This case concerned an application by the creditor for the Company to be wound up in insolvency on the basis of failing to comply with statutory demand: . The Company sought to rely upon two affidavits sworn by an account and two affidavits sworn by a solicitor. The account’s affidavit stated that he was satisfied that the Company was solvent within the meaning of s 95A of the Corporations Act 2001: .
The creditor argued that the accountant was not qualified to give the opinion given in his affidavit evidence and further, the evidence was based upon third hand knowledge of the company: .
The Company owns, develops and sells parcels of residential land: .
Although the Company’s assets and liabilities statement indicated assets of $8.562 million and liabilities of $3.862 million, his Honour stated that the company could not be said to be in a position to pay its debts as and when they fall due unless it could be shown, at best, that the parcels of land will be sold in the fairly near future in order to generate sufficient funds to meet liabilities: .
The Court noted that the assets and liabilities statement also omitted a judgment debt in the Supreme Court for in excess of $800,000. Although the company claimed it intended to appeal the judgment, no evidence of an appeal or prospects of an appeal were presented and the court found that the debt should be treated as a current liability: .
The Company had failed to adduce admissible evidence of its ability to pay its debts, despite given the opportunity. There is no guarantee that the company will achieve sales that will enable it to meet its current liabilities of in excess of $4.5 million: .
The court did not see any reason for adjourning the hearing and ordered the winding up of the company: .
Relevant paragraphs of Ford
[1.320], [10.150], [10.210], [20.100], [20.120], [27.050], [27.080], [27.091], [27.240], [27.340]