Winding Up Application Lawyers in Melbourne

A winding up application asks the court to appoint a liquidator to take control of a company and wind up its affairs. Whether you want to bring one or you have just been served with one, acting early gives you more choices.

Hendersons Legal is a Melbourne law firm established in 2001, and our debt recovery and insolvency lawyers act for creditors, company directors and liquidators. If you are looking for a winding up application lawyer in Melbourne, this page has one section for creditors and one for companies that have been served.

We prepare and bring winding up applications, and we defend them. We also appear in the Supreme Court of Victoria’s winding up list ourselves, which often saves the cost of briefing counsel. Our office is a short walk from the Court. Our principal, David Henderson, has more than 30 years’ experience. See also our court representation and litigation work.

If you are a creditor: winding up a company that ignored your statutory demand

When you can apply

A creditor can apply to the court for an order winding up a company that is insolvent. The most common route starts with a creditor’s statutory demand for a debt that is due and payable. The company then has 21 days after service to comply by paying or settling the debt to your reasonable satisfaction, or to apply to have the demand set aside. Courts apply the 21 days strictly, and the court cannot extend the time to apply to set a demand aside.

If the company does none of those things, it is presumed to be insolvent. You can rely on that presumption if your winding up application is made within three months of the company’s failure to comply. Working out the exact date depends on how and when the demand was served, so we check the dates before anything is filed. If you have not served a demand yet, start with our guide to using a statutory demand to recover a company debt.

Other ways to show a company is insolvent

An ignored demand is the most common route, but insolvency can be shown in other ways. A company is insolvent if it cannot pay all its debts as and when they become due and payable. If you hold other evidence of that, tell us what you know about the company’s finances and we will explain whether an application is realistic.

The steps in the Supreme Court of Victoria

Applications based on an ignored statutory demand are heard in the Supreme Court of Victoria’s winding up list. In broad terms, the steps are:

1. We prepare the originating process and the evidence that supports it: the debt, the statutory demand, how it was served and the company’s failure to comply. We file it for the next available hearing date in the list.
2. We serve a copy on the company.
3. We lodge notice of the application with ASIC and have it published on ASIC’s insolvency notices website.
4. Supporting material is due seven days before the hearing, and the court applies that deadline strictly.
5. A Judicial Registrar hears the application. Anyone who intends to appear, such as the company or another creditor, files a notice of appearance no later than three days before the hearing.
6. If the court orders the company wound up, it appoints a liquidator, who takes control of the company.

The court decides on the evidence. The company can try to show it is solvent, so we plan for that from the start.

What winding up means for getting paid

Winding up is a shared process, so applying does not put you ahead of other creditors. Once a liquidator is appointed, unsecured creditors generally cannot start or continue legal action against the company without the court’s permission. Apart from the priorities described next, proved debts rank equally, and if there is not enough to pay them in full, they are paid proportionately.

Liquidation costs and unpaid employee entitlements are paid before unsecured creditors, and secured creditors can enforce their security separately. An unsecured creditor may receive a small dividend or nothing. So we talk through whether a winding up application is the right tool, or whether another approach would suit you better. Our debt recovery lawyers can help with those options.

Costs

What an application costs depends on whether it is opposed and how many hearings are needed. If the company is wound up, a creditor can ask the court for its costs at the hearing, but whether you receive them depends on what the company has. We confirm the scope and our fees in writing before we start.

If your company has been served with a winding up application

Do not ignore it

If a company is not represented and does not appear, the Supreme Court says the matter will still go ahead and an order may be made against it. Companies must generally be represented by a solicitor in the winding up list unless the court gives leave, and a notice of appearance is due no later than three days before the hearing.

If the statutory demand is the first you have heard of the debt, read our guide on what to do if your company receives a creditor’s statutory demand.

Your options

What is open to the company depends on the debt and its finances. In general terms, it can:

• Pay or settle the debt. The parties can then ask the court by consent to adjourn or dismiss the application, but it still has to be advertised, even if it has settled.
• Oppose the application by filing a notice of appearance and putting its evidence to the court.
• Show that it is solvent. Where an application relies on an ignored demand, the company is presumed insolvent, so the focus is evidence that it can pay its debts as and when they become due and payable.
• Challenge the debt, but timing matters. A company that disputes a debt in a statutory demand is expected to apply to set the demand aside within 21 days. Under section 459S of the Corporations Act, where an application relies on an ignored demand, the company may not, without the court’s leave, oppose it on a ground it relied on, or could have relied on, to set the demand aside. A genuine dispute about the debt is one of those grounds. The court can give leave only if it is satisfied the ground is material to proving that the company is solvent.

What happens to directors if an order is made

When the court orders a company wound up, it appoints a liquidator. The liquidator takes control. A director stays in office but cannot exercise the powers of an officer without the liquidator’s written approval or the court’s approval. Directors must help the liquidator by handing over company property and books and reporting on the company’s affairs, and the liquidator can apply to the court for a public examination of a director.

If the company traded while insolvent, a liquidator, ASIC or, in some cases, a creditor can sue directors personally. Our page for directors of a company in financial trouble explains where you stand and what to do next.

When to call a winding up application lawyer in Melbourne

• A company has ignored your statutory demand and you want to know whether to apply to wind it up.
• Your company has been served with a winding up application, or you have been told one is coming.
• Your company has received a statutory demand and you are not sure whether the time to respond has run out.
• You are a director and want to know where you stand personally.

This is general information, not legal advice. Every situation is different, so get in touch about yours.

Send us the details

Use our online enquiry form to describe the matter briefly and upload the statutory demand, the winding up application or any court documents. We act for creditors, company directors and liquidators, so we check for conflicts before we discuss the details of your matter. If a hearing date or deadline is close, call (03) 9629 2211 as well, because an enquiry does not stop time running.

Questions about winding up applications

How it works

1. Call (03) 9629 2211 or send us the details through our online enquiry form. Tell us whether you are the creditor or the company, and send whatever you have, such as the statutory demand, any court documents and the key dates.
2. We clarify your instructions and take a first look at the documents.
3. We send you a costs agreement and disclosure statement setting out the scope of the work and our fees.
4. Once you accept, we start work and keep you posted.