Scott v Duncan

[2007] FCAFC 30

FEDERAL COURT OF AUSTRALIA

Scott v Duncan [2007] FCAFC 30

INSOLVENCY – unfair preferences – insolvent transactions – uncommercial transactions – whether primary judge wrongly concluded companies insolvent – reasonable grounds to expect companies solvent – actual expectation that companies solvent – whether evidence of previous support from third party demonstrate reasonable grounds to expect companies solvent and actual expectation that company solvent

Held: No error in primary judge’s conclusion that companies insolvent. No reason to interfere with primary judge’s refusal to believe that directors expected companies to be solvent.

Corporations Act 2001 (Cth), ss 588FA, 588FB, 588FC, 588FE, 588FF, 588FGA, 588FGB

Superior Press Pty Ltd v Deputy Commissioner of Taxation (2004) 55 ATR 541
Lewis v Doran (2004) 208 ALR 385
Lewis v Doran (2005) 219 ALR 555

ANTHONY JAMES SCOTT v ADRIAN STEWART DUNCAN AS LIQUIDATOR OF TRADER SYSTEMS INTERNATIONAL PTY LTD (IN LIQUIDATION), COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA AND ANDREW IAN FAIRBANK
VID 874OF 2006

SUNDBERG, EMMETT AND MIDDLETON JJ
15 MARCH 2007
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 874  OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

ANTHONY JAMES SCOTT
Appellant

AND:

ADRIAN STEWART DUNCAN AS LIQUIDATOR OF TRADER SYSTEMS INTERNATIONAL PTY LTD (IN LIQUIDATION) (ACN 086 401 952)
First Respondent

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Second Respondent

ANDREW IAN FAIRBANK
Third Respondent

JUDGES:	SUNDBERG, EMMETT AND MIDDLETON JJ
DATE OF ORDER:	15 MARCH 2007
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The appeal be dismissed.

2.The third respondent’s application for an extension of time within which to file a cross-appeal be refused.

3.The appellant pay the first and second respondents’ costs of the appeal.

4.The cross-appellant pay the first and second respondents’ costs of the application for an extension of time.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 874 OF 2006

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

ANTHONY JAMES SCOTT
Appellant

AND:

ADRIAN STEWART DUNCAN AS LIQUIDATOR OF TRADER SYSTEMS INTERNATIONAL PTY LTD (IN LIQUIDATION) (ACN 086 401 952)
First Respondent

COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Second Respondent

ANDREW IAN FAIRBANK
Third Respondent

JUDGES:	SUNDBERG, EMMETT AND MIDDLETON JJ
DATE:	15 MARCH 2007
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE COURT:

BACKGROUND

1. The liquidator of Trader Systems International Pty Ltd (TSI), Adrian Stewart Duncan, brought proceedings (the first proceeding) claiming that payments totalling $38,319.55 made by TSI to the Commissioner of Taxation were unfair preferences within s 588FA of the Corporations Act 2001 (Cth) (the Act) and were void against him under s 588FE of the Act. The liquidator sought an order under s 588FF that the Commissioner pay him $38,319.55 together with an agreed sum of $16,865.33 for interest and costs.

2. Mr Duncan was also liquidator of TSI Australia Limited (TSIA). He brought proceedings (the second proceeding)…