In the matter of Manly Warringah Cabs (Trading) Co-operative Society Ltd (administrators appointed pursuant to the Co-operatives National Law (NSW))

[2026] NSWSC 797

Supreme Court of NSW

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Catchwords

1. CORPORATIONS — Insolvency — Co-operative registered in New South Wales under Co-operatives National Law (NSW) — Where administrators were appointed to the co-operative — Application by administrators for winding up in insolvency — Whether insolvency was established in fact — Whether there are viable alternatives to winding up — Relevance of administrators’ conduct in holding a ballot to the residual discretion
1. CORPORATIONS — Identity of the liquidators to be appointed on the winding up — Where current administrators seek to be appointed as liquidators — Where defendants oppose that appointment — Where administrators are currently largest creditor of the co-operative by reason of their claim for remuneration as administrators
1. ASSOCIATIONS AND CLUBS — Rules — Proper construction of Co-operatives National Law (NSW) in respect of the voting rights of members of a co-operative — Utility of declaratory and other relief sought by five members of the co-operative

Quick Take

The Court held that a co-operative was insolvent under the s 95A Corporations Act cash flow test as applied via s 444 CNL, where current liabilities exceeded current assets by over $870,000 and no realistic prospect of borrowing against property existed, notwithstanding net asset surplus. A conditional member finance proposal insufficient to cover all current liabilities and contingent on the unlikely revocation of the administration did not establish solvency or constitute a viable alternative to winding up. The Court granted leave under s 532(2) to appoint the administrators as liquidators despite their creditor status for unpaid remuneration, finding the conflict managed by members' statutory appeal rights. The Court left open whether active membership provisions under the CNL cease to operate when a co-operative ceases its primary activity, noting the question was reasonably arguable but lacked utility to determine given the winding up order.