Shaw (as liquidator of ACN 166 338 138 Pty Ltd (in liq) (formerly Structural Projects Pty Ltd) v KPR Recruitment Australia Pty Ltd

Supreme Court of NSW|2017-04-24|Before: Gleeson JA

Judgment

GLEESON JA: Application is made by the plaintiff, Mr James Shaw, as liquidator of ACN 166 331 183 Pty Ltd (in liq) (formerly Structural Projects Pty Ltd) (Projects), for an order under s 588FF of the Corporations Act 2001 (Cth) that the defendant, KPR Recruitment Aust Pty Ltd (KPR), make payment of $61,420.89 to Projects. The liquidator contends that KPR was a party to a transaction with Projects on 28 April 2015 which involved the receipt by KPR of an "unfair preference" within the meaning of s 588FA, an "insolvent transaction" within the meaning of s 588FC and a "voidable transaction" within the meaning of s 588FE. Section 588FF provides that where on the application of the company's liquidator, the court is satisfied that a transaction of the company is voidable because of s 588FE, the court may make one or more of the orders specified, which include an order directing a person to pay to the company an amount equal to some or all of the money that the company has paid under the transaction.
KPR did not enter an appearance, nor did it appear at the hearing. An affidavit of service of Mr Andrew Ng-Saad, sworn 23 March 2017, establishes that a copy of the interlocutory process, filed 20 March 2017, and supporting affidavit of Mr Anthony Foate, sworn 9 March 2017, were served at the registered office of KPR on 21 March 2017. There is also evidence in the form of a letter from the liquidator's solicitors to KPR dated 18 April 2017 notifying KPR of the hearing date.

Background

Projects was incorporated on 18 October 2013 with a paid-up capital of $20. Its sole shareholder was Mr Luke Webb, who was also the sole director and secretary. The evidence does not clearly establish the nature of the business of Projects, but it appears to have been involved in the building and construction industry.
On 26 February 2015, KPR served a creditor's statutory demand on Projects. The debt to which that demand related was an amount of $42,285.39 described as being for the provision of personnel, the subject of eight separate tax invoices dated 10 February 2013; 24 and 29 December 2014; 7, 14, 21 and 29 January 2015 and 5 February 2015. It would appear that KPR operated a labour-hire business providing the services of personnel to companies such as Projects.
Projects failed to pay the debt claimed in the statutory demand. On 21 April 2015, KPR filed an originating process seeking an order that Projects be wound up in insolvency. Those proceedings were compromised on 28 April 2015 by the payment by Projects to KPR of an amount of $61,420.89. Subsequently on 15 May 2015, the originating process was dismissed.
Projects was wound up by order of the Court and Mr Shaw appointed liquidator on 10 December 2015 on the application of Industrial Maintenance & Fabrications Pty Ltd (IMF). That application was based upon the presumption of insolvency arising from the failure to pay a creditor's statutory demand dated 14 July 2015 in the amount of $607,892.01. The debt to which that demand related included invoices dated 30 March 2015 for $204,853 and dated 14 April 2015 for $1,562. Projects failed to pay the debt claimed in that statutory demand.
On 31 August 2015, IMF filed an originating process seeking an order that Projects be wound up in insolvency. A number of creditors filed notices of appearance indicating their intention to appear and support that winding up application. Those creditors included iSoft Group Pty Ltd (iSoft) which had served a creditor's statutory demand on Projects on 29 July 2015 in relation to a debt in the sum of $16,850.32. The evidence establishes that Projects and iSoft had earlier agreed on 23 April 2015 to compromise an indemnity costs order made by White J on 10 March 2015 in the amount of $16,850.32 payable on or before 30 April 2015 and that Projects failed to pay that amount.
It seems that Projects did not oppose the application by IMF for winding up on the basis that it was solvent, but rather on the ground that IMF was the cause of its insolvency. Reference was made by the liquidator to the judgment of Black J in Re Structural Projects Pty Ltd [2015] NSWSC 1859 where his Honour referred at [2] to the only ground then pressed in Project's amended grounds of opposition to the winding up as follows: The plaintiff's claim arises from work it performed (and was to perform) and goods it supplied (and was to supply) as sub-contractor to the defendant company for a contract the latter has with Lend Lease. As a result of the plaintiff's breach of its agreement with the defendant company, Lend Lease has withheld payment and that has been the cause of the defendant's cash flow problem. Black J continued at [3] as follows: That paragraph appears to identify a basis of opposition to the winding up, in the sense that it is contended that a winding up order should not be made because it is submitted that it was the conduct of the applicant for the winding up order, involving a breach of its agreement with Structural Projects, that caused a third party to withhold payment, which has in turn created cash flow problems for Structural Projects. That proposition may be correct or may be incorrect as a matter of fact, and it may be a strong, or a weak, defence to a winding up application. Where this matter will go to a final hearing on its merits before another judge, I will seek to limit my comments in respect of the prospects of the defence as far as possible, to the minimum necessary to determine this application.
The liquidator's report to creditors dated 12 July 2016 notes that the report as to affairs of the company (RATA) lodged by the director showed an estimated deficiency of $2,410,528.16. The liquidator estimated a higher deficiency of $2,738,209.49 based on the liquidator's estimated realisable value of Projects' alleged assets.
The only assets of Projects recorded in the RATA were sundry debtors of $43,890.41 and work-in-progress of $991,473.99. The liquidator noted that the sole debtor was listed as Lend Lease, however, no further details or records of the company had been provided to enable the liquidator to investigate the legitimacy of that claim. In any event, the liquidator noted that the company's debtors were subject to a factoring facility with 180 Capital Funding Pty Ltd (180 Capital), and 180 Capital had advised that the amount owing by Projects under the factoring agreement and secured by a general security agreement was $1,548,368.41. As to work-in-progress, the RATA described this amount as representing partially completed and unbilled works, however, the liquidator noted that he had not been provided with any documentation to evidence the value of the work-in-progress as recorded in the RATA.
Based on proofs of debt received and the company's records, the liquidator estimated that unsecured creditors' claims were in the order of $1,080,040.76, compared to the amount shown in the RATA of $790,530.08.
The liquidator noted that numerous attempts had been made to contact the director, Mr Luke Webb, for the purpose of obtaining the books and records of the company, but as at the date of the liquidator's report, Mr Webb had only provided the liquidator with a RATA and had failed to provide any books and records of the company. In his affidavit sworn 18 April 2017, the liquidator confirmed that he had not received any books or records of the company from the director or his lawyer. The liquidator has sought and obtained an examination summons in relation to Mr Luke Webb and his brother, Mr Ben Webb, however, neither summons has been served as the liquidator has been unable to locate either of the examinees.

The liquidator's claim for an unfair preference

Section 588FA of the Corporations Act provides for when a transaction is an unfair preference. Relevantly, s 588FA(1) provides: 588FA Unfair preferences (1) A transaction is an unfair preference given by a company to a creditor of the company if, and only if: (a) the company and the creditor are parties to the transaction (even if someone else is also a party); and (b) the transaction results in the creditor receiving from the company, in respect of an unsecured debt that the company owes to the creditor, more than the creditor would receive from the company in respect of the debt if the transaction were set aside and the creditor were to prove for the debt in a winding up of the company; even if the transaction is entered into, is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency.
The two elements of a transaction 'given by' a company are that the company and the creditor are parties to the transaction (even if someone else is also a party): s 588FA(1)(a); and the conferral of a preference on the creditor: s 588FA(1)(b).
"Transaction" is defined in the Corporations Act, s 9 to mean a transaction to which a body corporate is a party, and a number of examples are given (but without limitation), including a payment made by the body corporate. It has been said that common to the examples of a "transaction" in s 9 is the characteristic that the conduct or dealing engaged in by the debtor company has the consequence of affecting a change in the rights, liabilities or property of the company itself: Re Emanuel (No 14) Pty Ltd (in liq) (1997) 24 ACSR 292; [1997] FCA 667.
The requirement that the 'transaction' 'be given' by the company itself does not mean that any payment is to be sourced from the companies own monies: Sheahan v Carrier Air Conditioning Pty Ltd and Campbell (1997) 189 CLR 407; [1997] HCA 37. It is sufficient if the debtor company "directs a third party who holds funds at the direction of the debtor to account to the debtor not by payment to the debtor but to the creditor of the debtor": Sheahan v Carrier Air Conditioning at 437 (Dawson, Gaudron, Gummow JJ), in relation to the former s 122 of the Bankruptcy Act 1966 (Cth). Thus, in Walsh as liquidator of Thompson Land Ltd (receiver and manager appointed) v Terranova (1994) 14 ACSR 432, where an agent of the company made a payment of monies, which, although drawn from its own bank account, represented monies of the company provided to the agent less than six months before the commencement of the winding up, Hayne J found at 432 that the agent "made that payment in satisfaction of a debt owed by the company to the creditor who thereby obtained a preference over other creditors".
In the present case, the payment by Projects to KPR on 28 April 2015 of $61,420.89 was effected in the following manner. Projects paid money into its solicitors' trust account on 24 April 2015 in two amounts - $54,533.89 and $6,887. On 28 April 2015, Projects' solicitors, Ziman and Ziman drew a cheque on their trust account in favour of KPR in the sum of $61,420.89. It can be inferred that those solicitors made such payment at the direction of Projects. Such payment was a transaction 'given by' Projects.
Having regard to the substantial deficiency upon liquidation recorded in the RATA (see [9] above), the payment received by KPR undoubtedly resulted in it receiving an unfair preference in respect of its unsecured debt, being more than KPR would receive from Projects in respect of that debt if the transaction were set aside and KPR were to prove for the debt in the winding up of Projects.

Insolvent transaction

Section 588FC relevantly provides that a transaction of a company is an insolvent transaction of the company if, and only if, it is an unfair preference given by the company and the company is insolvent at the time that the transaction is entered into, or becomes insolvent because of, or because of matters including entering into the transaction. I return to the issue of insolvency below.

Voidable transaction

Section 588FE provides that a transaction is voidable if it is an insolvent transaction of the company and it was entered into, or an act was done for the purpose of giving effect to it, during the six months ending on the relation-back day, or after that day but on or before the day when the winding up begun.
The term "relation-back day" in relation to a winding up of the company is defined in s 9 of the Corporations Act. Relevantly, if Div 1A of Pt 5.6 causes the winding-up to be taken to begin on the day when an order that the company be wound up was made, the relation-back day is the day on which the application for the order was filed. That directs attention to s 513A in the case of a court-ordered winding up under s 459A. Relevantly, by sub-par (e) of s 513A, the winding up of Projects is taken to have begun or commenced on the day when the order was made, namely, 10 December 2015. The "relation-back day" is 31 August 2015, being the day on which the originating process was filed by IMF.
It follows that the payment by Projects to KPR on 28 April 2015 occurred within six months of the relation-back day.

Insolvency

Section 588FC directs attention to the solvency of the company at the time of the transaction, which in turn directs attention to the provisions of s 95A of the Corporations Act: (1) A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable. (2) A person who is not solvent is insolvent.
It has been said that s 95A is principally concerned with the cash flow test of insolvency, however, the state of the company's balance sheet remains of subsidiary relevance: Sutherland & Another (as joint liquidators of Australian Coal Technology) v Hanson Construction Materials Pty Ltd and Others (2009) 254 ALR 650; [2009] NSWSC 322 at [8]-[9] and the cases there cited.
In Lewis (as liq of Doran Constructions Pty Ltd (in Liq)) v Doran and Others (2005) 219 ALR 555; [2005] NSWCA 243 at [103] Giles JA (Hodgson and McColl JA agreeing), after noting that the test of insolvency is objective, emphasised the need for consideration to be given to the immediate future: …..Section 95A speaks of objective ability to pay debts as and when they become due and payable, but ability must be determined in the circumstances as they were known or ought to have been known at the relevant time, without intrusion of hindsight. There must of course be "consideration … given to the immediate future" ( Bank of Australasia v Hall (1907) 4 CLR 1514 at 1528 ; 14 ALR 51 at 54-5 per Griffith CJ), and how far into the future will depend on the circumstances including the nature of the company's business and, if it is known, of the future liabilities. Unexpected later discovery of a liability, or later quantification of a liability at an unexpected level, may be excluded from consideration if the liability was properly unknown or seen in lesser amount at the relevant time.
Importantly, as Barrett J observed in Australian Coal Technology at [10], "s 95A requires a decision whether the company is suffering from a temporary lack of liquidity or an endemic shortage of working capital" [citations omitted]. Barrett J continued at [11]: The emphasis must be upon the extent of cash and other liquid assets compared with the quantum of debts due and payable and to become due and payable in the immediate future. Insufficiency of cash or liquid resources to pay those debts is indicative of insolvency. The insufficiency becomes determinative if it is shown that it is more than a temporary lack of liquidity. In essence, there is a question whether the inability to pay is purely temporary.
In Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621, Palmer J at [54], provided a useful summary of principles for the determination of solvency for the purpose of s 95A. It is sufficient to mention the following matters. Solvency or insolvency is a question of fact to be ascertained from a consideration of the company's financial position taken as a whole. An assessment of solvency requires regard to commercial realities when considering what resources are available to the company to meet its liabilities as they fall due, whether resources other than cash are realisable by sale or borrowing upon security, and whether such realisations are achievable. It is proper to have regard to the commercial reality that, in normal circumstances, creditors will not always insist on payment strictly in accordance with their terms of trade, but that does not result in the company thereby having a cash or credit resource which can be taken into account in determining solvency.
Reference should also be made to what has been described in the authorities as the "usual indicia of insolvency". In ASIC v Plymin and Ors (2003) 46 ACSR 126; [2003] VSC 123 at [386], Mandie J referred to the following indicia of insolvency: 1. Continuing losses. 2. Liquidity ratios below 1. 3. Overdue Commonwealth and State taxes. 4. Poor relationship with present Bank, including inability to borrow further funds. 5. No access to alternative finance. 6. Inability to raise further equity capital. 7. Suppliers placing [company] on COD, or otherwise demanding special payments before resuming supply. 8. Creditors unpaid outside trading terms. 9. Issuing of post-dated cheques. 10. Dishonoured cheques. 11. Special arrangements with selected creditors. 12. Solicitors' letters, summons[es], judgments or warrants issued against the company. 13. Payments to creditors of rounded sums which are not reconcilable to specific invoices. 14. Inability to produce timely and accurate financial information to display the company's trading performance and financial position, and make reliable forecasts.
See also Lewis v Doran [2004] NSWSC 608; (2004) 50 ACSR 175 at [75] (Palmer J).
It has been said that the presence of one or more of the above indicia of insolvency is not necessarily conclusive of insolvency: Pegulan Floor Covering Pty Ltd v Carter (1997) 24 ACSR 651 at 655 (Doyle CJ). Nor is the absence of one or more of the above indicia inconsistent with the conclusion that a company is insolvent: Re Ashington Bayswater Pty Ltd [2013] NSWSC 1008 at [5] (Black J).

Presumption of insolvency under s 588E(4) is not available

Corporations Act, s 588E(4) provides: (4) Subject to subsections (5) to (7), if it is proved that the company: (a) has failed to keep financial records in relation to a period as required by subsection 286(1); or (b) has failed to retain financial records in relation to a period for the 7 years required by subsection 286(2); the company is to be presumed to have been insolvent throughout the period.
The liquidator primarily sought to establish the insolvency of Projects on 28 April 2015 by relying on the presumption of insolvency under s 588E(4), which is available if it is proved that the company breached the Corporations Act, s 286(1) by failing to keep adequate accounting records. The liquidator pointed to the evidence that the director of Projects had failed, despite requests, to provide any books and records of the company to the liquidator, and submitted than an inference should be drawn that Projects breached s 286(1). However, that presumption is subject to three qualifications, as provided in sub-sections (5)-(7) of s 588E.
Relevantly for the present case, s 588E(7) provides: (7) If the recovery proceeding is an application under section 588FF, subsection (4) of this section does not have effect for the purposes of proving, for the purposes of the application, that an unfair preference given by the company to a creditor of the company is an insolvent transaction, unless it is proved, for the purposes of the application, that a related entity of the company was a party to the unfair preference.
The effect of s 588E(7) is that the presumption of insolvency based on the failure to keep adequate financial records as required by s 286(1) is only available in an action for recovery of an unfair preference and relief under s 588FF if the creditor who received the benefit of the alleged voidable transaction is a related entity of the company. As the authors of McPherson's Law of Company Liquidation explain at [11.570]: … that is [to] relieve third parties from the potential unfairness of having affirmatively to prove solvency at a relevant time when, due to the non-existence of the company records and a lack of personal knowledge of the company's internal affairs at that time, they might be at the same disadvantage as the liquidator.
Surprisingly, s 588E(7) was not referred to in the submissions of counsel for the liquidator. Nor was there any submission that KPR is a related entity to Projects. When this provision was drawn to the liquidator's attention by the Court after the conclusion of the hearing, counsel for the liquidator indicated that he did not press reliance upon the presumption of insolvency under s 588E(4).

Has the liquidator established insolvency on 28 April 2015?

It is trite that the liquidator has the onus to prove that the company was insolvent at the relevant time(s): Welcome Homes Real Estate Pty Limited v Ziade Investments Pty Limited [2007] NSWCA 167 at [40], [46(2)] and [70] (Hodgson JA, Spigelman CJ and Santow JA agreeing).
Where a liquidator is seeking to recover an unfair preference, the issue of solvency as at a date prior to the winding up necessitates an inquiry into what actually happened. Palmer J described this as 'retrospective insolvency' in Lewis v Doran at [108] when remarking: Where the question is retrospective insolvency, the court has the inestimable benefit of the wisdom of hindsight. One can see the whole picture, both before, as at and after the alleged date of insolvency. The court will be able to see whether as at the alleged date of insolvency the company was, or was not, actually paying all of its debts as they fell due and whether it did, or did not, actually pay all those debts which, although not due as at the alleged date of insolvency, nevertheless became due at a time which, as a matter of commercial reality and common sense, had to be considered as at the date of insolvency. By reference to what actually happened, rather than to conflicting experts' opinions as to the implications of balance sheets, the court's task in assessing insolvency as at the alleged date should not be very difficult.
Importantly, mere suspicion of insolvency cannot substitute for proof. In M & R Jones Shopfitting Co Pty Ltd v National Bank of Australasia Ltd (1983) 68 FLR 282; (1983) 7 ACLR 445 the liquidator of the plaintiff company sought to set aside as preferences certain reductions in the overdraft of the company with the defendant bank, which took place within 6 months before the company went into liquidation on 4 March 1981. Wotten J noted at 286 (FLR) that the only evidence offered by the liquidator in support of the proposition that the company was unable to pay its debts on 30 September 1980 (the commencement of the first reduction on which he relied) was: (a) the appointment of the liquidator at a meeting of creditors held on 4 March 1981, ie, nearly 6 months later; and (b) the state of the company's bank account at the relevant time. The bank's internal file, which was also tendered, contained in it a notice calling a meeting of creditors of the company which was dated 20 February 1981, and to which was attached a list of unsecured creditors totalling $65,263. However, I find this of no assistance on the issue of insolvency at an earlier date. The accuracy of the document was not proved. It does not state the length of time for which any of the debts had been owing, and it says nothing about the assets or credit of the company.
Wotten J observed at 288 (FLR) that: No attempt has been made in the present case to place before me any evidence about the debtor's financial position in its entirety or to show that at any particular time the company was suffering from more than a temporary lack of liquidity. No attempt was made to show what precipitated the company's insolvency. It may have been that other creditors beside the bank changed their policies as to the credit they were prepared to extend to the company and that this quite suddenly moved it from a situation in which it could pay its debts as they became due to one in which it could not. A large debtor may have suddenly become insolvent. … In Sandell v Porter one of the matters relied on to establish insolvency was that a debt of £141.11.6 had been unpaid for four months in 1964. Barwick CJ, with whom McTiernan and Windeyer JJ agreed, said: "However much it may lead to a suspicion that the debtor is not merely unwilling but in fact unable to pay it, the continuance of the unpaid debt itself does not establish the fact of that inability: in particular, it does not establish that fact as at any particular time". (p 672) His Honour concluded at 288-289 (FLR): In seeking the aid of a court in setting aside a payment as a preference a liquidator should bear in mind that the onus is on him to show the insolvency of the company at the relevant time, not merely to create some suspicion of insolvency. Normally it should not be difficult for a liquidator with the control of a company's records to establish the factual position. As to the question of proof, I refer to Re Action Waste Collections Pty Ltd (in liq); Crawford v O'Brien [1981] VR 691 ; (1981) 38 ALR 199 ; 60 FLR 393 ; 5 ACLR 673
In Quick v Stoland Pty Ltd (1998) 157 ALR 615 at 622; 29 ACSR 130 at 138 Emmett J provided the following practical guide to the task facing a liquidator in establishing insolvency: In order to determine whether the company was solvent at a given time, it would be relevant to consider the following matters: • All of the company's debts as at that time in order to determine when those debts were due and payable. • All of the assets of the company as at that time in order to determine the extent to which those assets were liquid or were realisable within a timeframe that would allow each of the debts to be paid as and when it became payable. • The company's business as at that time in order to determine its expected net cash flow from the business by deducting from projected future sales the cash expenses which would be necessary to generate those sales. • Arrangements between the company and prospective lenders, such as its bankers and shareholders, in order to determine whether any shortfall in liquid and realisable assets and cash flow could be made up by borrowings which would be repayable at a time later than the debts.
In the present case the only evidence offered by the liquidator in support of the proposition that the company was insolvent on 28 April 2015 was: 1. that the debts of two other creditors (IMF and iSoft) became due and payable at the end of April and early May 2015 and remained unpaid at the date of liquidation on 10 December 2015; 2. that two later applications to wind up Projects were filed in May and August 2015; 3. that as at the date of liquidation, Projects had no cash in its bank accounts and had substantial creditors; 4. that the liquidator had expressed the opinion in his affidavit sworn 18 April 2017 that Projects had never been solvent, or if it had, it had only been solvent temporarily.
The first three matters each provide the basis for a suspicion of insolvency at an earlier date than 10 December 2015, but it is not possible to conclude from those matters, either alone or taken together, that Projects' failure to pay two other creditors (IMF and iSoft) as at the end of April 2015 or mid-May 2015 indicates more than a temporary lack of liquidity at that time. The state of Project's bank accounts in December 2015 says nothing about its cash resources over 8 months earlier.
Matters significant to the assessment of Project's solvency on 28 April 2015 would include:

an analysis of outstanding creditors, including the "aged payables" at the end of April 2015, and whether those debts remained unpaid thereafter;
an analysis of Project's cash and other resources at the end of April 2015, including cash at bank, debtors, and the amount of credit, if any, available to Projects under the factoring arrangement with 180 Capital;
an assessment of the value of Project's work in progress, including under the contract with Lend Lease, and any impediment to the likely realisation of the work in progress arising, for example, from disputes with head contractors, as seems to have occurred at some point with Lend Lease.

However, no evidence was adduced by the liquidator directed to such matters.
The fourth matter relied upon by the liquidator, namely his opinion that Projects was insolvent on 28 April 2015, does not advance his case, because the three reasons given for this opinion are not determinative. The three reasons given for that opinion were: that Projects had only been registered on 18 October 2013, that between April and August 2015 three winding up applications were made against it, and that when it was placed into liquidation Project's had no assets and had debts of over $2,738,209. The liquidator did not explain how any of those matters were a means of determining solvency, that is, whether Projects was able to pay all of its debts, as and when they became due and payable. Further, although winding up applications may be an indicator of insolvency, they are not determinative; nor is the net asset deficiency as at the date of liquidation determinative of the position over eight months earlier. Taken together those matters do not support a conclusion that Projects was insolvent on 28 April 2015.
One further matter should be mentioned. It can be accepted that the liquidator's task of establishing insolvency has been made more difficult because of the failure of the director of Projects to provide the books and records of the company. Nonetheless, the liquidator might have addressed that difficulty by seeking relevant documentary material from third parties to assist in reconstructing (to the extent possible) the financial position of Projects as at the end of April 2015. The obvious sources of potential information are Projects' bank (for copies of bank statements), 180 Capital (for details of Projects' debtors and the amount undrawn under the factoring arrangement), Lend Lease (for details of the state of the contract with Projects, including the likely quantum of work in progress, and when and on what basis payment was first withheld by Lend Lease), and the creditors (for details of the aged payables).

Conclusion

For the above reasons, I am not satisfied that the liquidator has established on the balance of probabilities that Projects was insolvent on 28 April 2015. It follows that, on the present state of the evidence, the liquidator's claim for relief under s 588FF must fail.
However, I would be prepared to entertain an application by the liquidator to re-open his case if made promptly after delivery of these reasons. That is because it is tolerably clear that the liquidator has approached this proceeding under the mistaken view that the presumption in s 588E(4) would be available to establish the insolvency of Projects. There would seem to be no prejudice to KPR if the liquidator sought to re-open his case to adduce further evidence on the issue of insolvency, since KPR has not appeared in the proceedings. Nonetheless, notice of such an application, if made, should be given to KPR.
Accordingly, I make the following orders, directions and notation: 1. Grant liberty to the plaintiff to apply within 14 days of these reasons for leave to re-open the plaintiff's case to adduce further evidence on the issue of insolvency. 2. Direct that notice of any application to re-open the plaintiff's case be served on the defendant. 3. Note that if the plaintiff does not exercise the liberty to apply within the time stated in order 1, the Court will make an order that the plaintiff's interlocutory process filed 20 March 2017 be dismissed with no order as to costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 May 2017

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