It is commonly presumed that an order to wind up a company is an order set in stone and that nothing can be done to resurrect the fate of the company. However this is not true.

Justice Markovic in the recent case of Pugh v Pro Stainless Pty Ltd (in liq); in the matter of Pro Stainless Pty Ltd (in liq) [2015] FCA 1095 has outlined the circumstances in which the court will set aside or vary an order to wind up a company.

On 9 September 2015 District Registrar Wall made an order that Pro Stainless Pty Ltd (Pro Stainless) be wound up in insolvency.  However, that order was set aside by the Federal Court under rule 39.05 of the Federal Court Rules 2011 (Cth) (the Rules), which permits the court to set aside winding up orders made in the absence of a party.

Citing George Ward Steel Pty Ltd v Kizot Pty Limited (1989) 15 ACLR 46 his Honour indicated the following would need to be shown for the court to consider setting aside a winding-up order:

1. That the application to set aside the order has been brought promptly;
2. That notice of the application was given to the liquidator, the plaintiff and any other creditor who appeared at the initial hearing;
3. A good explanation was provided for non-appearance by the company at the hearing of the winding-up application;
4. That the company is likely solvent; and
5. That the liquidator has not found anything in his or her investigations showing reason for the company to be stopped from trading.

If these matters are shown, it is not guaranteed that the court will set aside the winding-up order, but at least the matter can be the subject of submissions.

For more information on setting aside a winding up order please view our previous article detailing applications to set aside winding-up orders or contact us.