Dexcam Australia Pty Ltd (In Liquidation) v Deputy Commissioner of Taxation [2002] FCA 820

FEDERAL COURT OF AUSTRALIA

Dexcam Australia Pty Ltd (In Liquidation) v Deputy Commissioner of Taxation [2002] FCA 820 INCOME TAX – applicant (Dexcam) in administration – Deed of Company Arrangement (the Deed) executed whereby "Participating Creditors" entitled to payment of debts – Commissioner a Participating Creditor for purposes of Deed – Commissioner submits proof of debt to Administrator for an amount of $715,328 (the pre-Deed debt) – Dexcam lodges income tax returns for 1993 to 1996 financial years – Commissioner makes assessments and Dexcam becomes entitled to prescribed payment system (PPS) credits plus interest credits under Div 3A of Pt VI of Income Tax Assessment Act 1936 (Cth) (the ITA Act) – Commissioner sets-off the PPS credits and interest credits against tax assessed to be payable for 1993 to 1996 financial years and against part of the pre-Deed debt – Commissioner has notice Dexcam insolvent at time of set-off – Dexcam defaults on payments under Deed and Deed terminated – whether there was "tax payable" within meaning of s 221YHG(2) of ITA Act against which Commissioner could set-off tax credits – whether Ch 5 of Corporations Law operated concurrently with Pt VI of ITA Act after enactment of Insolvency (Tax Priorities) Legislation Amendment Act 1993 (Cth) (the Priorities Act) – whether provisions of Pt VI of ITA Act outside general statutory schemes relating to issues of set-off in insolvency WORDS AND PHRASES – "tax payable"

Income Tax Assessment Act 1936 (Cth) s 221YHG(2) and s 222ARA Corporations Law s 553C Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 at 9 applied Clyne v Deputy Commissioner of Taxation (No 3) (1984) 154 CLR 589 at 594 applied McDermott v Black (1940) 63 CLR 161 at 184-5 referred to Taylor v Commissioner of Taxation (1987) 16 FCR 212 distinguished Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 74-5 referred to Commissioner of Taxation v Kavich (1996) 68 FCR 519 at 523-6, 535-7 applied Scott v English [1947] VLR 445 at 453 followed Osborn v McDermott [1998] 3 VR 1 at 9 cited Re Kolb; Ex parte England v Commissioner of Taxation (1994) 51 FCR 31 cited Gye v McIntyre (1991) 171 CLR 609 discussed DEXCAM AUSTRALIA PTY LTD (IN LIQUIDATION) & ORS v DEPUTY COMMISSIONER OF TAXATION VG 3023 of 1999 HEEREY J 27 JUNE 2002 MELBOURNE