Tibofu Pty Ltd v Deputy Commissioner of Taxation

[1987] FCA 435

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT	OF AUSTRALIA	)
) i-

NEW SOUTH WALES DISTRICT REGISTRY	)	NO. NSW G.316 Of 1987	!
)

DIVISION GENERAL )

BETWEEN:

TIBOFU PTY LIMITED

Applicant

AND:

THE DEPUTY FEDERAL

COMMISSIONER OF TAXATION

Respondent

I I,

CORAM :	WILCOX J
PLACE :	SYDNEY
DATE :	20 JULY 1987

MINUTES OF ORDER	4 8 WdG 1987
4 8 WdG 1987

AUSTRALIA

AUSTRALIA

PRINCIPAL

PRINCIPAL

THE COURT DIRECTS	THAT:	REGISTRY
REGISTRY

A. The trial of the matter proceed on the basis of

affidavit evidence, subject	to cross-examination as
required.

i

B.	Any further affidavits to be relied upon by the
applicant be filed and served not later than Monday,

27 July 1987; any affidavits to be relled upon the

I '

I

respondent be filed and served not later	than Monday,	, I.
:
3 August 1987.	r .

I

I

2.

C.	The matter be fixed for hearing	on Thursday, 6 August
1987 at 10.15 a.m.

D.	Thursday, 30 July 1987 at 9.30 a.m. be appointed for
the return of any subpoenas.

THE COURT ORDERS THAT:

1. Pending further order, no further steps, other than

by way of adjournment of the proceedings in the

Supreme Court of New South Wales, be taken in

connection with the prosecution of the winding up

proceedings brought by the respondent against the

applicant.

2. Costs of today be reserved.

3 . Liberty be granted to either party to apply on twenty-four ( 2 4 ) hours' notice.

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

!

NOT FOR GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA 1

)

I

NEW SOUTH WALES DISTRICT REGISTRY No. NSW G.316 of 1 9 8 7

1

DIVISION GENERAL 1

BETWEEN:

TIBOFU PTY LIMITED

Applicant

AND:

THE DEPUTY FEDERAL

COMMISSIONER OF TAXATION

Respondent

CORAM : WILCOX J

I. . -

, .

PLACE :	SYDNEY
DATE :	20 JULY 1 9 8 7

EXTEMPORE REASONS FOR JUDGMENT

The application that has been made today is for an

order under s.15 of the Administrative Decisions (Judicial

Review) Act 1 9 7 7 restraining the respondent, the Deputy

I

Commissioner of Taxation, from taking any further steps in	!
, 1

connection with the winding up of the applicant company.

I understand that a winding up petition will be

listed before the Supreme Court of New South Wales tomorrow.

Mr Foster has indicated three grounds which will be argued in

. a '

support of the appllcation for review. I am not impressed by

the third ground, which would have the Court review the

quantum of additional tax imposed by the Deputy Commissioner.

As to the first ground, it is difficult to form any

impression as to whether there is an arguable case that the

Deputy Commissioner erred in having regard to the fact, in

L . I

assessing the amount of the additional tax, that Mr T E

Dowley, who is the Managlng Director of the applicant, had

been assiciated wlth two other companies who were at that time

said to owe sales tax. Apparently the claim against one of

those companies has since been abandoned -- but I know nothing

about the circumstances.	As to the second company, all that I	: ,
1'.

know is that it is claimed by the Deputy Commissioner that the

company remains indebted to the Deputy Commissioner for a

considerable sum by way of sales tax, but apparently this

question 1s Itself in issue.

If the matter stood only on the first ground, then I

would have some difficulty in reaching a conclusion that the

facts indicated a serious question	to be tried. However, I	I .-
I.

think that the second ground is a little stronger from the , .

applicant's point of view: and I say that wlthout having

formed any concluded view one way or the other. Indeed, on

the informatlon that	I have in front of me, it would be quite	I
:-

impossible to form such a view.

m	.
' , .

3.

IIowever, there is some evidence that the company did keep records of its sales as from the commencement of trading in January 1986 and that the reason why the books from January

1986 to June 1986 were not immedrately produced to the

auditors from the Australian Taxation Office was that they

were with the accountant in Orange at the time of the original

request. According to a letter dated 5 June 1987 from the

Deputy Commlssioner, the matter of sales records between

January 1986 and July 1986 was investigated by the auditors.

I infer, from what is said in the 5th paragraph of that

letter, that the auditors formed a view, or perhaps a

suspicion, that the sales ~ournal from 13 January 1986 was not

in fact kept during the period up to the end of June: but

that it was brought into existence at a later date. This may

not be the correct inference from the letter but, if so, it

would appear to be inconsistent with the evidence as it	,:’
presently stands. I think that it is arguable that an

erroneous assumption of fact was made	which was taken into	,.
, _ .

account to the disadvantage of the applicant.

r. ,.

I emphasize that I have no view as to whether or not

there was an error of fact or whether this was taken into

account: and still less a view as to whether it would have

affected the final assessment of addltional tax. However,

there is on the present evidence enough, possibly only just

enough, to enable the Court to conclude that there is a

serious question to be trled as to the legal validity of the

respondent‘s decision as to the additlonal tax.

!

4 .

I bear in mind that these matters are In dispute and

that, in addition, the respondent disputes the jurisdiction of

the Court to review the sub~ect decision and that the

appearance today is conditional only. Havlng all those

matters in mind, I have invited submissions as to whether

there would be any prejudice if the winding up petition were

adjourned for two or three weeks. Mr Slater frankly says that

he can point to none, and I think that this indicates that the

appropriate course 1s to grant an	interim order for a short
time pendlng a final hearing.

I

I propose to fix the matter for hearing on Thursday,

6 August 1987. I direct that the trial of the matter proceed

I

on the basis of affldavit evidence, sub~ect to

cross-examination as required. Any further affidavits to be

relied upon by the applicant are to be filed and served not

later than Monday, 3 August 1987. I appoint 9.30 a.m.

Thursday, 30 July for the return of any subpoenas.

I '

I I order that, pending further order, no further

steps, other than by way of adjournment of the proceedings in

1-

the Supreme Court of New South Wales, be taken in connectlon

i

with the prosecution of the winding up proceedings brought by

the respondent against the applicant.

I reserve the costs of today and I will add liberty

to apply on 2 4 hours' notice in case either party wishes to

make any application.

I

!

t

\	I ,
I . .

I certify the four ( 4 )

preceding pages to be a true copy of

I	the Reasons for Judgment of	!,
his Honour Mr Justlce Wilcox.
Associate: &z,tab

H ?

Date : 11 August 1 9 8 7

I.

. I

Counsel for the Applicant:	Mr L G Foster
Solicitors for the Applicant:	Baker & McKenzie
Counsel for the Respondent:	Mr A H Slater
Solicitors for the Respondent:	Australian Government
Solicitor ,
Date(s) of hearing:	20 J u l y 1987