RFZD v Commissioner of Taxation

In the case of RFZD v Commissioner of Taxation, the appellant, a deregistered company, sought to appeal against a decision of the Commissioner of Taxation. The nature of the dispute centred on the competency of the appeal, as the company was deregistered and thus unable to institute or maintain legal proceedings. The Federal Court was tasked with determining the validity of the appeal and the associated costs.

The primary legal issue before the court was whether the deregistered company could maintain the appeal and, if not, what should be the appropriate course of action regarding the proceedings and the costs incurred. The court needed to consider the effect of deregistration under the Corporations Act and whether it rendered the company incapable of continuing the appeal. Furthermore, the court had to decide on the manner in which to address the costs of maintaining an incompetent appeal, including whether indemnity costs should be awarded against the solicitors who continued to act for the deregistered company.

The court found that upon the company's deregistration, it ceased to exist as a legal entity and therefore could not maintain the appeal. Despite the solicitors' efforts to reinstate the company, they proceeded with an evidently incompetent appeal. The court concluded that the appeal was incompetent and should be dismissed. Additionally, the court determined that the solicitors should bear the costs of the appeal, which were to be taxed on a party and party basis up until a certain date, and on a solicitor and own client basis thereafter.

The final orders of the court included the dismissal of the appeal and the imposition of costs on the solicitors acting for the deregistered company. The costs were to be taxed on a party and party basis up until 10 October 2022, and on a solicitor and own client basis from 11 October 2022 onwards. The ruling underscored the legal principle that a deregistered company cannot institute or maintain legal proceedings, and it highlighted the consequences for solicitors who continue to act for such a company in an incompetent appeal.