From January 2015, Coffees R Us Pty Ltd (CRU), a small caf, has rented space from Strip Shop Retailers Pty Ltd (SSR) at a strip of shops on Smith St. A clause in the lease agreement between CRU and SSR limits SSR from leasing any of the other shopfronts in Smith St to a direct competitor of CRU.

As at September 2017, CRU had accumulated debt of $6000 to SSR in late rental fees. CRU argued that it had suffered loss of trade as a result of SSRs decision to rent space to another caf, Organic Coffee Culture Pty Ltd (OCC), two doors down from CRU in April 2017, and that it was justified in not paying rent because it had lost more than $6000 in trade due to this alleged breach of the lease agreement.

In October 2017, SSR served a statutory demand upon the registered office of CRU under section 459E of the Corporations Act 2001 (Cth). The registered office was the office of CRUs solicitors, however the companys regular solicitor was on leave and did not bring the demand to the attention of CRU until 30 days had passed from the date of service. The solicitor advised CRU that it was too late to bring an application to set aside the statutory demand but that, if SSR applied to wind up CRU, CRU could then oppose the application. CRU told its solicitor that it is not in a position to pay the $6000 claimed by SSR, but that it is able to meet all other debts as they fall due.

On the 15^th of November 2017, SSR filed an application to wind up CRU under section 459P of the Corporations Act 2001 (Cth) relying on the presumption of insolvency arising under the statutory demand procedure.

A. Advise Coffees R us Pty Ltd whether they can oppose SSRs application to wind up the company and on what basis. [12 marks]