Tuscan Capital Partners Pty Ltd v Trading Australia Pty Ltd

IN THE MATTER OF TRADING AUSTRALIA PTY LTD (IN LIQUIDATION)

BETWEEN: TUSCAN CAPITAL PARTNERS PTY LTD Plaintiff

AND: TRADING AUSTRALIA PTY LTD (IN LIQUIDATION) Defendant

between: DOMINIC GALATI Applicant

and: TUSCAN CAPITAL PARTNERS PTY LTD Respondent

JUDGE: PERRAM J DATE OF ORDER: 6 FEBRUARY 2020

1. Mr Dominic Galati's interlocutory application dated 20 November 2019 be dismissed.
2. Mr Dominic Galati pay the Plaintiff's costs as assessed or agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

background 1 Pending in the Equity Division of the Supreme Court of New South Wales is a case entitled Galati v Deans being file 2016/00360462. The nature of that case was usefully described by Ward CJ in Eq in Galati v Deans [2018] NSWSC 1600 at [4]ff. It concerns business ventures to redevelop the Sydney Fish Market which have soured. The litigation has not yet been heard but blows have been traded in several interlocutory hearings so far. One of the protagonists in that litigation, and the Defendant to these proceedings, is Trading Australia Partners Pty Ltd ('the Company'). 2 On 23 October 2019 Registrar Segal made orders in the present proceeding winding up the Company in insolvency and appointing as its liquidator Mr Danny Vrkic of DV Recovery Management, a Wollongong insolvency practice. He did this at the suit of the Plaintiff, Tuscan Capital Partners Pty Ltd ('Tuscan'), a creditor of the Company. The Company did not appear at that hearing, and nor did its sole director, Mr Dominic Galati, who was overseas at the time. 3 It is not suggested that either Mr Galati or the Company were unaware that Tuscan would be pursuing its winding up application on 23 October 2019. Instead, Mr Galati says that he had caused certain documents to be uploaded to this Court's electronic court file ('ECF') in relation to Tuscan's application and that he had assumed that the Registrar would look at those documents before proceeding to make any orders for the winding up of the Company. This assumption proved erroneous. 4 After the orders were made and Mr Vrkic had taken control of its affairs as its liquidator, he instructed the Commonwealth Bank of Australia ('the Bank') to place a debit freeze on two accounts the Company held with it. 5 Mr Galati has filed an interlocutory application which purports to have been filed by the Company but which then nominated Mr Galati as the Applicant. Since Mr Galati has no authority to file any documents on behalf of the Company because it is in liquidation and because only its liquidator may act on its behalf I propose to treat this application as the only application it can be: an application by Mr Galati. What is the application? Mr Galati applies for a review of the Registrar's alleged decision not to take into account the documents he says he uploaded to the ECF. By s 35A(5) of the Federal Court of Australia Act 1976 (Cth), the Court has power to review the exercise of a power of the Court by a registrar but any such application must be made 'within the time prescribed by the Rules of Court'. The relevant rule is r 3.11(2) of the Federal Court Rules 2011 (Cth) ('FCR') which requires any such application to be made within 21 days after the exercise of the power. Because the orders were made by Registrar Segal on 23 October 2019 any application to review that order had to be made by the end of 13 November 2019. Mr Galati's application was filed on 22 November 2019 which was therefore nine days out of time. However, by FCR 1.39(a) the Court may extend the time fixed by the Rules even after that time has expired. Mr Galati seeks such an order under FCR 1.39(b). 6 In addition, Mr Galati also seeks an order that the two bank accounts be unfrozen. This is misconceived. If the winding up order is set aside then Mr Galati may instruct the Bank to lift the debit freeze in his capacity as the Company's sole director. On the other hand, if the winding up order remains in place, this Court has no jurisdiction in the present suit to order Mr Vrkic to instruct the Bank to lift the debit freeze. It is possible that such an order could be made if a challenge were brought to his decision to instruct the Commonwealth Bank to freeze the accounts. However, that is not what the present application is - it is (or, more accurately as I explain below, I am going to treat it as if it is) an application to review the initial decision of the Registrar to make the winding up orders. On either outcome, there is no possibility of this Court making any order about the debit freeze. I mention it no further. 7 I make two other assumptions in favour of Mr Galati. First, I am going to assume that as a director of the Company he has residual standing to challenge an order that the Company be wound up. Secondly, I am going to treat his application to review the decision of the Registrar not to consider the evidence which had been filed on the ECF as being, in fact, an application to set aside the winding up and related orders made by the Registrar on 23 October 2019. This is because there are difficulties with the proposed review of the Registrar's alleged decision not to consider that evidence: there is no order giving effect to that decision; it is not obvious that any such decision was made; even if it were, there would be no utility in setting aside that decision by itself unless it also resulted in the setting aside of the winding up order; and, because a review of a Registrar's decision involves a fresh hearing so, in a sense, whatever happened before the Registrar, or whatever the Registrar did or did not do in reaching a decision, has no continuing relevance.

TUSCAN'S EVIDENCE 8 Mr Galati's application was returnable before this Court for hearing on 23 January 2020 and adjourned to 6 February 2020. Tuscan relied upon the materials which it had relied upon before the Registrar on 23 October 2019. These were: The affidavit of Mr Adam Hill affirmed on 13 August 2019 in support of the winding up application. In this affidavit Mr Hill swore that the Company was indebted to his company, Tuscan, in the sum of $134,364.26 for unpaid monthly service fees incurred between December 2018 and June 2019 pursuant to a consultancy agreement dated 30 November 2018. He also affirmed that Tuscan had served a statutory demand on the Company. That demand was attached to the originating process and was in the sum of $135,670.87 which was slightly more than the amount Mr Hill now affirmed was owing. He also affirmed that the Company had failed to pay the statutory demand within the 21 day period Tuscan had demanded. A form under rr 5.5 and 6.1 of the Federal Court (Corporations) Rules 2000 (Cth) signed by Mr Vrkic on 13 August 2019 indicating that he was willing to be appointed as the liquidator of the Company. An affidavit of Ms Jemima Bissett sworn on 14 August 2019. Ms Bissett is a solicitor for Tuscan. She said that she had performed a company search of the Company on 13 August 2019 and attached a copy of it. The search showed that the Company was an Australian proprietary company limited by shares with one ordinary share on issue. That share was owned by International Entertainment Corporation Pty Ltd. It also showed that the Company had one director, being Mr Galati. A further affidavit of Ms Bissett sworn on 15 August 2019 in which she explained that she had lodged a Form 519 providing notification of the winding up application with Australian Securities and Investments Commission ('ASIC') on 15 August 2019. A further affidavit of Ms Bissett sworn on 23 August 2019 in which she explained that she had served the winding up application and accompanying documents at the Company's registered office. A further affidavit of Ms Bissett sworn on 4 September 2019 in which she explained that she had placed a notice of the winding up application on the ASIC Insolvency Notices website and she annexed a copy of that notice. A further affidavit of Mr Hill affirmed on 24 September 2019 confirming that Tuscan's debt remained unpaid. 9 Tuscan also tendered the liquidator's statutory report to creditors dated 21 January 2020 ('the liquidator's report'). It also relied upon a further affidavit of Mr Hill affirmed on 5 February 2020. Only paragraphs 27 and 47 to 60 of this affidavit were read. 10 That liquidator's report discloses assets of $2,595, being the contents of two bank accounts with the Bank, but no other assets. The Company has three car leases in respect of a Range Rover Sport, an Audi A3 and a Skoda Rapid Monte Carlo. The liquidator estimates that if the leases are paid out and the vehicles sold there will be a shortfall of $25,713 which he proposed to treat as an unsecured claim. In addition to that unsecured claim he has identified $544,250 in other unsecured claims. These consist of unpaid fees for the Company's former lawyers and Tuscan's claim for $135,671. There are the five other creditors whose debts arise from an adverse costs order made in interlocutory stages of the Supreme Court proceedings: Galati v Deans (No 2) [2018] NSWSC 1813 ('Galati v Deans (No 2)'). That costs order was made in respect of an interlocutory application, and the Uniform Civil Procedure Rules 2005 (NSW) ('UCCPR') r 42.7(2) would usually provide that the costs would not be due and payable until the conclusion of the proceedings. However, as the order arose from an unsuccessful application to join the now creditors as defendants to the Supreme Court proceeding, as far as those creditors are concerned, the proceeding is concluded and the costs are due and payable. One such creditor filed an application for costs assessment and obtained a certificate of assessment in the sum of $19,821.22. That creditor has subsequently filed that certificate pursuant to UCPR 36.10(1)(b) in the Local Court of New South Wales. And, on 30 October 2019, that Court issued a minute of judgment in that sum pursuant to s 70(5) of the Legal Profession Uniform Law Application Act 2014 (NSW) and UCPR 36.11(3). Judgment for that amount was entered on 30 October 2019. 11 In addition to the unsecured creditors there are also the costs of the liquidator, which Mr Vrkic estimates at an upper limit of $15,269 (ex GST), but I propose to exclude these from the insolvency question which is to be resolved as at the date the winding up application is filed as well as the date it is heard: Ann Street Mezzanine Pty Ltd (in liq) v Beck [2009] FCA 333; 255 ALR 324.

mr galati's evidence 12 Prior to the hearing before Registrar Segal on 23 October 2019, Mr Galati uploaded to the ECF the following documents: A copy of the consultancy agreement referred to by Mr Hill in his affidavit of 13 August 2019 and dated 30 November 2018. This was a consultancy agreement by which the Company and Mr Galati retained Tuscan and Mr Hill as a consultant. Mr Hill and Tuscan were to provide services in return for a fee and a reimbursement of expenses. The services Mr Hill was to provide was as the chief executive officer of ACELL International LLC ('ACELL'). The fee was $20,000 per month and there were additional bonus and incentive provisions including for upon the completion of what was referred to as the 'Mildura Solar projects'. The affidavit of Mr Kerry Hyland affirmed on 16 October 2019. Mr Hyland is also known as Bhavani Ma but I will refer to him as Mr Hyland. Mr Hyland is the general manager of ACELL. Mr Hyland explained that Mr Hill had represented himself as having significant leadership and communication skills. However, he had failed to secure funding for any of ACELL's projects. Mr Hyland thought that Mr Hill was personable but not up to the job and that he materially overstated his talents and achievements to secure his appointment as the Company's consultant. Worse, he also said that he believed that Mr Hill had attempted to poach some of ACELL's potential clients in a milk products venture. A further affidavit of Mr Galati affirmed on 16 October 2019. Mr Galati gave similar evidence to Mr Hyland about the alleged deficiencies of Mr Hill. He also gave evidence of a meeting between Mr Hill, himself and Mr Hill's father during which Mr Hill's father had insisted upon the payment of his son's invoices. A further affidavit of Mr Galati affirmed on 16 October 2019 attaching another copy of the consultancy agreement with Tuscan and Mr Hill. 13 Because neither the Company nor Mr Galati appeared on 23 October 2019 none of this material was put before the Registrar. In that circumstance, having regard to the formal matters in Tuscan's affidavits, the winding up order at that time was inevitable. 14 On the application to extend the time to bring a review application Mr Galati relied upon those materials and, in addition, the following: A further affidavit of Mr Galati affirmed on 17 December 2019. In this affidavit Mr Galati explained that he had dispensed with the services of his previous lawyers in August 2019. Those lawyers had been acting for the Company in the winding up proceeding. He had therefore filed a notice of appearance in his own name on 2 October 2019 and had proceeded to file the documents to which I have referred above through the ECF on 17 October 2019. An important part of his evidence is that between 18 October 2019 and 27 October 2019 he was travelling overseas on urgent business and was unable to attend the hearing scheduled on 23 October 2019. What the urgent business might have been was not explained. He does not say, for example, that he was establishing a trading post in the upper reaches of the Congo and therefore unable to use the telephone or send an email. Nor does he say that some misfortune befell him whilst overseas which disabled him from using a telephone or the internet. He went on to explain - on what basis I do not know - that because he had filed the documents through the ECF he thought his attendance was not compulsory and that the Court would rely on those materials. He did not serve the material on Tuscan's lawyers either, since he was not aware that they needed to be served. He also thought that Tuscan's lawyers would have access to the materials because he knew from earlier correspondence that they did search the ECF from time to time. So his approach to the litigation appears to have been not to tell anyone about the fact that he was defending the case and not to turn up at the hearing. It is not self-evident to me where anyone would get such an idea. He also says he was not contacted by Tuscan's lawyers on the day of the hearing (which appears to proceed on the assumption that Tuscan had some duty to him to warn him against the perils of non-appearance - again, a most curious attitude). For good measure, he attached a transcript of the hearing before the Registrar which showed that there was no appearance by the Company and that the Registrar, having read Tuscan's formal materials, was content to make the orders. Mr Galati detailed his subsequent efforts to have the Registry reverse the order on the basis that it had resulted from an administrative error and he explained that the Company's bank accounts had been frozen on 30 October 2019. A further affidavit of Mr Hyland affirmed on 17 December 2019. This time Mr Hyland expanded on his previous theme of the shortcomings of Mr Hill which he now supplemented with a description of some of the correspondence between the parties after the making of the orders of 23 October 2019. These disclose some minor procedural frictions of no moment. The affidavit of Mr Gary Lissa affirmed on 20 December 2019. Mr Lissa is a certified practising accountant and has acted for the Company for around 35 years (and also for Mr Galati). I interpolate that Ms Bissett's company search shows that the Company was incorporated on 15 February 2001 so this may not be entirely accurate. Mr Lissa explained his view that the Company was solvent. He explained some of the minor debts of the company relating to car leases and the like. However, the centrepiece of his evidence was that the Company had an asset worth between $6,562,500 and $7,875,000. This asset was a 25% share of the value of the Sydney Fish Market which was said to be $106,250,000 based on a valuation. Mr Lissa explained that the Company would likely receive 25-30% of the share to which it was said to be entitled. The Company's interest in this arose as a result of the proceeding I have previously described in the NSW Supreme Court. A further affidavit of Mr Galati affirmed on 29 January 2020 disputing debts the Company was said to owe arising from the liquidator's report. A further affidavit of Mr Lissa affirmed on 31 January 2020 also taking issue with various aspects of the liquidator's report. 15 At the hearing Mr Galati gave oral evidence directed at two topics: (a) why the Company had not filed an application to set aside Tuscan's statutory demand; and, (b) why the Company was solvent.

The application to extend time 16 Treating Mr Galati's application as an application to review the winding up order, what must be before the Court is an application for leave to file out of time an application to review the orders of the Registrar. On the extension of time application, the guiding principles would appear to require the Plaintiff to demonstrate (a) some sufficient explanation for why the application was not filed within time and (b) that the proposed review application has sufficient merit to justify permitting the Plaintiff to be put to the trouble of dealing with it a second time having already won it once: see, eg, Butler v Moore [2007] FCA 1053; Project Lab North America Pty Ltd v Bell Microproducts Inc [2007] FCA 306. These two inquiries are not wholly distinct. The length of the delay has its role to play too. 17 I do not propose to extend the time in which this application may be made. Mr Galati's explanation for why the Company did not appear at its own winding up hearing is at the very least unsatisfactory. One cannot simply ignore a court case because one is overseas. At the very least Mr Galati should have contacted Tuscan's lawyers to see if they would consent to an adjournment. If they did not consent he should have instructed someone to appear to apply for an adjournment. If he could not find a lawyer he should have sent a letter or email to the Registry seeking an adjournment and at the same time doing what he has not done on the present application which is to explain why being overseas prevented him from taking any steps at all. Nor has any explanation been proffered for why the review application itself was filed late.

The proposed review application 18 That would be a sufficient basis to refuse the application. However, even if that problem could be surmounted, the underlying application has no prospects of success. Assuming that the Company's proposed defence is that it is solvent, the evidence before the Court does not permit that conclusion to be drawn. 19 Part of Mr Galati's application involved impugning the statutory demand which had been issued by Tuscan. In essence Mr Galati sought to submit that the amount claimed by Tuscan in relation to the services of Mr Hill were not due because Mr Hill had wholly failed to carry out the task which had been assigned to him under the contract. Without dwelling on the detail of this argument it may be said at once that this is an argument which could have been raised in application to set aside Tuscan's statutory demand under s 459G of the Corporations Act 2001 (Cth) ('the Act'). This matters because s 459S prohibits such an argument being advanced at the hearing of a winding up application without first obtaining a grant of leave. Section 459S(2) further prohibits a grant of leave unless the argument is 'material' to proving the solvency of the company. 20 As a procedural efficiency, I conducted a hearing of the question of whether the Court would grant leave under s 459S(2) before deciding the question of whether the time should be extended to allow Mr Galati to apply for a review of the Registrar's winding up order. I did this because it seemed to me that if leave would not be granted under s 459S(2), on the basis that the debt the subject of the statutory demand was not material to the solvency of the Company, then there would be no point in extending the time.

Debt to Company's former solicitors 21 The evidence showed that the Company was indebted to its former solicitors, Kreisson, in the sum of either $242,091.52 or $321,346.52 under a series of invoices each of which required payment within a month. The last invoice was dated 8 May 2019. Kreisson lodged a proof of debt in respect of the larger amount with the liquidator on 21 January 2020. The smaller amount appears in the liquidator's report. Mr Galati claimed in his evidence that all of the invoices had been paid but this is inconsistent with the lodging of the proof of debt. Next he claimed in his most recent affidavit that the amounts claimed by Kreisson were disputed. Some email correspondence was exhibited which asserted that Mr Galati was unhappy with the way in which the Supreme Court proceeding had played out. That correspondence did not descend into any detail as to why Kreisson was not entitled to its fees. It may be assumed for the sake of argument that a solicitor who has performed his retainer negligently is not entitled to charge a fee in respect thereof. The allegations Mr Galati makes against Kreisson are set out in his email of 3 July 2019 which was annexed to his affidavit of 29 January 2020. They may be summarised as follows: The Company had not engaged the firm but instead someone called 'Costa' had (I interpolate that 'Costa' is most likely Mr Costa Meitanis, who I discuss below). The invoices were in evidence and they appeared to suggest that the retainer was with the Company and Mr Galati. Mr Galati did not tender Kreisson's fee agreement to prove that the invoices were incorrect. In the absence of that agreement I do not accept that the retainer was not a joint one with the Company and Mr Galati. The Company and Mr Galati had not followed instructions 'from day 1' but subject to the next points, none of these instructions were identified. The Company and Mr Galati had instructed that the case was one of fraud and should have been put on that basis. In order to assess whether Kreisson had negligently failed to run a fraud case it would be necessary (a) to demonstrate what that fraud case was; and, (b) why Kreisson would have a proper basis for making such an allegation. This was not attempted. The Company and Mr Galati had instructed Kreisson to take action against Mr Mark Fraser but this had not been done. But there was no evidence about Mr Fraser or why Kreisson should have taken action against him. Kreisson had been requested to seek litigation funding but had not done so. Again, there is no material before this Court which would allow one to weigh whether this was so and, if it was so, whether it had been negligent of Kreisson not to seek litigation funding. The Company had instructed Kreisson to seek payment of its fees from Costa. How it could give such an instruction when, on its first argument, its retainer was with Costa is not clear. In any event, it is not clear why any of this bespeaks negligence on Kreisson's part. 22 In those circumstances, I do not accept that it has been shown that the Kreisson accounts are not payable. It may be that if Mr Galati or Kreisson sought assessment of the bills that some other figure may be payable but neither party was obliged to take that step. Whilst I accept in principle that it is open to Mr Galati to argue that Kreisson are not owed their fees because of negligence this would require an evidentiary effort on his part which has not been in anyway undertaken. In that circumstance, I conclude that the Kreisson debt is due and payable. 23 Next Mr Galati claimed that the Company was not responsible for the payment of these accounts because the Company had the benefit of an indemnity granted to it in respect of its legal costs in the Supreme Court proceedings. This indemnity was said to have been granted by Mr Costa Meitanis under a heads of agreement dated 19 March 2018. However, the heads of agreement contains no such indemnity. It was submitted on his behalf that there was an implied term to that effect. I do not accept this. The heads of agreement records the creation of a partnership between Mr Galati and Mr Meitanis in effect to profit from the redevelopment of the Sydney Fish Markets. Mr Meitanis was required by cl 2 of the operative parts to pay $20,000 into a bank account which, by cl 3, could 'only' be used for fees in the Supreme Court proceedings, but there does not appear to have been any obligation to pay the entirety of the legal fees. It is true that cl 5 of the recitals says this: Mr Meitanis is prepared to provide funding to prosecute those proceedings and contribute his interest in the bakery business owned by G, A & M Frelingos, and he wishes to initiate, participate in, and profit from the Sydney Fish Market's redevelopment with Mr Galati and Trading Australia Pty Ltd. 24 But this is not an operative provision and in fact all it says is that Mr Meitanis is 'prepared' to do so. I do not accept that it is necessary to give business efficacy to this agreement to require Mr Meitanis to be responsible for all of the legal bills. This is particularly so in light of cl 7 of the recitals which appears to suggest something more cooperative: The parties have agreed to enter into partnership to combine their respective expertise and resources to carry on a business which (1) prosecutes the proceedings to successful resolution; (2) acquires the bakery business owned by G, A & M Frelingos; and (3) initiates, participates in, and profits from the Sydney Fish Market's redevelopment. 25 Even however if there was such an indemnity (and there is not) this would not mean that Kreisson's accounts were not due and payable. It would just mean that the Company had a right of indemnity from Mr Meitanis. There is no evidence of Mr Meitanis having honoured any such an indemnity and no substantial reason to think that the Company is in a position to pay these accounts because of it. It was not suggested that the Company had on hand cash sufficient to pay these accounts and, indeed, it is abundantly apparent that it does not. The best that could be said is that it has an interest in the Supreme Court litigation said in Mr Lissa's affidavit of 20 December 2019 to be worth many millions of dollars but taking the most charitable view of that matter, and assuming in the Company's and Mr Galati's favour that they will emerge from those proceedings victorious, any such proceeds will not be available any time soon. And, it need hardly be said, no effort was made to show that the Supreme Court proceeding was the legal El Dorado that his argument entailed. The Court knows nothing about the merits of this case.

Other debts 26 The Company, as noted above at [14], is also liable under a judgment debt issued by the Local Court in the amount of $19,821.22 to a third party. Mr Galati said that the third party had not asked for the money but that seems to be beside the point. 27 There were some other debts such as car leases which Mr Galati said were being met by the persons who were driving those vehicles and what were said to be some superannuation and tax related debts. It is unnecessary to consider these. It is clear that the Company is unable to pay two substantial debts as and when they fall due. As I explain shortly, this means it is insolvent. 28 Since it is clear that it is insolvent without any consideration of the debt the subject of the statutory demand, the raising of a ground which would justify the setting aside of that statutory demand cannot be material to its solvency since, regardless of that debt, it is insolvent. Accordingly, the Court is not permitted to grant leave under s 459S(2).

The Company's failure to challenge Tuscan's statutory demand 29 Even if that power arose, I would not grant leave because no adequate explanation was proffered as to why an application under s 459G was not pursued: see, eg, Re Kay Investment Holdings Pty Ltd v North East Developments Pty Ltd (in liq) [2011] NSWSC 1121; 85 ACSR 610 at [73]; Consolidated Constructions Pty Ltd v The Satellite Group Ltd [2000] NSWSC 984; 35 ACSR 565 at [4]. 30 Here Mr Galati said that he put the matter in the hands of a Mr Hancock (about whom nothing is known) who had failed to pursue the s 459G application. This is not a sufficient explanation without knowing more about who Mr Hancock was and what he was asked to do. 31 In that circumstance, I would not grant leave under s 459S if the review application proceeded.

The presumption of insolvency 32 Leave being refused under s 459S(2) has the following consequences for the Company. Having failed to comply with a statutory demand within three months of the filing of the winding up application the Company is taken to be insolvent by s 459C(2)(a) of the Act in an application (such as the present) made by a creditor under s 459P. Its effect is to cast upon the Company the onus to establish that it is solvent: Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd [2011] HCA 18; 244 CLR 1 at 12 [21]. A company is solvent if, and only if, it is able to pay all of its debts as and when they become due and payable (s 95A(1)) and a person who is not solvent is insolvent (s 95A(2)). Thus the Company is required to prove that it can meet its debts as and when they become due and payable. 33 Mr Lissa prepared a set of financial statements for the year ending 30 June 2019 which were signed by Mr Galati as Cthe ompany's director. These were annexed to his affidavit of 20 December 2019 which was affirmed after the Company was wound up. The only debts disclosed in the financial statement are the vehicle leases and unexplained 'loans from director'. It does not disclose as non-current liabilities the various costs orders which have been made against the Company by Ward CJ in Eq in Galati v Deans (No 2) (although that such costs orders exist is beyond doubt), the judgment debt in the Local Court, nor does it mention Kreisson's fees. I therefore do not regard Mr Lissa's financial statements as being reliable or a fair reflection of the position of the Company. Mr Lissa's subsequent affidavit of 31 January 2020 took issue with a number of the debts described in the liquidator's statutory report. These did debts however did not include the debt to Kreisson or the judgment debt. Mr Lissa's evidence is, in my opinion, worthless. 34 In that circumstance, if I granted leave to review the Registrar's order out of time, it could not succeed. Mr Galati could not seek to impugn the statutory demand because he could not get leave under s 459S(2). The presumption of insolvency would then arise under s 459C(2)(a) and the evidence does not come close to establishing that the Company is solvent. To the contrary, it is clear as day that the Company is hopelessly insolvent.

conclusion 35 Mr Galati's application to extend time is refused with costs as agreed or assessed. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.