148 Brunswick Street Pty Ltd v 5G Network Operations Pty Ltd [2026] QSC 76

SUPREME COURT OF QUEENSLAND CITATION: 148 Brunswick Street Pty Ltd v 5G Network Operations Pty Ltd [2026] QSC 76 PARTIES: 148 BRUNSWICK STREET PTY LTD AS TRUSTEE FOR THE 148 BRUNSWICK STREET DISCRETIONARY TRUST ACN 117 914 664 (applicant) v 5G NETWORK OPERATIONS PTY LTD ACN 620 305 393 (respondent) FILE NO/S: BS No 4573 of 2025 DIVISION: Trial Division PROCEEDING: Originating Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 22 April 2026 DELIVERED AT: Brisbane HEARING DATE: 2 April 2026 JUDGE: McCafferty J ORDER: 1. The applicant has leave to amend its originating application in the form attached to its submissions filed by leave on 2 April 2026. 2. The application for leave under s 459P of the Corporations Act 2001 (Cth) is dismissed. 3. The originating application is dismissed. 4. I will hear the parties on costs. CATCHWORDS: CORPORATIONS — WINDING UP — APPLICATIONS FOR WINDING UP BY COURT — GENERALLY — where the respondent is a member of a group of companies owned or controlled by a parent company, in which the respondent is the primary operating entity — where the applicant commenced proceedings seeking orders winding up the respondent in deemed insolvency for a failure to respond to a statutory demand issued for a substantial disputed debt — where the applicant sought leave to amend its application at the hearing such that it now applies for winding up orders under s 459A of the Corporations Act 2001 (Cth) — where the only debt the subject of the amended application is a comparatively modest contingent debt arising from a costs order made in earlier -- 1 of 17 -- 2 litigation between the parties — where the respondent has deposited an amount sufficient to pay the contingent debt into its solicitors’ trust account — where the respondent’s parent company has provided a letter of financial support — where the commercial realities of the respondent’s corporate structure indicate that the parent company will continue to support the respondent in paying its debts as and when they fall due — where there are competing expert opinions as to solvency — whether there is a prima facie case that the respondent is insolvent — whether leave should be granted nunc pro tunc to the applicant to commence the proceeding as a contingent creditor — whether the originating application should be dismissed Corporations Act 2001 (Cth), s 95A, s 295, s 459A, s 459C, s 459P, s 459P(2), s 459P(3), s 465B Australian Securities and Investments Commission v Bilkurra Investments Pty Ltd [2016] FCA 371, cited Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1, cited Chan v First Strategic Development Corporation Limited (in liq) [2015] QCA 28, cited Emanuele v Australian Securities Commission (1997) 188 CLR 114; [1997] HCA 20, cited In the matter of Leasing Holdings Pty Ltd (formerly Charlie Lovett Pty Ltd) [2015] NSWSC 771, cited International Cat Manufacturing (in liq) v Rodrick [2013] QCA 372; (2013) 97 ACSR 200, cited Low v Joondalup Golf Management (Aust) Pty Ltd [2023] WASCA 33, considered Masri Apartments Pty Ltd v Perpetual Nominees Ltd [2004] NSWCA 471; (2004) 214 ALR 338, considered Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 17 ACSR 187, considered National Australia Bank Ltd v Market Holdings Pty Ltd [2001] NSWSC 253; (2001) 161 FLR 1, cited North Ganalanja Aboriginal Corporation v The State of Queensland (1996) 185 CLR 595; [1996] HCA 2, cited Re Slodyczka & Farren Pty Ltd [2022] VSC 19, cited Re Testro Brothers Consolidated Ltd [1965] VR 18, cited Staatz v Berry, in the matter of Wollumbin Horizons Pty Ltd (in liq) [2018] FCA 1090, distinguished COUNSEL: C J Jennings KC with A L Morrow for the applicant E J Goodwin KC for the respondent SOLICITORS: PHV Law for the applicant AJ & Co Lawyers for the respondent -- 2 of 17 -- [1] The applicant, by an originating application, seeks orders that the respondent (5GNO) be wound up in insolvency under s 459A of the Corporations Act 2001 (Cth).1 To do so, the applicant requires leave under s 459P(2) and, assuming leave is granted, it must prove that 5GNO is, in fact, insolvent. [2] To maintain its application, the applicant requires leave to amend its originating application. Subject to the payment of costs thrown away, leave to amend is not opposed by 5GNO. It does, however, oppose the grant of leave under s 459P and the orders sought under s 459A. [3] It is appropriate that the applicant be given leave to amend its originating application. However, for the reasons that follow the application for leave to commence the proceedings under s 459P(2) is refused and the application to wind up 5GNO is dismissed. The originating application and proposed amendments [4] The proceeding was commenced on 9 October 2025. Originally, it sought an order winding up 5GNO in deemed insolvency as provided for by s 459C of the Act for a failure to respond to a statutory demand issued in March 2025. The statutory demand related to a series of unpaid invoices for rent and other expenses associated with the leasing of premises by the applicant to 5GNO. The statutory demand was for $5,144,115.31. Of this amount, $4,556,770.44 was disputed by 5GO (the disputed debt). That remains the position. [5] The statutory demand had some history to it. Aspects of it were ventilated in submissions and evidence filed at earlier stages of the proceeding. That history has, with one exception, lost relevance as the applicant no longer relies on the statutory demand in support of its application. This has a further consequence: reliance on the statutory presumption of insolvency cannot be maintained. [6] The exception is an application 5GNO made to set aside the statutory demand in the Supreme Court of Victoria in April 2025. In July 2025 the application was dismissed, by consent, with orders that 5GNO pay the applicant’s costs (Costs Order). This event remains relevant to this proceeding because the Costs Order is the basis upon which the applicant seeks leave, under s 459P(2), to maintain the application under s 459A of the Act. [7] This requires the applicant to amend its originating application. An oral application to amend was made on the day of the hearing. It was accompanied by a draft amended application. Other than formalising its abandonment of reliance on the failure to respond to the statutory demand, there are two proposed amendments. The first is to seek leave nunc pro tunc to commence the proceeding to wind up 5GNO under s 459P(2). The power to grant leave in this manner is uncontroversial. A failure to obtain leave before the proceeding is a defect or irregularity which may be cured by granting leave nunc pro tunc.2 The second amendment is to include the positive allegation that 5GNO is in fact insolvent. 1 All references to sections and provisions within these reasons are to the Corporations Act 2001 (Cth), unless otherwise indicated. 2 Emanuele v Australian Securities Commission [1997] HCA 20; (1997) 188 CLR 114 at 125; Re Testro Brothers Consolidated Ltd [1965] VR 18 at 33–5. -- 3 of 17 -- 4 [8] Both proposed amendments are, in a practical sense, procedural formalities. The applicant had foreshadowed an intention to rely upon the Costs Order as a basis for standing under s 459P(2) and to raise a positive allegation of insolvency in written submissions and evidence filed in January 2025. This was appropriately recognised by 5GNO. Subject to the payment of costs thrown away, which was not resisted by the applicant, 5GNO does not oppose the amendments. It does, however, oppose the grant of leave under s 459P and, unsurprisingly, the relief sought. [9] Before considering the substantive issues raised, it is necessary to set out some factual background. Background [10] 5GNO provides IT services, including servers and data storage services to its customers. It is a wholly owned subsidiary of 5G Networks Limited (5G), a publicly listed company. [11] There are other companies owned or controlled by 5G. Together these entities form the 5G Group, a consolidated entity within the meaning of s 9. In that capacity, and by reason of an executed deed of cross-guarantee, the 5G Group are authorised to prepare and lodge financial statements on a consolidated basis. [12] The deed of cross-guarantee is intended to protect creditors that will not have access to each company’s financial reports to assess their individual financial positions. Its effect is that each entity within the 5G Group has entered into a covenant with the holding entity, 5G, to guarantee payment in full of any debts to creditors of each party to the deed. [13] The practical consequence of these arrangements is that each entity within the 5G Group is not required to prepare separate accounts for external financial reporting purposes. It is however a requirement under s 295 that a consolidated entity disclosure statement be provided as part of the reporting entity’s financial reports for a financial year. [14] The evidence, which is unchallenged, is that 5G and 5GNO are deliberately structured to operate together. 5G is the holding vehicle and listed entity for the 5G Group. 5GNO is the operating entity that executes all activities on behalf of the 5G Group. 5G and 5GNO are also functionally intertwined. In practical terms, 5GNO is the 5G Group’s primary operating entity. It also pays all expenses incurred by 5G and on 5G’s behalf. The two entities also share a centralised treasury, centralised finance and unified cash management. [15] The most recent financial reports available are the consolidated interim financial reports of the 5G Group for the half-year ended 31 December 2025 (consolidated half year interim reports). The reports have been reviewed by Grant Thornton. They record a net loss for that period of $6,428,000. The net asset position for that period was $34,794,000. There is no evidence that this has materially changed. [16] 5GNO has no outstanding payments owing to the Australian Tax Office (ATO) and is up to date with its lodgements. All other leases to which 5GNO and the other 5G Group entities are parties are paid and up to date. No other statutory demands have been received by 5GNO, nor by any other entity within the 5G Group. -- 4 of 17 -- 5 [17] Immediately prior to the hearing, 5GNO had substantial cash holdings in its bank accounts. The provenance of these funds was from the sale of an asset by 5G in May 2024. It will be necessary to return to this later. For present purposes, the balance of 5GNO’s savings account exceeds AUD$10,500,000. It also has a term deposit of AUD$2,925,000. This amount is held as security for bank guarantees associated with property leases. [18] At an operational level, consistent with the structure of the group, the funds in the 5GNO savings account can be used by 5GNO. This includes for the purpose of paying the disputed debt, if required. This was the evidence of the Chief Financial Officer for 5G and 5GNO, Kieran Donovan, who also provided evidence that 5G wishes to ensure 5GNO is and remains solvent. Mr Donovan also identified that 5GNO contributes 93.1 per cent of the total revenue of the 5G Group, excluding another entity, AuCyber. This evidence was also not challenged. [19] The Managing Director of 5G and 5GNO, Joseph Demase, gave evidence that 5GNO has the support of 5G in the form of a letter of financial support dated 21 October 2025 (letter of support). It provides, relevantly; “ … 2. [5G] agrees that if [5GNO]: (a) has a liability that is due and payable (including but not limited to any liability that [5GNO] has under the Deed of Cross-Guarantee) (Relevant Liability); (b) does not have the funds to pay the Relevant Liability (whether in whole or in part); and (c) would be insolvent within the meaning of section 95A … in the absence of further funding, [5G] will provide sufficient funding to fully financially support [5GNO] in ensuring that [5GNO] will at all times be able to discharge any Relevant Liability. … 4. [5G] acknowledges that the matters set out in this letter are intended to be legally binding upon [5G] in favour of [5GNO]. 5. [5G] agrees not to dispose of its shares in [5GNO] prior to the final resolution of [the proceedings] by settlement or court order, including any appeals. …” [20] Mr Demase was cross-examined. He accepted that the letter of support was provided for the purpose of this proceeding, but his evidence was that there is no intention of withdrawing the letter of support and that it will remain in place for the foreseeable future, until at least the resolution of this proceeding. [21] It is also relevant to record that during the hearing, Senior Counsel retained by the respondent offered an undertaking to the Court on behalf of 5G to the effect that 5G and all other entities within the 5G Group would not demand or require payment of -- 5 of 17 -- 6 any loans made by them to 5GNO for a period of 6 months from the date of the undertaking or until further order of the Court (whichever is earlier). The applicant’s standing under s 459P [22] Section 459A of the Act provides: “459A Order that insolvent company be wound up in insolvency On an application under section 459P, the Court may order that an insolvent company be wound up in insolvency.” [23] This provision confers jurisdiction on the Court to order a winding up in insolvency.3 Section 459P identifies the eligible candidates who may make the application, some of whom require leave to do so. It provides: “459P Who may apply for order under section 459A (1) Any one or more of the following may apply to the Court for a company to be wound up in insolvency: (a) the company; (b) a creditor (even if the creditor is a secured creditor or is only a contingent or prospective creditor); (c) a contributory; (d) a director; (e) a liquidator or provisional liquidator of the company; (f) ASIC; (g) a prescribed agency. … (2) An application by any of the following, or by persons including any of the following, may only be made with the leave of the Court: (a) a person who is a creditor only because of a contingent or prospective debt; (b) a contributory; (c) a director; (d) ASIC. (3) The Court may give leave if satisfied that there is a prima facie case that the company is insolvent, but not otherwise. (4) The Court may give leave subject to conditions. (5) Except as permitted by this section, a person cannot apply for a company to be wound up in insolvency.” 3 Low v Joondalup Golf Management (Aust) Pty Ltd [2023] WASCA 33 (“Low”) at [57]. -- 6 of 17 -- 7 The requirements for leave under s 459P(2) and (3) [24] The requirement for leave is “undergirded by policy considerations”.4 In Masri Apartments Pty Ltd v Perpetual Nominees Ltd5, Beazley JA (as her Honour then was, and with whom Spigelman CJ and Mason P agreed) identified some of these considerations relevant to a grant of leave under s 459P as follows (emphasis added):6 “In my opinion, this also follows from the policy that underlies the need for a specified group of eligible applicants to obtain the leave of the court. Liquidation is a serious, indeed fatal step, in the life of a company. It is not a means of debt collection. Rather, in the case of insolvency, it is a means whereby creditors and potential creditors are protected from the continued trading by a company that is unable to pay its debts as they become due. The legislature could not have meant to allow that step to be taken by a party whose debt was not presently due as in the case of a prospective creditor, or which may not become due in the case of a contingent creditor, unless there was good reason to do so. That ‘good reason’ is where the company is insolvent. Thus, the Court may not grant leave to an entity falling within sub-s 2 unless it is ‘satisfied that there is a prima facie case that the company is insolvent, but not otherwise’. There are a number of reasons why the section limits the grant of leave, not the least of which is that otherwise, a prospective or contingent creditor could use the section as a means of pressure or harassment. The same might be said of a contributory or a director. By requiring that these parties obtain leave, the legislature ensures a system whereby the purpose for which the section was enacted, that is, that insolvent companies not trade, is appropriately applied.” [25] The grant of leave for a person falling within s 459P(2) is also informed by s 459P(3). Its operation was described by Buss P and Murphy JA in Low as follows:7 “By s 459P(3), the court may give leave if satisfied that there is a prima facie case that the company is insolvent, but not otherwise. The applicant bears the onus of demonstrating that leave ought to be granted. The effect of s 459P(3) is that (1) leave will not be granted if the court is not satisfied that there is a prima facie case that the company is insolvent, and (2) even where there is a prima facie case that the company is insolvent, the power to grant leave is discretionary, and there remains a residual discretion to decline leave. In the latter regard, other relevant considerations must be determined from the subject matter, scope and purpose of s 459P read within the context of div 1 of pt 5.4 of the Act. As to the former matter (whether there is a prima facie case), an applicant for leave will be assisted by virtue of s 459C(1)(b) if the statutory presumption of insolvency under s 459C(2) applies.” (emphasis added, citations omitted) [26] This statement is consistent with the statutory language of s 459P(2) and (3): an applicant who requires leave must, as a mandatory requirement, satisfy the court that 4 Low at [66]. 5 [2004] NSWCA 471; (2004) 214 ALR 338 (“Masri”). 6 Masri at [49]–[50]. 7 Low at [67]. -- 7 of 17 -- 8 a prima facie case of insolvency exists before leave can be granted. Even then, it must also satisfy the court that leave should, as matter of discretion, be granted. This discretion is obviously separate to the court’s discretion in the exercise of its jurisdiction to order that a company be wound up in insolvency conferred by s 459A. Should leave be granted under s 459P(2)? [27] The applicant is a person eligible to apply for leave under s 459P(2)(a). It is a creditor because of a contingent debt. There is no dispute as to the nature of the contingent debt.8 It is the Costs Order. While the order has not been assessed or taxed9 the applicant’s solicitors estimate that the amount owing by 5GNO is between $40,000 to $60,000. There is no reason to doubt the accuracy of this estimate: it is made by someone who should be taken to have intimate knowledge of the matter. [28] The day prior to the hearing, 5GNO deposited $70,000 into its solicitors’ trust account to be held for the purpose of paying the Costs Order, subject to agreement being reached as to quantum or assessment. The applicant’s solicitors are aware of this. [29] The mere status of a contingent creditor is an insufficient basis for the grant of leave. The applicant must satisfy the court that there is a prima facie case that 5GNO is insolvent. [30] To meet this threshold, the applicant contends it must demonstrate a case which, on the material before the Court, is sufficiently arguable. The evidential basis it identifies is the existence of two competing expert opinions as to solvency. These opinions, which are considered below, are from Mr Brennan, retained by the applicant, and Mr Connolly, retained by 5GNO. The existence of a contest between experts on the issue of solvency, is, in the applicant’s submission, sufficient to meet the threshold of a prima facie case for the purposes of s 459(3). The test for insolvency [31] Section 95A defines insolvency for the purposes of s 459A. It provides: “(1) A person is solvent if, and only if, the person is able to pay all the person's debts, as and when they become due and payable. (2) A person who is not solvent is insolvent.” [32] The question of solvency is to be determined at the date of hearing.10 It is not an exercise of clairvoyance. The practical operation of the statutory test under s 95A was explained by Black J in In the matter of Leasing Holdings Pty Ltd (formerly Charlie Lovett Pty Ltd)11 as follows: “Whether the Company has established its solvency is to be determined by reference to the statutory test in s 95A(1) of the Corporations Act which has effect that, relevantly, the Company is solvent if and only if it is able to pay all its debts as and when they become due and payable. Section 95A(2) has effect 8 See National Australia Bank Ltd v Market Holdings Pty Ltd (2001) 161 FLR 1 at [133]-[134]. 9 The nomenclature still retained in Victoria. 10 Australian Securities and Investments Commission v Bilkurra Investments Pty Ltd [2016] FCA 371 at [60]. 11 [2015] NSWSC 771. -- 8 of 17 -- 9 that a person who is not solvent is insolvent. That definition adopts a cashflow test of insolvency that turns upon the income sources available to the Company and the expenditure obligations that it has to meet, rather than a balance sheet test which would focus on the value of its assets and liabilities, although a balance sheet test can provide context for the application of the cashflow test …. Whether the Company is able to pay its debts as and when they fall due and payable is a question of fact to be determined objectively in all the circumstances, including the nature of the Company’s assets and business, and the court will have regard to commercial realities in that regard … In order to displace the presumption arising from non-compliance with the Demand, the Company must generally present the ‘fullest and best’ evidence of its financial position, and that unaudited accounts, unverified claims of ownership or valuation, or assertions of solvency arising from a general review of the company’s accounts would not generally be sufficient for that purpose…”12 (emphasis added, citations omitted) [33] Commercial realities cannot be disregarded. The position of the company under scrutiny must, as Morrison JA (with whom Gotterson JA and Boddice J (as his Honour then was) agreed) observed in Chan v First Strategic Development Corporation Limited (in liq)13: “ … be considered by reference, not only to its legal rights and obligations, but also to the relative likelihood that it will have funds available to it, albeit from sources in respect of which there is no formalised agreement or understanding. Those sources might include consideration of the prospect of loans from related corporations or directors.” (citations omitted) [34] In Chan Morrison JA also considered what is required in a case where financial support is being provided by a related entity, where there is no formalised agreement or understanding. As to this, his Honour said:14 “ … what is required is cogent evidence which enables the court to conclude that there is such a degree of commitment on the part of the provider of the financial support to continue it, such that it can be said that at any point of time it was likely to be continued, with the result that, at any of those times, the company was able to pay its debts as and when they fell due.” The meaning of prima facie case of insolvency? [35] The phrase “prima facie case” can have shades of meaning in a particular statutory context. Its ordinary meaning is “at first sight; on the face of it; as appears at first sight without investigation.”15 Not uncommonly in the context of civil litigation, the phrase is considered at the infant stages of litigation where there is yet to be a hearing 12 Ibid at [52]. 13 [2015] QCA 28 (“Chan”) at [40]. 14 Chan at [44]. See also International Cat Manufacturing (in liq) v Rodrick [2013] QCA 372; (2013) 97 ACSR 200 at [105]-[108]. 15 North Ganalanja Aboriginal Corporation v The State of Queensland [1996] HCA 2; (1996) 185 CLR 595 at 615–616. -- 9 of 17 -- 10 on the merits. Obvious examples are injunctions and applications where leave is required to serve proceedings out of a court’s jurisdiction. In these situations, the focus is on the existence (or otherwise) of a foundation for an arguable case and whether there is a probability that at the trial of the proceeding the moving party will be entitled to relief.16 [36] There is an artificiality in the process in situations where the Court is considering the question of a prima facie case in the context of a final hearing. The point was alluded to by Lindgren J in Melbase Corporation Pty Ltd v Segenhoe Ltd:17 “The meanings of threshold requirement, utilising such expressions as ‘prima facie’ and ‘prima facie case’ have been discussed in different contexts, for example, in the context of the granting of leave to serve originating process outside the Commonwealth (cf O 8 r 2(2)(c) of the Federal Court Rules and the cases decided on that provision). Under s 459P(3), the first question to arise is whether the evidence relied on by the applicant, if accepted on a final hearing, would establish insolvency. A further but related question may arise as to how countervailing evidence relied on by the respondent company is to be treated. Clearly, the determination called for by s 459P(3) is of a preliminary nature and is to be distinguished from the determination as to insolvency called for on a final hearing. In Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 (Beecham), the High Court said that a plaintiff seeking an interlocutory injunction was required to make out a prima facie case ‘in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief’ (at 622). In World Series Cricket Pty Ltd v Parish (1977) 16 ALR 181 (FCA/FC) (World Series Cricket) at 186 , Bowen CJ, after referring to this passage, said: ‘The strength of the [prima facie] case which the plaintiff must make out will depend upon the nature of the right which he is seeking to assert, and the consequences which will flow from the making of the interlocutory order. However, where the facts are seriously in dispute, the court will not undertake a preliminary trial of the action in order to forecast a probable result, but rather, if the plaintiff has a fair chance of success (and what will be required will vary according to the nature of the case), the court will proceed to look to the balance of convenience.’ … The word ‘may’ in s 459P(3) indicates that the court has a residual discretion whether to grant leave, even if it is satisfied that there is a prima facie case of insolvency. It follows that the applicant for leave must satisfy the court both that there is a prima facie case of insolvency and that leave should, as a matter of discretion, be granted. A question may arise as to whether particular factors are appropriately considered as relevant to the application of the ‘prima facie case’ test or to the subsequent exercise of discretion. The making of an application for winding up in insolvency, the publicity given to it (see s 465a of the Law and Form 519 16 Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 at 622. 17 (1995) 17 ACSR 187 at 190-191. -- 10 of 17 -- 11 under the Law; Federal Court Rules O 71, r 37(9) and Form 93) and the making by a contributory of the allegation that the company is insolvent are serious matters. But insolvent trading by a company is also a serious matter, particularly for its directors (see ss 588g-588u of the Law). Moreover, in a case such as this, in which the applicant will rely on the grounds set out in s 461 in any event and has standing as of right under s 462 to apply on those grounds, it may be thought that little additional injury is done to the company by reliance on the insolvency ground in addition, and by the revelation of that reliance in Form 519 under the Law to those interested enough to search at the Australian Securities Commission. Generally, in causes involving a threshold test similar to that, posed by s 459P(3), it is a relevant consideration that the test falls to be applied before interlocutory procedures of discovery and interrogatories and perhaps a full range of subpoenas to produce documents have been available to the party bearing the onus of establishing the prima facie case. Although these considerations may not apply with the same force where an applicant for leave under s 459P(3) is a director (since a director has a right of access to the company's records), they apply in the present case, Melbase being merely a holder of a small number of shares in Segenhoe (see later). In summary, the considerations to which I have referred do not point clearly to any particular or distinctive approach to be adopted in the application of the ‘prima facie case’ test under s 459P(3), either generally or in the particular circumstances of the present case. I think it appropriate to approach the question in conformity with the passages quoted earlier from Beecham and World Series Cricket.” [37] The “first question” and “further but related question” posed by Lindgren J in the passages above are valid points. There is, in his Honour’s observation, no particular or distinctive approach to be adopted in the application of the prima facie case test in s 459P(3). In practical terms, there must be a degree of flexibility or discretion involved in the application of the test. [38] In the circumstances of the present case, which is a final hearing, I have difficulty in adopting an approach to the question of a prima facie case under s 459P(3) in conformity with cases involving interlocutory injunctions. To do so, in my view, invites a wholly artificial approach. The artificiality of such a process is best demonstrated where, as is the case here, the same evidence is relied upon to establish a prima facie case as it is to prove insolvency, in fact. It cannot be the case that the consideration of s 459P(3) in the context of a final hearing should be bifurcated such that there is a determination of a preliminary nature which is distinct from the determination as to insolvency on a final hearing. Is there a prima facie case that 5GNO is insolvent? [39] Before considering this question there is one issue which, in my view, assumes some importance. It is the extent to which, if at all, the disputed debt is relevant to the question of leave under s 459P(2). [40] 5GNO contends that for the purposes of s 459P(2) the disputed debt is irrelevant. Its position is that the disputed debt can only be relevant if it is, in fact, a debt, which it -- 11 of 17 -- 12 is not. The applicant’s only basis for standing is as a contingent creditor who is owed up to (but not more than) $70,000. [41] In response to this issue, the applicant sought to rely upon the reasons of Derrington J in Staatz v Berry, in the matter of Wollumbin Horizons Pty Ltd (in liq)18 where his Honour observed that “it is difficult to think of a more obvious indicia of insolvency than the non-payment of the statutory demand.”19 It was contended that the noncompliance with the statutory demand in this case is a matter that could be taken into account for the purposes of s 459P. [42] In my view, 5GNO’s submission must be accepted. The observation of Derrington J in Staatz is undoubtedly accurate in the context in which it was made. But context is critically important. In the present case these observations do not, as 5GNO contends, inform the exercise of discretion for the purposes of s 459P(2). The disputed debt does not have the status of a debt. 5GNO continues to dispute the debt. [43] The consequence is that that the disputed debt is to be disregarded for the purposes of s 459P.20 It cannot be characterised as a debt, let alone one that is owing. This creates a fundamental problem for applicant. It has the necessary consequence that on no view, on the basis of the applicant’s status as a contingent creditor owed not more than $70,000, can it establish a prima facie case that 5GNO is insolvent under s 459P(3). [44] I find that is the case regardless of whether one adopts the approach in conformity with the injunction cases referred to by Lindgren J or the approach I think preferable on a final hearing, being a proper consideration of the evidence. As to the former, the fact that $70,000 is held in 5GNO’s trust account, which exceeds the amount owing to it, is a complete response that debunks an allegation of insolvency. The latter requires a consideration of the evidence. Aspects of this have considered above. What is yet to be considered is the expert evidence. The expert evidence Mr Brennan [45] The applicant invites the finding that as a matter of commercial reality 5GNO is unable to pay its debts as and when they become due and payable. The invitation is made, primarily, in reliance on Mr Brennan’s second report. An earlier report prepared by Mr Brennan offered the qualified opinion that 5GNO was solvent. In his second report, that opinion has changed. [46] Before considering some aspects of Mr Brennan’s second report it must be noted than under cross-examination Mr Brennan accepted that as at 9 October 2025, 5GNO would have been able to pay a debt of $70,000. Mr Brennan had not been asked to address this in his reports. That is because they had been prepared at the time before the amendments to the application when the statutory demand remained its primary focus. Mr Brennan was instructed to proceed on the basis that the disputed debt is due and payable. That, of course, is no longer a correct assumption. In any event, Mr 18 [2018] FCA 1090 (“Staatz”). 19 Staatz at [26]. 20 A similar conclusion was reached on the question of standing under s 459P in Re Slodyczka & Farren Pty Ltd [2022] VSC 19 at [78], in the context of s 459S. -- 12 of 17 -- 13 Brennan accepted that at the date of the hearing 5GNO, on the assumption that it had available to it the balance of the savings account, could pay the disputed debt. [47] Within his second report, Mr Brennan considers that 5GNO is insolvent based upon the following matters: (a) 5GNO’s solvency is materially dependent upon the solvency and financial capacity of the 5G Group; (b) Further material provided to him (including the consolidated half year interim report, affidavits filed in the proceedings by Mr Donovan and Mr Demase, and the 5G results presentation for the financial year 2026) demonstrates a significant deterioration in the 5G Group’s cash reserves, net assets and trading performance, and does not support any conclusion that 5G is capable of providing continuing financial support to 5GNO; (c) He has not been provided any explanation as to how the funds held in 5GNO’s bank accounts are beneficially owned by it, there is no evidence establishing the source or ownership of the funds, and there is a risk, arising from the centralised treasury structure, that these funds may be subject to competing claims by other entities within the 5G Group; (d) The funds held in 5GNO’s bank accounts are not beneficially owned by it and “the potential liability that is repayable on demand, exceeds the funds currently held and reasonably likely to be available to [5GNO] from any source”; (e) The letter of support is not, in accordance with his instructions, legally enforceable; and (f) There is no reliable basis to conclude that discretionary support, consistent with the tenor of the letter of support, would be provided or could be sustained. [48] Mr Brennan placed some significance on the fact that 5GNO had certain debts that were not, on his assessment of matters, recorded, disclosed or otherwise known to him in preparing his first report (undisclosed debts). These debts comprised a liability to the ATO of $1,507,797.04, a judgment debt of $1,259,446.51, a costs award in an unquantified amount, working capital obligations of $800,000 and share buy-back costs of $1,226,952.32. Mr Brennan accepted however that each of the undisclosed debts, with the exception of working capital, were not recurring obligations. [49] Mr Brennan also placed significance on what he considered to be a lack of evidence corroborating the statement made by Mr Donovan in an affidavit that the funds in 5GNO’s accounts were beneficially owned by it and there are no inter-company loans. [50] Mr Brennan accepted that it is in 5G’s commercial interests to avoid 5GNO being wound up. He did not accept that the deed of cross-guarantee is of value in assessing whether 5GNO is insolvent. He explanation was, in substance, that the cross- guarantee cannot be relied upon until 5GNO is in liquidation. In other words, while it may provide reassurance to creditors, it does not provide value in assessing whether 5GNO is able to pay all its debts as and when they become due and payable under s 95A. -- 13 of 17 -- 14 [51] In strict terms, Mr Brennan might be correct when considering s 95A. That does not mean the existence of the cross-guarantee is not relevant. To my mind, it is relevant in assessing the commercial realities and, specifically, one of the realities which Mr Brennan accepted: it remains in 5G’s interest that 5GNO remains solvent. Mr Connelly, whose opinion I will consider below, made a similar point: the cross- guarantee is not put in place with liquidation in mind, but rather to create confidence that liquidation is not intended and is to be avoided. Mr Connelly [52] Mr Connelly has provided three reports. His view is that 5GNO is solvent. [53] Like Mr Brennan, in each of his reports he was instructed to assume that the disputed debt was a liability of 5GNO. He was also instructed to assume the funds held in the savings account were available to 5GNO. [54] In Mr Connelly’s view, a sensible approach in considering a company’s solvency is to consider three sequential questions. First, whether the company is currently paying its debts as and when they become due and payable. Second, if it is not, whether the company could pay its debts as and when they become payable from its own resources. Third, if it could not, whether the company could pay its debts as and when they become due and payable from external resources or by raising funds by way of debt or equity against its assets. If any of these questions is answered in the affirmative, the company is likely solvent. If all three questions are answered in the negative, the company is likely insolvent. [55] Mr Connelly’s opinion is that in the case of 5GNO all three questions are answered in the affirmative. He also undertook an analysis of 5GNO’s solvency based on the cash flow test. The approach he took to this was to examine liquid assets available to meet due and payable debts, then ascertain the due and payable debts (including the disputed debt) required to be met from those assets to determine whether 5GNO can meet its debts. [56] Consistent with this, Mr Connelly’s analysis was as follows. The cash balances available to 5GNO (in the savings account) exceeded AUD$11,000,000 (he excluded the term deposit held as a bank guarantee). Its accounts receivable recorded receivables of $4,321,536.10 as at 28 February 2026, and there was in his opinion no material bad debt risk to 5GNO. The accounts payable by 5GNO as at 28 February 2026 were $3,387,584.34. Mr Connelly also considered that over the five-month period from 30 September 2025 to 28 February 2026, the overall total monthly value of receivables exceeded the total value of payables, with the exception of one month. Notably, in the data most recently made available to him (as at 28 February 2026), accounts receivable exceeded accounts payable by approximately $934,000. [57] Overall, Mr Connelly’s opinion was that there is a significant surplus of approximately $4,416,050.03 when considering both the due and payable debts (including the disputed debt) and the liquid assets available to meet them. On this basis, he considers 5GNO solvent and that it is not likely to become insolvent within the short to medium term. [58] Mr Connelly’s approach to solvency and his views as to 5GNO’s solvency were not the subject of challenge. The focus of Mr Connelly’s cross-examination was on the -- 14 of 17 -- 15 financial classification of funds held by 5GNO owing to their provenance, 5G. This is a matter which, as I have outlined, Mr Brennan placed some emphasis on. [59] On the classification of the funds, Mr Connelly accepted as a general proposition that funds advanced by one company to another, and assuming there are no other arrangements in place and no existing accounting in place, good accounting practice would be to raise a loan. On this hypothesis, Mr Connelly’s view was that if 5G were in a position to demand the repayment by 5GNO of funds it had advanced to it (estimated at approximately $32.91 million) then 5GNO would likely be immediately insolvent and may be wound up. [60] This view is not however to be considered in the abstract. Mr Connelly considered that such an event may end in the catastrophic failure of 5G and the other parties to the cross-guarantee. In his third report, Mr Connelly said that such a course would not accord with commercial realities. He also gave oral evidence to this effect. Mr Connelly also gave evidence that in his experience it is common for corporate groups to have a treasury company which raises funds, or which holds funds, which are then made available to the group. In his opinion, it would be unusual for the head company in a corporate group structured this way to either require or demand the return of funds (and particularly so where the head company is a listed entity). Consideration [61] The grant of leave under s 459P requires the court to be satisfied that there is a prima facie case that 5GNO is insolvent. Even if that is established, there remains a residual discretion under s 459P to decline leave. Quite apart from the grant of leave, the jurisdiction conferred by s 459A, to wind up a company in insolvency—a serious, and indeed fatal, step in the life of a company—is itself a discretionary matter. It may be exercised even if a creditor has standing, as a right or by leave, under s 459P. [62] 5GNO does not of course bear any onus of proving solvency. It is for the applicant to prove a prima facie case of insolvency for the purposes of standing under s 459P, and that 5GNO is in fact insolvent for the purposes of s 459A. [63] In assessing whether 5GNO is insolvent for the purposes of leave under s 459P or, for that matter, 459A, it is in my view clear that 5GNO can pay its debts as and when they fall due. This includes the $70,000 debt, being the only basis upon which the applicant can claim status as a contingent creditor. But it would also include the disputed debt, accepting, as I have found, that it is not relevant to the question of leave under s 459A. This is consistent with the opinions expressed by both Mr Brennan and Mr Connelly. I am therefore satisfied that 5GNO is solvent. [64] To the extent it is necessary, I accept the opinion on solvency expressed by Mr Connelly. That includes his analysis of the cash flow test and his evidence of the commercial realities. Mr Brennan’s analysis, without intending disrespect, does not in my view consider the commercial realties unique to 5GNO and the 5G Group. Those realities cannot be disregarded. [65] In this case, those realities include the structure of 5GNO and the 5G Group as outlined above. The central features of this structure are that 5GNO is the primary operating entity. It shares a centralised treasury, with centralised finance and unified cash management. Even accepting that the source of its funds is 5G, there can be no -- 15 of 17 -- 16 sensible suggestion that 5G will somehow make a demand for repayment of monies it has advanced. To begin with, there is no evidence that there is a loan. But in any event, the is no evidence of an intention of 5G making a demand for “repayment”. The commercial reality is that 5G has every interest in ensuring 5GNO remains solvent and continues to operate consistently as it has. [66] Even if there is no formalised agreement or understanding between 5G and 5GNO it is, in my view, likely that 5GNO will continue to receive funds from 5G and, therefore, have funds available to it. So much follows from the structure of the 5G Group and the evidence of Mr Demase and Mr Donovan outlined above. It also follows from Mr Connelly’s evidence and the existence of the cross-guarantees. Those guarantees might not, as Mr Brennan said, be relevant to s 95A. But they are relevant to a consideration of commercial realities for the reasons identified. I consider this to be cogent evidence which enables me to conclude that there is a sufficient degree of commitment on the part of 5G to maintain the status quo. This includes, to the extent necessary, 5GNO continuing to use funds from its savings account. This is not necessarily financial support in the orthodox sense, but rather a continuation of the structures of the 5G Group. [67] In view of this, it is unnecessary to make a finding as to the efficacy of the letter of support or to act on the undertaking 5G offered to the court on the date of the hearing. [68] The ultimate findings that I make, therefore, are that the applicant has not satisfied me that there is a prima facie case that 5GNO is insolvent. I have come to this conclusion regardless of which approach is adopted to the statutory meaning of “prima facie” case in the context of a final hearing and regardless of whether the disputed debt is considered a debt. [69] Even if I am wrong as to the correct approach toward the existence of a prima facie case of insolvency under s 459(3), I would, in any event, in the exercise of the residual discretion decline to grant leave. [70] The applicant, quite apart from the issue of a prima facie case, identified three discretionary considerations which favour the grant of leave nunc pro tunc under s 459P. The considerations are: (a) it has, since January 2026, been apparent that the applicant sought to establish standing and to wind up 5GNO on the basis that it is in fact insolvent; (b) the public interest is in ensuring that insolvent companies do not continue to trade and that their affairs are placed under the control of a liquidator as soon as possible; and (c) the ultimate relief sought by the applicant has not changed. [71] As to these matters, points (a) and (c) are, to my mind, matters relevant to the application to amend the originating process. It is not immediately apparent why they are relevant to a grant of leave under s 459P. As to point (b), that is of course relevant. But there is, in fact, no substance in the contention that 5GNO is insolvent. [72] Against these matters, there are several reasons why leave should not in any event be granted under s 459P in the exercise of the residual discretion. In the first place, the -- 16 of 17 -- 17 only basis for the applicant’s standing is a contingent debt, being the Costs Order. An amount in excess of the amount of that debt, even accepting it is yet to be assessed, has been placed in 5GNO’s solicitors’ trust account. 5GNO is able to pay that debt. It was able to when the proceedings were commenced. That the costs have not been assessed can only be attributable to the applicant. But in any event, the applicant’s persistence in seeking orders under s 459A to wind up a company on the basis of the Costs Order, in circumstances where the evidence is consistent with 5GNO having comparatively vast sums of money available to it to satisfy the order, should not be countenanced. Conclusion [73] It follows that the application for leave under s 459P should be dismissed. There is no substitute creditor. The court has power under s 465B to substitute a person who might otherwise have applied for the company to be wound up for the applicant in any application under s 459P. In the absence of substitution, the application to wind up 5GNO in insolvency should also be dismissed. [74] There is no reason why the costs of the proceeding should not follow the event. I will however hear the parties on the question of costs. -- 17 of 17 --