Deputy Commissioner of Taxation v Wylkian Pty Limited

[2006] FCA 368

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Wylkian Pty Limited [2006] FCA 368

DEPUTY COMMISSIONER OF TAXATION v WYLKIAN PTY LIMITED

NSD2571 OF 2005

EMMETT J
24 MARCH 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD2571 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	WYLKIAN PTY LIMITED DEFENDANT
JUDGE:	EMMETT J
DATE OF ORDER:	24 MARCH 2006
WHERE MADE:	SYDNEY

THE COURT:

1. Notes that the applicant on the interlocutory application is prepared to submit to such order as the court sees fit on the costs of the liquidator.
2. Orders that the orders of 24 February 2006 be set aside on terms that the Defendant accept that, if the Court considers it appropriate when the matter comes on for hearing, the costs of the liquidator be paid by the defendant.
3. Directs that the matter be listed before the Registrar for hearing on 28 April 2006.
4. Directs the defendant to file any further affidavits upon which it intends to rely no later than 7 April 2006
5. Directs the plaintiff to file any further affidavits upon which she intends to rely no later than 20 April 2006.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD2571 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	WYLKIAN PTY LIMITED DEFENDANT

JUDGE:	EMMETT J
DATE:	24 MARCH 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 24 February 2006, a Registrar of the Court made an order that Wylkian Pty Limited (‘the Company’) be wound up.  An order was made that Christopher John Palmer be appointed liquidator of the Company and that the costs of the applicant, the Deputy Commissioner of Taxation (‘the Deputy Commissioner’), be fixed in the sum of $1,935.16.  By interlocutory application filed on 9 March 2006, the Company seeks, amongst other orders, an order that those orders be set aside. 

2. The application must be taken to have been brought under Order 35 rule 7(2)(a) of the Federal Court Rules, which provides that the Court may, if it thinks fit, set aside an order where the order has been made in the absence of a party, whether or not the absent party is in default of appearance.

3. The Deputy Commissioner claims that a debt is owing in respect of tax assessed on the Company.  The application is brought by the only director and a 99 per cent shareholder of the Company, who acknowledges that a statutory demand was received by the Company in early September 2005.  He says that on 22 September 2005 he made contact, by telephone, with the Australian Taxation Office concerning the debt specified in the statutory demand, of $14,170.49.  He says that the Australian Taxation Office provided him with ‘special biller codes’ to enable electronic payment and advised him that, based on reassessment of the Company’s tax position due to the submission of outstanding tax returns, the Company was only required to pay an amount of $4,000.  He was also advised, he says, that even that lower amount was likely to be refunded as further tax returns were submitted.  The sum of $4,000 was paid by the Company to the Deputy Commissioner on 22 September 2005.

4. There is evidence that the winding‑up application was served on the Company by being posted to its registered office, being the first or second floor of an office building.  No facilities were made for the receipt of mail outside business hours.  As a consequence, the proceeding did not come to the attention of the Company or its director until after the orders of 24 February 2006 were made and the liquidator’s office communicated with the Company.  There is a dispute between the parties as to how much tax is presently owing.  However, the Deputy Commissioner does not oppose orders setting aside the orders made on 24 February 2006.  The only question concerns the costs of the proceeding to date and the costs of the liquidator. 

5. Ordinarily, where an indulgence is sought by a party for having failed to attend a hearing, the costs thrown away by reason of that failure should be paid by the party seeking the indulgence.  However, the circumstances of this case appear to me to be slightly different, insofar as there is uncontested evidence before me that Mr Upton was informed that the only amount owing by the Company was $4,000 and that sum was paid.  It is possible to draw the inference that, had the Company been informed of any other amount claimed by the Deputy Commissioner, that amount may also have been paid.  I have no information, however, as to the financial position of the Company to indicate whether that is likely or otherwise.

6. Ordinarily, as I have said, I would order the Company to pay the costs of the liquidator.  However, it seems to me that justice will be served if the question of the liquidator’s costs be reserved, on the basis that they should be paid either by the Company or by the Deputy Commissioner.  I tend to the view that, notwithstanding the evidence as to the communication in September 2005, the fault lies at the feet of the Company.  Nevertheless, until that question is investigated, I consider that it is inappropriate to make an order one way or the other.  I would be disposed to order that the orders of 24 February 2006 be set aside on terms that the Company agree that, if the Court considers it appropriate when the matter comes on for hearing, the costs of the liquidator be paid by the Company.

7. I note that the applicant on this interlocutory application is prepared to submit to such order as the Court considers fit concerning the liquidator’s costs.  On that basis, I order that the orders made on 24 February 2006 be set aside.  I direct that the matter be listed before the Registrar for hearing on 28 April 2006. 

8. I will direct the defendant to file any further affidavits on which it intends to rely no later than 7 April and I direct the Commissioner to file any further affidavit on which she wishes to rely no later than 20 April 2006. 

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:            5 April 2006

Solicitors for the Plaintiff:	Church & Grace
The Defendant was represented by its director, Mr H Upton
Date of Hearing:	24 March 2006
Date of Judgment:	24 March 2006