Deputy Commissioner of Taxation v JJ and Son Pty Ltd

[2013] FCA 556

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v JJ & Son Pty Ltd [2013] FCA 556

Citation:		Deputy Commissioner of Taxation v JJ & Son Pty Ltd [2013] FCA 556
Parties:		DEPUTY COMMISSIONER OF TAXATION v JJ & SON PTY LTD
File number:		QUD 161 of 2013
Judge:		DOWSETT J
Date of judgment:		8 May 2013
Date of hearing:	8 May 2013
Place:	Brisbane
Division:	GENERAL DIVISION
Category:	No catchwords
Number of paragraphs:	4
Solicitor for the Applicant:	ATO Legal Services Branch
Counsel for the Respondent:	Mr JJ Jones, appeared on behalf of the Applicant

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 161 of 2013

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION Applicant
AND:	JJ & SON PTY LTD Respondent

JUDGE:	DOWSETT J
DATE OF ORDER:	8 MAY 2013
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

Upon John Joseph Jones (“Mr Jones”) undertaking to the Court that he will personally pay such debts of the company JJ & Son Pty Ltd ACN 099 787 032 (the “company”) as would be provable in the current winding-up of that company and as are notified to him by the liquidator, within 28 days of any such notification;

THE COURT ORDERS THAT:

1.John Joseph Jones be joined as an applicant on this interlocutory application.

2.The company and Mr Jones have approval nunc pro tunc pursuant to s 471A(1A)(d) of the Corporations Act 2001 (Cth) (the “Act”) to make this interlocutory application.

3.The liquidator be entitled to remuneration fixed in the sum of $13,257.36 inclusive of GST, pursuant to s 473(3)(b)(ii) of the Act.

4.The order winding up the company made on 19 April 2013 be set aside pursuant to r39.05 of the Federal Court Rules 2011.

5.Mr Jones pay the liquidator’s costs of and incidental to this application, such costs to be taxed.

6.The application to wind up the company filed on 19 March 2013 be dismissed.

7.The parties and any other creditor have liberty to apply as they may be advised, on two days’ notice to the other parties.  

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 161 of 2013

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION Applicant
AND:	JJ & SON PTY LTD Respondent

JUDGE:	DOWSETT J
DATE:	8 MAY 2013
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. This matter is quite unusual.  I should therefore say something about the circumstances in which, as I understand it, the orders have been made.  As I understand the orders are being made on the basis that it seems likely that the winding-up order was made in the absence of the company, in circumstances in which it may have been deprived of an opportunity to appear at the hearing by the conduct of a person who has been responsible for substantial fraud upon the company, leading to non-payment of tax liability, of which the company was unaware, and upon which the winding-up petition was based.

2. It seems likely that the company’s business will survive if the winding up is terminated, but less likely if the winding up continues.  Mr JJ Jones, the sole director and shareholder has personally made arrangements with the petitioning creditor, the Commissioner of Taxation, for satisfaction of his debt and costs.  Mr Jones has undertaken to meet any other debts of the company.  Mr Jones has also arranged for payment of the liquidators’ remuneration, expenses and costs.

3. The other major creditor is the Bank of Queensland, but its position seems to be secured by guarantees by Mr Jones and charges.  There seem to be no other significant creditors.

4. Mr Jones’ capacity and willingness to fund the ongoing operation of the company and payment of its debts provide a reasonable basis for an inference as to solvency, he being a person with relevant knowledge and a substantial interest in this matter. I proceed pursuant to rule 39.05 of the Federal Court Rules, following the decision of Hodgson J in George Ward Steel Proprietary Limited v Kizkot (1989) 7 ACLC 835.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:       26 June 2013