Commissioner of Taxation v Macquarie Health Corp & Ors [1998] FCA 1136

IN THE FEDERAL COURT OF AUSTRALIA NG 118 of 1996

NEW SOUTH WALES DISTRICT REGISTRY NG 445 of 1995

BETWEEN: COMMISSIONER OF TAXATION

Applicant

AND: MACQUARIE HEALTH CORPORATION LIMITED

First Respondent

BUSINESS AND PROFESSIONAL LEASING PTY LTD

Second Respondent

RYNDALE PTY LTD

Third Respondent

SARZANA HOLDINGS PTY LTD

Fourth Respondent

RICHARD WALTER PTY LIMITED (IN LIQUIDATION)

Fifth Respondent

AT HOLDINGS PTY LTD

Sixth Respondent

MORLEA PROFESSIONAL SERVICES PTY LTD

Seventh Respondent

JUDGE: EMMETT J

DATE: 20 AUGUST 1998

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT HIS HONOUR: In the course of cross-examining Mr Holden, Mr Nettle QC showed him a document which became exhibit 13A, being a letter dated 4 October 1994 from Ventura Partnership to Greenwood Challoner. The letter is signed by Dr Wenkart. At the time when it was tendered, objection was taken on behalf of AT Holdings by Mr Macfarlan QC. When I enquired of Mr Nettle as to its relevance, Mr Nettle replied that it established the existence of the debt, that is to say, it showed the efficacy of the distributions made in 1984 for which the Commissioner was contending. I then confirmed that the document was to be admitted to prove the existence of the debt due by the Taxpayer to Ventura Securities Inc. Mr Nettle now seeks to have the letter admitted on a wider basis as being relevant to the assertion made in paragraph 32 of the defence to the amended second cross-claim. In that paragraph the allegation is made that at all relevant times Morlea and the beneficiaries of the trust of which Morlea acted as trustee were directed and controlled by Dr Wenkart and Mr Holden for the benefit of members of Dr Wenkart's family. That further tender is objected to by Mr Macfarlan. There is evidence that Ventura Securities Inc, one of the unit holders in the Aurelius Unit Trust, was acquired, or at least certain of its assets were acquired, by Dr Wenkart or somebody associated with Dr Wenkart. Mr Holden, in cross-examination, was asked whether he knew that Ventura Securities Inc was incorporated as a California limited partnership. He agreed with that proposition but said that whether that was for the benefit of Dr Wenkart as at 30 June 1994 he did not know. Mr Holden said that he thought that Ventura Securities Inc was for the benefit at that time of a Mr Rollo Davis. Mr Holden said that Mr Davis left the organisation in 1981 and died in 1982. However, Mr Holden said, in answer to an inquiry as to whether Ventura Securities Inc was for the benefit of Dr Wenkart or not, that he thought it was acquired from the estate of Rollo Davis. When asked whether Ventura Securities Inc was acquired he said he didn't know whether "we acquired Ventura, whether we acquired that company" and said that he thought that "we might have acquired some assets, not necessarily the structure" and said that "I'm not sure whether I, I don't believe I acquired the structure, I believe I acquired the assets of it". The document in question may have some marginal relevance because of a presumption of continuity from 1982 until the date of the document in 1994. The document is on the writing paper of Ventura Partnership although there is no evidence as to what connection there is between Ventura Partnership and Ventura Securities Inc. However, having regard to the lateness of the time at which it is now sought to have the document admitted on an additional basis and having regard to what seems to me to be the minimal weight which I could attach to it in terms of the issue raised by paragraph 32 of the defence to the second cross-claim, I consider that it is not appropriate that it be admitted on any additional basis. Accordingly, I confirm that the document is in evidence only on the basis upon which I originally allowed it to be tendered. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett