Deputy Commissioner of Taxation v Applied Design Development Pty Ltd (In Liq) [2002] FCA 205

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Applied Design Development Pty Ltd (In Liq) [2002] FCA 205

TAXATION – income tax – Pay As You Go system – interaction with Corporations Law – whether provisions obliging an entity to withhold an amount on account of taxation from a payment of salary or wages to an individual as an employee extend to oblige the withholding of an amount on account of taxation from dividends paid to a former employee on the winding up of a company – whether dividends paid pursuant to the winding up scheme constitute payments in the nature of salary or wages – whether creditor of a company being a former employee receives the said dividend in the capacity of creditor or employee. CORPORATIONS LAW – whether payment of dividend by a company in liquidation made to a former employee pursuant to s556(1)(e) of the Corporations Law enlivened an obligation to withhold and pay an amount on account of taxation to the Deputy Commissioner of Taxation – whether a liquidator in applying the company's property in discharging the company's liabilities acts as agent for the company or in pursuance of a personal statutory duty. Corporations Law of South Australia ("the Corporations Law") ss 9(1), 439C, 471A(1), 471B, 478(1)(a), 553, 553E, 556, 556(1)(e), 556(2), 1321. Income Tax Assessment Act 1997 (Cth) ss s221C(1A), 960-100. Taxation Administration Act 1953 (Cth), ss 3AA(2), 6-1, 6-10, 6-20, 11-1, 12-35, 15-10 to 15-35, 16-30, 16-70, 34A. Bank of Scotland v Macleod [1914] AC 311 - cited Beckwith v R (1976) 12 ALR 333 - applied Dean and McLean v Federal Commissioner of Taxation (1997) 37 ATR 52 -cited Hillman v Crystal Bowl Amusements Ltd [1973] 1 WLR 162 - cited McDonald v Deputy Commissioner of Taxation (1997) 37 ATR 521 - cited O'Brien v Tanning Research Laboratories Inc (1989) 7 ACLC 182 - cited Pyramid Building Society v Howell (1994) 14 ACSR 633 - cited Re Anglo-Moravian Hungarian Junction Railway Co; Ex parte Watkin (1875) 1 ChD 130 - cited Re Beverage Packers (Australia) Pty Ltd [1990] VR 446 -cited Re Farrow's Bank [1921] 2 Ch 164 - cited Re General Rolling Stock Co; Chapman's Case (1886) 1 Eq 346 -cited Re Johnson and Anor; Ex parte Law (1946) ABC 43 - distinguished Re Quatrovision Pty Ltd (In Liquidation) (1982) 1 NSWLR 95 - cited Re S & N (Nominees) Pty Ltd and the Companies Act 1981 (Cth) (1984) 15 ATR 475 - cited Reigate v Union Manufacturing Company (Ramsbottom) Ltd [1918] 1 KB 592 - cited Tanning Research Laboratories Inc v O'Brien (1990) 169 CLR 332 - cited Tanning Research Laboratories v O'Brien Inc (1987) 5 ACLC 820 - cited Trueman's Estate; Hooke v Piper (1872) LR 14 Eq 278 - cited DEPUTY COMMISSIONER OF TAXATION V APPLIED DESIGN DEVELOPMENT PTY LTD (IN LIQUIDATION) ACN 008 168 232 S.42 of 2001 MANSFIELD J 15 MARCH 2002 ADELAIDE