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Re Plutus Payroll Pty Ltd

Re Plutus Payroll Pty Ltd

Case [2017] NSWSC 1360 9 October 2017

Winding Up & Liquidation

Unpaid Taxation Liabilities

Statutory Construction

Corporate Law & Governance

Taxation Law

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of Plutus Payroll Pty Limited & others [2017] NSWSC 1360
Hearing dates: 26 September 2017
Date of orders: 09 October 2017
Decision date: 09 October 2017
Before: Brereton J
Decision:
Order that the defendant companies be wound up.

Catchwords:
CORPORATIONS – external administration – winding up – winding up in insolvency – creditor’s statutory demand – whether presumption of insolvency may be relied on where non-compliance with statutory demand occurs after institution of winding up proceedings – held, it can.

TAXES AND DUTIES – whether a winding up proceeding is a proceeding to recover an amount of a tax-related liability under (CTH) Taxation Administration Act 1953, Sch 1, s 255-45(1) – held, it is.
CORPORATIONS – external administration – winding up – winding up in insolvency – actual insolvency – where existence of unpaid taxation liabilities proven – where many defendants owe employee entitlement debts – where many unrelated statutory demands not complied with – apparent absence of cash of property to meet liabilities – held, relevant defendants wound up in insolvency.
Legislation Cited: (CTH) A New Tax System (Goods and Services Tax) Act 1999, s 33-3, s 33-5
(CTH) Corporations Act 2001, s 459C(2), s 459F, s 459P, s 459Q, s 459T, s 461(1)(k), s 466(2)
(CTH) Fringe Benefits Tax Assessment Act 1986, s 72
(CTH) Income Tax Assessment Act 1936, s 166A
(CTH) Superannuation Guarantee (Administration) Act 1992, s 36, s 37, s 46
(CTH) Taxation Administration Act 1953, Sch 1, s 12-35, s 155-5, s 250-10, s 255-1, s 255-5, s 255-45, s 268-20, s 268-40, s 284-75, s 298-15, 350-10(1)
(NSW) Uniform Civil Procedure Rules 2005, r 6.19, r 19.2(4)
Cases Cited: Australian Beverage Distributors v The Redrock Co [2008] NSWSC 3
Bluehaven Transport Pty Ltd v DCT (2000) 157 FLR 26
Commissioner of Revenue (Vic) v Roy Morgan Research Centre Pty Ltd (1997) 24 ACSR 73
Deputy Commissioner of Taxation v Bayconnection Property Developments Pty Ltd [2012] FCA 363
Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473
Equititrust Limited v Willaire Pty Ltd [2012] QSC 206
FP Leonard Advertising Pty Ltd v KD Travel Service Pty Ltd (1993) 12 ACSR 136
Golden Plantation Pty Ltd v TQM Design and Construct Pty Ltd [2010] NSWSC 1453
James v Deputy Commissioner of Taxation (1957) 97 CLR 23
Just Juice Corporation Pty Ltd v Murrayland Fruit Juice Pty Ltd (1990) 2 ACSR 541
Lorang Contractors Pty Ltd, In the matter of [2015] NSWSC 1435
Missing Link Network Integration Pty Ltd v Keene Consulting International Pty Ltd [2007] NSWSC 1377
Perovich v ASIC [2005] QCA 456
Pinn v Barroleg Pty Ltd (1997) 138 FLR 417
Plutus Payroll Australia Pty Limited, In the matter of [2017] NSWSC 1041
Sim v Ravenswood Resort Pty Ltd [2003] WASC 121
Simpson v CT Partners Australia Pty Ltd [2015] FCA 1191
Southgate Investment Funds Ltd v DCT (2013) 211 FCR 274
Surdex Steel Pty Ltd v GB Manufacturing…

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 Plutus Payroll Pty Ltd

Details

AGLC: Re Plutus Payroll Pty Ltd [2017] NSWSC 1360
Case: [2017] NSWSC 1360
Decision Date: 09 October 2017

CaseChat Overview and Summary

In the matter of Plutus Payroll Pty Ltd, the Federal Court of Australia was called upon to address several significant legal issues related to the insolvency of the company and the validity of various statutory demands against it. The primary dispute involved the timing and legal effect of statutory demands issued to the company prior to the commencement of winding-up proceedings and whether these could be considered in determining the company's insolvency.

The court needed to decide whether the presumption of insolvency, which arises from a company's failure to comply with a statutory demand, could be relied upon when the non-compliance occurred after the winding-up proceedings had already been initiated. Additionally, the court was tasked with determining if a winding-up proceeding could be considered a proceeding to recover an amount of a tax-related liability under the Taxation Administration Act 1953. Finally, the court had to assess whether the company was actually insolvent, given the presence of unpaid taxation liabilities, employee entitlement debts, and the company's apparent lack of cash or property to meet its liabilities.

In its judgment, the court held that the presumption of insolvency may indeed be invoked when non-compliance with a statutory demand occurs after the winding-up proceedings have been initiated. The court also found that a winding-up proceeding is a proceeding to recover an amount of a tax-related liability. This determination was based on the specific provisions of the Taxation Administration Act 1953. Regarding the company's insolvency, the court concluded that the existence of unpaid taxation liabilities, employee entitlement debts, and the absence of cash or property to meet these liabilities were sufficient grounds to wind up the company in insolvency. The court's findings on these issues provided clarity on the interplay between statutory demands, insolvency proceedings, and tax-related liabilities in the context of corporate external administration.

Orders