Deputy Commissioner of Taxation v SCT Townsville Pty Ltd
[2009] FCA 295
•20 March 2009
FEDERAL COURT OF AUSTRALIA
Deputy Commissioner of Taxation v SCT Townsville Pty Ltd [2009] FCA 295
Corporations Act 2001 (Cth) s 459S
DEPUTY COMMISSIONER OF TAXATION v SCT TOWNSVILLE PTY LTD ACN 101 182 585
QUD397 of 2008
LOGAN J
20 MARCH 2009
BRISBANE
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD397 of 2008
IN THE MATTER OF SCT TOWNSVILLE BETWEEN: DEPUTY COMMISSIONER OF TAXATION
ApplicantAND: SCT TOWNSVILLE PTY LTD ACN 101 182 585
Respondent
JUDGE:
LOGAN J
DATE OF ORDER:
20 MARCH 2009
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.SCT Townsville Pty Ltd ACN 101 182 585 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth).
2.Richard William Buckby, an Official Liquidator, be appointed liquidator of the company.
3.The Plaintiff’s costs be fixed in the sum of $1,122.95 and be reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth).
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
QUD397 of 2008
BETWEEN: DEPUTY COMMISSIONER OF TAXATION
ApplicantAND: SCT TOWNSVILLE PTY LTD ACN 101 182 585
Respondent
JUDGE:
LOGAN J
DATE:
20 MARCH 2009
PLACE:
BRISBANE
REASONS FOR JUDGMENT
An application has been made today on behalf of SCT Townsville Proprietary Limited, ACN 101 182 589, for the adjournment for two weeks of an application for the winding up of that company at the behest of a Deputy Commissioner of Taxation. The adjournment application originally came on in the Registrar’s list and was referred to me by the Registrar. I have considered the application for the adjournment in light of the evidence read both for the Commissioner and for the company.
The basis upon which the winding up application is made is a failure on the part of the company to comply with the terms of a statutory demand. That demand was based upon a range of debts owed to the Commonwealth. There was no application to set aside that statutory demand. Neither today is there an application for leave to oppose the application on a ground that either could have been relied on or, for that matter, was relied on, in respect of an application to set aside the statutory demand. Thus, s 459S of the Corporations Act 2001 (Cth) does not arise for consideration.
That said, there is some debate evident in the correspondence about the company’s indebtedness in respect of superannuation guarantee charge, which is one of the components of the overall indebtedness to the Commonwealth, which was the subject of the statutory demand. Even excising, perhaps inappropriately, the superannuation guarantee charge debt, there remains nonetheless a debt of some $72,592 owed to the Commonwealth and payable to the Commissioner of Taxation.
There is evident in the material correspondence which has passed between the Commissioner and the company in respect of the settlement of accounts as between the Commonwealth and the company; settlement, in the sense of providing a basis upon which, administratively, the Commissioner might be disposed to amend exist superannuation guarantee charge assessments and otherwise to see the payment in full of the resultant overall indebtedness to the Commonwealth.
Having perused that correspondence, it seems to me there is nothing in it which might have served to lull the company into a false sense of security insofar as the prospect that the Commissioner would, today, seek to prosecute to finality the winding up application that has been made. Indeed, I note that in a letter of 17 March 2009, the following paragraph appears:
In the absence of payment of this amount – and I interpolate that the “this amount” referred to would seem to be a debt excluding superannuation guarantee charge and interpolation – in full or a payment arrangement being entered into, we place you on notice that the Deputy Commissioner intends to proceed with the application for winding up the company at the hearing at 9.30 am on Friday, 20 March 2009, at the Federal Court of Australia.
There was some further correspondence after that, but not, as I read it, which would lull the company. There does seem to have been a flurry of last-minute activity on the part of the officers of the company, both to endeavour to demonstrate solvency and also to reach some sort of accommodation with the Commissioner. Further, there has also been some endeavour to secure finance, which might see the discharge of indebtedness to the Commonwealth. The application for finance, according to the affidavit of Ms Danielle Anita, a director of the company, is “still being assessed”.
So far as the solvency of the company is concerned, the accounts exhibited to the affidavit of the company’s solicitor, Ms Lowe, include the running balance account, which evidences, in terms of the Commissioner’s books of account, an indebtedness to the Commonwealth. Apart from this, I also have in evidence before me accounts of the company for the year ended 30 June 2008. These accounts show, in the profit and loss, an operating loss before income tax of $185,292. They also show, in the statement of financial position, that the company has what one might euphemistically describe as, at that date, a negative equity of $308,411.
A study of those accounts, assisted by Ms Lowe’s affidavit, discloses that some of the liabilities which go to that negative equity may be to related entities, and she deposes that those amounts are not presently owing. That said, as at 30 June 2008, there was still a third part indebtedness to the Westpac Bank by way of business overdraft of $76,316. There are other non-current liabilities in respect of various third party financiers also disclosed on those accounts.
Ms Lowe’s affidavit deposes, on information and belief, to a more current position. That current position is then bolstered by the evidence from Ms Anita. She deposes that:
On the information available to me, the company is solvent.
She then states:
To substantiate this, I wish to obtain a certified report from my accountant as to the solvency of the company.
She does mention that, of the operating loss in the 2008 accounts, if there were “addbacks” considered then, according to her accountant, Mr Dennis Rabbitt, the true position would be a profit of $122,470. Quite what those “addbacks” might be is not disclosed.
It suffices to note that I am not satisfied, on the evidence to hand, that the company is solvent and I bear in mind that the contrary position is deemed presently by statute, as a consequence of its failure to comply with a statutory demand.
The business of the company seems to be that of tree lopping, its business name being “Sun City Trees”. It operates in Townsville. I am concerned, at present, that there is an operating business that is deemed to be insolvent. The debt is not opposed and it seems to me that the formal requirements for the making of a winding up order have been met in the material read by the Commissioner. It seems to me that, though Mr Oliver has, with respect, made every submission that one might, in this circumstance, make on behalf of the company, this is, nonetheless, a case where a company has done too little, too late, to provide a satisfactory foundation for the adjournment of a winding up application, which is otherwise regular, on its face.
I therefore propose to refuse the adjournment and to make an order for the winding up of the company. I note that there is, on the court file, a consent by Richard William Buckby to act as official liquidator.
The costs which the Commissioner seeks are set out in a document filed and read today and they appear to me to be allowable. I, therefore, make an order in terms of the draft, which I have signed and placed with the papers.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate:
Dated: 31 March 2009
Solicitor for the Applicant: Mr S Jury (an Officer of the Australian Taxation Office appearing in person on behalf of the Commissioner pursuant to the Taxation Administration Act 1958 (Cth)) Counsel for the Respondent: Mr R Oliver Solicitor for the Respondent: Ruddy Tomlins & Baxter
Date of Hearing: 20 March 2009 Date of Judgment: 20 March 2009
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