McInnes Wilson Lawyers recently acted for the respondent to a winding up application, Kodiak Concrete Pty Ltd. The applicant, Newstart Homes Pty Ltd, brought the application in reliance on an expired statutory demand.
The respondent opposed the winding up application on two bases. Firstly, it submitted that the application was an abuse of process in circumstances where it was brought in reliance on a statutory demand claiming an unliquidated sum of damages which was disputed - rather than a debt - and knew that to be the case. Secondly, the Respondent adduced evidence that it was solvent.
Both grounds of opposition were successful. The amount claimed was no more than an imperfectly articulated claim for damages, in circumstances where the relevant contract under which it was claimed provided no mechanism for quantification of the amount. The amount due and payable (if any) could not be ascertained until the Applicant had established it in a proceeding for breach of contract. It was not a ‘debt’ for the purposes of the statutory demand regime. The winding-up application was an abuse of process given the Applicant knew that to be the case but proceeded anyway.
The Court also determined, based on expert accounting evidence, that the respondent was solvent. The judgment is available here.
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