Catarina v DCT - [2011] NSWSC 449

Supreme Court

New South Wales

Medium Neutral Citation: Catarina v DCT [2011] NSWSC 449
Hearing dates: Tuesday 5 April 2011
Decision date: 18 May 2011
Jurisdiction: Equity Division
Before: Associate Justice Macready
Decision:
I dismiss the proceedings with costs.

Catchwords: Corporations - Winding up - Winding up in insolvency - Statutory demand - Application to set aside demand - demand made pursuant to DCT notice of assessment - applicant lodged objections with ATO that have not yet been determined - single application made in relation to two separate statutory demands
Legislation Cited: Corporations Act 2001 (Cth) section 459 G
Income Tax Assessment Act 1997 (Cth)
Taxation Administration Act 1953 (Cth) Pt IVC, sections 8AAZJ, 14ZZM, 14ZZR, 105-5, 105-5(1), 105-20, 105-40, 105-100
Cases Cited: Clyne v Deputy Commissioner of Taxation (1982) 56 ALJR 857
Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473
FJ Bloemen Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 360
Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279
Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409
Category: Principal judgment
Parties: Catarina Gardens Pty Limited and Rose Corporation Pty Limited v Deputy Commissioner of Taxation
Representation: Counsel:
Ms Rose Caporale appeared in person for the plaintiff
Mr David Jay for the defendant
Solicitors:
ATO Legal Branch

File Number(s): 2010/145944

Judgment

This is the hearing of an application under section 459 G of the Corporations Act 2001 (Cth), in which the plaintiff companies seeks to set aside separate demands served upon them by the Deputy Commissioner of Taxation ('DCT'). The plaintiffs appeared by Miss Rosa Caporale an authorised officer thereof, without objection for the defendant.

The demand served on the first plaintiff is dated 19 May 2010 and claims an amount of $348,943.61. The debt comprises amounts for a Running Balance Account deficit debt in respect of the BAS provisions of the Income Tax Assessment Act 1997 (Cth), together with an administrative penalty.

The demand served on the second plaintiff is also dated 19 May 2010 and claims an amount of $579,375.13. The debt comprises an amount for a Running Balance Account deficit debt in respect of the BAS provisions of the Income Tax Assessment Act 1997.

The description of the application in the originating process is as follows:

"The application is to set the demand aside. The basis and reasons being as outlined in the Affidavit market Annexure "A".

The following documents are also attached as part of Annexure "A".

The statutory demands marked Annexure "B", "C"

..."

Although dated the same day in each case the creditors statutory demand is founded on a separate and discrete debt based on a unique factual substratum. Each debt is unique as between the respective plaintiff and the DCT. Accordingly it was submitted that each company was required to make "an application" in accordance with s 459G.

In Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1279 at paragraphs…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 449
Decision Date: 18 May 2011

CaseChat Overview and Summary

The case of Catarina v DCT involved the applicant, a company, which was seeking to set aside two statutory demands made by the Commissioner of Taxation. The applicant had lodged objections with the Australian Taxation Office regarding the assessments, which were yet to be determined. The Commissioner, acting through the Director of Corporate Tax (DCT), had issued the statutory demands, leading to the applicant's application to the Federal Circuit Court to set them aside.

The primary legal issues before the court were whether the statutory demands were valid and whether the applicant had sufficient grounds to seek their cancellation. The court had to consider the effect of the applicant's objections to the assessments and whether these objections were sufficiently robust to warrant setting aside the statutory demands. Additionally, the court examined whether the statutory demands were made in accordance with the relevant legislative provisions, particularly in light of the objections lodged by the applicant.

The court found that the statutory demands were validly issued as they were made pursuant to the notice of assessment and met the statutory requirements. The court held that the objections lodged by the applicant with the ATO were insufficient to constitute a defence against the statutory demands. The applicant's objections did not address the merits of the tax assessments or provide a basis for setting aside the demands. Consequently, the court dismissed the application to set aside the statutory demands. The court ordered that the applicant pay the costs of the proceeding.

Orders