SUPREME COURT OF QUEENSLAND

CITATION:	 Re 52 The Esplanade Pty Ltd [2021] QSC 318	
PARTIES:	100 BRISBANE STREET PTY LTD
(applicant)
v
52 THE ESPLANADE PTY LTD ACN 641 819 641
(respondent)	
FILE NO/S:	BS 10826 of 2021
	
DIVISION:	Trial Division	
PROCEEDING:	Application	
ORIGINATING COURT:	Supreme Court at Brisbane	
DELIVERED ON:	3 December 2021	
DELIVERED AT:	Brisbane	
HEARING DATE:	25 November 2021	
JUDGE:	Kelly J	
ORDER:	Upon Ajay Bakshi giving the usual undertaking as to damages, the orders of the Court are that:
1.	Pursuant to s 472(2) of the Corporations Act 2001 (Cth), Terry John Rose of SV Partners Insolvency (Qld) Pty Ltd, 22 Market Street, Brisbane, Queensland, 4000 be appointed as provisional liquidator to the defendant, 52 The Esplanade Pty Ltd;
2.	The provisional liquidator shall, within 14 days of his appointment, provide to the Court and to the plaintiff, 100 Brisbane Street Pty Ltd, a report as to the provisional liquidation of the defendant, including:
a.	The identification of the assets and liabilities of the company;
b.	An opinion as to the solvency of the company
c.	An opinion as to the value of the assets of the company;
d.	The likely return to creditors of the company; and
e.	Any other information necessary to enable the financial position of the company to be assessed;
3.	Liberty to apply.     	
CATCHWORDS:	CORPORATIONS  –  WINDING UP  –  LIQUIDATORS  –  APPOINTMENT  –  IN WINDING UP BY COURT  –  OTHER MATTERS  –  where the applicant held 50 of 100 shares in the respondent company – where the applicant asserts that a provisional liquidator should be appointed because it has reason to believe the respondent company is trading insolvently – where the respondent asserts the applicant held all of their shares on trust – whether the applicant is a “contributory” or “member” within the meaning of the Corporations Act 2001 (Cth) such that it has standing to bring the application – whether a provisional liquidator should be appointed. 
Corporations Act 2001 (Cth), s 9, s 461, s 472
 ASIC v Merlin Diamonds Ltd [2019] FCA 1546, considered
ASIC v Activesuper Pty Ltd (No 2) (2013) 93 ACSR 189, cited
Dalgety Downs Pastoral Company Pty Ltd v FCT (1952) 86 CLR 335, cited
Maertin v Klaus (2006) 233 ALR 358, cited
Sutherland v Take Seven Group Pty Ltd (1998) 29 ACSR 201, cited	
COUNSEL:	G Beacham QC and J Byrnes for the applicant 
G J Radcliff for the respondent
	
SOLICITORS:	Pennisi Zia Lawyers for the applicant
Legacy Legal for the respondent
	
Introduction
[1]	
[1]	By an originating application filed on 17 September 2021, 100 Brisbane Street Pty Ltd (“the applicant”) commenced a proceeding against 52 The Esplanade Pty Ltd (“the company”) seeking an order that the company be wound up pursuant to s 461 of the Corporations Act 2001 (Cth) (“the Act”). On 30 September 2021, orders were made by consent that the proceeding continue as if started by claim and requiring the applicant to file and serve a statement of claim by 14 October 2021. The applicant filed and served a statement of claim on 27 October 2021. On 10 November 2021, the applicant filed this interlocutory application seeking the appointment of a provisional liquidator to the company pursuant to s 472(2) of the Act. The company’s defence was filed on 23 November 2021. This interlocutory application was heard on 25 November 2021.   
Relevant factual background
[2]	On 17 June 2020, the company was incorporated for the purpose of acquiring a restaurant business located at 52 The Esplanade, Surfers Paradise known as “Sandbar” (“the business”). The company has an issued share capital comprising 100 ordinary shares. The applicant is registered as a member holding 50 shares in the company. Mr Ajay Bakshi is the director and sole shareholder of the applicant. GB No 3 Pty Ltd (“GB No 3”), is registered as the other member holding 50 shares in the company. Mr Greg Bell is the sole director of the company and the sole director and shareholder of GB No 3. 
[3]	On 20 June 2020, the company entered into a written contract to purchase the business for a purchase price of $520,000.00. 
[4]	On or about 20 November 2020 the company entered into a written loan agreement (“the loan agreement”) with Goldsmith Farrington Capital Pty Ltd (“the lender”) pursuant to which it borrowed, inter alia, the funds required to purchase the business. Mr Bakshi and the applicant, along with Mr Bell and 4 Orchid Avenue Pty Ltd, were parties to the loan agreement as guarantors. 
[5]	Pursuant to the material terms of the loan agreement:
(a)	the lender granted to the company a facility for the principal amount of $632,000.00;
(b)	the “Advance Date” was the date on which the first drawing of all or part of the principal amount occurred;
(c)	interest was payable monthly in arrears at the rate of 5% per month but the lender agreed to accept a lower rate of 3% per month if all amounts payable under the loan agreement were paid by the company when due;
(d)	“the Debt” was the sum from time to time outstanding inclusive of the principal amount plus interest; 
(e)	the Debt was required to be repaid in full by no later than twelve months from the Advance Date;
(f)	Mr Bakshi and the applicant granted in favour of the lender security by way of mortgages and charges over real property comprising properties situated at 6 Tristan Way, Tinana, 627 Ripley Road, Ripley and 81 Brisbane Road, Bundamba (“the secured properties”); and  
(g)	The company granted security over the assets comprising the business and all present and after acquired property of the company;
(h)	Mr Bakshi and the applicant gave an indemnity to the lender in respect of the company’s obligations under the loan agreement.
[6]	The Advance Date became 20 November 2020. On that date, the contract to purchase the business settled and the balance of the loan was $632,000.00.
[7]	From around 20 November 2020, the company has owned and operated the business. Mr Bell appointed a Mr Kevin Carey as the operations manager for the business.
[8]	Since 17 September 2021, the applicant has agitated for the appointment of a provisional liquidator to the company. Mr Bakshi swore an affidavit on 17 September 2021 which raised his concern that the company was trading whilst insolvent. That concern was expressed from a position that, as Mr Bakshi contended, he had no access to the company’s bank account, the company’s accountant, Mr Zen Knezevic, had been directed to not provide Mr Bakshi with information about the business and Mr Bell had refused to discuss the business with Mr Bakshi. 
[9]	By his 17 September 2021 affidavit, Mr Bakshi, relying on information from Mr Knezevic, materially deposed to his beliefs that:
(a)	The company owed a debt to the Australian Taxation Office for an amount of more than $300,000.00 which was under a payment arrangement;
(b)	the company owed arrears of rent for a period of at least two months;
(c)	the company had not made payments to the lender for a period of at least two months; 
(d)	the company was indebted to employees for superannuation and other employment entitlements; and 
(e)	the company was in debt to suppliers of its stock and products.
[10]	On 12 November 2021, the lender issued a demand for possession and a notice of exercise of power of sale in respect of the secured properties. The loan statement provided with the notice of exercise of power of sale revealed that the company had not paid interest under the loan agreement since August 2021 and that the balance owing to the lender as at 12 November 2021 was in the amount of $723,728.58. 
Overview of the parties’ contentions
[11]	The applicant seeks the appointment of a provisional liquidator on the grounds that there is an urgent and sufficient need for such appointment where there is a good circumstantial case that the company is insolvent, the company continues to trade without apparently attempting to remedy its default to the lender and the applicant is being kept out of information concerning the company’s affairs.
[12]	The company resists the appointment of a provisional liquidator on the grounds that the applicant lacks standing to bring the application, the company is not insolvent and the appointment of a provisional liquidator would be futile.
[13]	Before considering the merits of these contentions it is necessary to set out some principles which are relevant to the disposition of this interlocutory application.
Principles relevant to the appointment of a provisional liquidator
[14]	Pursuant to s 472(2) of the Act, the court may appoint a registered liquidator provisionally at any time after the filing of a winding up application and before the making of a winding up order. The purpose of such an appointment has been recognised as being to preserve the status quo so as to prevent the dissipation of assets prior to the final hearing of the winding up application and to ensure, in the public interest, that an independent official liquidator can investigate the company’s records, transactions, assets and liabilities. 
[15]	In ASIC v Merlin Diamonds Ltd, O’Bryan J relevantly observed: 
“The appointment of a provisional liquidator pending the determination of an application for winding up has been described as a ‘drastic intrusion into the affairs of the company and is not to be contemplated if other measures would be adequate to preserve the status quo’: Zempilas v JN Taylor Holdings Limited (No 2) (1990) 55 SASR 103 (Zempilas) at 106 per King CJ (with whom Cox and Olsson JJ agreed). That statement has been referred to with approval on many occasions: see for example Constantinidis v JGL Trading Pty Ltd (1995) 17 ACSR 625 (Constantinidis) at 635 per Kirby P and at 647 per Powell JA. The cautionary statement directs attention to the consequences of the appointment of a provisional liquidator. The appointment constitutes a significant intrusion into the affairs of the company because it has the effect of displacing the directors and the provisional liquidator assumes control of the company… The consequence of the appointment may be to paralyse the normal operations of the company.
Section 472(2) of the Act does not stipulate criteria governing the appointment of a provisional liquidator. As a discretionary power, it must be exercised judicially by reference to considerations relevant to its exercise…
A number of principles have been developed by the courts over the years to guide the exercise of the power to appoint a provisional liquidator. As observed by Austin J in Lubavitch Mazal Pty Ltd v Yeshiva Properties No 1 Pty Ltd (2003) 47 ACSR 197 at [106] … those principles are broadly analogous to the considerations relevant to the grant of other interlocutory relief to protect assets. In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, the High Court reiterated the organising principles for the grant of interlocutory relief which take account of the strength of the applicant’s case and the practical consequences likely to flow from the specific relief sought: see at [19] per Gleeson CJ and Crennan J and at [65] – [72] per Gummow and Hayne JJ.
Stated in broad terms, before appointing a provisional liquidator pursuant to s 472(2), the Court will need to be satisfied of two matters. The first is that a winding up application has been filed and there is a reasonable prospect, or it is reasonably likely, that a winding up order will be made on the application: Constantinidis at 635-636 per Kirby P (with whom Meagher JA agreed). In Zempilas, King CJ expressed the question as whether there is a sufficient prospect of a winding up order being made to justify consideration of the appointment of a provisional liquidator pending the determination of the petition for winding up (at 104).
The second factor is whether there is urgency and sufficient reason for intervention prior to the final hearing including whether the appointment is needed in the public interest, or to protect the company’s assets or to preserve the status quo in relation to the affairs of the company: Constantinidis at 635-636 per Kirby P (with whom Meagher JA agreed); Allstate Explorations NL v Batepro Australia Pty Ltd [2004] NSWSC 261 at [30]. Circumstances that are relevant to the exercise of the discretion to appoint a provisional liquidator include:
(a) the financial position of the company and the likelihood of insolvency…;
(b) where there is a need for an examination of the state of the accounts of a company in the public interest…
(c)  whether the affairs of the company have been conducted casually without due regard to legal obligations such that the Court has no confidence that the affairs of the company are being carried on for the benefit of shareholders…”.
Analysis and exercise of discretion
[16]	The first issue concerns the standing of the applicant. 
[17]	The winding up order, the subject of final relief in this proceeding, is sought pursuant to s 461 of the Act. Section 462 of the Act deals with standing to apply for a winding up order under s 461. 
[18]	Relevantly s 462(2) of the Act provides:
“Subject to this section, any one or more of the following may apply for an order to wind up a company:
(a)	…; or
(b)	a creditor (including a contingent or prospective creditor) of the company; or
(c)	a contributory; or
(d)	….; or
(e)	….; or 
(f)	….; or
(g)	….”.
[19]	Section 9 defines “contributory” to mean:
“(a)	 in relation to a company (other than a no liability company):
(i)	a person liable as a member or past member to contribute to the property of the company if it is wound up; and
(ii)	for a company with share capital – a holder of fully paid shares in the company; and
(iii)	before the final determination of the persons who are contributories because of subparagraphs (i) and (ii) – a person alleged to be such a contributory…”
[20]	Section 9 defines the term “member”, in relation to a company, as being “a person who is a member under section 231”.
[21]	Section 231 of the Act then relevantly provides:
“A person is a member of a company if they:
(a)	are a member of the company on its registration; or
(b)	agree to become a member of the company after its registration and their name is entered on the register of members; …”.
[22]	The standing issue is raised by the company in terms that “the factual scenario alleged by [the company] demonstrates a real dispute arises as to whether or not [the applicant] is a shareholder of [the company] and is entitled to seek the relief claimed”. The reference to “the factual scenario alleged by [the company]”, is a reference to certain evidence from Mr Bell and Mr Carey in relation to the circumstances in which the applicant came to acquire shares in the company. 
[23]	The statement of claim alleges that on or about 28 October 2020, Militis Bellator Pty Ltd, a company controlled and owned by Mr Carey, transferred its shareholding in the company (comprising fifty shares) to the applicant. The defence “admits that [the applicant] came to be recorded as the holder of shares as alleged”. The defence alleges that the transfer of the shares occurred pursuant to “a joint venture” which, in effect, appears to be an allegation made by reference to the circumstances described by the affidavits of Mr Bell and Mr Carey.
[24]	Mr Bell and Mr Carey each swore affidavits. 
[25]	Mr Bell’s affidavit relevantly provided as follows:
“3.	On or around May 2020, I had a meeting with Mr Ajay Bakshi and Mr Kevin Carey in relation to the potential purchase of the Sandbar, a restaurant and bar located at 52 The Esplanade, Surfers Paradise, Queensland. 
4.	Mr Carey was a business partner of mine in another venue known as Gilleys Bar. Mr Bakshi was an associate who owned and operated a Re-Max Real estate franchise at that time. 
5.	After a number of negotiations, on or around 20 June 2020, [the company] purchased the Sandbar for the sum of $520,000 which settled on 20 November 2020.
6.	Mr Bakshi was the sales agent for the sale of Sandbar. As settlement neared, Mr Carey and I sought to obtain finance to assist with the purchase of Sandbar. Mr Carey and I had proposed to use properties held by us as security for the finance. 
7.	In or around October 2020, Mr Carey raised the idea of changing the application for finance to include Mr Bakshi as guarantor. His reasons were that, Mr Bakshi had defaulted on his personal mortgage affairs, faced a mortgagee sale of his assets, and that Mr Carey and I should consider assisting him retain his properties in return for him allocating the properties as security for the finance for Sandbar. 
8.	Mr Carey had intended on offering an unencumbered block of land at 6 Tristan’s Way in Tinana worth approximately $150,000 as security for the Sandbar finance. I am aware that Mr Carey transferred that block to Mr Bakshi to boost his equity and also loaned him a sum of approximately $28,000 to pay his mortgage arrears so that he could retain his properties.
9.	It was on the basis of Mr Carey transferring the land at Tristan’s Way and advancing the sum of $28,000 that Mr Bakshi was able to satisfy his mortgage payments and retain his properties. The condition was that Mr Bakshi would then offer the properties as security for the Sandbar finance until such time that Mr Carey and I were in a position to refinance. 
10.	In circumstances where Mr Bakshi was providing property as security, the financier required Mr Bakshi to be listed as a shareholder of the company so that he could satisfy the lender’s concerns that Mr Bakshi had an attachment to the borrowing entity. Whether it was beneficially or not. 
11.	On that basis, Mr Carey’s 50% interest in the company was changed so that the shares were held by Mr Bakshi’s nominated entity 100 Brisbane Street Pty Ltd. There was no consideration whatsoever paid for the share allocation, and at all times, it was agreed and understood that the shares were merely held by Mr Bakshi in a position of trust as was required by the lender. At all times, the beneficial ownership of the shares is with and remains with Mr Carey. 
12.	It is within my knowledge that at no time has Mr Bakshi made any payment for a purchase of shares, made any payment for the purchase of property, repaid any loan made to him, or made any financial contribution whatsoever to the purchase and operations of Sandbar. 
13.	In fact, it is my view that Mr Bakshi ought to be considered a debtor of the company where he has been enriched with property and funds for which he has failed to return or repay.”
[26]	Mr Carey’s affidavit relevantly provided as follows:
“10. In or around October 2020, Mr Bakshi pleaded with me to assist him financially and stated that a financier by the name of Bluestone was charging him high interest on the finance of his property mortgages. Mr Bakshi also informed me that he was in default of his mortgage payments and that they were likely to seize and sell his properties. 
11.	I informed Mr Bakshi that I had an unencumbered property at 6 Tristan’s Way in Tinana and I had proposed to use it as security for the finance application to purchase Sandbar. 
12.	Mr Bakshi pleaded for assistance and therefore I agreed to transfer the Tinana property to 100 Brisbane Street Pty Ltd as trustee, and to loan him in excess of $18,000 so that he could make his mortgage payments and use the equity in the Tinana property to lower his mortgage rates. 
13.	This obviously caused a disruption in the finance for the Sandbar purchase and Mr Bakshi agreed that in return for assisting him save his properties, that he would offer them up as security for the loan for the Sandbar purchase until such time that we could refinance and remove his properties. 
14.	It was agreed that at this time, the property in Tinana would be returned to me.
…
18.	An agreement was reached and I transferred the Tinana property to Mr Bakshi and also caused the sum of $18,381.65 to be loaned to him so that he could pay his mortgage arrears towards his property at 627 Ripley Road, and hold sufficient equity to negotiate a better mortgage rate…..
19.	At no time have I received payment of any funds from Mr Bakshi for the property transfer or received any repayment from him for the loan amount given to him to pay his mortgage arrears. 
20.	In line with the agreement reached, Mr Bakshi offered my property at Tinana and his properties as security for the Sandbar finance to complete the purchase. 
21.	It was a requirement of the lender that Mr Bakshi hold my shares under 100 Brisbane Street Pty Ltd so that he could show some attachment to the company for which he was offering properties under a guarantee. 
22.	At no time has Mr Bakshi paid for a share transfer, paid for a land purchase, or paid the loan advanced to him. At no time was it ever agreed that Mr Bakshi would have any beneficial interest or ownership in [the company] whatsoever, and it remains the case that he holds no interest or ownership at all in [the company].
23.	It has always been the view of myself, Mr Bell and Mr Bakshi, that Mr Bakshi merely holds my shares in trust until such time that a refinance has been arranged to remove Mr Bakshi from his guarantee. At that time, he will also be required to return the funds advanced to him and return the title of the Tinana property.”
[27]	It is important to observe that the company does not dispute that, as a matter of fact, the applicant is the registered holder of 50 shares in the company. Rather, the company’s ultimate contention is that the applicant holds those shares on trust for Mr Carey. 
[28]	The issue of standing for the purposes of this interlocutory application, requires consideration as to whether the applicant is to be regarded as a “member” or “contributory” in relation to the company such that it has standing to bring a winding up application under s 461 of the Act. In Sutherland v Take Seven Group Pty Ltd, Young J approached the question of standing for the purpose of an application to appoint a provisional liquidator on the basis that the winding up application “would at least have to be one which is not an abuse of process, that is one brought by a person who apparently arguably has standing and is not purely vexatious”.
[29]	In Maertin v Klaus, Barrett J, by reference to the Act’s definition of “contributory”, said:
“For present purposes, paragraph (a) is the relevant part of the definition. The essence of the status contemplated by that paragraph in the case of a company limited by shares is membership of the company by virtue of registration as the holder of fully paid shares, with the person’s name actually recorded in the register.”
[30]	The ASIC Current Organisation Extract (“the ASIC Extract”) in respect of the company identifies the applicant as a current member of the company holding fifty fully paid shares. The applicant is the registered holder of fifty fully paid shares and by virtue of that status is a member of the company within the meaning of that term as defined by s 9 and s 231 of the Act. The applicant is also a contributory within the meaning of that term as defined by s 9 (relevantly part (a)(ii) of the definition). 
[31]	The company’s contention that the applicant holds the shares on trust, does not diminish the applicant’s standing as the registered holder of shares in the company, as a member and contributory. In Dalgety Downs Pastoral Company Pty Ltd v FCT, the joint judgement (Fullagar and Kitto JJ) said:
“…in the terminology of company law shares are said to be ‘held’ by the person who is registered as a shareholder in respect thereof… Indeed it is not too much to say that the verb ‘hold’ and its variants, when used in relation to shares in companies, normally refers to the legal ownership of the shares according to the register of members.”
[32]	Further, in Maertin at 361, Barrett J noted:
“…the defined statutory concept of contributory looks to the position a person actually occupies in vis-à-vis the company, not the position that he should occupy according to declarations of right binding upon persons who do not include the company.”
[33]	There is a further point relevant to standing. Beyond the applicant’s status as a member and contributory, there is no dispute that the applicant is a guarantor of the company’s obligations under the loan agreement. As a guarantor of the company’s obligations, the applicant falls to be considered as a contingent or prospective creditor. I find that on the evidence before me the applicant has established that it is a contributory and/or contingent or prospective creditor of the company and therefore has standing to seek the winding up of the company under s 461 of the Act.
[34]	Turning then to the broad matters relevant to the exercise of the discretion, as a starting point it is relevant to observe that the company has been on notice of the applicant’s intention to seek the appointment of a provisional liquidator since 17 September 2021 and effectively had a period of approximately two months within which to prepare and provide material to the court to allay the concerns and complaints raised by the applicant as contained in the affidavit of Mr Bakshi sworn on 17 September 2021. 
[35]	The material ultimately relied upon by the company in resisting the application for the appointment of a provisional liquidator was comprised of:
(a)	Mr Bell’s affidavit, which although filed on 23 November 2021 was sworn on 29 September 2021;
(b)	Mr Carey’s affidavit, which although filed on 23 November 2021 was sworn on 29 September 2021; and
(c)	an affidavit of Anton Tan filed 23 November 2021 which essentially concerned the circumstances surrounding service of the statement of claim and of the interlocutory application. 
[36]	The affidavits of Mr Bell and Mr Carey did little more than contain bare denials and mere assertions. There was a notable lack of exhibited material correspondence, financial records or books of account and there was also a distinct lack of detail and proof of any facts underlying the denials and assertions contained in the affidavits. Further, there was no attempt made by the company to update or supplement the evidence of Messrs Bell and Carey between 29 September 2021 and the date of the hearing of the interlocutory application on 25 November 2021. 
[37]	In Merlin Diamonds, O’Bryan J observed as follows:
“In assessing the evidence that has been adduced by ASIC on this application, I have taken into account the fact that Merlin has appeared on the application to resist the appointment of a provisional liquidator and has been given the opportunity to adduce evidence to rebut the case brought by ASIC. Indeed, on 15 May 2019, a few days after the commencement of this proceeding, Waterson Legal wrote to ASIC requesting that the application for the appointment of a provisional liquidator not be listed for a hearing for a period of at least 21 days ‘so that proper material may be prepared by our clients’. On 30 May 2019, ASIC replied and proposed consent orders timetabling the application to a hearing in a manner that would provide Merlin with sufficient time to file evidence. In a case management hearing on 4 June 2019, Merlin and each of the directors gave the Undertakings (referred to earlier) and timetabling orders were made by consent. Despite the time that was afforded to Merlin, it has chosen not to adduce evidence to rebut the case brought by ASIC, apart from the hearsay evidence of Mr Waterson that the directors deny the allegations made about their conduct. In Riviana (Aust) Pty Ltd v Laospac Trading Pty Ltd (1986) 10 ACLR 865 at 866, Young J observed:
…the court takes into account the fact that the company is present, so that the company has an opportunity of putting before the court any relevant factors as to why a provisional liquidator should not be appointed. If the plaintiff’s affidavits raise matters to which a court would expect there to be some answer and there is no answer provided then that in itself raises a matter of suspicion that it may well be in the public interest to put in a provisional liquidator.
That passage was cited with approval in Emmacourt Pty Ltd v Jewels of Australia Pty Ltd [2007] FCA 1483 at [11], Earth Loop Pty Ltd v AIAN Investments Pty Ltd [2008] NSWSC 1042 at [19], ASIC v Global SDR Technologies Pty Ltd (2004) 51 ACSR 42 at [50] and Active Super [ASIC v Active Super Pty Ltd (No 2) (2013) 93 ACSR 189] at [18].”
[38]	In the present matter, a winding up application has been filed by the applicant on 17 September 2021 seeking a winding up order under s 461 of the Act. 
[39]	As to whether there is a sufficient prospect of a winding up order being made to justify consideration of the appointment of a provisional liquidator pending the determination of the winding up application, the following matters are in my consideration particularly relevant. 
(a)	The evidence establishes that the company is in default of the loan agreement having not paid monthly interest since 24 August 2021; 
(b)	The company has not repaid the Debt under the loan agreement within 12 months of the Advance Date;
(c)	It is admitted in the proceeding that the company is indebted to the Australian Taxation Office in the sum of $370,253.11; 
(d)	Whilst the defence alleges that the amount of $370,253.11 is subject to a payment arrangement with the Australian Taxation Office, there is no evidence of that arrangement or its terms; no correspondence with the Australian Taxation Office was exhibited to the affidavit material;
(e)	As at 22 April 2021, the company had owed a significantly smaller sum ($213,955.00) to the Australian Taxation Office which was said to be under a payment arrangement;
(f)	No explanation was provided as to how or why the debt to the Australian Taxation Office has increased by $156,298.11 between April and November 2021;
(g)	Despite Mr Bell deposing that “at all material times I have access to the books and records of [the company]” and that he holds “regular meetings with [the company’s] accountants…”, the company did not adduce any evidence in the nature of financial records or books of account to demonstrate its solvency and/or compliance with its taxation obligations, including obligations owed to employees; 
(h)	The company did not rely upon any affidavit evidence from its accountant. Mr Knezevic had sworn an affidavit on 28 September 2021 which materially noted that, whilst he had provided the company with accounting services from around June 2020 until July 2021, “after July 2021, I understand that the role was taken over by Ms Charmaine Chase at [the business] and Ms Nicola Bouchaud of Accounting Tax Solutions”. On the return of this interlocutory application, the company did not seek to rely upon the affidavit of Mr Knezevic. Rather, the affidavit of Mr Knezevic was exhibited to an affidavit of Mr Bakshi filed 10 November 2021 and read by the applicant. Further, the company did not seek to rely upon any affidavit from Ms Chase or Ms Bouchaud;
(i)	Although Mr Carey deposed to the fact that “Mr Bell and I have proceeded to commit to our endeavours to refinance the loan attached to [the business] which would ultimately see Mr Bakshi relieved of his guarantee”, the company adduced no evidence of those endeavours or the stage which they had reached;
(j)	The company did not explain the circumstances in which it had come to default on the loan agreement by failing to pay interest since the end of August and nor was there any evidence from the company as to whether the default could or would be remedied;
(k)	The evidence of Mr Bell as to the solvency of the company did not extend beyond mere assertion;
(l)	 Mr Bell variously deposed that:
(i)	 “Mr Bakshi has absolutely no knowledge or information about the management or affairs of [the business] … I also fail to see how he has any right to intervene or comment on the operations of the business”;
(ii)	“Mr Bakshi has had absolutely no involvement in the affairs of the company nor should he as he has absolutely no interest.”
[40]	For the purposes of this interlocutory application, I am required to consider whether there is a reasonable prospect that a winding up order will be made on any final application. As to the approach which a Court might be expected to take on a final application, in ASIC v Activesuper Pty Ltd (No 2), Gordon J said:
“It has long been established that a company may be wound up where there is ‘a justifiable lack of confidence in the conduct and management of the company’s affairs’ and thus a risk to the public interest that warrants protection …. In Australian Securities and Investments Commission v ABC Fund Managers (2001) 39 ACSR 443 … at [119], Warren J (as her Honour then was) set out three ‘general fundamental principles’:
‘[119] First there needs to be a lack of confidence in the conduct and management of the affairs of the company …. Second, in these types of circumstances it needs to be demonstrated that there is a risk to the public interest that warrants protection. Third there is a reluctance on the part of the courts to wind up a solvent company.’”    
[41]	An order for winding up on the just and equitable ground may also be made where a shareholder has been denied access to information or excluded from major decisions.
[42]	On the basis of the evidence before me, I find that there is a reasonable prospect of a winding up order being made on the just and equitable ground or for oppression at any final hearing so as to justify consideration of the appointment of a provisional liquidator pending the determination of the petition for winding up. There is in my conclusion a reasonable prospect that the risk to the public interest, a justifiable lack of confidence in the conduct and management of the company and the denial of information to a shareholder would cause a court by way of final relief to find that a case for winding up has been made out. Further, I consider that the evidence before me demonstrates serious concerns and issues in relation to the solvency of the company. On the basis of the evidence, I consider it more likely than not that the company is presently insolvent. I consider that there is a reasonable likelihood that a court would not approach any application for a winding up order on the just and equitable ground or for oppression with the reluctance sometimes associated with applications to wind up solvent companies. 
[43]	In approaching the question as to whether there is urgency and sufficient reason for intervention prior to the final hearing of the winding up application, the following matters are in my consideration particularly relevant:
(a)	As I have indicated, I consider that the evidence before me demonstrates serious concerns and issues in relation to the solvency of the company. On the basis of the evidence, I consider it more likely than not that the company is presently insolvent;
(b)	The company apparently intends to continue to trade in a business in which, according to Mr Bell, the nature of the business “relies heavily on credit accounts for the supply of consumables”. The evidence has not included any financial records or books of account. There is no basis in the evidence for a conclusion that credit accounts with suppliers are likely to be honoured in the immediate future; 
(c)	Since the service of the notice of exercise of power of sale dated 12 November 2021, the secured properties are at risk of being sold. The property situated in Ripley is the residence of Mr Bakshi and is also the office of his real estate business which employs five employees;
(d)	The financial position of the company seems to be steadily deteriorating without any explanation as to how its existing and continuing tax obligations will be met and how any existing and continuing obligations to its employees will be met. 
[44]	The company submitted that the appointment of a provisional liquidator would constitute an event of default within the meaning of clause 6 of the loan agreement entitling the lender, amongst other things, to appoint a receiver pursuant to clause 7 of the loan agreement. In my assessment this is not a significant consideration in circumstances where the evidence establishes that, by reason of the failures to pay interest and to repay the Debt within 12 months of the Advance Date, the company has already committed events of default and is already exposed to the prospect of a receiver being appointed. Further, the company submitted that the appointment of a provisional liquidator would be futile because the lender could be expected to immediately appoint a receiver and manager over the assets of the business pursuant to the loan agreement. I do not accept that the evidence establishes that the appointment of a receiver and manager would be inevitable in circumstances of the appointment of a provisional liquidator. There was no evidence adduced from any representative of the lender and the correspondence which has passed between the lender’s solicitors and the applicant’s solicitors appears to suggest that the lender has not confirmed its intentions in the event of the appointment of a provisional liquidator. 
Orders
[45]	Upon Ajay Bakshi giving the usual undertaking as to damages, the orders of the Court are that:
1.	Pursuant to s 472(2) of the Act, Terry John Rose of SV Partners Insolvency (Qld) Pty Ltd, 22 Market Street, Brisbane, Queensland, 4000 be appointed as provisional liquidator to the defendant, 52 The Esplanade Pty Ltd;
2.	The provisional liquidator shall, within 14 days of his appointment, provide to the Court and to the plaintiff, 100 Brisbane Street Pty Ltd, a report as to the provisional liquidation of the defendant, including:
a.	The identification of the assets and liabilities of the company;
b.	An opinion as to the solvency of the company
c.	An opinion as to the value of the assets of the company;
d.	The likely return to creditors of the company; and
e.	Any other information necessary to enable the financial position of the company to be assessed;
3.	Liberty to apply.