Supreme Court New South Wales Medium Neutral Citation: In the matter of Vangory Holdings Pty Ltd [2015] NSWSC 546 Hearing dates: 21 and 22 April 2015 Decision date: 12 May 2015 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Application for leave under s 459S of the Corporations Act is therefore dismissed with costs. Catchwords: CORPORATIONS – winding up – winding up in insolvency – application for leave under s 459S of the Corporations Act – where company seeks to rely on dispute as to the existence of the debt the subject of a statutory demand – whether requirements for leave under s 459S are satisfied Legislation Cited: - Corporations Act 2001 (Cth) Pt 5.4, ss 459A, 459G, 459P, 459S, 459S(1), 459S(2) - Evidence Act 1995 (NSW) ss 136 Cases Cited: - Chief Commissioner of Stamp Duties v Paliflex Pty Ltd [1999] NSWSC 15; (1999) 149 FLR 179 - DAG International Pty Ltd v DAG International Group Pty Ltd [2005] NSWSC 1036 - Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113 - Hanson Construction Materials Pty Ltd v FEC Civil Pty Ltd [2009] NSWSC 161 - Kay Investment Holdings Pty Ltd v North East Developments Pty Ltd (in liq) [2011] NSWSC 1121; (2011) 85 ACSR 610 - Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd [2011] NSWSC 282 - Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 551; (2004) 49 ACSR 719 - Re Pegasus Capital Management Pty Ltd [2011] NSWSC 570 - Re Satellite Group Ltd [2000] NSWSC 984; (2000) 35 ACSR 565 - Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) [2014] FCA 466 - Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661 - Timms v Dellaplus Pty Ltd [2007] SASC 236 Category: Procedural and other rulings Parties: First Debenture Limited (Plaintiff) Vangory Holdings Pty Ltd (First Defendant) Jeffrey Douglas Dawson (Second Defendant) Sharon McDonagh (Third Defendant) McDonagh Management Pty Ltd (Fourth Defendant) Representation: Counsel: R Glasson (Plaintiff/Respondent) T Orlizki (Solicitor – First Defendant/Applicant) R Goodridge (Supporting creditors – Third and Fourth Defendants) Solicitors: O'Neill Partners (Plaintiff/Respondent) Kent Attorneys (First Defendant/Applicant) Firths – The Compensation Lawyers (Supporting creditors – Third and Fourth Defendants) File Number(s): 2014/317083 Judgment 1. By Amended Originating Process filed on 16 February 2015, the Plaintiff, First Debenture Limited ("FDL") seeks an order that the First Defendant, Vangory Holdings Pty Ltd ("Vangory") be wound up on the grounds of insolvency under s 459A of the Corporations Act 2001 (Cth). FDL's winding up application relies on a creditor's statutory demand for payment of debt dated 26 September 2014 ("Demand") served by FDL, which describes the relevant debt as follows: "On or about 12 October 2012, First Debenture Project No 4 Pty Ltd advanced $527,000.00 which it was [sic] repayable on demand. The advance was made out of the proceeds of settlement of a Loan made by First Debenture Project No 4 Pty Limited. The monies were paid to the use and benefit of [Vangory]." 1. Although the Demand was served by FDL, it relates to an advance claimed to have been made by another entity, First Debenture Project No 4 Pty Ltd ("FD4"). It is common ground that the claimed debt was subsequently assigned to FDL. No application was made by Vangory to set aside the Demand within 21 days of its service on Vangory, in which application may be brought to set aside a creditor's statutory demand under s 459G of the Corporations Act. Vangory also did not comply with the Demand by paying or securing or compounding the debt to FDL's reasonable satisfaction within that period or at all. 2. The application to wind up Vangory is supported by Ms Sharon McDonagh and McDonagh Management Pty Ltd who were joined as the Third and Fourth Defendants in the proceedings. Ms McDonagh and McDonagh Management have brought proceedings in the Common Law Division of the Court against Vangory and various other persons which allege several causes of action arising from their dealings with Ms McDonagh and McDonagh Management. It appears that those claims relate to the treatment of monies awarded to Ms McDonagh in a personal injury action in which she had suffered brain injury and cognitive loss. 3. By Interlocutory Process dated 4 March 2015, Vangory seeks leave under s 459S(1)(b) of the Corporations Act to oppose the winding up application on a ground it could have, but did not, rely on to set aside the Demand, namely that there is a genuine dispute as to the debt the subject of the Demand. Specifically, Vangory seeks to oppose the winding up application on the ground that it is not, and was not as at 26 September 2014, indebted to FDL on account of the debt claimed in the Demand. This application was brought in the usual manner, as a separate application heard prior to the hearing of an application to wind up Vangory under s 459P of the Corporations Act: Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37; (2000) 48 NSWLR 661 at [62] – [65]; Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) [2014] FCA 466 at [4]. 4. Vangory relied on an affidavit of one of its directors, Mr Jeffrey Dawson, sworn 5 March 2015 in support of the application for leave, and also on the affidavit of Mr Greg Huxley sworn 8 March 2015. Mr Huxley describes himself as a consultant to Vangory. 5. Vangory contends that a dispute exists as to the debt claimed by FDL on the basis set out in paragraphs 10 – 19 of Mr Dawson's affidavit. Mr Dawson there admitted that Vangory, and more precisely Mr Huxley on its behalf, received $572,000 on the settlement of the sale of a property situated at Gillieston by Gillieston Project No 1 Pty Ltd ("GP1"). Vangory contends that GP1 directed the purchaser of the property, FD4, to pay that amount to Vangory and denies the existence of any loan by FD4 to Vangory. Mr Dawson denies that he had discussions with Mr Photios or any other person on behalf of FD4 or FDL in relation to the alleged loan and gave evidence (admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) to his understanding) that, so far as he was aware, no other person on behalf of Vangory had such discussions with representatives of FD4 or FDL. His evidence was that Vangory did not sign any loan agreement with FD4 relating to the alleged loan and that, at the relevant time, he was a director of FDL which was a public company and, had FDL entered into a loan transaction with Vangory, he would have declared his personal interest to the board of FDL, and he had not done so. 6. Vangory also read two paragraphs of an affidavit dated 30 September 2014 sworn by Mr Huxley in other proceedings. One of those paragraphs contained a substantive response to FDL's claim in respect of the Gillieston transaction, which was partly admitted as a submission, as follows: "In relation to the Gillieston transaction, this was a transaction in which I assisted Gillieston Project No 1 Pty Ltd (GP 1), which was the owner of a mortgage over land at Gillieston. There was an agreement between GP 1 and First Debenture whereby a First Debenture subsidiary acquired the land for $12 million from GP 1. The consideration was to be paid in part by cash and in part by shares by First Debenture. The cash component was financed by [third parties]. The Drawdown Notice at page 1 of Exhibit JP-1 reflected that payments that GP 1 directed to be paid on the settlement. [Vangory] received $572,000. … This payment had nothing to do with any loan to [Vangory]." 1. Vangory also seeks to raise an offsetting claim against FDL on the basis set out in paragraphs 24 – 30 of Mr Dawson's affidavit. Mr Dawson there gives evidence that Vangory paid certain expenses of FDL by way of loan to FDL. He refers to the circumstances of one such payment of $5,500, and that Vangory relies on a document recording such payments of $185,000, and also refers to conversations involving the payment of amounts relating to directors' fees and Mr Photios' salary. Vangory has in turn issued a creditor's statutory demand to FDL in respect of that amount and FDL has commenced proceedings to set aside that statutory demand. Mr Orlizki, who appears for Vangory, accepted in the course of submissions that it was not necessary to determine the position in respect of this offsetting claim because it would not, on any view, be sufficient to avoid the presumption of insolvency arising unless a genuine dispute as to the debt claimed by FDL could be raised. The applicable principles 1. Section 459S of the Corporations Act relevantly provides: "(1) In so far as an application for a company to be wound up in insolvency relies on a failure by the company to comply with a statutory demand, the company may not, without the leave of the Court, oppose the application on a ground: (a) that the company relied on for the purposes of an application by it for the demand to be set aside; or (b) that the company could have so relied on, but did not so rely on (whether it made such an application or not). (2) The Court is not to grant leave under subsection (1) unless it is satisfied that the ground is material to proving that the company is solvent." 1. The matters relevant to an application for leave under this section are whether there is a serious question to be tried on the ground sought to be raised; the sufficiency of any explanation as to why that ground was not raised in an application to set aside the creditor's statutory demand, involving an evaluation of the reasonableness of the debtor's conduct at the time when the application might have been made; and whether the Court is satisfied that the relevant ground is material to proving whether the debtor is solvent: Chief Commissioner of Stamp Duties v Paliflex Pty Ltd [1999] NSWSC 15; (1999) 149 FLR 179 at [49]; DAG International Pty Ltd v DAG International Group [2005] NSWSC 1036; Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd [2011] NSWSC 282 at [33]; Re Pegasus Capital Management Pty Ltd [2011] NSWSC 570 at [6]. The discretion conferred by s 459S of the Corporations Act is to be exercised cautiously and sparingly and with regard to the purpose of Part 5.4 of the Corporations Act to provide for determination of any objections to a creditor's statutory demand by an application under s 459G of the Corporations Act, rather than at the time of the winding up application: Switz Pty Ltd v Glowbind Pty Ltd above; Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd above at [34]. Whether a serious question to be tried is established 1. The first relevant consideration in determining an application for leave under s 459S of the Corporations Act is, as I noted above, whether there is a serious question to be tried as to the ground now sought to be raised by Vangory. This consideration is directed to whether Vangory has a seriously arguable case that the debt is the subject of a genuine dispute and does not require a final determination of whether a genuine dispute exists: DAG International Pty Ltd v DAG International Group Pty Ltd above at [5]; Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) above at [10]. 2. I am satisfied that a serious question to be tried arises as to whether the amount of $572,000 was in the nature of a loan and gave rise to a debt owed by Vangory to FDL4, as thereafter assigned to FDL, for several reasons. 3. FDL relies, in seeking to establish the existence of the loan on which it relies, on a drawdown notice given by FDL4, by Mr Photios as its authorised representative and sole director, in respect of a loan by other parties in respect of a transaction in respect of a Gillieston property, which contemplated an advance of A$8.4 million to FDL4 and directed the disbursement of that amount, partly to the third parties which were making the advance, partly to other entities including the Office of State Revenue, Cessnock City Council and other corporate entities, and partly by two amounts of $42,000 and $530,000 to be paid to Vangory (CB 1/185). Those amounts total the amount of the loan on which FDL relies. Mr Orlizki submits, with substantial force, that that drawdown notice does not, in itself, support a characterisation of that payment as a loan, where that drawdown notice also recorded disbursements to other entities that plainly did not have had the character of loans. Indeed, that drawdown notice would equally be consistent with the payment being made to Vangory for some other purpose, including, for example, as a repayment of an amount owed by FDL to Vangory. 4. Mr Orlizki points out, and I accept, that FDL does not produce any loan agreement, cash book, loan ledger or demand for repayment of the loan and also led no evidence of oral communications relating to the existence or terms of the loan, and there is also no reference to the loan in board meetings of FDL at a time that it appears to have had cashflow difficulties which might have been addressed by repayment of that loan. In particular, Mr Orlizki points out that Mr Photios, who is involved with FDL and appears to have been involved in respect of the purchase of the Gillieston property, did not give evidence in this application. Mr Orlizki also points, with significant force, to evidence given by Mr Photios in other proceedings as to the nature of the Gillieston transaction, which referred to an advance of $8.4 million for the purpose of the purchase of that property, which included the $572,000 disbursed by FDL4 to Vangory. Mr Orlizki submits that a characterisation of that disbursement as a loan repayable by Vangory would reduce the purchase price of the property, in a manner that is, he submits, inconsistent with Mr Photios' evidence in the other proceedings. Mr Orlizki also points out, again with substantial force, that Mr Photios made no direct statement in his evidence in those other proceedings, even as a statement of understanding or belief, that the amount of $572,000 paid to Vangory was a loan. It might be added that the financial dealings between FDL and Vangory are generally, to say the least, opaque. 5. All these matters seem to me to raise a serious question to be tried as to whether, as a matter of fact, the loan on which FDL relies existed. It seems to me that there is at least a seriously arguable case that Vangory may have received that payment on some other basis, consistent with the opacity of the parties' financial dealings generally. Whether there is a sufficient explanation for the failure to apply to set aside the Demand 1. The next issue which arises is the sufficiency of any explanation as to why the relevant ground was not raised in an application to set aside the Demand brought under s 459G of the Corporations Act. In opening submissions, Vangory submitted that its earlier failure to respond to the Demand reflected a "breakdown in the system in place between Mr Huxley and Mr Dawson" such that the Demand was not brought to Mr Dawson's attention, which was brought about by stress and illness suffered by Mr Huxley. That submission has the difficulty that the evidence does not establish either that such a system was in place, or that Mr Dawson would himself have accepted responsibility for dealing with the Demand, when, as will emerge below, he appears to have accepted, at best, limited responsibility for many of the other obligations imposed upon a company director in respect of Vangory. 2. Mr Dawson's evidence in that regard is that the Demand was served by FDL by post, addressed to Vangory's registered office, which was situated at Mr Huxley's home, and that Mr Dawson was unaware of service of the Demand until after the Originating Process for Vangory's winding up was served, and that Mr Huxley did not bring the Demand to Mr Dawson's attention. Mr Huxley, who, as I noted above, describes himself as a "business consultant" working for Vangory, gives evidence that he was diagnosed with a medical condition in early 2014 and his treatment for that condition brought about depression as a result of a chemical imbalance, which in turn required psychiatric treatment. He also refers to having been required to provide assistance to Vangory's solicitors in relation to two other proceedings in this Court to which Vangory was party, and in which serious allegations had been made against him. He gives evidence that he was given medical advice that he should not be working on the proceedings although his evidence is that he continued to provide assistance in respect of those proceedings and was working long hours in respect of them. He refers to the fact that he had prepared notes relating to the alleged $572,000 debt in respect of the other proceedings and provided them to Vangory's solicitor and that he took no further action in relation to the Demand. Mr Huxley also addresses the question why no action was taken in respect of the Demand as follows: "Thinking back, I cannot fathom why I did not deal with this [Demand]. I certainly made no conscious decision not to deal with it. All I can think is that I must have assumed that my response to the claim for the sum of $572,000 (which certainly stuck very clearly in my mind) in the Affidavit in the [other] proceedings had somehow dealt with the [Demand] and I thought no more about it. I believe that my depression, my marital difficulties and the stress I was under that time [sic] contributed to what I did and did not do." 1. The explanation offered by Mr Huxley for the delay did not address the position in respect of any communication of the receipt of the Demand to his wife, Mrs Huxley, from whom he is separated. Mrs Huxley remains a director of Vangory together with Mr Dawson, although Mr Dawson's evidence was that he and Mrs Huxley do not communicate in respect of Vangory's affairs. Mr Huxley was not required for cross-examination in respect of this evidence. 2. An assessment of Mr Huxley's explanation for failure to set aside the Demand is complicated by the fact that, also in September 2014, Mr Photios personally served a second creditor's statutory demand on Vangory alleging a debt of $120,000, which was served in the same manner as the Demand. Mr Dawson's affidavit evidence was that Mr Huxley provided him with a copy of that second demand and he instructed Vangory's solicitors to commence proceedings to set aside that demand, which have not yet been finalised. Mr Dawson's evidence in cross-examination was not consistent with his affidavit evidence in that regard, and it appears that Mr Huxley rather than Mr Dawson attended to dealings with Vangory's solicitors. The implication in Mr Huxley's evidence that he was unable to address the Demand, by reason of ill health, depression or the demands of the other proceedings, is at least potentially inconsistent with his apparent ability to respond to the other demand. On the other hand, there is no apparent benefit to Vangory or to Mr Huxley in responding to one demand and ignoring the other, and that tends to support an explanation that an error occurred in that regard. I consider it preferable not to determine this matter, in an interlocutory application of this kind, where it can readily be determined on the other grounds to which I refer below. 3. FDL submits, and I accept, that the reasonableness of Vangory's conduct can be taken into account in assessing the sufficiency of the explanation to raise a ground of opposition to the Demand in time and that leave is less likely to be granted where there is some default on the part of Vangory or its advisers in that regard: Re Satellite Group Ltd [2000] NSWSC 984; (2000) 35 ACSR 565; Perpetual Nominees Ltd v Masri Apartments Pty Ltd [2004] NSWSC 551; (2004) 49 ACSR 719; Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd above at [42], [44]; Kay Investment Holdings Pty Ltd v North East Developments Pty Ltd (in liq) [2011] NSWSC 1121 (2011) 85 ACSR 610 at [73]. Mr Orlizki seeks to distinguish the decision in Re Satellite Group Ltd above on the basis that the director had there seen the statutory demand, before passing it to his solicitor, whereas Mr Dawson had here not seen the statutory demand. However, it does not seem to me that distinction assists where a company does not have arrangements in place to ensure that a director will see the statutory demand. It seems to me that, as FDL submits, the same reasoning must apply where Vangory's directors have apparently placed the responsibility of dealing with mail delivered to Vangory's registered office in the hands of Mr Huxley, a consultant to and not a director of Vangory, and he has failed to do so for whatever reason. Mr Goodridge, who appears for Ms McDonagh and McDonagh Management, also submits that Vangory at least failed to take any reasonable steps to draw the attention of the Demand to its other director (and possibly its sole director, for reasons noted below), Mrs Huxley. As I noted above, she was no longer in occupation of the residential property where Vangory's registered office was located in September 2014 and was apparently not communicating with Mr Dawson in respect of Vangory's affairs. 4. The question of Vangory's failure to respond to the Demand needs to be addressed in the context that the Demand itself emphasised the serious consequences that might follow from a failure to respond to it, including that Vangory might be placed in liquidation; Wigney J similarly noted the relevance of that matter in Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) above at [30]. It is scarcely likely that Mr Huxley was ignorant of that matter, particularly where he took steps to respond to another creditor's statutory demand issued by Mr Photios in the same month. Notwithstanding Mr Huxley's evidence of his depression and of the other demands arising from the other proceedings in which Vangory was involved, it seems to me that, as Wigney J also noted in Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) above (at [33]), inattention and inactivity cannot provide a satisfactory explanation for a failure to comply with or set aside a statutory demand, since otherwise the statutory scheme in relation to statutory demands would be significantly undermined. 5. It does not seem to me that the matters to which Mr Dawson and Mr Huxley refer amount to a reasonable explanation for Vangory's failure to bring any application to set aside the Demand within the 21 day period specified in s 459G of the Corporations Act. It was open to Vangory to put in place adequate arrangements to ensure that any creditor's statutory demand delivered to its registered office was addressed, despite Mr Huxley's known health issues and known commitments in respect of the other proceedings involving Vangory. It would not have been difficult to do so, so that Mr Huxley would not be left to bear the additional burden of dealing with such demands if his circumstances would not allow him adequately to do so, and a creditor which served a creditor's statutory demand would not be exposed to the costs of an application of this kind or left to meet any contest as to the debt claimed in the winding up application rather than in the manner contemplated by s 459G of the Corporations Act. 6. For these reasons, I am not satisfied that the matters referred to by Mr Dawson and Mr Huxley provide a sufficient explanation for Vangory's failure to take steps to set aside the Demand within the 21 day period specified by s 459G of the Corporations Act. Whether the claimed debt to FDL is material to Vangory's solvency 1. FDL submits that the mandatory requirement under s 459S(2) of the Corporations Act (which I have set out above) that the ground on which Vangory relies is material to proving its solvency has not been established, or, alternatively, the discretion to grant leave under that section ought not to be exercised. FDL submits that leave should not be granted under s 459S of the Corporations Act because Vangory is clearly insolvent, irrespective of the debt claimed by FDL. 2. I should first refer to the applicable legal principles before turning to the evidence led as to that matter. Mr Orlizki, for Vangory, refers to two approaches to the requirement under s 459S(2) of the Corporations Act that the Court be satisfied that the relevant ground is material to proving that the company is solvent. He describes those approaches, in terms that are broadly consistent with those adopted by Ward J (as her Honour then was) in Perpetual Nominees Ltd v NA Investment Holdings Pty Ltd above at [70]–[71], as the "strict" or "narrow" approach, namely that a challenge to the debt will be material to proving that a company is solvent if the company is able to demonstrate that, if the debt does not exist, then the company will be solvent, and a "broad" approach which looks to the company's overall financial position. 3. In Switz Pty Ltd v Glowbind Pty Ltd above, which is usually seen as the origin if the "strict" or "narrow" approach, Spigelman CJ (with whom Handley and Giles JJ agreed) summarised the materiality requirement in s 459S of the Act (at [53]–[56]) as follows: "By the time an application under s459S is made, the company will be presumed to be insolvent and will have the burden of proving that it is not. In my opinion s459S(2) directs attention, in part, to what it is that the company intends to prove and how it intends to prove it. If the company is not prepared to contemplate the possibility that its assertion of solvency is subject to qualification, then the Court cannot be "satisfied" of the mandatory precondition in s459S(2). An objective element is introduced by the word "material" but that can only be determined after identifying the company's contentions. … The process of proving solvency is not some kind of forensic game. Solvency is a matter peculiarly within the knowledge of the company. The primary source of information on the solvency of the company must be the company itself." That observation emphasises that the materiality of a particular ground of challenge to a debt must be determined in the light of the contentions that a company proposes to make in support of the proposition that it is solvent. In the present case, Vangory's position is that it is unlikely to be solvent, if the debt is owed, and in that sense the debt is likely to be material to its solvency, at least if it could establish its solvency in the absence of that debt. 1. In Hanson Construction Materials Pty Ltd v FEC Civil Pty Ltd [2009] NSWSC 161 at [28], Barrett J formulated the test of materiality under s 459S(2) as requiring that the matter have "a capacity to have some influence or effect". Even that broad formulation would require, however, that a finding that the debt claimed by FDL was genuinely disputed would have some effect on Vangory's insolvency, in the sense that the Court could find that it were solvent if that debt were not owed. As Mr Orlizki acknowledges, in Perpetual Nominees Ltd v NA Investment Holdings above, Ward J (as her Honour then was) preferred the strict or narrow approach. Her Honour also there observed (at [74]) that, even on the broad approach, materiality would not be established where a company had made no effort to establish its overall financial position, beyond the making of assertions by a witness, or to establish the materiality of the evidence to proof of solvency. 2. In Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113, White J observed (at [26]) that he did not accept that, in an application under s 459S of the Corporations Act, the applicant was required to adduce evidence which, if accepted, would satisfy a Court hearing the winding up application that the existence or non-existence of its debt was "determinative of its solvency". His Honour accepted that further evidence might be led by the applicant, on a winding up application, within the parameters of the evidence adduced in the application under s 459S of the Corporations Act, that might establish solvency; that a company need not establish by the fullest and best evidence that it is solvent if it does not owe the disputed debt, at the point of an application under s 459S; and that materiality, for the purposes of s 459S(2) might be established if a finding of existence or non-existence of the debt would be pivotal to a decision on solvency at the s 459S stage, where the company might be found to be solvent if the debt does not exist. His Honour also observed (at [48]) that: "In short, the existence or non-existence of the plaintiff's debt is not material to proving that the company is solvent where the company claims it is solvent, even if it owes the debt. It does not follow that all questions of a company's solvency are to be advanced to the stage at which leave is sought under s 459S, so that the company must then establish by the fullest and best evidence that it is solvent if it does not owe the disputed debt. A finding of the existence or non-existence of the debt will be pivotal to a decision on solvency at the s 459S stage, if the company might be found to be solvent if the debt does not exist. That would establish materiality for the purposes of s 459S(2)." However, I do not understand those observations to suggest that the existence or non-existence of a debt would be material for the purposes of s 459S(2), unless there is at least some basis for a view that a company might be found to be solvent if it does not owe the debt, and that requires at least some evidence of solvency on that basis, even if it is not the fullest and best evidence of solvency. 1. FDL submits that the approach adopted by White J in Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) above is inconsistent with the decision of the Court of Appeal Switz Pty Ltd v Glowbind Pty Ltd above. The difference between the broad and narrow approaches to the materiality standard applied under s 459S(2) have been noted in several cases, although it has generally not been necessary to reach a concluded view as to which of the different approaches is correct, and it is also not necessary to reach such a view here. In Re Pegasus Capital Management Pty Ltd above at [11], Ball J recognised the possible difference of approach between Switz Pty Ltd v Glowbind Pty Ltd above and Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) above, but did not need to resolve that issue because the result would be the same in the circumstances of that case. 2. In Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) above at [36]–[37], Wigney J summarised the different approaches as follows, omitting citations: "There appears to be a dispute in the authorities concerning s 459S(2) about the appropriate test to be applied in determining whether the relevant ground (the dispute concerning the debt) is relevant to the solvency of the company seeking to oppose the winding up application. On the one hand, there are various authorities which are said to adopt a strict or narrow approach … This approach is said to require an applicant for leave under s 459S to prove that for a dispute concerning the debt to be material, it must be "the difference between solvency and insolvency", or "pivotal", "crucial" or "determinative" of solvency. That would require proof that if the disputed debt exists then the company will be insolvent, and that if the debt does not exist then the company will be solvent. On the other hand, there are authorities that are said to favour a broad or less strict approach … This approach is said to be that the disputed debt need not be determinative of the company's solvency. Rather, materiality will be established if there is evidence that the company would undoubtedly be insolvent if the debt was owed, as well as evidence that it "might be" solvent if the debt is not owed." 1. His Honour there expressed a preference for the view that materiality would be established if the existence or otherwise of the debt was relevant to or had the capacity to have some influence or effect on a conclusion as to a company's solvency. However, his Honour also emphasised the significance of evidence as to solvency, observing (at [40]) that: "The additional observation that I would make is that, in my view, at the s 459S stage, the company that is seeking leave must adduce sufficient evidence concerning solvency to satisfy the court that the existence or otherwise of the debt will be material to the conclusion as to the company's solvency — that is, that the existence or otherwise of the debt is relevant to, or has the capacity to influence, or have an effect on, that conclusion. If, at the s 459S stage, the company contends and intends to prove that it is solvent if it does not owe the disputed debt, it must lead evidence of its financial position which, if accepted, is capable of satisfying the court of that fact. It is doubtful that the court could be so satisfied on the basis of mere assertion. Nor should the court be required to speculate about what evidence of solvency might be led at the final hearing of the winding up application." 1. His Honour also noted (at [41]) that a company would not necessarily be required to lead the fullest and best evidence of its solvency, but indicated that it was unlikely that the materiality requirement in s 459S(2) "can be satisfied by mere assertions of solvency, or by conjecture about what further evidence concerning solvency might be led at the hearing of the winding up application" and that the Court "must be satisfied that the ground is material to the company's solvency or otherwise, not that it might be if further or better evidence is adduced at the hearing of the winding up application". That view is potentially somewhat stricter than that adopted by White J in Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) above. Wigney J there declined to grant leave under s 459S(2) where he was not satisfied, on the evidence, that the company was solvent even if it did not owe the relevant debt. 2. It is not necessary to determine the correctness of Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) above for the purposes of this application. Even the more generous approach adopted by White J seems to me to require that, to establish the materiality of a finding of the existence or non-existence of the debt under s 459S of the Corporations Act, there must be a possibility that the relevant company would be found to be solvent if the debt did not exist. That possibility is not established in this case for the reasons noted below. Vangory's position 1. Vangory advanced several reasons why it contended that the existence of the debt claimed by FDL was material to its solvency, in the sense that it might be found to be solvent if that debt did not exist. Those propositions depended partly on matters of law, and otherwise on Mr Dawson's evidence, since Mr Huxley did not address Vangory's financial position in his evidence. I am satisfied, for the reasons noted below, that Mr Dawson's evidence should be given little weight. I should add that does not reflect any adverse finding as to his credit, but instead is the consequence of taking his evidence on its face. 2. I should first refer to Mr Dawson's evidence in cross-examination as to his dealings with Mr Huxley and his role in Vangory, which provide context for his evidence as to Vangory's financial position. Mr Dawson's evidence in cross-examination was that he had known Mr Huxley at school and became a director of Vangory in 2011 at Mr Huxley's request (T77). He did not review Vangory's accounts, books or records at that time and his knowledge of the company, at that stage, was what Mr Huxley told him (T77). He has attended one or two formal directors' meetings of Vangory but he accepted that the last one was so long ago that he could not recall it (T78). He does not have any dealings with Vangory's other director, Mrs Huxley, and the solicitors acting for Vangory in the proceedings in this Court were not retained by resolution of its directors (T78). 3. Vangory contends that it does not trade or own property on its own account and is the trustee of three trusts, the Vangory Investments Family Trust No 2 ("VIFT 2"), the Vangory Equities Trust No 1 ("VET 1") and Vangory Investments Family Trust ("VIFT"). The evidence that Vangory was the trustee of such trusts was inadequate, and there is some evidence that Vangory is not the trustee of one of those trusts, VIFT. Mr Dawson's evidence, admitted with a limiting order under s 136 of the Evidence Act as a submission only, was that Vangory was the trustee of VET 1 (Dawson [32]). A trust deed for VET 1 is in evidence (Ex A1). Mr Dawson's evidence, also admitted with a limiting order under s 136 of the Evidence Act as a submission only, was that Vangory replaced Sui Generis (SA) Pty Ltd as trustee of VET 1 on 16 June 2012 (Dawson [34]). Mr Dawson then gave oral evidence that Vangory Pty Ltd, presumably a different entity to Vangory, became the trustee of VET 1, but subsequently gave further evidence that Vangory was the trustee of the trust (T38). 4. Mr Dawson referred to draft financial statements of VET 1 for the year ended 30 June 2014. His evidence was that VET 1's only asset was shares in FDL and its only liability was $61,000 owed to him or a company he controlled, which was repayable on demand. Mr Dawson's evidence was that no demand had been made for repayment of that loan and he did not intend to make such a demand (Dawson [36]). His evidence was that he could not indicate whether the draft financial statements for Vangory as trustee of VET 1 existed prior to January 2015, because he left the question of accounts to Vangory's accountant and Mr Huxley, notwithstanding that he was a director of Vangory (T42). He then amended that evidence to accept that, until January 2015, there were no accounts for VET 1. His evidence was that he had not signed the draft accounts for Vangory as trustee for VET 1 because they were not fully complete (T43). That reservation significantly reduces the weight that could be given to those accounts in this application. 5. Mr Dawson's evidence, admitted with a limiting order under s 136 of the Evidence Act as a submission only, was that Vangory was the trustee of VIFT (Dawson [32]). However, there is evidence to the contrary, since Mr Dawson had previously executed a deed of indemnity in favour of administrators appointed to Beechworth Land Estates Pty Ltd ("Beechworth") in July 2014 which stated that Vangory Services Pty Ltd rather than Vangory was the trustee of that trust (Ex R3; T51). Mr Dawson referred to draft financial statements of VIFT for the year ended 30 June 2014. His evidence was that VIFT's assets included 75 ordinary shares in Beechworth, which, I interpolate, is party to other proceedings in this Court that also involve FDL and Vangory. His evidence, admitted with a limiting order under s 136 of the Evidence Act as identifying a claim made by Vangory against Beechworth, was that Vangory had lent approximately $1.5 million, including interest up to 5 December 2014, to Beechworth. He also gave evidence, admitted as a submission only, that he believed Beechworth's assets would allow the debt claimed by Vangory, or the vast majority of it, to be paid, and referred to certain matters to support that claim. He acknowledged that he was unable to estimate when that debt would be paid by Beechworth's administrators (Dawson [48]) and indicated that he had reservations as to whether Vangory's shares in Beechworth were worth anything (Dawson [49]). 6. Mr Dawson also led evidence as to the amounts making up VIFT's assets and liabilities, based on a schedule which he said, in his affidavit, was prepared on his instructions by Mr Huxley (Dawson [55]). That schedule recorded an amount referable to GST, said to be payable by Vangory to the Australian Taxation Office, although no explanation was given as to how such a liability arose, in circumstances that Vangory's case and Mr Dawson's evidence was that Vangory did not carry on business. Mr Dawson's evidence, admitted as a submission only, was that, if the amount of $572,000 received by Vangory from FDL was properly considered to be a loan, then he considered that Vangory would be entitled to indemnity from the assets of VIFT in the amount of $25,565 and would not be entitled to indemnity from trust assets in respect of the balance of that amount (Dawson [64]). The draft accounts for Vangory as trustee of the VIFT disclose net income, described as "before taxation" of approximately $1.7 million in 2013 and approximately $1.3 million in 2014 and record undistributed profits in the trust for the years 2013 and 2014 of approximately $3.5 million and $2.2 million respectively, although Mr Dawson's evidence that those profits related to accrued interest and intellectual property and were more "book entry than real profit" (T44). 7. Notes to the draft accounts for Vangory as trustee for VIFT in turn refer to accrued interest brought to account as income when secured by appropriate real estate or corporate security and to "[i]nstalment payments received with respect to sale of mortgage asset and associated intellectual property". Mr Dawson's evidence was that he could not say whether Vangory had ever lodged a tax return, notwithstanding the level of income recorded in its accounts as trustee for VIFT on a before-taxation basis. He indicated that, after a notice to produce was issued for Vangory's income tax returns, "he checked with the accountants and Mr Huxley" and "[t]hey were looking into that" and acknowledged that no income tax returns were produced (T45). It seems to me that a position where a company records substantial income in draft accounts in its capacity as trustee, on a before-tax basis, and its director cannot say whether it has ever lodged a tax return, substantially undermines any reliance on its draft accounts as establishing the absence of liabilities. 8. Mr Dawson's evidence was also that he did not know whether the amount of approximately $1 million recorded in the draft accounts of Vangory as trustee for VIFT for the year ended 30 June 2014 as intellectual property debt book sale instalments was received or was accrued, although he accepted that the note to the accounts recorded it as received (T55). Mr Dawson recognised that the draft accounts of Vangory as trustee for that trust recorded more than $1.6 million of income in the 2013 financial year, but indicated that he could not recall that income, and did not know whether it was actually received (T56). He did not know whether the receipt of that income recorded in those accounts would give rise to a substantial taxation liability and indicated that he would have to check with the accountant to find the answer to that and had not done so because that question had not arisen before (T57). I interpolate that one would expect that the question whether a company had, and had discharged, income tax obligations would ordinarily have arisen prior to that question being asked in cross-examination in this application. 9. Mr Dawson's evidence, admitted with a limiting order under s 136 of the Evidence Act as a submission only, was that Vangory was also the trustee of VIFT 2 (Dawson [32]), and Mr Dawson also gave oral evidence that Vangory was now the trustee of VIFT 2 (T39). A trust deed for VIFT 2 is in evidence (Ex A2). Mr Dawson also referred to draft financial statements of VIFT 2 for the year ended 30 June 2014. His evidence was that VIFT 2 was dormant and did not hold substantial assets and had no substantial liabilities (Dawson [56]–[58]). 10. Mr Dawson's evidence was that Vangory did not trade on its own account (Dawson [60]). There is evidence that third parties, including entities controlled by Mr Dawson, are owed money by Vangory. However, Mr Dawson's evidence, which I accept for the purposes of this application, is that he has made a decision not to call in those loans. Mr Dawson also appears to have understood, from what he had been told by Mr Huxley, that Vangory was not liable for a debt if it was incurred as trustee. That position does not reflect the legal position, where (subject to the particular terms of any relevant contract) Vangory is liable for a debt which it incurs whether as trustee or in its personal capacity, subject to any right of indemnity against trust assets. Mr Orlizki accepted in submissions that the correct position was that Vangory would be entitled to indemnity against liabilities from the trust assets to the extent that the liabilities were (I interpolate, properly) incurred in the execution of its trusts or powers. Mr Orlizki also accepted, in submissions, that Vangory had no assets in its own account and could not meet liabilities other than by utilising a right of indemnity from the assets of the relevant trusts. 11. Mr Dawson's attention was drawn, in the course of cross-examination, to substantial deposits into Vangory's bank account, including, for example, a credit to that account of $820,000 from another entity associated with the principal of FDL, but he indicated that he did not actually know the basis of that deposit (T47). His evidence was that, although he was a director of Vangory, he did not have the "day-to-day running" of Vangory and would not necessarily wish to know why such an amount was paid into its account (T48). Regardless of the scope of Mr Dawson's directors' duties, or the level of knowledge of Vangory's financial affairs that he would need to maintain in that regard, his lack of knowledge of matters of this kind significantly undermines the weight that could be given to his evidence. 12. Mr Dawson also acknowledged in cross-examination that senior and junior counsel had appeared for Vangory in other proceedings in this Court in October 2014, and that he assumed, but did not know whether they had rendered bills and their value, and had not seen such bills and if those bills had been paid, they would have been paid by Vangory (T58). He acknowledged that Vangory had incurred expenses for motor vehicles and transportation in the amount of $37,412 in 2013 and $48,730 in 2014 and continues to incur motor vehicle and transportation expenses in the 2015 financial year, and his evidence that those expenses were paid through Mr Huxley and Vangory (T58–T59). 13. Although Mr Dawson was one of the two directors of Vangory, and the other, Mrs Huxley, has played no apparent role in the proceedings, he was not provided with copies of at least some notices to produce that have been issued to Vangory in the proceedings (T61). He had not seen any financial statements of Vangory in the first 5 months of his appointment as a director, to 30 June 2011 (T62). He has not approved or signed any accounts for Vangory in the period since he became a director in 2011 (T63). He is not aware of Vangory having lodged any income tax return in that period, in its capacity as trustee or otherwise and, if Vangory has lodged business activity statements, he has not seen them (T63). He has not been made aware of any notices of assessment issued by the Australian Taxation Office to Vangory, in any capacity, including as trustee, since he became a director in February 2011 (T63). He was unable to explain the entries referring to goods and services tax in Vangory's draft accounts, notwithstanding his evidence that Vangory was not registered for an Australian business number and did not need one because it did not trade (T63–T64). When Mr Dawson referred in his affidavit to his understanding that no money was presently payable by Vangory on account of GST, he did not undertake any inquiries to ascertain whether that statement was correct, but relied on his solicitor and accountant, and in fact did not know whether Vangory had a liability to pay GST for the current financial year (T64). His understanding that no money was payable on account of GST arose because he was told that by Mr Huxley (T64) who, I should add, gave no evidence to that effect in his affidavit. Although Vangory's draft accounts indicated that it had repaid an unsecured advance of $91,000 that was current during 2013, Mr Dawson did not know whether that amount had in fact been repaid (T66). Although the Vangory had retained solicitors to act for it in the Supreme Court proceedings, Mr Dawson had not authorised it to do so (T69). 14. Mr Dawson's evidence in cross-examination was that, to the extent that Mr Dawson understands that Vangory does not have a taxation liability, because it does not trade, that is because Mr Huxley has told him that (T79). Mr Dawson is not able to say how Vangory earns the income that is referred to in its draft accounts (T80). Mr Dawson also accepted in cross-examination that he had not signed the draft accounts, not only because they were not complete, but also because he did not know whether they were correct (T80). He would only know anything about Vangory's financial affairs and solvency of Vangory if he were told that by other persons, because he is not an accountant or a solicitor (T80). He does not know the source of information that is provided to Vangory's accountant to prepare its draft accounts (T81). He does not know whether the interest recorded in Vangory's draft accounts is secured by a corporate security or by appropriate real estate, as recorded in the notes in the draft accounts (T81). Although he did not accept, in terms, that the real decision-maker in Vangory was Mr Huxley, his evidence was that Mr Huxley "runs the business from day-to-day" and asks if he needs Mr Dawson's assistance or funds (T81). Mr Dawson has provided funds to Vangory, in circumstances that some proposals put by Mr Huxley have worked out and others have not, because he has been friends with Mr Huxley for a long time, and because Mr Huxley is "down on his luck" by reason of bankruptcy (T81). 15. Mr Dawson also acknowledged that some documents signed on behalf of Vangory as at April 2014 record Mrs Huxley as its sole director at that time, and Mr Dawson accepted that, although he is not aware that he was removed as a director prior to that time, he has not had access to Vangory's records since that time (T85). There were plainly also inadequacies in Mr Dawson's review of the materials exhibited to his affidavit, since his evidence in cross-examination that he had not previously seen documents relating to Vangory included several documents that were exhibited to his affidavit and he accepted, in answer to a question from me, that he had not read those documents at the time they were exhibited to his affidavit (T86). 16. There is also evidence that Vangory is incurring debts by reason of its retainer of solicitors in the various Supreme Court proceedings to which it is party. The terms of the retainer letters with its solicitors (Ex R4) prevent enforcement proceedings being taken, until after the conclusion of the proceedings; however, that does not seem to me to be sufficient to avoid at least a contingent liability in respect of costs arising. Vangory also has a further contingent liability to the administrators of Beechworth, so far as it has indemnified them in respect of their appointment as administrators. Mr Orlizki points out that the administrators would have a right of indemnity against the assets of Beechworth. While I accept that proposition, it does not exclude a contingent liability on Vangory's part, so far as Beechworth's assets may be insufficient to meet the administrators' remuneration and costs. 17. Mr Orlizki advanced a somewhat complex submission distinguishing the position as to Vangory's solvency, depending upon the capacity in which it entered the alleged loan from FDL, whether on its own account, as trustee for the VIFT 2, as trustee for the VET 1, or as trustee for the VIFT. Mr Orlizki submitted that, at least if Vangory entered the alleged loan as trustee for VIFT 2 or VET 1, the position was probably that the existence of the loan was decisive, since the trusts would not have sufficient assets to meet the relevant debt. He submitted that, so far as the alleged loan was entered into by Vangory as trustee for the VIFT, that trust's financial position was healthy, but Vangory's solvency would depend on its ability to convert assets into cash within a relatively short period. Mr Orlizki accepted that some of those assets could not be readily realised, and again contended that the existence of the debt would be decisive to Vangory's solvency. This analysis depended, first, upon the accuracy of the draft accounts for the trusts and, second, upon the proposition that Vangory had no other liabilities which, on the present evidence, established its insolvency irrespective of any debt owed to FDL. It seems to me that neither premise of that analysis is established. Submissions and outcome as to materiality 1. FDL submits that unaudited accounts and unverified claims of ownership or valuation are not ordinarily probative of solvency, and that, where a company places insufficient material before the Court to determine the issue of materiality, an application under s 459S for leave must fail: Re Satellite Group Ltd above at [27]; Timms v Dellaplus Pty Ltd [2007] SASC 236 at [31]; Re Pegasus Capital Management Pty Ltd above at [11]. FDL emphasises that no current, up-to-date accounts (at least in a final form) or other documents have been tendered by Vangory that would throw independent light on its current financial position. FDL also submits that there is no evidence to establish the existence of the trusts to which Mr Dawson refers or of any indemnity from trust assets; that there is no evidence that Vangory has cash on hand or assets that could be realised in any reasonable time so as to pay current debts; that loans made by Vangory to third parties, which are said to have been on demand, have not been called in and there is no evidence to establish that they could be repaid, whether within a short timeframe or at all, after demand by Vangory; that a loan claimed to have been made by Vangory to Beechworth will not produce any return to Vangory or, at least, will not produce any return to it within the short term, where the loan and security claimed over it are the subject of complex other proceedings in this Court and Beechworth is presently in administration. 2. FDL also seeks to raise an issue as to the source of the monies said to have been lent by Vangory to Beechworth, which it claims was properly money of a third party, Rockcliffe Ltd ("Rockcliffe"), a Hong Kong entity. I do not consider it necessary to seek to address that issue in order to determine this application. FDL also contended that other dealings between Rockcliffe, Vangory and other entities, had the result that Vangory received funds of or due to Rockliffe totalling more than $1.4 million. FDL contends that, if those amounts are debts or liabilities of Vangory, then it is insolvent irrespective of the debt claimed by FDL that is the subject of the Demand. Mr Glasson, who appeared for FDL, advanced detailed submissions as to those transactions, but the documents that evidence those dealings were largely not admitted into evidence, by reason of the failure to give prior notice to Vangory of the case that was sought to be advanced in this regard, and the fact that FDL wished to avoid any adjournment that would have been necessary, had the tender of those documents been permitted, to allow Vangory to respond to them. It is therefore not possible to reach a determination as to these matters and it is not necessary to do so given the other findings that I have reached. 3. Mr Orlizki responds to the issues arising in respect of Vangory's tax position by submitting that there is no evidence as to whether tax is payable on, for example, interest income that was accrued but not received by Vangory. While that proposition is correct, the uncertainty as to whether Vangory's draft accounts have properly taken income tax liabilities to account seems to me to be so substantial, when combined with Mr Dawson's evidence that he was not satisfied that they were complete, as to entirely undermine their value in establishing anything as to Vangory's financial position or its solvency. 4. Mr Orlizki also accepted that, on the authorities, the dispute as to the debt owed to FDL could not be material to the proof of solvency, if the Court had no evidence that would establish Vangory's financial position or its solvency in other respects. It seems to me that the Court is in that position, since Mr Huxley, who has day-to-day management of Vangory's affairs, gives no evidence as to its financial position; Mr Dawson, who does give evidence of that matter, plainly does not have adequate knowledge to lead reliable evidence of that matter, notwithstanding that he is a director of Vangory; and Vangory's draft accounts have been fundamentally undermined both by Mr Dawson's concerns as to their completeness and by uncertainty as to whether they adequately address its tax liabilities. Mr Orlizki accepted, in closing submissions, with admirable frankness although a degree of understatement, that Vangory would be "doing it a little bit tough" in any argument as to solvency based on the evidence before the Court, although he sought to mitigate that difficulty by speculating as to what might turn up by the point of a final hearing as to solvency (T107). I do not accept that any possibility that something might turn up is sufficient basis to grant the leave sought. 5. In oral submissions, Mr Glasson, not surprisingly, contended that little weight should be given to Vangory's draft accounts where they were draft and unsigned and where Mr Dawson did not have any real knowledge of the matters included in them, beyond anything that he had been told by Mr Huxley. He emphasises that Vangory had prepared no accounts prior to 2015, and has produced no tax returns or business activity statements, notwithstanding the reference to GST payable in its accounts, and that Mr Dawson has taken no steps to satisfy himself as to Vangory's financial position, beyond inquiry of Mr Huxley (T109). Mr Goodridge in turn submitted that, even on a generous view of the evidence, Mr Dawson knew nothing as to Vangory's affairs, and his affidavit had been sworn without reading its exhibits and without being able to represent that he believed in the truth of the draft accounts that were exhibited to it. Mr Goodridge, not surprisingly, also submitted that Mr Dawson's affidavit and the draft accounts should be given no weight given the developments in his cross-examination. Mr Goodridge also submitted that Vangory's draft accounts themselves raise the likelihood that Vangory has undischarged tax liabilities, but points out that the evidence relating to that matter is within Vangory's knowledge and it has led no evidence to address it. 6. In Soundwave Festival Pty Ltd v Altered State (WA) Pty Ltd (No 1) above, Wigney J emphasised the absence of business or accounting records capable of verifying a company's assets, liabilities and financial position in declining to grant leave under s 459S of the Corporations Act. The position seems to me to be no different where such documents are produced in draft, but are apparently incomplete, and where the evidence led by Mr Dawson did not support their accuracy or completeness, and Mr Dawson himself had little knowledge of Vangory's financial position. I am not satisfied, on the evidence before me, there is any real prospect that Vangory might be found to be solvent even if the debt claimed by FDL did not exist. Accordingly, I am not satisfied that Vangory has met the precondition for leave under s 459S(2) of the Corporations Act and such leave cannot be granted. The deficiencies in the evidence led in the application are also such that, in any event, I would not have granted such leave, in the exercise of discretion. 7. For completeness, I should note that Mr Orlizki did not put a submission that the Demand was served for a purely collateral purpose, but submitted that there would be collateral benefit to FDL if Vangory was wound up, so far as a liquidator would then determine its position in other proceedings in the Court involving FDL. I do not need to address that submission, where Mr Orlizki has not in terms put an allegation as to abuse of process. I note, however, that if Vangory is in truth insolvent, then it seems to me that FDL would have a proper interest in seeking to have it wound up and seeking to avoid the position that it is engaged in complex litigation with an insolvent entity. 8. The application for leave under s 459S of the Corporations Act is therefore dismissed with costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 May 2015