Re Tomker Pty Ltd (In Liquidation) - [2016] VSC 656

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2014 03270

IN THE MATTER of TOMKER PTY LTD (In Liquidation) (ACN 132 233 946)

DAVID RAJ VASUDEVAN as official Liquidator of TOMKER PTY LTD (In Liquidation) (ACN 132 233 946)	First Plaintiff/First Respondent
TOMKER PTY LTD (In Liquidation) (ACN 132 233 946)	Second Plaintiff/Second Respondent
and
THOMAS LIANGOS also known as TOM LIANGOS	Defendant/Applicant
and
J & T REFRIGERATED TRANSPORT PTY LTD (ACN 144 793 493)	First Third Party
VEGE-FRESH (WERRIBEE) PTY LTD (ACN 081 125 297)	Second Third Party
JIM DIMITRIADIS	Third Third Party

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JUDGE:	Randall AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24, 25, 26 August and 6 September 2016
DATE OF JUDGMENT:	2 November 2016
CASE MAY BE CITED AS:	Re Tomker Pty Ltd (In Liquidation)
MEDIUM NEUTRAL CITATION:	[2016] VSC 656

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CORPORATIONS – Corporations Act 2001 (Cth) ss 471A, 553, 588M, 1322 – Winding-up of corporation – Insolvent trading – GST debts incurred while insolvent – Deputy Commissioner of Taxation provided amended proofs of debt – Commissioner is the only creditor – Director objected to assessment by Commissioner – Liquidator refused to lodge objection on behalf of taxpayer – Director lodged objection on behalf of taxpayer – Whether leave should be granted to permit objection to be lodged by director – Whether leave should be granted nunc pro tunc – Whether tax is no longer payable because of Taxation Administration Act 1953 (Cth) s 105-50 – Whether tax amount remains payable after four years if taxpayer is in liquidation – Input tax credits – Principles relevant to grant of leave to director of company in liquidation – Prejudice to creditors in granting leave – Prospects of success – Leave granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Farey	Mendelsons Lawyers
For the Defendant	Mr D McAloon	Clayton Utz

HIS HONOUR:

The originating process was filed 27 June 2014. The liquidator of the second plaintiff (‘Tomker’) sought relief for insolvent trading pursuant to s 588M of the Corporations Act 2001 (Cth) (‘Corporations Act’).

The primary amount sought by the liquidator at that time was $99,950.80. This amount was composed entirely of a debt claimed to be proven by the Deputy Commissioner of Taxation (‘Commissioner’). The Commissioner is the sole creditor. The amount now sought is $189,257.56.

Tomker was wound up pursuant to an earlier order of the Federal Court on 22 July 2013. The plaintiff was the Commissioner. The statutory demand which had been served prior to the application for winding up set out debts totalling $95,482.73.

Proofs of debt for different amounts have been lodged by the Commissioner over time, which had the effect of amending previous proofs rather than being cumulative. Those proofs of debt are as follows:

(a) $99,950.80, dated 7 October 2013;

(b) $217,129.15, dated 17 December 2015;

(c) $314,509.15, dated 2 February 2016;

(d) $295,801.91, dated 5 February 2016;

(e) $189,275.56, dated 25 May 2016.

The amount claimed when…

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: [2016] VSC 656
Decision Date: 2 November 2016

CaseChat Overview and Summary

Re Tomker Pty Ltd (In Liquidation) involved the liquidator of Tomker Pty Ltd, a company in liquidation, and the Commissioner of Taxation. The dispute centred on the company's liability for goods and services tax (GST) debts incurred while insolvent. The case was heard in the Federal Circuit and Family Court of Australia. The primary concern was whether the director of the company could object to an assessment by the Commissioner of Taxation and whether the liquidator should be permitted to lodge this objection on behalf of the company.

The legal issues encompassed whether leave should be granted to the director to object to the assessment, whether such leave could be granted nunc pro tunc, and whether the tax liability had been extinguished under the Taxation Administration Act 1953 (Cth). Additionally, the court needed to determine if the tax remained payable after four years of the company being in liquidation and whether input tax credits could be applied. The principles relevant to granting leave to a director of a company in liquidation, the potential prejudice to creditors, and the prospects of success of the objection were also considered.

The court ruled that the director could object to the assessment and that leave should be granted to permit the objection to be lodged. The court found that the objection had merit and that the tax was not extinguished under the Taxation Administration Act 1953 (Cth). The court acknowledged that the tax remained payable even after four years of the company being in liquidation. The court also considered the application of input tax credits, ultimately granting leave to the director to lodge the objection. The decision emphasised the importance of assessing the potential prejudice to creditors and the likelihood of success in granting such leave.

The final orders included granting leave to the director to object to the assessment by the Commissioner of Taxation and allowing the objection to be lodged nunc pro tunc. The court's decision provided clarity on the role of the director and the liquidator in tax objections during a company's liquidation.

Orders