Tranz Link Chinese Products [2000] NSWSC 200

New South Wales Supreme Court

CITATION : Tranz Link Chinese Products [2000] NSWSC 200 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4704/1999 HEARING DATE(S) : 06/03/2000 JUDGMENT DATE : 6 March 2000

PARTIES : Tranz Link International Pty Limited, Chinese Products Exhibition & Marketing (Aust) Pty Limited JUDGMENT OF : Master Macready at 1

COUNSEL : Mr A P. Coleman for plaintiff Mr L.Y.K. Ma for defendant SOLICITORS : Carbone Anderson for plaintiff Ma & Co for defendant CATCHWORDS : Corporations Law - Application to wind up in insolvency. - Application dismissed. - No matter of principle. DECISION : Paragraph 13

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

Monday 6 March 2000

4704/99 - TRANZ LINK INTERNATIONAL PTY LTD -V- CHINESE PRODUCTS EXHIBITION & MARKETING (AUSTRALIA) PTY LTD

JUDGMENT

1 MASTER: This is an application to wind up the defendant in insolvency. The company failed to comply with the statutory demand claiming the sum of $31,898.39. In those circumstances the usual statutory presumption of insolvency applies. 2 The defendant company seeks to prove from its accounts that it is solvent. The principles which relate to a matter such as the present and what is necessary were conveniently summarised with reference to authority in Leslie & Anor -v- Howship Holdings 15 ACLC 459. At 465 Sackville J referred to the authorities in these terms: "As Lindgren J observed in Melbase Corporation Pty Limited v. Segenhoe Limited (1995) 13 ACLC 823; (1995) 17 ACSR 187 (FCA/Lindgren J), at ACLC 832; ACSR 198, s 95A(1) of the Corporations Law states a 'cash flow test' rather than a 'balance sheet test of insolvency'. It follows that the mere fact that the company's assets exceeds its liabilities does not establish solvency. In Re Bond Corporation Holdings Ltd (1990) 8 ACLC 153; (1990) 1 ACSR 350 (S Ct WA/Ipp J), at ACLC 160; ACSR 358, Ipp J quoted the following passage from Buckley on the Companies Act (13th ed, 1957), at 60 (cited by Plowman J in Re Tweeds Garages Ltd [1962] Ch 406, at 410), on the question of commercial insolvency: