FEDERAL COURT OF AUSTRALIA Panadell Architectural Cladding Systems Pty Limited (In Liquidation) v Commissioner of Taxation [2010] FCA 1502 Citation: Panadell Architectural Cladding Systems Pty Limited (In Liquidation) v Commissioner of Taxation [2010] FCA 1502 Parties: PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) and SUTHERLAND AND ARNAUTOVIC AS LIQUIDATORS OF PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) v COMMISSIONER OF TAXATION File number(s): NSD 1036 of 2010 Judges: EMMETT J Date of judgment: 3 December 2010 Legislation: Corporations Act 2001 (Cth) s 588FGA Date of hearing: 3 December 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 4 Solicitor for the Plaintiff: S.K. Mullette of Matthews Folbigg Solicitor for the Defendant: I. Chan of the Australian Taxation Office Counsel for the Respondent on the motion: The Respondent on the motion did not appear IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1036 of 2010 BETWEEN: PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) First Plaintiff SUTHERLAND AND ARNAUTOVIC AS LIQUIDATORS OF PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) Second Plaintiff AND: COMMISSIONER OF TAXATION Defendant / Applicant on the motion CLAUS DAM MAARCHALK Respondent on the motion JUDGE: EMMETT J DATE OF ORDER: 3 DECEMBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 588FF(1)(a) of the Corporations Act 2001 (Cth), the defendant pay to the plaintiffs the sum of $63,000 within 28 days' service of a sealed copy of this order on the defendant. 2. Interest pursuant to s 52 Federal Court Act 1976 (Cth) shall be payable at the prescribed rate from the date on which judgment takes effect upon so much of the amount referred to in order 1 above as remains unpaid after 28 days of service of a sealed copy of order. 3. The respondent pay to the defendant, pursuant to s 588 FGA(2) of the Corporations Act the sum of $53,251.83. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1036 of 2010 BETWEEN: PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) First Plaintiff SUTHERLAND AND ARNAUTOVIC AS LIQUIDATORS OF PANADELL ARCHITECTURAL CLADDING SYSTEMS PTY LIMITED (IN LIQUIDATION) Second Plaintiff AND: COMMISSIONER OF TAXATION Defendant / Applicant on the motion CLAUS DAM MAARCHALK Respondent on the motion JUDGE: EMMETT J DATE: 3 DECEMBER 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this proceeding the plaintiffs, being a company in liquidation and its liquidators, claimed payment from the defendant, the Commissioner of Taxation, of sums said to have been paid, the effect of which was to give the Commissioner a preference. The Commissioner does not dispute the claims made by the plaintiffs. However, the Commissioner seeks indemnity under s 588FGA(2) of the Corporations Act 2001 (Cth) (the Act). That indemnity was claimed by interlocutory process filed on 25 August 2010. Points of claim, in relation to the interlocutory process and an affidavit in support was served on the respondent, Mr Claus Dam Maarschalk, on 7 September 2010. 2 No appearance has been entered, and there was no appearance for Mr Dam Maarschalk when the matter was called for hearing today. However, there is evidence of correspondence between the Commissioner's solicitors and Mr Dam Maarschalk's solicitors concerning the claim for indemnity. In that correspondence, the solicitors initially indicated that they required the Commissioner to defend the claim by the plaintiffs that the first plaintiff was insolvent at the time that the payments were made to the Commissioner. After a further exchange of correspondence the solicitors indicated that they no longer had instructions. The Commissioner's solicitors therefore wrote directly to Mr Dam Maarschalk, indicating that they intended to proceed on the interlocutory process today. There is no evidence of any response from Mr Dam Maarschalk. 3 The Commissioner is entitled to recover debts due to the Commonwealth and payable to the Commissioner of Taxation. Section 588FF of the Act relevantly provides that where, on the application of a company's liquidator, the Court is satisfied that a transaction of the company is voidable because of section 588FE, the Court may make an order that a person pay an amount equal to the amounts of money paid under the transactions. The plaintiffs and the Commissioner, in the absence of any application by Mr Dam Maarschalk to stand in the shoes of the Commissioner, have consented to an order that the Commissioner pay to the plaintiffs the sum of $63,000 together with interest. Under s 588FGA, where the Court makes an order under section 588FF against the Commissioner of Taxation, each person who was a director of the company when the payment was made is liable to indemnify the Commissioner in respect of any loss or damage resulting from the order. Under s 588FGA(4) the Court may, in the proceeding in which it makes an order against the Commissioner, order a person to pay the Commissioner an amount payable under section 588FGA(2). 4 In the circumstances, I consider that it is appropriate to accede to the Commissioner's application. The evidence before me indicates that the amount of the $63,000, which was applied to group tax or other liabilities, totals some $53,251.83. Accordingly, I propose to order that Mr Dam Maarschalk pay that sum to the Commissioner, pursuant to s 588FGA(2) of the Act. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 25 January 2011