NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.316 of 1987 ) ) GENERAL DIVISION BETWEEN: TIBOFU PTY LIMITED Applicant AND: THE DEPUTY FEDERAL COMMISSIONER OF TAXATION Respondent CORAM: WILCOX J PLACE: SYDNEY DATE: 20 JULY 1987 /\ RECo Ins MINUTES OF ORDER 18 AUG 1987 FEDERAL COURT OF AUSTRALIA PRINCIPAL THE COURT DIRECTS THAT: A. The trial of the matter proceed on the basis of affidavit evidence, subject to cross-examination as required. 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 relied upon the respondent be filed and served not later than Monday, 3 August 1987. a wr "7 ae eee Cc. 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 (24) hours' notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. y Vos ten eee eww NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.316 of 1987 ) ) GENERAL DIVISION BETWEEN: TIBOFU PTY LIMITED Applicant AND: THE DEPUTY FEDERAL COMMISSIONER OF TAXATION Respondent CORAM : WILCOX J PLACE: SYDNEY DATE: 20 JULY 1987 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 1977 restraining the respondent, the Deputy Commissioner of Taxation, from taking any further steps in 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 TON oes ahs NR . support of the application 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 assessing the amount of the additional tax, that Mr T E Dowley, who is the Managing Director of the applicant, had been assiciated with 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 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 think that the second ground is a little stronger from the applicant's point of view; and I say that without having formed any concluded view one way or the other. Indeed, on the information that I have in front of me, it would be quite impossible to form such a view. op no " 3. Ilowever, 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 immediately 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 Commissioner, 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 journal 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. 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 additional 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 tried as to the legal validity of the respondent's decision as to the additional tax. wep ere age ee re ee ee per at tea ri 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 subject decision and that the appearance today is conditional only. Having 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 pending a final hearing. I propose to fix the matter for hearing on Thursday, 6 August 1987. I direct that the trial of the matter proceed on the basis of affidavit evidence, subject 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 order that, 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. I reserve the costs of today and I will add liberty to apply on 24 hours' notice in case either party wishes to make any application. ayaa pees ut ome ee at men nie a te eee > -— ro I certify the four (4) preceding pages to be a true copy of the Reasons for Judgment of his Honour Mr Justice Wilcox. associates banne, fotecd Date: 11 August 1987 Counsel for the Applicant: Solicitors for the Applicant: Counsel for the Respondent: Solicitors for the Respondent: Date(s) of hearing: Mr L G Foster Baker & McKenzie Mr AH Slater Australian Government Solicitor 20 July 1987