20 Accordingly, leave would be required by the respective defendants to rely on that contention. No such leave was sought. If it had been I would have refused it.
21 The second basis is that the companies are not insolvent.
22 Under s 459C(2) and (3) of the Act, each of the companies having failed to comply with a statutory demand, it is presumed to be insolvent, except so far as the contrary is proved. Each company bears the onus of proving its solvency.
23 In order to discharge that onus, the Court should ordinarily be presented with the "fullest and best" evidence of the financial position of the respondent. Bald assertions of solvency arising from a general review of the accounts, even if made by qualified accountants who have detailed knowledge of how those accounts were prepared, is not ordinarily probative of solvency: Ace Contractors & Staff Pty Limited v Westgarth Development Pty Limited [1999] FCA 728 at [4]; Expile Pty Limited v Jabb's Excavations Pty Limited (2003) 45 ACSR 711.
24 The only evidence of solvency which has been placed before the Court is that contained in the affidavit of Mr Peters, a director of both companies, dated 1 May 2007. Mr Peters is an accountant and a registered tax agent presently operating "in the private equity space".
25 Dealing first with Joadja, according to Mr Peters, in October 2002 he and a fellow director, Mark Longobardi, acquired a property at Joadja Creek Road, Joadja, through a company trust known as The Joadja Whiskey Company Trust. Joadja is the trustee.
26 The place Joadja is an historic mining town, and he and Mr Longobardi conduct limited historical tours on the property, which generate only a small portion of the property's holding costs.
27 In evidence is a title search establishing that Joadja is the owner of the property in fee simple. The property is mortgaged to support borrowings by Mr Peters and Mr Longobardi, and shortfalls in servicing these loans have been, and continue to be, met by them.
28 There is a mortgage on title in favour of Bank of West Australia Limited, which according to Mr Peters "is in the names of Mark Longobardi and myself". He says that at no stage has Joadja undertaken any role other than trustee for the trust, and has no assets or liabilities. Accordingly, no financial records have ever been kept and the only returns ever made have been to the Australian Securities and Investment Commission.
29 Mr Peters says that in its capacity as trustee Joadja has given a number of fixed and floating charges "in line with the Trust having provided its assets as security for loans raised by unit holders of the trust. This has not altered the fact that the Trustee has no assets or liabilities in its own name."
30 As is apparent from the foregoing, the evidence goes no distance in establishing the solvency of Joadja.
31 A trustee has a right to resort to and apply the trust fund for the discharge of liabilities in the authorised conduct of the trust: Octavo Investments Pty Limited v Knight (1979) 144 CLR 360 at 371.
32 Notwithstanding that the information is peculiarly within its own knowledge, Joadja has placed no evidence before the Court, let alone the fullest and best evidence, of any ability to recoup from any trust assets the liability which it has to the plaintiff.
33 If anything, the evidence of Mr Peters seems to establish the contrary.
34 Joadja has not rebutted the statutory presumption of insolvency which lies against it. Indeed, in my view, the evidence establishes actual insolvency.
35 Turning now to Jasmman. Key financial documentation was stolen from Mr Longobardi's home in June 2004. Although Jasmman continued to trade after this theft, this, according to Mr Peters, became untenable, due to the plaintiff commencing multiple proceedings against Mr Longobardi, Joadja and Jasmman in a number of jurisdictions.
36 Mr Peters then "considered it prudent to operate the historical tours through a further entity unrelated to the present disputes." He says that while the shareholders of Jasmman continue to provide funding, "as is currently the case", it will remain solvent.
37 This evidence falls far short of rebutting the statutory presumption of insolvency which lies against Jasmman.
38 If Mr Peters' evidence is to be accepted, then funding would forthwith be provided to enable the company to meet its judgment debt to the plaintiff. He gives no evidence of any commitment upon which the company can rely to discharge this undisputed obligation.
39 The company is at the mercy of its shareholders, without any legal or practical resort to funding for the discharge of the obligation which is the subject of these proceedings.
40 To my mind, the evidence displays a strategy in the face of the judgment debt of ensuring that Jasmman cannot meet it.
41 The company has no books and records and there is no evidence of any assets from which it could discharge its debt. Jasmman has equally failed to displace the presumption of insolvency against it. In my view the evidence against it establishes its actual insolvency.