Commonwealth of Australia, Represented by the Department of Employment and Workplace Relations v Resilient Investment Group Pty Ltd ACN 128 547 580 & Ors

The applicant, the Commonwealth of Australia represented by the Department of Employment and Workplace Relations, sought special leave to appeal from a decision of the Court of Appeal. The respondents were Resilient Investment Group Pty Ltd and the joint and several liquidators of Spitfire Corporation Ltd (in liquidation) and Aspirio Pty Ltd (in liquidation). The core dispute concerned whether a company's entitlement to a tax refund constituted a "circulating asset" under insolvency law, thereby being available to satisfy priority claims of employees. This question hinged on whether the right to the refund existed at the critical date of the company's insolvency and whether it arose from providing services in the ordinary course of business.

The High Court was asked to determine two primary legal issues. First, whether the right to a tax offset refund exists as a chose in action at the end of an income year, or only upon the making of a tax assessment. Second, whether an "account" that arises from granting a right or providing services in the ordinary course of business, as defined in the Corporations Act 2001 (Cth) for the purpose of identifying circulating assets, extends beyond traditional book debts to encompass a right to a tax refund.

The applicant argued that the right to a tax refund, like the obligation to pay tax, arises at the end of the income year, even if it is only enforceable upon assessment. This position was contrasted with the Court of Appeal's reasoning, which appeared to link the existence of the right to the making of an assessment, thereby preventing it from being a chose in action at the earlier insolvency date. Regarding the second issue, the applicant contended that the Court of Appeal erred by confining the definition of an account arising from providing services to book debts, thereby excluding the tax refund. The applicant submitted that the statutory language did not require an equivalence between the activities generating the account and the services provided, and that intermediate appellate court decisions supported a broader interpretation. The respondent, conversely, argued that the right to a refund did not arise until a calculation and assessment were made, and that the relevant statutory provision did not impose an obligation on the Commonwealth to make a payment that would give rise to a chose in action at the end of the income year.