSR 544, 552-3 [63] (Lindgren AJA); Main Camp (n 21) 731-2 [17] (Barrett J); Re Sceam Construction Pty Ltd [2021] VSC 437 [34] (Hetyey AsJ); Re Simmoll Pty Ltd [2021] VSC 693 [44] (Hetyey AsJ) ('Re Simmoll').

[14] Re South Wales Atlantic Steamship Co [1876] UKLawRpCh 169; (1876) LR 2 Ch D 763.

[15] Re Simmoll Pty Ltd [2021] VSC 693 [45] (Hetyey AsJ).

[16] Hawkins v Bank of China (1992) 26 NSWLR 562, 572 (Gleeson CJ) ('Hawkins'); Powell v Fryer [2001] SASC 59; (2001) 159 FLR 433, 443 [64] (Olsson J, with whom Duggan and Williams JJ agreed).

[17] [1990] 2 Qd R 85 ('Rothwells v Nommack').

[18] Ibid 86. A liquidated sum was explained in Spain v Union Steamship Co of New Zealand Ltd [1923] HCA 21; (1923) 32 CLR 138, 142 (Knox CJ and Starke J quoting the then current fifth edition of Odgers on Pleading and Practice) as being an 'amount to which the plaintiff is entitled ... [which] can be ascertained by calculation or fixed by any scale of charges, or other positive data'.

[19] Young v Queensland Trustees Ltd (1956) 99 CLR 560, 569 (Dixon CJ, McTiernan and Taylor JJ). See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 424 where Brennan CJ, Dawson and Toohey JJ characterised a debt as being a 'form of action for a liquidated sum and not damages'; and Hansmar Investments Pty Ltd v Perpetual Trustee Co Ltd [2007] NSWSC 103; (2007) 61 ACSR 321, 327 (White J) ('Hansmar Investments').

[20] Re Elgar Heights; Rothwells v Nommack 88 (McPherson J); First Line Distribution Pty Ltd v Whiley (1995) 18 ACSR 185, 188 (Cohen J); Reinsurance Australia Corporation Ltd v Odyssey Re (Bermuda) Ltd [2000] NSWSC 1118; (2000) 36 ACSR 348, 355 (Macready M); CGI Information Systems and Management Consultants Pty Ltd v APRA Consulting Pty Ltd [2003] NSWSC 728; (2003) 47 ACSR 100, 103 (Barrett J); Re Towncars Franchises Sydney Pty Ltd [2013] NSWSC 1235 [29]-[30] (Brereton J).

[21] Assaf's Winding Up in Insolvency [3.49]. See also Re Elgar Heights 669 (Ormiston J); Remuneration Database [41] (White J); Re Renu Waste Pty Ltd [2020] NSWSC 108 [23] (Rees J) ('Re Renu Waste'); Re Essential Media and Entertainment Pty Ltd [2020] NSWSC 990 [97] (Rees J).

[22] [2007] QSC 223; (2007) 213 FLR 388.

[23] Ibid [15]-[16]. See also B&W Windows v Cohott [2008] NSWSC 49 [13] (Macready AsJ); Body Corporate Repairers Pty Ltd v Oakley Thompson & Co Pty Ltd [2017] VSC 435; (2017) 322 FLR 355 [45]-[46] (Randall AsJ).

[24] Transcript of Proceeding Re Efficient Pure Plumbing (Supreme Court of Victoria, S ECI 2022 01905, Hetyey AsJ, 22 July 2022) 20-1 ('Transcript').

[26] Unlike the defects and irregularities present in cases such as Re DG Haulage Pty Ltd (2017) 54 VR 705 ('Re DG Haulage') and Re Kornucopia (No 1).

[27] National Australia Bank Ltd v Market Holdings Pty Ltd (in liq) [2001] NSWSC 253; (2001) 37 ACSR 629, 650-2 (Young J); Leveraged Capital Pty Ltd v Modena Imports Pty Ltd [2009] NSWSC 509 [20] (Brereton J).

[28] Re Vangory Holdings Pty Ltd [2015] NSWSC 1809 [10] (Brereton J) ('Re Vangory Holdings (No 2')) citing Braams Group Pty Ltd v Miric [2002] NSWCA 417; (2002) 44 ACSR 124, 130 [37] (Stein JA, Mason P and Ipp JA agreeing) ('Braams Group v Miric'); Bibby Financial Services v Wolf Industries [22] (Austin J); Cedars Concrete Services v Maatouk [2006] NSWSC 884 [41] (Campbell J); Radiancy (Sales) Pty Limited v Bimat Pty Limited [2007] NSWSC 962 [21] (White J) ('Radiancy v Bimat').

[29] Re DG Haulage 719-20 and Re Kornucopia (No 1) [38].

[30] Re Vangory Holdings (No 2) [17] (Brereton J).

[31] T-S Capital Partners LLC v Paltar Petroleum Limited (administrators appointed); In the matter of Paltar Petroleum Limited (No 1) [2019] FCA 635 (Stewart J) [55].

[32] [1992] HCA 34; (1992) 174 CLR 509.

[33] Citing Roy Morgan Research Center Pty Ltd v Wilson Market Research Pty Ltd (1996) 20 ACSR 108, 116 (Santow J) and Tokich Holdings Pty Ltd v Sheraton Constructions (NSW) Pty Ltd (in liq) [2004] NSWSC 527; (2004) 185 FLR 130 [72] (White J).

1. [34]Chen & Ors v Chan & Ors [2009] VSCA 233 [10] (Maxwell P, Redlich JA and Forrest AJA) ('Chen v Chan') citing Spotless Group Ltd v Premier Building and Consulting Pty Ltd [2008] VSCA 115 [14] (Redlich JA).
2. [35] See also s 65C of the Civil Procedure Act 2010 (Vic); Assaf's Winding Up in Insolvency [10.101] citing Re Mailrite Pty Ltd (1985) 9 ACLR 863, 867-8 (Master Lee); Re Great Barrier Reef Flying Boats Pty Ltd (1982) 6 ACLR 820, 822 (Thomas J) and Morepine Pty Ltd v Crush Pacific Industries Pty Ltd (1996) 20 ACSR 41, 44 (Young J).

[36] Towercom [2013] VSC 585; Ritter v Godfrey [1920] 2 KB 47, 5; Donald Campbell & Co Ltd v Pollak [1927] AC 732, 809; Milne v Attorney-General (Tas) [1956] HCA 48; (1956) 95 CLR 460, 477.

[37] Assaf's Winding Up in Insolvency [10.107]. See also Equity Australia Corporation Pty Ltd v Falgat Constructions Pty Ltd [2005] NSWSC 918; (2005) 54 ACSR 813 (where the winding up application was dismissed on the ground of solvency and because of an abuse of process); WRL Pty Ltd v Veritical Telecoms Pty Ltd [2008] NSWSC 1089; Rural Security Holdings Pty Ltd v Equititrust Ltd [2011] FCA 512 (where the winding up application was summarily dismissed on the basis there was no reasonable prospect that it could succeed); Re Slodyczka & Farren Pty Ltd (Costs) [2022] VSC 102 [9] (Hetyey AsJ) ('Re Slodyczka (Costs)') (where the winding up application was dismissed on the ground of solvency).