Background
The Deputy Commissioner of Taxation sought to wind up Medicheckr Pty Ltd in insolvency after it failed to comply with a statutory demand for $70,462.20 in tax debt. The demand was issued on 1 October 2025, served by post at Medicheckr’s registered office, and was neither paid nor challenged by an application to set it aside. The winding-up application was filed within three months of the resulting non-compliance.
Medicheckr did not file evidence or formal submissions opposing the application. Its director, Dr Nguyen, sought leave at the final hearing to represent the company without a lawyer after the company’s solicitors withdrew shortly beforehand. He also submitted by email that outstanding tax lodgements were being addressed and that he was prepared personally to pay the debt, but supplied no supporting evidence.
The Court’s Holding
Justice Meagher refused Dr Nguyen leave to represent Medicheckr. A corporation ordinarily must act through a lawyer, and Dr Nguyen had not provided evidence about the company’s or his own financial capacity. The Court found that he had adequate notice of both the hearing and his solicitors’ intended withdrawal, and that his conduct at the hearing raised concerns about his ability to act with the objectivity expected of legal representation.
The Court held that Medicheckr’s failure to comply with the statutory demand gave rise to the statutory presumption of insolvency. Although there was uncertainty about whether the originating process had been served within the 14-day period required by s 465A, any late service was a procedural irregularity that caused no substantial injustice: Medicheckr had later received the material, had solicitors on the record for months, and the hearing had been adjourned. The company’s unsupported assertions of solvency and prospective payment did not rebut the presumption or justify withholding a winding-up order.
Key Takeaways
- Failure to comply with an unchallenged statutory demand can create a presumption of insolvency supporting a winding-up order.
- Late service of a winding-up application under s 465A may be cured where it causes no substantial injustice.
- Unsupported statements that a company or director can pay the debt will not ordinarily displace the creditor’s prima facie entitlement to winding up.
Why It Matters
The decision illustrates the evidentiary burden on a company seeking to resist winding up after non-compliance with a statutory demand. A company must put forward reliable financial evidence, not merely assurances that reconciliations, payments, or tax-lodgement work may occur.
It also confirms that procedural defects in service are not automatically fatal to a winding-up application. The practical question is whether the defect caused substantial injustice that cannot otherwise be remedied.