E. The Creditor admits that the first time the Invoice was delivered to the Debtor was on 29 November, 2007 notwithstanding it genuinely believed that the Invoice had been rendered in accordance with the then current agreement for building services between the parties and was delivered by one of its agents to a representative of the Debtor on or about 22 June, 2007.
F. The Parties hereto agree and acknowledge that as at the date of this Deed, the total indebtedness (including interest, costs of the proceedings and GST) of the Debtor to the Creditor is $28,000 ("the Debt")."
11 The deed went on to provide for payment of the $29,000 and, as I understand it, that amount has been paid.
12 It seems to me that there is a real difficulty with the argument as to whether in fact the affidavit was false. In recital (E) the statement is that it was genuinely believed that the invoice was delivered. That makes falsity unlikely. Whether the failure to deliver the invoice would be sufficient to allow the setting aside of the statutory demand may be dependent upon what were the arrangements for the payment of the debt.
13 Leaving all these things aside, it has to be noted that the Court is not to grant leave under section 459S unless it is satisfied that the ground is material to proving that the company is solvent.
14 It seems that at the most that the dispute might have shown the amount was $28,000 rather than $45,000 and that that the difference of some $17,000 was not payable. Even if that submission is incorrect, whether the $45,000 is material to the solvency of the company is another matter. On the matters set out in the accounts the company has current assets of $742,965.77 and current liabilities of $384,181.24.
15 Evidence as to solvency has not been tendered at this stage, other than the balance sheet. Accepting that the balance sheet figures might not be a test of solvency, it is hard to see that the $17,000 or the $45,000 would be material to the question in hand. In any event, the Court is concerned with the situation at the current time and certainly the debt is not payable at this stage.
16 In those circumstances it seems to me that the dispute sought to be relied upon is not material to proving the company is solvent and, accordingly, I refuse the application for relief in paragraph 1 of the interlocutory process dated 9 September 2008.
17 This then brings me back to the adjournment application, and I will hear what the parties have to say in respect of that.
(Counsel addressed on the application for an adjournment)
18 It seems to be that the question of any evidence that might be given in respect of the falseness of the affidavit is not relevant to the present proceedings and, accordingly, I refuse the application for an adjournment.
(Later)
19 This is the further hearing of the application to wind up the defendant. I will not repeat what I have earlier said today in the application under s 459S and the adjournment application which can be included in this judgment.
20 This is a matter, as I have said, where there is a presumption of insolvency arising from the failure to pay the statutory demand. The only evidence that is before the court, apart from this presumption of insolvency, is the evidence in pars 2 and 3 of the affidavit of Christine Maree DeLacy of 6 September 2008 which is in these terms:
"I have caused the Defendant's accountants, Economos Pty Ltd to prepare a Financial Report in draft form for the Defendant up to 30 June, 2008. A copy of that Report is annexed and marked "A" (the "Financial Report").
I note the matters set out in the Director's Declaration forming a part of that document and state that those matters are, to the best of my knowledge, information and belief, true and correct and I would be prepared to sign that Declaration."
21 Annexure A, which is the report referred to in par 2, is stamped as "Draft as at 30/06/08" and is not signed. The balance sheet discloses a total of current assets of $742,965.77. This amount is made up of cash and cash equivalents of $7,047.77 and what are described as "trade and other receivables" of $735,918, in the notes of account described as "income receivable". Non-current assets amount to $7,687.37. Current liabilities are shown in the balance sheet as at 30 June 2008 at $384,181.24. There is the "non-current liabilities" which are a loan to the director of the company, Christine DeLacy, of $297,114.24. In respect of that loan, Ms DeLacy has sworn that she had no current intention to call up payment of the loan and would not call upon that loan in circumstances where it would cause the defendant to become insolvent. I infer from this that in fact it is repayable by either notice or demand. If one allows for non-current liabilities, the surplus of net assets is $69,357.66.
22 Nowhere in the evidence is there any expression as to the solvency of the company or as to whether in fact the company is able to pay its debts as and when they fall due.
23 Weinberg J in Ace Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 said the following in respect of the circumstances with which I am now confronted:
"The authorities which govern the operation of s459G of the Corporations Law seem to me to establish the following propositions:
The respondent is presumed to be insolvent and as such bears the onus of proving its solvency: s459C(2) and (3); Elite Motor Campers Australia v Leisureport Pty Ltd (1996) 22 ACSR 235 per Spender J; Commissioner of Taxation v Simionato Holdings Pty Ltd . (1997) 15 ACLC 477 per Mansfield J.