‘Unhappy’ delay in an insolvent winding up

A NSW Judge was ‘unhappy’ about delay in a solvency report being prepared for the defendant, in response to what had become a creditor’s ‘aged’ winding up application based on the defendant’s non-compliance with a winding up demand.

On an application for a further adjournment, to 15 June 2020, the Judge described the variable evidence in support, given by the defendant’s lawyer as being

‘very troubling … No one likes to be misled, and I am no exception’.

The Judge accepted the

‘very unusual circumstances [of the COVID-19 pandemic] in which the administration of justice continues to operate’

which prompted her to

‘look beyond’ the solicitor’s affidavits ‘towards his client’

and give the defendant a further two weeks or so to complete the solvency report.


‘the preparation of a solvency report by an expert accountant … does not require a large social gathering’ given it can be done by reviewing records electronically or by email’.

The law requires winding up applications to be determined within 6 months: s 459R Corporations Act. The Judge extended that time to 17 April 2020.

See In the matter of LML Repairs Pty Limited (No 2) [2020] NSWSC 310


The current crisis impacts all and cases like this may become common, with necessary concessions needing to be made, on all sides.

Insolvency has its own purposes and timelines, here, to deal promptly with a winding up application which if delayed may have adverse economic impact, countered by the need for proper time for a claimed solvent defendant to avoid its demise.

In the current crisis, the balance arguably should be in favour of time extension or adjournment, but at the same time, within limits, with full transparency and disclosure that the courts expect at the best of times.


On a related note, medium neutral reporting of court judgments traditionally is preceded by taxonomic ‘catchwords’ as a shorthand means of alerting readers to the content; but the catchwords do not form part of the judgment as such.

In this matter, the catchwords listed

‘unhappy judge … giving one more chance’

which seems to fall outside catchwords’ usual taxonomy.

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