Deputy Commissioner of Taxation v Arizcorp Pty Ltd ACN 078 186 722 (No. 3) - [2008] FCA 760

FEDERAL COURT OF AUSTRALIA
Deputy Commissioner of Taxation v Arizcorp Pty Ltd ACN 078 186 722 (No. 3)
[2008] FCA 760
CORPORATIONS AND INSOLVENCY - consideration of an application to terminate an order for the winding‑up of the first defendant
Prendergast v Rolcross (in Liquidation) [2008] NSWSC 146
DEPUTY COMMISSIONER OF TAXATION v ARIZCORP PTY LTD ACN 078 186 722
QUD239 OF 2007
GREENWOOD J
21 MAY 2008
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD239 OF 2007

BETWEEN:

DEPUTY COMMISSIONER OF TAXATION
Plaintiff

AND:

ARIZCORP PTY LTD ACN 078 186 722
First Defendant

ROBERT ALEXANDER WILKIE
Second Defendant

JUDGE:

GREENWOOD J

DATE OF ORDER:

21 MAY 2008

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:
1.The winding‑up in insolvency of Arizcorp Pty Ltd pursuant to the order made on 29 February 2008 is terminated.

2.The first defendant shall provide further security to a liquidator of the first defendant in an amount of $5,000 and pay such sum into Court.

3.The parties shall have liberty to apply on three days notice.

4.There shall be no order as to costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD239 OF 2007

BETWEEN:

DEPUTY COMMISSIONER OF TAXATION
Plaintiff

AND:

ARIZCORP PTY LTD ACN 078 186 722
First Defendant

ROBERT ALEXANDER WILKIE
Second Defendant

JUDGE:

GREENWOOD J

DATE:

21 MAY 2008

PLACE:

BRISBANE

REASONS FOR JUDGMENT

I have before me an application this morning for the termination of an order for the winding up of the first defendant, Arizcorp Pty Ltd, pursuant to orders that were made on 29 February 2008. The matter was last before the Court on 24 April 2008 and adjourned on terms to this morning. The history of the matter is recited in ex tempore reasons I delivered on 24 April 2008 and I do not propose to go into the reasons at great length except that it might be convenient to simply quote what I said on that occasion (Deputy Commissioner of Taxation v Arizcorp Pty Ltd (No. 2) [2008] FCA 580). At para [3], I said this:
The history of the matter involves a statutory demand made by the Deputy Commissioner of Taxation (which I will refer to as the ATO) in relation to taxation liabilities due to the Commonwealth by the first defendant company. Taxation returns under the PAYE regime have not been lodged in 1999 and 2000 and after the introduction of the BAS protocols taxation returns were not lodged throughout a number of years. The end result of the ultimate lodgement of returns and assessment of the unpaid tax was that an amount of $631,955.71, among perhaps some other moneys, became payable to the commissioner. The company has fully paid that amount of money.
I also said this, at para [5]:
Earlier undertakings given to the Court required further returns for particular years to be lodged by 16 April 2008 as a…

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

AGLC: Deputy Commissioner of Taxation v Arizcorp Pty Ltd ACN 078 186 722 (No. 3) [2008] FCA 760
Case: [2008] FCA 760
Decision Date: 21 May 2008

CaseChat Overview and Summary

The case of Deputy Commissioner of Taxation v Arizcorp Pty Ltd ACN 078 186 722 (No. 3) involved the Deputy Commissioner of Taxation and Arizcorp Pty Ltd, a company that had been wound up in insolvency. The dispute centred on the termination of the winding-up order and the conditions under which the company's insolvency could be resolved. The matter was heard in the Federal Circuit Court of Australia, where the court was required to address specific legal issues related to the insolvency proceedings and the terms of the winding-up order.

The primary legal issues before the court were whether the winding-up order should be terminated and, if so, what conditions should be imposed to ensure the company's debts could be managed and paid. The court had to consider the statutory framework governing insolvency proceedings, the obligations of the liquidator, and the rights of creditors, including the Commissioner of Taxation. The court also needed to assess whether the security provided by the company met the requirements set out in the relevant legislation.

In delivering the judgment, the court concluded that the winding-up in insolvency of Arizcorp Pty Ltd should be terminated. The court determined that the company had provided adequate security and met the necessary criteria for the winding-up order to be set aside. The court ordered the company to provide further security of $5,000 and pay this sum into court. The court also allowed for the possibility of further applications by the parties within a specified timeframe. Importantly, the court did not make any order regarding the costs of the proceedings, reflecting a balanced approach to the resolution of the dispute.

The final orders of the court were to terminate the winding-up in insolvency of Arizcorp Pty Ltd, require the company to provide additional security of $5,000 to a liquidator and pay this sum into court, allow the parties to apply for further orders on three days' notice, and make no order as to costs. This decision provides clarity on the conditions under which a winding-up order may be terminated and highlights the importance of meeting legislative requirements in insolvency proceedings.

Orders

Orders of the court

1. The winding‑up in insolvency of Arizcorp Pty Ltd pursuant to the order made on 29 February 2008 is terminated.

2. The first defendant shall provide further security to a liquidator of the first defendant in an amount of $5,000 and pay such sum into Court.

3. The parties shall have liberty to apply on three days notice.

4. There shall be no order as to costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GREENWOOD J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: GREENWOOD J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD239 OF 2007

JUDGE:	GREENWOOD J
DATE OF ORDER:	21 MAY 2008
WHERE MADE:	BRISBANE

JUDGE:	GREENWOOD J
DATE:	21 MAY 2008
PLACE:	BRISBANE