Federal Court of Australia

Ablett v Matrix Commercial Interiors Pty Ltd [2026] FCA 723

ORDERS

THE COURT ORDERS THAT:

1.    The First Respondent be wound up in insolvency under s 459A of the Corporations Act 2001 (Cth).

2.    Bill Karageozis of DVT Mcleods, be appointed liquidator of the First Respondent.

3.    I will hear the parties as to costs of the originating application dated 15 September 2025 on 11 August 2026.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

LONGBOTTOM J:

INTRODUCTION

1    The Applicant (Mathew Ablett) seeks an order that the First Respondent (Matrix Commercial) be wound up in insolvency pursuant to s 459A of the Corporations Act 2001 (Cth) (insolvency application).

2    Mr Ablett, together with the Second Respondent (Richard Bunting), are the sole directors of Matrix Commercial. Matrix Commercial is the corporate entity through which Mr Ablett and Mr Bunting ran a commercial interior design and build business in Brisbane. The business has been effectively dormant since April 2025 and has no further work to undertake. This application forms part of a broader dispute across two proceedings as to the fate of the companies involved in that business, being Matrix Commercial; its ultimate holding company, Insert Name of Company Here Pty Ltd (INCH); and the two companies through which each of Mr Ablett and Mr Bunting hold their shares in INCH (respectively, MSDL Investments and DSA Vision).

3    In a related proceeding (QUD584/2025), MSDL seeks an order pursuant to s 461(k) of the Act that INCH be wound up on the just and equitable ground and DSA Vision seeks orders that it purchase MSDL’s shares in INCH at a price to be determined by the Court and be paid compensation by MSDL for MSDL’s alleged oppression of DSA Vision: Act, s 232 and s 233. In this proceeding, should Mr Ablett not succeed in obtaining an order that Matrix Commercial be wound up in insolvency, he seeks an order that Matrix Commercial be wound up on the just and equitable ground.

4    Mr Ablett relies in support of the insolvency application on two acts said to give rise to a presumption of insolvency under s 459C of the Act. First, the repossession of two Ford Ranger Raptors the company owned, in enforcement of a security interest Matrix Commercial granted in respect of its obligations under a loan agreement with Mr Ablett: Act, s 459C(2)(e). Second, Matrix Commercial’s “failure” (as that term is defined in s 459F of the Act) to comply with a statutory demand personally served at its registered office on 16 January 2026: Act, s 459C(2)(a).

5    Matrix Commercial did not appear at the insolvency application. Mr Bunting did appear and opposes the relief sought by Mr Ablett. While Mr Bunting puts in issue the capacity of Mr Ablett to rely on the statutory demand, he does not seriously contest that a presumption of insolvency arises under s 459C(2)(e) by reason of the repossession of the Ford Ranger Raptors. Rather, his principal contention is that Matrix Commercial is solvent and, as such, ought not to be wound up.

6    For the reasons that follow, I am satisfied that the presumption of insolvency arises and I am not persuaded that the presumption has been displaced. As such and given that there is no compelling reason to refuse the relief sought, I will order that Matrix Commercial be wound up in insolvency under s 459A of the Act.

proceduRAL REQUIREMENTS

7    Mr Bill Karageozis, a registered liquidator, has given his consent to be appointed as liquidator of Matrix Commercial. With one exception, the procedural requirements under s 465A and s 470(1) of the Act with respect to the insolvency application have also been met. Mr Ablett notes that the insolvency application was lodged with the Federal Court on the morning of 15 September 2025, but was not accepted for filing until the following afternoon. He raises this because s 470(1)(a) of the Act requires an applicant to lodge “not later than 10:30 am on the next business day after the filing of [an insolvency] application”, notice of the application and the date on which the application was filed. Mr Ablett provided the notice to which s 470(1)(a) of the Act refers on 16 September 2025, just over an hour after the insolvency application was accepted for filing but “later than 10:30 am on the next business day after” the insolvency application was lodged.

8    Under r 2.25 of the Federal Court Rules 2011 (Cth) a document lodged electronically with the Federal Court is deemed to be filed on the day it was sent if it is “received” before 4:30 pm on a business day and accepted by the Registry. Accepting that the insolvency application was sent electronically, the practical consequence is that while it was “accepted” by the Registry on 16 September 2025, it is deemed to have been filed on 15 September 2025. As such, notice of the filing of the insolvency application ought to have been lodged by 10:30 am on 16 September 2025, but was not lodged until 2:40 pm that day: cf, Act, s 470(1)(a). Notwithstanding this defect, I am satisfied that the insolvency application should proceed because there is no evidence that either Matrix Commercial or Mr Bunting or any other party or stakeholder has suffered any prejudice as a result of the late lodging of the notice of the insolvency application: cf, Act, s 467A.

presumption of insolvency

Does the presumption of insolvency under s 459C(2)(e) arise?

9    Section 459C(2)(e) of the Act establishes a statutory presumption of insolvency if, during or after the three months ending on the day when the winding up application is made, a person entered into possession, or assumed control, of property for the purpose of enforcing a security interest.

10    The insolvency application (made under s 459P of the Act) was filed on 15 September 2025. As such, the three-month period prescribed by s 459C of the Act commenced on 15 June 2025.

11    Mr Ablett contends, and for the following reasons I am satisfied, that s 459C(2)(e) of the Act is engaged by reason of the repossession of one of the Ford Ranger Raptors secured by a registered personal property security interest granted by Matrix Commercial in favour of Mr Ablett.

12    Matrix Commercial granted two personal property security interests (one for each of the Ford Ranger Raptors) securing its obligations under a loan agreement between the company and Mr Ablett, that they entered into in or about January 2024. Under the terms of the loan agreement, Mr Ablett advanced Matrix Commercial the sum of $196,694.60 for the purchase of the two Ford Ranger Raptors. Both were used in the business, one by Mr Ablett, the other by Mr Bunting.

13    On 12 August 2025, following a series of failures to make repayments under the loan agreement when they fell due, Mr Ablett issued a notice of demand requiring repayment of the balance owing under the loan ($146,228.70) by 15 August 2025.

14    Matrix Commercial did not comply with the notice of demand. On 15 August 2025, Mr Bunting wrote Mr Ablett a letter in his capacity as a director of Matrix Commercial, making various complaints about “factual inaccuracies and procedural improprieties” with the notice of demand and disputing its validity. Mr Bunting did not press the contents of that letter at the hearing as a basis for resisting a conclusion that an event under s 459(2)(e) arose. In any event, I am not persuaded that the matters to which that letter refers (which essentially concern the circumstances of the delay in loan repayments and whether there had been communication with respect to those delays) are material to determining whether the presumption of insolvency arises. That is because the letter accepted that there was at least one scheduled payment outstanding such that there was a proper basis under the loan agreement to issue the notice of demand.

15    On 22 August 2025, a commercial agent instructed by Mr Ablett effected repossession of the Ford Ranger Raptor used by Mr Bunting. It is clear from the affidavits upon which he relies that Mr Ablett also instructed the commercial agent to repossess the Ford Ranger Raptor he was using. This is somewhat curious given that the Ford Ranger Raptor was already in his possession. In any event, there is an absence of evidence that the commercial agent did repossess the car. A report provided by the commercial agent only refers to repossession of the Ford Ranger Raptor used by Mr Bunting. The invoice issued by the commercial agent specifically refers only to the repossession of the Ford Ranger Raptor used by Mr Bunting. And while there are various invoices for works completed with respect to two Ford Ranger Raptors, as well as two records of payments to a towing company, the materials contain a specific reference as to the repossession of only one vehicle by the commercial agent – that being, the Ford Ranger Raptor used by Mr Bunting.

16    It is not necessary to resolve the position with respect to the Ford Ranger Raptor used by Mr Ablett. That is because the evidence establishes that on 22 August 2025 a commercial agent instructed by Mr Ablett entered into possession of the Ford Ranger Raptor driven by Mr Bunting for the purpose of enforcing the security interest Matrix Commercial granted over that vehicle. It follows that I am satisfied that s 459C(2)(e) of the Act is engaged. As such, the Court must presume for the purposes of the insolvency application that Matrix Commercial is insolvent.

Does the presumption of insolvency arise under s 459C(2)(a) of the Act?

17    Section 459C(2)(a) of the Act further provides that the statutory presumption of insolvency will arise when a company has failed to comply with a statutory demand during or after the three months ending on the day when the winding up application was filed. A company will have “failed” to comply with a statutory demand if, at the end of the period for compliance (21 days), the statutory demand is still in effect and the company has not complied with it: Act, s 459F(2)(b); see also, Act, s 9 (“statutory period”).

18    On 16 January 2026, after the insolvency application was filed, Mr Ablett caused a statutory demand to be personally served on Matrix Commercial at its registered office: Act, s 109X. The debt the subject of the statutory demand comprised the amount outstanding under the loan agreement for the purchase of the Ford Ranger Raptors referred to above ($25,308.87). The time for compliance with the statutory demand expired on 6 February 2026: Act, s 459F(2). Matrix Commercial neither paid the amount owing under the statutory demand nor applied during the statutory period to have the statutory demand set aside: Act, s 459F(1) and s 459G.

19    Mr Bunting did not dispute that Matrix Commercial failed to comply with the statutory demand. Rather, Mr Bunting contended that unless Mr Ablett was granted leave to amend the insolvency application, the statutory presumption in s 459C(2)(a) did not arise because the statutory demand was served after it was filed. He relied, in that regard, on the observation made by Sifris J at [135] in Re Kornucopia Pty Ltd [2019] VSC 756, that the failure to attach a statutory demand to a winding up application made on the just and equitable ground under s 461(1)(k) of the Act means that there can be no reliance on the presumption of insolvency under s 459C of the Act.

20    Mr Bunting further contended that leave to amend the insolvency application ought be refused because the failure to comply with the statutory demand (rather than the statutory demand itself) was an abuse of process. It is uncontroversial that the statutory demand was not brought to his attention until after it had expired. Nor is it controversial that Mr Ablett knew, because he was copied into an email sent by Mr Bunting on 24 November 2025 before the statutory demand was issued, in which Mr Bunting refused to accede to a request for an outstanding payment under the loan agreement because “the amounts claimed remain in dispute”. Those matters, coupled with the asserted failure by Mr Ablett to take any steps to cause Matrix Commercial to comply with the statutory demand, are said by Mr Bunting to constitute an abuse of process warranting the refusal of leave to amend the insolvency application to rely on s 459C(2)(a) of the Act.

21    As PD McMurdo J (as his Honour then was) found in Equititrust Limited v Willaire Pty Ltd [2012] QSC 206, a failure to comply with a statutory demand issued after the commencement of an application under s 459P of the Act to wind up a company on the insolvency ground need not be disregarded for the purposes of s 459C of the Act: at [81]-[82] and [87]-[90]; see also, Simpson v CT Partners Australia Pty Ltd [2015] FCA 1191 at [35]-[36] (Gilmour J). Section 459C provides that the presumption arises “if during or after the three months ending on the day when the application was made” any of the prescribed events occur (emphasis added). Thus, according to its “unambiguous terms”, the question for the Court is whether any of the identified events has occurred at any time after the commencement of the relevant period: Equititrust at [88]-[89], citing Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Limited [2008] HCA 9; (2008) 232 CLR 314 at [21]-[22] (Gleeson CJ, Hayne, Crennan and Kiefel JJ). The result of that construction is, as PD McMurdo J went on to explain in Equititrust (at [90]):

… thereby one which accords with the evident object of Pt 5.4, which is that insolvent companies ought to be wound up. A failure to comply with a statutory demand should be more telling for being more recent at the time of the hearing. To exclude such an event would be anomalous.

22    At the hearing I granted Mr Ablett leave to amend the insolvency application. That was because, in light of the decision in Equititrust, I was satisfied that Mr Ablett was entitled to rely on the failure to comply with the statutory demand despite it being served after the insolvency application was filed. Moreover, I was not persuaded that the amendment would cause Mr Bunting (or Matrix Commercial) prejudice given that Mr Ablett foreshadowed reliance on the statutory demand in the material filed in support of the insolvency application. Finally, I was not persuaded that the matters raised by Mr Bunting with respect to the failure to comply with the statutory demand were sufficient to support the high threshold needed to establish an abuse of process such that leave to amend the insolvency application should be refused: cf, eg, Pharmanet Group Limited v Primeland Pty Ltd, in the matter of Pharmanet Group Limited [2015] FCA 208 at [65] (McKerracher J) in the context of issuing a statutory demand.

23    As such and given the evidence establishes that after the insolvency application was filed, Matrix Commercial failed to comply with a statutory demand, I am satisfied that s 459C(2)(a) of the Act is engaged. It follows that the presumption of insolvency also arises under that section.

has the presumption of insolvency been displaced?

24    The so-called “cash flow test” applies to the question of solvency for the purposes of deciding whether to wind up a company under s 459A of the Act: Melbase Corporations Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187 at 198 (Lindgren J) and QBE Insurance (Australia) Limited v Good Life One World Pty Limited, in the matter of Good Life One World Pty Limited (Controller Appointed) [2021] FCA 1249 at [32]-[35] (White J). The cash flow test necessarily requires that it be established that a company is able to pay all of its debts, as, and when, they become due and payable: Act, s 95A(1); see also, the Acts Interpretation Act 1901 (Cth), s 2C(1) and Act, s 6(2) and s 9 (“person”).

25    The principles relevant to rebutting the presumption of insolvency were summarised by Weinberg J in Ace Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 (in the context of an application to set aside a statutory demand under s 459G of the Act), as follows (at [44]):

•    The respondent is presumed to be insolvent and as such bears the onus of proving its solvency: s 459C(2) and (3); Elite Motor Campers Australia v Leisureport Pty Ltd (1996) 22 ACSR 235 per Spender J; Commissioner of Taxation v Simionato Holdings Pty Ltd. (1997) 15 ACLC 477 per Mansfield J.

•    In order to discharge that onus the Court should ordinarily be presented with the “fullest and best” evidence of the financial position of the respondent: Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075 at 1081 per Hayne J.

•    Unaudited accounts and unverified claims of ownership or valuation are not ordinarily probative of solvency. Nor are bald assertions of solvency arising from a general review of the accounts, even if made by qualified accountants who have detailed knowledge of how those accounts were prepared: Simionato Holdings Pty Ltd (supra); Re Citic Commodity Trading Pty Ltd v JBL Enterprises (WA) Pty Ltd [1998] FCA 232 per Heerey J; Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459 at 463 per Sackville J.

•    There is a distinction between solvency and a surplus of assets. A company may be at the same time insolvent and wealthy. The nature of a company’s assets, and its ability to convert those assets into cash within a relatively short time, at least to the extent of meeting all its debts as and when they fall due, must be considered in determining solvency: Rees v Bank of New South Wales (1964) 111 CLR 210; Re Tweeds Garages Ltd [1962] Ch 406 at 410 per Plowman J; Simionato Holdings Pty Ltd (supra); Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 13 ACLC 823 at 832 per Lindgren J; Leslie v Howship Holdings Pty Ltd (supra) at 465-466.

•    The adoption of a cash flow test for solvency does not mean that the extent of the company’s assets is irrelevant to the inquiry. The credit resources available to the company must also be taken into account: Sandell v Porter (1966) 115 CLR 666 at 671 per Barwick CJ (with whom McTiernan and Windeyer JJ agreed); Leslie v Howship Holdings Pty Ltd (supra) at 466; Taylor v ANZ Banking Group Ltd (1988) 6 ACLC 808 at 812 per McGarvie J.

•    The question of solvency must be assessed at the date of the hearing. However, this does not mean that future events are to be ignored: Leslie v Howship Holdings Pty Ltd (supra) at 466-467.

•    It is no abuse of process for an applicant to seek to wind up a company presumed to be insolvent by reason of its failure to comply with a statutory demand merely because that company contends that it is solvent, or because there may be alternative means available to the applicant to vindicate its rights: Elite Motor Campers Australia v Leisureport Pty Ltd (supra).

26    It has been said that the “proper verification of assets and liabilities” is “critical” to the task faced by the company in seeking to prove its solvency: Re Statewide Developments Pty Ltd [2011] NSWSC 1537 at [56] (Barrett J), citing Expile Pty Ltd v Jabb’s Excavations Pty Ltd [2003] NSWCA 163; (2003) 45 ACSR 711 at [16] (Meagher JA, Handley and Santow JJA concurring).

27    Be that as it may, counsel for Mr Ablett made clear at the hearing that it was not contended that audited accounts and an opinion as to solvency was required, given the relatively smaller size of Matrix Commercial: cf, Deputy Commissioner of Taxation v Fyna Constructions (Hire & Sales) Pty Ltd (administrators appointed) [2019] FCA 578 at [17] (Griffiths J). Mr Ablett acknowledged that this is not “an overwhelming case of insolvency” because, amongst other matters, the company has not traded in over a year and is not currently incurring debts to employees or suppliers. Nonetheless, Mr Ablett emphasised that there “has got to be something” in the financial material before the Court that provides a sufficient basis to displace the statutory presumption of insolvency and highlighted the absence of financial information before the Court as to the company’s position with respect to prospective liabilities, including those arising under warranties for its previous work.

28    The onus of displacing the statutory presumption of insolvency ordinarily “rests squarely with the debtor company”: Re Buzztech Phone Repair Pty Ltd [2026] VSC 374 at [33] (Hetyey AsJ). The standard is the balance of probabilities. Here, it is Mr Bunting rather than Matrix Commercial that seeks to establish that the company is solvent. Mr Ablett did not put in issue whether it was open for him to do so.

29    Mr Bunting relies on two matters to displace the statutory presumption of solvency.

30    First, a dispute with respect to the debt the subject of the statutory demand. The evidence in support of that dispute is the email Mr Bunting sent on 24 November 2025, as referred to above. The email concerned a request for payment under the loan agreement. Mr Bunting stated in the email that the “underlying enforcement, sale, application of the sale proceeds, and the amounts claimed remain in dispute”. I am not persuaded that bare assertion, unaccompanied by evidence, supports the existence of a “genuine dispute” with respect to the debt the subject of the statutory demand upon which Mr Bunting can, or should, be granted leave to oppose the insolvency application: cf, Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 787 (McLelland CJ) and Act, s 459S(1)(b). I note that the amount claimed by the statutory demand in respect of the debt under the loan agreement remains unpaid, as Mr Ablett affirms in his affidavit dated 26 February 2026.

31    Second, evidence with respect to the financial position of Matrix Commercial, including its payment of certain debts. That evidence, relevant to the date of the hearing at which the question of solvency is to be assessed, is as follows:

(a)    A report by a forensic accountant dated 16 January 2026, which includes a balance sheet recording that as of 12 November 2025, Matrix Commercial had cash and cash equivalents of $88,312 and valued the shares in the company as held by INCH at $46,798;

(b)    A bank statement dated 25 February 2026, recording that an account in the name of Matrix Commercial held a closing balance of $70,398.46; and

(c)    Records of Matrix Commercial paying bills since the insolvency application was filed on 15 September 2025. Mr Bunting particularly relied on a “remittance advice” from Matrix Commercial dated 12 November 2025 for payment of $17,088.93 in respect of the sale and repossession costs for the Ford Ranger Raptors; and payments of $15,333 on 25 February 2026 to the Australian Taxation Office and $2,035.00 on 23 February 2026 to Achieve Advisory Pty Ltd as recorded in the bank statement as having been made by Matrix Commercial.

32    Mr Bunting further asserted in his oral submissions that Mr Ablett owed Matrix Commercial an amount of $33,000. He could not, however, point to any evidence in support of that assertion. As such, I have not had regard to that alleged debt to the company in considering its solvency.

33    Mr Ablett has also put in evidence relevant to the current financial position of Matrix Commercial. Relevantly, this includes an extract from the Xero accounting software for the company dated 26 February 2026, which records three creditors of the company (one of whom is Mr Bunting) owed a total of $15,143.36. Those debts are recorded as dating back to August 2025.

34    The effect of the evidence detailed above is that as of 25 February 2026, Matrix Commercial had a net cash position of $29,946.23 (subtracting the balance in the bank statement from the amount claimed by the statutory demand ($25,308.87) and the debts identified at [32] above (recorded debts)). The report also records that, as of 12 November 2025, Matrix Commercial had fixed assets (described as some computer, property, plant and equipment assets) that were valued at $3,083.

35    That leaves the report’s valuation of the shares in Matrix Commercial at $46,798 as of 12 November 2025. But as Mr Ablett emphasises, and as appears from the report, that figure was derived by subtracting the net assets of the company from its net liabilities. As such, the report does not relevantly add to a consideration of the solvency of Matrix Commercial because it does not speak to the existence of assets held by the company, other than fixed assets already referred to above.

36    While the evidence establishes that, as of 25 February 2026, Matrix Commercial had a net positive cash position, there is an absence of evidence as to the existence of any prospective liabilities beyond the recorded debts. The height of Mr Bunting’s evidence is that as of that date, the only creditor of Matrix Commercial was Encite Partners who was owed $1,925. That evidence is contradicted by Xero which records two additional creditors with debts dating back to August 2025: Mr Bunting who was owed $12,974.66 and RLI Pty Ltd who was owed $243.71. It may be that this reflects that Mr Bunting does not seek to recover the amount there recorded. But in any event, and more importantly, there remains an absence of evidence to confirm that those debts are the only debts of Matrix Commercial and that the company has no known prospective liabilities.

37    The considerations in the case are finely drawn. Matrix Commercial has not traded in over a year and, as such, is not incurring any debts to employees or suppliers. While it is not currently receiving any income, the company also has a positive net cash position, taking into account the recorded debts. But by reason of s 459C of the Act, Matrix Commercial is presumed to be insolvent. And the “fullest and best material” put before the Court in support of the contention that Matrix Commercial is solvent is silent as to the existence of any prospective liabilities: cf, Commonwealth Bank of Australia v Begonia Pty Ltd (1993) 11 ACSR 609 at 617 (Hayne J). In the absence of evidence establishing that the recorded debts are the only debts or prospective liabilities of the company, I am not satisfied that the presumption of insolvency is displaced, and it can be concluded that Matrix Commercial is able to pay all of its debts, as, and when, they become due and payable. It follows that I am not persuaded that Matrix Commercial is solvent.

conclusion

38    The Court retains a discretion under s 459A of the Act as to whether a company ought to be wound up. Where a company is insolvent, there needs to be a compelling reason for the exercise of that discretion against winding up: Khoury v Rosemist Holdings Pty Ltd [1999] FCA 458 at [65] (Boon J). I am not persuaded that any such circumstances exist in the present case. It follows that Matrix Commercial will be wound up on the ground of insolvency under s 459A of the Act.

39    Mr Ablett further seeks an order that Matrix Commercial and Mr Bunting are jointly and severally liable for his costs of the insolvency application. That is a departure from the ordinary position in which the applicant’s costs for a successful application to wind up a company in insolvency are paid out in priority and from the property of the company: Act, s 556(1)(b). Given that, and that Mr Bunting has not made submissions with respect to the question of costs, I will hear the parties as to costs of the insolvency application on the date listed for the hearing of the related proceeding.

Associate:

Dated: 18 June 2026