How not to set aside a statutory demand

Counsel: “I seek orders to adjourn the wind-up hearing.”

Judge: “On what grounds?”

C: “I am instructed that the half year 2017 audit report won’t be ready until March 2018.”

C: “Oh and my instructing solicitor signed an affidavit stating the reports will establish solvency.” 

J: “It’s January. The parties agreed to the proceedings timetable in December. Why was this not raised earlier?”

C: “Umm, the defendant has been busy selling certain of its assets.”

J: “Without a reasonable explanation, it is not in the interests of justice or fairness to grant the adjournment.”

C: “I seek orders terminating the wind-up on the basis of solvency.”

J: “What evidence?”

C: “I direct your Honour to the December 2016 audit reports. My client had $126 million in the bank and should have $91 million as at September 2017.”

C: “As the statutory demand is only for <$10 million (Singapore), my client has sufficient cash reserves to repay the debt.”

J: “Where are the bank statements or management accounts for June or December 2017?”

C: “We are still waiting on the audit reports.”

You can imagine the outcome.

This is a fictional exchange based on the facts of a recent case from the WA Supreme Court. Don’t try this at home.

Case: Re Premier Eastern Energy Ltd [2018] WASC 35

#SVVoidables

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