Educational Resources P/L v Deputy Commissioner of Taxation

[1992] FCA 816

IN THE FEDERAL COURT OF AUSTRALIA )	No. QG 153 of 1992
QUEENSLAND DISTRICT REGISTRY	)
GENERAL DIVISION	1

BETWEEN: EDUCATIONAL RESOURCES PTY, LTD.

as Trustee for the James Nicholas Poteri

Family Trust

Applicant

AND:  THE DEPUTY COMMISSIONER OF TAXATION

,c p ~ ( 1 , : D M ) 'c BANK OF OUEENSLAND LIMITED_ First Respondent

! -! Second Respondent

- 12 NOV 1992

FEDERAL COUaT c'.

1. P,USTRALIA

   PRINCIPAL

REOlSTRY i . / MINUTES OF ORDERS

h P

JUDGE MAKING ORDER:	Drummond J
DATE OF ORDER:	26 October, 1992
WHERE MADE:	Brisbane

UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING THAT UNTIL RESOLUTION OF ACTION NO. 1474 OF 1992 IN THE SUPREME COURT OF QUEENSLAND OR UNTIL EARLIER ORDER OF THIS COURT, IT WILL NOT WITHDRAW ANY MONEYS STANDING TO ITS CREDIT WITH THE BANK OF QUEENSLAND LIMITED OR ANY INTEREST EARNED ON SUCH MONEYS

BY CONSENT THE COURT ORDERS THAT:

iii) which it holds or may subsequently hold
for or on account of some other person for payment to the applicant;

1.        Pending the final conclusion of Supreme Court of Queensland Action No. 1474 of 1992 between the Commonwealth of Australia and the applicant, or until the trial of this action or earlier order:

(a) the second respondent is restrained from paying to the first respondent any money:

i)    due or which may become due by it to the applicant;

ii) which it holds or may subsequently hold on account of the applicant;

iv) which it has authority from some other

person to pay money to the applicant;

pursuant to a notice in writing from the first respondent to the second respondent dated the second day of October, 1992.

The second respondent is restrained from paying

(b)	to the first respondent any money:
i) due or which may become due by it to the applicant;

ii) which it holds or may subsequently hold on

account of the applicant;

iii) which it holds or may subsequently hold for or on account of some other person for payment to the applicant;

iv) which it has authority from some other

person to pay money to the applicant;

pursuant to a notice in writing from the first respondent to the second respondent dated the seventh day of October, 1992.

(c)	The second respondent is restrained from paying to the first respondent any money:
i) due or which may become due by it to the applicant;

ii) which it holds or may subsequently hold on

account of the applicant;

iii) which it holds or may subsequently hold for or on account of some other person for payment to the applicant;

iv) which it has authority from some other person to pay money to the applicant;

pursuant to a notice in writing from the first respondent to the second respondent dated the twenty sixth day of October, 1992.

(d) The first respondent is restrained from issuing or purporting to issue any further notice pursuant to S; 218 of the income Tax Assessment Act 1936 in respect of any account held by the applicant with the second respondent or moneys held on deposit with the second respondent on account of the applicant.

THE COURT FURTHER ORDERS THAT:

1.         The first respondent pay the costs of today's proceedings.

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

I N A U S T R A L I A	)	No. QG 153 of 1992
QUEENSLAND DISTRICT REGISTRY	'l
GENERAL DIVISION	)

BETWEEN: EDUCATIONAL RESOURCES PTY. LTD.

as Trustee for the James Nicholas Poteri

Family Trust

Applicant

AND:  THE DEPUTY COMMISSIONER OF TAXATION

First Respondent

AND :  BANK OF OUEENSLAND LIMITED

Second Respondent

Coram:	Drummond J
Date:	26 October, 1992

Place: Brisbane

EX TEMPORE REASONS FOR ORDER AS TO COSTS

It seems to me that, notwithstanding inconsistent positions adopted in correspondence, particularly in the letter from the applicant's solicitors to the Deputy Commissioner of Taxation dated 5 October 1992, by no later

Mr. Poteri's affidavit which contains a quite unequivocal	than 22 October 1992, the Commissioner had in his possession
statement that the corpus of the fund on deposit with the Bank of Queensland which is essentially the fund the subject of this litigation was not the applicant's money, but was acknowledged by Mr. Poteri, as a director with authority to swear the affidavit on behalf of the applicant company, to be moneys belonging to the students.

It seems to me that in the face of such an

unqualified admission by a director of the applicant with

!-

authority to make the admission that the moneys were not the	I
1 .
company's moneys but were beneficially owned by others, it was	I
inappropriate, having regard to the outline of argument handed	i
i
up by counsel for the Commissioner at the start of the	I .
1 .
hearing, for the Commissioner to persist in the kind of	1
arguments that it was intended to advance before me. I acknowledge that the question of interest on the deposit remained in issue until discussions took place between counsel at my suggestion after some preliminary debate on the application for interlocutory relief, but I think the circumstances are such that the substantial dispute was about the corpus of the fund and, from 22 October, the applicant had so acted as to make it clear that it could make no claim to those moneys and that the Commissioner's actions in nevertheless continuing to seek to defend the application make it appropriate, in my view, to make an order that the first respondent pay the costs of today's proceedings.
I certify that this and the

preceding page is a true copy
of the reasons for judgment
herein of the Honourable m.

Justice Drummond.

Associate :	pHv""
Date:	i6 October, 1992