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Federal Court of Australia · [2026] FCA 5

Dang, in the matter of JMJ Cosmetic

A Federal Court insolvency case about a sole director urgently seeking approval for a company in liquidation to review a winding-up decision.

Federal Court of Australia18 Feb 2026

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • Once a company is in liquidation, directors lose control over company powers unless the Corporations Act or the Court allows a specific step.
  • A Federal Court insolvency case about a sole director urgently seeking approval for a company in liquidation to review a winding-up decision.

Use this to check

  • Directors lose ordinary control once a company is in liquidation.
  • Review deadlines for winding-up decisions can be very short.
  • Claims that a company is solvent need evidence, not assertion.

Decision snapshot

  1. 1

    What happened

    • JMJ Cosmetic Pty Ltd had been wound up in insolvency by a Registrar's decision.
    • Huynh Bich Thuy Dang, the sole director of JMJ Cosmetic, wanted the company to apply for review of that decision.
    • The problem was that once the company was in liquidation, s 198G of the Corporations Act prevented her from exercising director powers for the company unless approval was obtained.
    • The review time limit was 21 days and was expiring that day.
  2. 2

    What the court had to decide

    • The Federal Court had to decide whether to grant approval under s 198G(3)(b) of the Corporations Act so the sole director could cause JMJ Cosmetic, a company in liquidation, to apply for review of a Registrar's winding-up decision.
    • The urgency came from the 21 day review period and uncertainty about whether approval could be granted after the act had already been taken.
  3. 3

    What the court decided

    • The Court joined the Deputy Commissioner of Taxation, gave Ms Dang leave to proceed urgently, extended the time to institute review by seven days, and granted approval under s 198G(3)(b) for her to commence and proceed with the review application.
    • The approval was conditional on her indemnifying JMJ Cosmetic for costs it might incur or be ordered to pay in the review.

Practical impact

Practical read

  • Once a company is in liquidation, directors lose control over company powers unless the Corporations Act or the Court allows a specific step.
  • If a winding-up order needs to be challenged, timing, standing, evidence of solvency and cost exposure become urgent.

Useful next steps

  • Directors lose ordinary control once a company is in liquidation.
  • Review deadlines for winding-up decisions can be very short.
  • Claims that a company is solvent need evidence, not assertion.
  • A director seeking to act for a company in liquidation may need Court approval and may need to indemnify the company for costs.
  • Escalate statutory demands, winding-up applications and tax creditor steps immediately.

Practical read

This is the kind of insolvency case that matters to small-business directors because the timeline is brutally short. A company has been wound up. The director says the company should seek review. But the director can no longer simply act for the company because the liquidator has displaced ordinary director control.

The Court was not deciding whether JMJ Cosmetic was solvent. In fact, the judgment notes that any assertion of solvency was likely to be contested and would need cogent evidence on notice. The immediate question was narrower and urgent: could the director get approval to cause the company to bring the review application before the review window closed?

The business lesson is not that a director can always revive company control after liquidation. It is that winding-up deadlines are unforgiving. If a business receives a statutory demand, winding-up application, registrar decision or tax-driven insolvency step, the evidence and instructions need to move quickly. Waiting until the company is already in liquidation can turn a commercial dispute into a procedural scramble over who is even allowed to act.

Checks to run

Key points

  • Escalate statutory demands, winding-up applications and tax creditor steps immediately.
  • Keep current solvency evidence, bank records and creditor records ready if a winding-up order is challenged.
  • Work out who has authority to instruct lawyers after liquidation starts.
  • Check review or appeal deadlines before assuming a later fix is available.
  • Budget for possible indemnity or costs conditions if a director asks the Court to let the company take a step.

Key takeaways

  • Directors lose ordinary control once a company is in liquidation.
  • Review deadlines for winding-up decisions can be very short.
  • Claims that a company is solvent need evidence, not assertion.
  • A director seeking to act for a company in liquidation may need Court approval and may need to indemnify the company for costs.

Related topics

Companies & StartupsInsolvency & Restructuring

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