Case: Ace Contractors Staff Pty Ltd v Westgarth Development Ltd (1999) FCA 728
Outcome: cited
The above legal principles (and others) were conveniently set out by Weinberg J in Ace Contractors Staff Pty Ltd v Westgarth Development Ltd (1999) FCA 728 at [44] . 13 I have concluded that APM has failed to demonstrate that it is solvent, it having the burden to the requisite civil standard to prove solvency. I have reached this conclusion for a number of reasons. 14 In order to demonstrate solvency, reliance was finally placed by APM upon a report of James Edward Miller dated 30 August 2007, an expert accountant, who prepared a Balance Sheet and Profit and Loss Statement of APM as at 30 August 2007 and provided a report as to solvency as at 30 August 2007. 29 In addition to what I have concluded above, there are other matters which demonstrate that APM has not discharged the onus of proving solvency:- (i) APM has failed to comply with the statutory demand of the creditors, and that of a supply creditor, T &amp; G Welding Pty Ltd. (ii) APM has been in default under mortgages over its property, and has no immediate or foreseeable capacity to service the mortgages. (iii) The application for winding up was made on 15 March 2007, over six months ago. On 18 June 2007, in the written submissions of APM, it was stated: [APM] is able to raise sufficient funds with which to pay for its short term creditors and it is anticipated that it will receive further funds in the near future from the sale of a properties [sic] . It is conceded that there are other further supporting creditors. [APM] will be able to use the funds that it is capable of raising and which it is anticipated of receiving in the near future with which to pay these debts. This has not eventuated despite the time lapse and there is no evidence to suggest that there will be sufficient funds to pay creditors in the near or reasonably near future. All the evidence relied upon by APM over recent months simply raised possibilities which have not eventuated. (iv) APM has been involved in disputes and legal proceedings with a number of people in addition to the Supreme Court proceedings mentioned above. The proceedings instituted already do not appear to be capable of resolution in the short term. (v) APM's books and records are incomplete and unsubstantiated. There have been a number of suggestions by APM since this matter was first heard to the effect that the new director Mr Fisher would take steps to put the books of accounts in order these suggestions have not been fulfilled and even Mr Miller in his report of 30 August 2007 necessarily relied upon incomplete and unsubstantiated records. (vi) No director can make a declaration of solvency. The then current directors of APM on 9 June 2006 resolved that APM was solvent as at that date, but this is obviously not sufficient to persuade me that the company was solvent at the date of hearing of this application. (vii) No cash flow statement or projections have been provided by APM despite ample opportunity to do so in these proceedings. (viii) There is no material to demonstrate that the company, in its attempts to refinance or obtain sufficient funding, will succeed in the foreseeable future or at all see Crema (Vic) Pty Ltd v Land Mark Property Developments (Vic) Pty Ltd (2006) 24 ACLC 889, at [172] per Dodds-Streeton J; Re Presha Engineering (Aust) Pty Ltd (1983) 1 ACLC 675 at 677 and Ace Contractors Staff Pty Ltd v Westgarth Development Ltd (1999) FCA 728 ;