Affidavits of continuing debt in winding-up proceedings

The Full Court of the Federal Court of Australia has delivered an important decision which clarifies what is required to be stated in an affidavit of continuing debt filed in support of winding-up proceedings. In Deputy Commissioner of Taxation v National Skin Institute (Aust) Pty Ltd [2012] FCAFC 2 dealt with the admissibility of three paragraphs in the affidavit filed on behalf of the plaintiff in support of the application to wind up the defendant company.

The court held that the three paragraphs in the affidavit complied with both the Corporations Act 2001 (Cth) and the Court Rules, and therefore ordered that the defendant company be wound up in insolvency.

This case demonstrates that in order to satisfy s459Q of the Act, an affidavit is only required to formally affirm on oath that a certain amount of money is due and payable. In other words, the affidavit does not need to prove, by evidence, the existence of the debt. Additionally, this decision confirms that preparation of affidavits that are not in dissimilar terms to the form of affidavit provided in schedule 3 to the Rules will satisfy the requirements of s459Q of the Act.