In the matter of Nighthawks Aviation Operations Pty Ltd (No 2)

On 2 March 2026, I announced orders in this matter and gave reasons for those orders. Those orders were:

The orders have not been formally entered. Entry of orders is governed by r 36.11 of the Uniform Civil Procedure Rules 2005 (NSW). This rule relevantly provides that any judgment or order of the Court is to be entered and that unless the Court orders otherwise, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. That has not yet occurred in this case.

The defendant made an oral application today (foreshadowed yesterday) that I should not enter the orders and that, instead, the Court should order that the plaintiff’s application be dismissed. The basis for the application is that after I delivered my reasons yesterday, an amount of $84,626.65 was paid into the defendant's solicitor's trust account. That figure, I was informed, was arrived at by the amount of the statutory demand, being $34,626.65, plus a further $50,000 which would represent payment, at least in part, towards the legal costs of plaintiff. I was told that the defendant was unaware of the plaintiff's actual legal costs and that it was prepared to pay an amount to cover those costs, at least on the ordinary basis.

The Court has power under UCPR r 36.16 to vary an order if a notice of motion for the variation is filed before the entry of the order. In this case, no notice of motion was filed but an application was made orally. It was not suggested that I should not entertain the application because it was made orally. I accept that the Court has power to vary the orders that I announced yesterday in open Court prior to the entry of those orders.

The relevant principles that apply in this context are set out in the reasons of Mason CJ in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6. His Honour stated as follows (at 303):

Counsel for the defendant also took me to the reasons of Clarke JA (with whom Mahoney and Meagher JJA agreed) in Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471. In that case, Clarke JA was considering circumstances where a defendant, after the closing of its case and there being no case in reply, sought leave to re-open because its counsel realised he had made a mistake. Clarke JA stated the following (at 478):

None of the grounds identified by Mason CJ in Autodesk are relied upon in this case. Rather, the defendant effectively seeks to reopen its case to rely on developments that took place after I published my reasons.

I am prepared to accept that if the payment for the debt and provision for costs had been made prior to my delivery of reasons and, in particular, if it occurred prior to the hearing, which occurred on 25 and 26 February 2026, that would have been relevant to the exercise of my discretion as to whether to make orders winding up the defendant in insolvency.

In this case, the defendant made a forensic decision to wait until after my reasons to proffer the amount to pay the debt and anticipated legal costs. The defendant must have appreciated that the Court could have made the orders that I announced yesterday. That is because the orders granted the relief that was being sought by the plaintiff.

I do not accept that the defendant has shown exceptional circumstances that would justify revisiting and changing the orders that I announced.

I accept that the payment proposed by the defendant after I delivered my reasons would not be entirely without risk to the plaintiff. That is because if the defendant is wound up at some future time (within the relevant statutory period), there is the possibility that the payment could be deemed an unfair preference and at risk. This is a risk, but it is not altogether apparent to me that this risk is greater than the risk that the plaintiff currently faces in the circumstances of a winding up of the defendant.

The evidence demonstrated that the defendant has liabilities to Mr Kennedy and other related entities that would, I expect, be claimed on a winding up. It is not obvious that the plaintiff would be better off on a winding up compared to the risks that would flow if it now receives the outstanding debt, together with a payment of its costs. The defendant submitted that the plaintiff was acting unreasonably in not accepting the offer. While I am not prepared to come to that conclusion, I also take the view that there would seem to be some real justification in the plaintiff accepting the offer.

Nevertheless, in my view, it is inimical to the administration of justice that a party in the position of the defendant can wait until after reasons are delivered before taking steps, such as proffering payment of a debt, and then seek to have the Court revisit those reasons in light of that step. In making a forensic and tactical decision to wait until after my reasons to proffer payment, the defendant, in my view, has left it too late to be able to rely on that offer as a reason to resist the entry of the orders that have been announced in open Court, and to seek different orders instead.

If the defendant wished for me to take into account an offer to pay the debt and costs, they needed to make the offer certainly before I announced my orders, and probably prior to the hearing: see the reasons of Rees J in In the matter of GHS Safety Products Pty Ltd [2019] NSWSC 668 at [48]-[50].

I recognise the serious consequences of the orders for the defendant. I recognise that the outstanding debt is not a large one. I have found in my reasons that the defendant has not rebutted the presumption of insolvency and I have also concluded that the evidence would not otherwise have led me to a finding that the defendant is insolvent. In that respect, the position in this case is different to that considered by Rees J in GHS Safety Products Pty Ltd.

I also note that it is regrettable that so much time and expense has been incurred over what is a relatively modest debt. It is apparent that the legal expense significantly outweighs the amount of the debt.

For these reasons, I am not prepared to accede to the defendant’s application that I vary the orders that were announced (but not entered) yesterday. The orders that were announced will be entered. I will not order that the winding up application is dismissed.