MNWA Pty Ltd v Deputy Commissioner of Taxation (No 2)

In the case of MNWA Pty Ltd v Deputy Commissioner of Taxation (No 2), the plaintiffs sought to set aside statutory demands issued by the defendant under the Corporations Act 2001 (Cth). The plaintiffs argued that the statutory demands should be set aside because the defendant had promised not to issue them until certain tax proceedings had concluded and because the defendant’s conduct in issuing them was not for the proper purpose and was unconscionable. The dispute arose from negotiations between the plaintiffs and the defendant regarding tax liabilities. The plaintiffs claimed that the defendant had made an oral agreement not to issue statutory demands until the tax proceedings ended, and that the defendant had unconscionably departed from that agreement by issuing the demands.

The court had to decide whether the plaintiffs had established on the balance of probabilities that the statutory demands were issued for an improper purpose or in breach of an alleged binding agreement. The court considered the evidence of the parties, including affidavits and witness testimony. The court found that while the plaintiffs' witness held a genuine subjective belief in the existence of a binding agreement, this was not supported by objective documentary evidence or the evidence of the defendant's witnesses. The court concluded that the onus was on the plaintiffs to establish the alleged abuse or collateral purpose on the balance of probabilities, and that they had not met this burden.

As a result, the court dismissed the plaintiffs' applications to set aside the statutory demands. The court also ordered the plaintiffs to pay the defendant's costs of the proceedings. This decision highlights the importance of objective evidence in supporting claims of improper purpose or unconscionable conduct in the context of statutory demands under the Corporations Act.