Peter and Debbie are the only directors and equal shareholders of South West Winery Pty Ltd. The business has been very successful and it has even received a few awards for its wines. In 2017 the directors decided to expand the winery. The production room was extended and a new wine tasting room and cellar were built. However, over the past few years the business has been struggling. With the oversupply of wines on the market, the company has not been able to reach its sales target. This has meant that South West Winery has not been able to pay its bills.

The company has the following debts that are due:

1. $60,000 to ABC Bank Ltd which is a secured loan that was obtained for the building extensions, and in the contract it there is a clause that states that in the event the interest cannot be paid ABC Bank Ltd can appoint a Manager Receiver to look after the company; and
2. $20,000 to Barrel Masters Ltd for wine barrels and bottling equipment.

Despite the debts owing, Peter and Debbie decide that they could possibly save the company by embarking on a strong marketing campaign to sell the companys award winning wines. The company enters into a contract with Smart Advertising Ltd to produce a TV advertisement for $30,000.

In the meantime, ABC Bank has notified South West Winery Pty Ltd that the interest payment has not been paid for the last two months and if they dont pay within two weeks then they will honour the clause in the contract.

REQUIRED:

With reference to the Corporations Act 2001 (Cth) discuss whether ABC Bank Ltd can appoint enforce the clause in the contract against South West Pty Ltd