Re Plutus Payroll Australia Pty Ltd - [2017] NSWSC 1041

Supreme Court

New South Wales

Case Name:	In the matter of Plutus Payroll Australia Pty Limited
Medium Neutral Citation:	[2017] NSWSC 1041
Hearing Date(s):	8 June 2017
Date of Orders:	9 June 2017
Decision Date:	9 June 2017
Jurisdiction:	Equity - Corporations List
Before:	Brereton J
Decision:	Provisional liquidators appointed
Catchwords:	CORPORATIONS – winding up – liquidators – interpretation of Corporations Act, s 440A and s 440D – where Deputy Commissioner of Taxation seeks appointment of provisional liquidator pending winding up hearing – where case for winding up is strongly arguable – where respondent appears to have large unpaid taxation liabilities – where some prospect that respondent companies may dissipate assets – held, provisional liquidators appointed.
Legislation Cited:	(CTH) Corporations Act 2001, s 436A, s 440A s 440D, s 472
Cases Cited:	Australian Prudential Regulation Authority v Rural and General Insurance Limited [2004] FCA 185; [2004] 136 FCR 149; 48 ACSR 616 Corey v Registrar of the Federal Court of Australia [2010] FCA 1215 Deputy Commissioner of Taxation v A & S Services Australia Pty Limited [2017] FCA 437 Evans and Mullumbimby News Pty Limited [2008] NSWSC 240 Hall v Mercury Information Technology (South Australia) Pty Limited [2002] FCA 272; (2002) 20 ACLC 496 Offshore and Ocean Engineering Pty Ltd v Greenwich Contractors Pty Ltd [2012] NSWCA 371 Reid Constructions Australia Pty Limited, Re [2012] NSWSC 1045
Category:	Procedural and other rulings
Parties:	Deputy Commissioner of Taxation (plaintiff) Plutus Payroll Australia Pty Limited (first defendant) PPA Contractors Australia Pty Limited (second defendant) PPA Services Australia Pty Limited (third defendant) PP Australia Holdings Pty Limited (fourth defendant) PP Australia NSW Pty Limited (fifth defendant) PP Services (WA) Pty Limited (sixth defendant) PPA (SA) Pty Limited (seventh defendant) PPA NT Pty Limited (eighth defendant) RAM Enterprises Australia Pty Limited (ninth defendant) SAI Solutions Australia Pty Limited (tenth defendant)
Representation:	Counsel: D A McLure SC with T O Prince (plaintiff) Solicitors: Australian Government Solicitor (plaintiff)
File Number(s):	2017/169447

JUDGMENT (EX TEMPORE)

By an originating process filed on 6 June 2017, the Deputy Commissioner of Taxation applies for orders winding up, on the just and equitable ground, ten companies, namely Plutus Payroll Australia Pty Limited, PPA Contractors Australia Pty Limited, PPA Services Australia Pty Limited, PPA US Holdings Pty Limited, PPA NSW Pty Limited, PPA Services WA Pty Limited, PPA SA Pty Limited, PPA NT Pty Limited, RAM Enterprises Australia Pty Limited and SAI Solutions Australia Pty Limited.
The application for leave to serve short notice of the originating process was made on 6 June 2017, on which occasion some time before the luncheon adjournment that day I granted leave to file the originating process, directed that it be returnable on Thursday 8 June at 9.45am and abridged the time for service to close of business on Tuesday 6 June 2017.
Evidence of service, by way of affidavits of the persons who served the relevant documents, now establishes service at the registered office of each of the defendants other than the…

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.

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Details

Case: [2017] NSWSC 1041
Decision Date: 9 June 2017

CaseChat Overview and Summary

In the matter of Re Plutus Payroll Australia Pty Ltd, the Federal Court was called upon to determine whether provisional liquidators should be appointed to the respondent companies, pending a winding up hearing. The Deputy Commissioner of Taxation sought the appointment, contending that the respondent companies had large unpaid taxation liabilities and there was a risk of asset dissipation. The case presented a significant question regarding the interpretation and application of the Corporations Act, specifically sections 440A and 440D.

The legal issues before the court centred on the criteria required to justify the appointment of provisional liquidators under the Corporations Act. The court needed to assess whether the case for winding up the respondent companies was 'strongly arguable' and whether there was a significant risk of dissipation of the companies' assets. Given the respondent companies' substantial unpaid tax liabilities and the potential for asset dissipation, the court had to determine if these factors warranted the appointment of provisional liquidators.

The court found that the case for winding up the respondent companies was indeed strongly arguable, given the significant unpaid tax liabilities. Furthermore, the prospect of asset dissipation was also considered a valid concern. The court held that the risk of dissipation, coupled with the arguable case for winding up, justified the appointment of provisional liquidators. Consequently, the court ordered that provisional liquidators be appointed to the respondent companies.

The court's final orders included the appointment of provisional liquidators to Plutus Payroll Australia Pty Ltd and related companies. The liquidators were tasked with preserving the assets of the companies until further court orders, aiming to protect the interests of creditors, including the Deputy Commissioner of Taxation.

Orders