Former Aviva Holdings director ordered to pay $1.18M after insolvent trading finding

A former director of Aviva Holdings Pty Ltd has been ordered to pay more than $1.18 million after the Federal Court found that the company traded while insolvent and that the director separately owed the company funds recorded through director loan accounts.

Justice Beach declared that Anshul Arora, the former sole director of Aviva Holdings, contravened section 588G(2) of the Corporations Act by failing to prevent the company from incurring unsecured debts totalling $370,076.21. The debts were owed to the Deputy Commissioner of Taxation, Alinta Energy Retail Sales Pty Ltd, Workcover Queensland and Blue NRG Pty Ltd.

Aviva Holdings was incorporated in April 2021 and placed into liquidation on 13 March 2025. Arora was its sole director throughout that period. The company appears to have previously operated The Tipsy Grill in Jimboomba, Queensland.

The liquidators, David Vasudevan and Timothy Bradd of Pitcher Partners, argued that Aviva failed to keep proper written financial records as required by section 286(1) of the Corporations Act. The Court accepted that the company’s records did not correctly record and explain its transactions, financial position and performance, and did not enable true and fair financial statements to be prepared and audited.

That failure allowed the liquidators to rely on the statutory presumption of insolvency under section 588E(4), which provides that a company that fails to keep or retain proper financial records is presumed insolvent throughout the relevant period in a recovery proceeding.

The Court found that, from at least 31 December 2022, Aviva progressively incurred unsecured debts that remained unpaid. During that period, the company did not have adequate cash in its bank accounts to pay creditors as and when debts fell due, and its cash deficiency against unsecured debts increased over time, ranging from $42,959.70 to $451,747.

Justice Beach found there were reasonable grounds for suspecting Aviva was insolvent when each of the debts was incurred. The Court also found that Arora was likely aware of those grounds, or that a reasonable person in his position would have been aware of them.

Arora did not file material opposing the insolvent trading claim.

The Court ordered Arora to pay $370,076.21 under section 588M of the Corporations Act, together with pre-judgment interest of $20,265.

The liquidators also succeeded on a separate debt claim arising from Aviva’s accounting entries for director loans. The Court accepted evidence that the company’s director loan accounts recorded total debits of $1,800,682.10 and credits of $1,053,123.52, leaving a net indebtedness of $747,558.58 owed by Arora to the company.

Arora had also failed to dispute a notice to admit served by the liquidators, which sought admission that he was indebted to Aviva in that amount. He did not file material opposing that claim either.

The Court ordered Arora to pay the additional $747,558.58, together with pre-judgment interest of $40,937. He was also ordered to pay the applicants’ costs.

Read the decision here.

Mark Dean of Lennon’s List and Batten Sacks Lawyers represented the liquidators.