Wilcom International Co Pty Limited v Deputy Commissioner of Taxation

Wilcom International Co Pty Limited appealed to the Full Federal Court against an order of a Master of the Federal Court which had dismissed its application to set aside a statutory demand issued by the Deputy Commissioner of Taxation. The core of the dispute concerned whether Wilcom had a genuine dispute about the existence of the debt claimed in the statutory demand, or whether there were substantial grounds upon which it could be said that it would be unfair for the Commissioner to rely on the demand.

The Full Federal Court was required to determine whether the Master erred in finding that Wilcom had failed to establish a sufficient basis for setting aside the statutory demand. Specifically, the court had to consider whether Wilcom had demonstrated a "genuine dispute" regarding the debt, or whether there were other substantial reasons why the demand should be set aside under section 459J(1)(b) of the *Corporations Act 2001* (Cth), such as the existence of offsetting claims or other grounds making it unjust to proceed.

The Full Federal Court allowed the appeal, finding that the Master had misapplied the principles governing applications to set aside statutory demands. The court held that Wilcom had raised substantial questions regarding the validity of the debt, particularly in relation to alleged contraventions of the *Foreign Acquisitions and Takeovers Act 1975* (Cth) and associated penalties, which constituted a genuine dispute about the existence of the debt. The court emphasised that a genuine dispute does not require a high degree of certainty of success for the applicant, but rather a real question of fact or law that is seriously arguable. The court also considered that it would be unfair to allow the Commissioner to rely on the statutory demand given the unresolved issues surrounding the debt.

Consequently, the Full Federal Court set aside the Master's order and the statutory demand, ordering the Deputy Commissioner of Taxation to pay Wilcom International Co Pty Limited's costs of the appeal and the costs incurred before the Master.