JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	5 March 2024
DATE OF JUDGMENT:	13 June 2024
CASE MAY BE CITED AS:	Re Neerim Investments; Re Sukkar Holdings
MEDIUM NEUTRAL CITATION:	[2024] VSC 313

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CORPORATIONS – Corporations Act 2001 (Cth) – Pt 5.4 – Insolvency – Statutory demands – ss 459G and 459J of the Act – Plaintiffs involved in property development venture with other parties pursuant to written agreement – Written agreement includes clause appointing an accountant who registered the venture as a partnership for tax purposes – Annual GST returns lodged for FY2015 to FY2019 with the ATO on basis the venture is a partnership – plaintiffs’ personal tax returns lodged for same periods on basis the venture is a partnership – ATO issued statutory demands alleging debts based on self-assessments by GST returns – ATO relying on prima facie evidence and deeming provisions in Tax Administration Act 1953 (Cth) (‘TAA’) ss 8AAZG, 8AAZI, 8AAZJ and ss 155-5 and 155-15 of Schedule 1 of the TAA – plaintiffs submit the provisions do not apply because accountants were not authorised to treat the venture as a partnership and should have treated it as a trust and therefore the documents lodged do not constitute self-assessments – Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 considered. Held: plaintiffs failed to establish a genuine dispute on the facts. Held: the principles in Broadbeach apply equally to s 459J of the Act and for the same reasons the applications are dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Marlow-Weir	Madgwicks Lawyers
For the Defendant	Mr M A J McKillop	K&L Gates

S ECI 2023 03516

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Marlow-Weir	Madgwicks Lawyers
For the Defendant	Mr M A J McKillop	K&L Gates

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

Consideration of the general principles under s 459G of the Act.......................................... 14

Consideration of the general principles under s 459J of the Act............................................ 17

HIS HONOUR:

Introduction

Two proceedings are listed before me each of which raises the same issues on substantially the same factual background. The first is Neerim Investments (Vic) Pty Ltd (ACN 602 961 884) (S ECI 2023 03515) (‘Neerim’) the second is Sukkar Holdings Pty Ltd (Vic) (ACN 601 916 965) (S ECI 2023 03516) (‘Sukkar’). An order has been made that they be heard together having regard to the common factual background. These reasons relate to both…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Neerim Investments

Details

AGLC: Re Neerim Investments [2024] VSC 313
Case: [2024] VSC 313
Decision Date: 13 June 2024

CaseChat Overview and Summary

In the case before the court, Neerim Investments was involved in a property development venture with other parties, as outlined in a written agreement. This agreement included a clause appointing an accountant who registered the venture as a partnership for tax purposes. The plaintiffs lodged annual GST returns for financial years 2015 to 2019 with the Australian Taxation Office (ATO) based on this partnership status, and they also lodged their personal tax returns for the same periods on the same basis. The ATO issued statutory demands alleging debts based on the self-assessments made in the GST returns. The plaintiffs argued that the accountant was not authorised to treat the venture as a partnership and that it should have been treated as a trust. They submitted that the relevant provisions in the Tax Administration Act 1953 (Cth) did not apply because the documents lodged were not self-assessments.

The legal issues the court was required to decide included whether the accountant was authorised to treat the venture as a partnership and the applicability of the deeming provisions in the Tax Administration Act 1953 (Cth) to the statutory demands issued by the ATO. The court needed to determine if the plaintiffs had established a genuine dispute on the facts regarding the venture's tax status and the validity of the ATO's reliance on the self-assessments. The court considered the case of Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 in its reasoning.

The court found that the plaintiffs had failed to establish a genuine dispute on the facts. It held that the principles applied in Broadbeach applied equally to section 459J of the Corporations Act 2001 (Cth), and for the same reasons, the applications were dismissed. The court determined that the ATO was entitled to rely on the self-assessments made in the GST returns and that the plaintiffs' arguments regarding the venture's tax status did not constitute a genuine dispute. Consequently, the statutory demands issued by the ATO were valid, and the plaintiffs' applications were dismissed.

Orders