Home > News > Evidence vs Inference: Analysis of Ross, in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias [2021] FCA 419

Evidence vs Inference: Analysis of Ross, in the matter of Print Mail Logistics (International) Pty Ltd (in liq) v Elias [2021] FCA 419

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By Alicia Hill, Principal and Harrison Breer, Law Clerk

Proving your case in court requires the leading of evidence and the making of submissions about how a court should interpret that evidence. Liquidators are often in a position where they are unable or would not wish to call a particular evidence who in the ordinary case would be the best person to give evidence necessary to prove an element of a case.

This article looks at one such example where liquidators failed to call as a witness a director and instead asked the court to draw inferences about particular events to prove their claim resulting in a court finding that the claim was not proven.


Mr Ross and Mr Pleash were the Liquidators of Print Mail Logistics (International) Pty Ltd (‘PMLI’). PMLI claimed relief against various directors of the company, both past and present for their involvement in two loan transactions made in the space of two weeks during July 2015 from two companies owned by Ms Hutson, Wellington Capital Pty Ltd (‘Wellington’) and Armstrong Registry Services Limited (‘Armstrong’)

  • Armstrong Unsecured Loan Agreement (the ‘Armstrong Agreement’) whereby $100,000 was allegedly loaned to Mr Elias, who was a director for PMLI
  • Wellington Secured Loan Agreement (the ‘Wellington Agreement’) whereby $420,000 was loaned to PMLI

PMLI also entered into a deed with Wellington whereby the parent company of PMLI would guarantee payment to Wellington for any monies due and payable in the event of default. PMLI later defaulted and did not meet the further extension granted by Wellington. Wellington also allowed the parent company to get out of its guarantor agreement for the payment of $1000.

On 2 October 2018, PMLI was placed into voluntary administration, and liquidators were later appointed.

There were three main issues present in this case:

  1. Did Mr Elias and Armstrong enter into the Armstrong Agreement in respect of an advance of $100,000 to Mr Elias
  2. Did PMLI become liable for the debts of Mr Elias owing to Armstrong through their entry into the Wellington Agreement
  3. In entering the Wellington Agreement, did PMLI become insolvent?

Issue 1 – Did Mr Elias enter into the Armstrong Agreement?

The Liquidators relied on three forms of evidence to show this occurred, including the parent company ledger which showed a credit of $100,000 from Mr Elias, a bank statement for the parent company which also showed a credit for $100,000 and three copies of a document which apparently illustrated the agreement between Armstrong and Mr Elias, however there were substantial differences between each document including dates and detail.

Mr Elias argued that Armstrong had nothing to do with the funds that were transferred to the parent company, and that he did not transfer the funds. He claimed that the bank’s reference to “Elias” was provided by Armstrong, and that the signature on the three respective loan documents appeared to be his but he did ‘not recollect signing it’ and maintained he did not sign it.

The Liquidators contended that Mr Elias’ explanations were improbable, and it was likely that he was aware of PML’s financial difficulty. The Liquidators also argued that an inference cannot be drawn regarding Ms Hutson’s absence as a witness in trial given the relevance of her evidence (distinguishing Jones v Dunkel).

Mr Elias responded by claiming there was no evidence of him ever receiving the $100,000 from Armstrong, and that given Ms Hutson was in the position of Director at Armstrong, she was in a position to give evidence about the transaction, and since she had not been called upon, a Jones v Dunkel inference should be drawn, whereby her absence allows an inference to be drawn regarding her evidence.

Justice Reeves took the inference-heavy arguments into account, held in favour of Mr Elias for this issue. Relying on Gageler J’s comments in Henderson v State of Queensland which provided clarification on the outcome of Jones v Dunkel, His Honour found that Ms Hutson would most likely be in a position to explain why Armstrong transferred the $100,000, and therefore the Liquidator’s argument relating to Jones v Dunkel was rejected. Furthermore, His Honour was unwilling to infer that the documents which supposedly showed the execution of the agreement were true and accurate without further evidence.

Issue 2 – Was PMLI liable for the debts supposedly owed by Mr Elias?

The Liquidators contended that the Wellington Agreement was entered into as a means of accepting liability for the $100,000 debt owed by Mr Elias personally, and the interest of $11,980.01 owed from an earlier loan made 4 years prior.

Given Reeves J held that the Liquidators had failed to show the existence of the $100,000 debt, the matter concerned only the interest from the prior loan.

His Honour ultimately found that PMLI, in entering the Wellington Agreement, did not accept the liability for the personal debt of Mr Elias. This is due to PMLI not paying Armstrong any funds from the loan, and that the amount owing was applied in reduction of the balance of the running loan account that existed between PML and Mr Elias, of which PMLI was not involved.

Issue 3 – Did PMLI become insolvent by entering into the Wellington Agreement:

Finally, the Liquidators argued that in entering the Wellington Agreement, PLMI had entered into an uncommercial transaction under s588FB and also engaged in insolvent trading under s588G, and possibly further breaches under the directors’ duties provisions under the Corporations Act.

With regards to insolvent trading, Greeves J ultimately found that PLMI at no point was insolvent at the time of, or for two years after the Wellington Agreement was entered, as PLMI was able to pay its debts as and when they fell due during this period.

Both parties provided expert reports to illustrate whether or not PLMI was solvent at the time the Wellington Agreement was entered into. However, Justice Greeves did not ‘rely, to any significant extent, on the evidence of the expert witnesses called by the parties’, especially that provided by the Liquidators, of which Greeves J found several problems including its disregard of the significance of the parent company’s guarantee provided to Wellington for the loan, the unsubstantiated reliance on the parent company being in financial difficulty, and the lack of sources relied upon. In effect striking out or disregarding the liquidators evidence.

Instead Greeves J ultimately determined that had Wellington pressed PMLI for their obligations under the loan, they would have been able to meet the requirements. Furthermore, PMLI remained solvent at the time they entered into the Agreement, and for two years after.

Greeves J ultimately found that the claim under s588FB was unsubstantiated, and ultimately found it to be unsuccessful.


Greeves J held that the Liquidators, tasked with the onus of proving all three claims, did not sufficiently prove any of the claims on the balance of probabilities. As such, the claim was dismissed with costs to be paid by the plaintiffs.


This case provides various intriguing take-aways.

Firstly, it illustrates that the Court will be open to accepting an inference when it is deemed just in the circumstances. There exists a conception that Courts are reluctant to accept inferences, and instead rely solely on evidence for decisions. However, when an inference can be accurately and appropriately drawn, such as the Jones v Dunkel inference in this case, the Court will be willing to draw upon it.

As the outcome of this case demonstrated though the best evidence is the evidence of a witness with personal knowledge of the events sought to be established and if a liquidator cannot call upon such a witness and instead rely on inferences only a court may find this insufficient to prove their claims.

Finally, this case illustrates the role of expert evidence, and why it is crucial for an expert witness to fully comprehend the matter on which they are giving evidence and address all reasonable factors that may impact on their opinion. Otherwise, as occurred with the plaintiff’s expert in this case, a Judge may strike out completely or give no weight to such evidence or favour an opposing expert.

If you have any queries about any of the matters raised by this case, then please contact Alicia Hill on (03) 8540 0292 or alicia.hill@mst.com.au