Background
Matrix Commercial Interiors Pty Ltd was a Brisbane commercial interior design and construction company co-directed by Mathew Ablett and Richard Bunting. The company had been effectively dormant since April 2025 and sat at the centre of a broader corporate dispute involving its ultimate holding company and the directors’ respective investment vehicles. In January 2024, Ablett had personally lent the company $196,694.60 to purchase two Ford Ranger Raptors, secured by registered personal property security interests over those vehicles.
Following the company’s failure to keep up loan repayments, Ablett issued a repayment demand in August 2025. When Matrix Commercial did not comply, a commercial agent repossessed one of the vehicles on 22 August 2025. Ablett then filed an originating application on 15 September 2025 seeking a winding-up order in insolvency under s 459A of the Corporations Act 2001 (Cth). He subsequently served a statutory demand on the company on 16 January 2026 for the remaining balance of $25,308.87, which Matrix Commercial neither paid nor moved to set aside within the 21-day compliance period.
Bunting appeared at the hearing in opposition, arguing that Matrix Commercial was solvent and that certain procedural defects and alleged abuses of process should defeat the application. Matrix Commercial itself did not appear.
The Court’s Holding
Justice Longbottom held that two independent grounds triggered the statutory presumption of insolvency under s 459C(2) of the Corporations Act. First, the repossession of a Ford Ranger Raptor by a commercial agent on 22 August 2025 — within the three-month lookback period — constituted entry into possession of property to enforce a security interest under s 459C(2)(e). Second, Matrix Commercial’s failure to comply with the statutory demand served on 16 January 2026 gave rise to a further presumption under s 459C(2)(a). The Court granted Ablett leave to amend his application to rely on this second ground, rejecting Bunting’s argument that a statutory demand served after filing of the winding-up application could not engage s 459C — the section’s text expressly covers events occurring “during or after” the three-month period, and excluding post-filing demands would be anomalous given Part 5.4’s purpose of ensuring insolvent companies are wound up.
On the question of whether the presumption was displaced, the Court applied the cash flow test under s 95A(1) and the requirement that the company provide the “fullest and best” evidence of its financial position. While Matrix Commercial held a net positive cash balance of approximately $29,946 as of 25 February 2026 and had paid some creditors, Bunting’s evidence was silent on prospective liabilities — including potential warranty obligations from the company’s prior work. The Court found that the absence of any evidence confirming that the recorded debts were the company’s only obligations meant the presumption of insolvency was not displaced on the balance of probabilities.
Finding no compelling reason to exercise its discretion against winding up, the Court ordered Matrix Commercial wound up in insolvency under s 459A and appointed Bill Karageozis of DVT Mcleods as liquidator. A procedural defect — late lodging of the filing notice under s 470(1)(a) — was excused under s 467A as no party had suffered prejudice.
Key Takeaways
- A statutory demand served after a winding-up application is filed can still trigger the s 459C(2)(a) presumption of insolvency; the section’s “during or after” language is unambiguous and excluding post-filing events would undermine Part 5.4’s purpose.
- To rebut the presumption of insolvency, a company must produce the “fullest and best” financial evidence, including evidence addressing prospective liabilities — a positive cash balance alone is insufficient if the record is silent on contingent or future debts.
- Repossession of a single asset to enforce a personal property security interest is sufficient to engage s 459C(2)(e), regardless of what occurs with other secured assets.
- Minor procedural defects in the winding-up process (such as late lodging of the s 470(1)(a) notice) will be excused where no party has suffered prejudice.
Why It Matters
This decision reinforces the formidable practical burden that a company — or, as here, a director acting in its stead — faces when seeking to resist a winding-up application once the statutory presumption of insolvency is engaged. The judgment makes clear that a dormant company with no trading activity cannot simply point to a positive bank balance; it must account for the full universe of potential obligations, including warranty liabilities and other contingencies, to satisfy the cash flow solvency test.
The Court’s treatment of the post-filing statutory demand is also significant for practitioners: it confirms that applicants can bolster an existing winding-up application by serving a fresh statutory demand after filing, and that non-compliance with such a demand will independently support the presumption of insolvency at the hearing. Combined with the Court’s willingness to grant leave to amend rather than require a fresh application, this gives creditor-applicants a meaningful procedural tool when a company remains non-compliant throughout litigation.