› Statutory demand — failure to comply within 21-day period
Corporations
› Winding up
› Presumption of insolvency — payment after expiry of compliance period
Corporations
› Winding up
› Discretion to refuse winding-up order — debt paid before hearing
Quick Take
1Where a debtor company pays the full amount of a statutory demand after the 21-day compliance period but before the winding-up hearing, the presumption of insolvency under s 459C(2) of the Corporations Act 2001 is not removed, but the court retains a discretion to refuse to make a winding-up order, particularly where no other creditor seeks substitution.
2Costs incurred by an applicant in pursuing a winding-up application do not constitute a debt owed by the respondent company unless and until a court order for costs is made; such costs cannot serve as a standalone basis for winding up.
3Following Braams Group Pty Ltd v Miric, it is unacceptable for a creditor who has been paid the full amount specified in a statutory demand to nonetheless seek to wind up the debtor company where no substituting creditor has come forward.
