Diamond Exchange case adjourned

3.8 k views | Posted October 13, 2010 | By Coleby Nicholson

The Diamond Exchange court hearing relating to an application to wind up the online jewellery retailer was adjourned today in the Victorian Supreme Court.

The wind-up application has been brought against the troubled online diamond retailer by Morgan Trusscolt Capital (MTC).

The 519G wind-up application was filed on September 15 and, at the time, Diamond Exchange chief financial officer Simon Middleton claimed that the debt was to a marketing company for media consultancy work, some of which is disputed.

However, Supreme Court documents seen by Jeweller state that Timothy Stanford of MTC, who is claiming an amount of $235,923.38 from Diamond Exchange relating to a loan agreement entered into in October 2009, made the application.

Lawyer acting for the defence, Nick McKenzie-McHarg of Gadens law firm told the judge that the debt is disputed and that his client’s assets far exceed the disputed debt.

The judge set a second directions hearing for Friday November 5. At the hearing, Diamond Exchange will have to inform the court whether it intends to defend itself against the wind-up application (under Section 459). At that point, it will also have to advise the court whether it is disputing the MTC debt and whether the debt is immaterial to the question of insolvency.

The judge set another hearing date for November 30, which will only take place if Diamond Exchange decides to defend the action. On November 5, Diamond Exchange will also need advise the court when it can file its evidence confirming its solvency.

Another company, Lola Diex Ltd, attended the hearing as a supporting creditor for the wind-up application. The company, represented by Jarrod Munro of Corwall Stodart Lawyers, must file evidence by November 24 to support its case, the judge ordered. Lola Diex appears to be a company that trades in the diamond industry.

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