FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation v Croftworth Property Holdings (No 2) Pty Ltd (No 2) [2011] FCA 373 Citation: Deputy Commissioner of Taxation v Croftworth Property Holdings (No 2) Pty Ltd (No 2) [2011] FCA 373 Parties: DEPUTY COMMISSIONER OF TAXATION v CROFTWORTH PROPERTY HOLDINGS (NO 2) PTY LTD ACN 108 807 227 DEPUTY COMMISSIONER PTY OF TAXATION v BLAXLAND GARDENS LTD ACN 127 861 090 DEPUTY COMMISSIONER OF TAXATION v FENSTATE PTY LTD ACN 112 692 798 DEPUTY COMMISSIONER OF TAXATION v KINSWATER PTY LTD ACN 093 130 815 DEPUTY COMMISSIONER OF TAXATION v CROFTWORTH PROPERTY HOLDINGS (NO 1) PTY LTD ACN 106 280 666 DEPUTY COMMISSIONER OF TAXATION v HEIDELBERG INVESTMENTS PTY LTD ACN 105 533 033 DEPUTY COMMISSIONER OF TAXATION v CROFTWORTH PROPERTY HOLDINGS PTY LTD ACN 108 807 254 File number(s): QUD 24 of 2011 QUD 25 of 2011 QUD 27 of 2011 QUD 28 of 2011 QUD 29 of 2011 QUD 30 of 2011 QUD 31 of 2011 Judge: LOGAN J Date of judgment: 1 April 2011 Catchwords: CORPORATIONS – applications to wind up companies pursuant to a statutory demand under s 459P of the Corporations Act 2001 (Cth) – where application adjourned pending provision of debt finance from the United Kingdom – where no evidence that finance way provided – where other previously undisclosed debts existed – companies wound up Legislation: Corporations Act 2001 (Cth) s 466(2) Judiciary Act 1903 (Cth) Cases cited: Deputy Commissioner of Taxation v Clear Blue Developments (No 2) (2010) 190 FCR 11 considered Deputy Commissioner of Taxation v Croftworth Property Holdings (No 2) Pty Ltd [2011] FCA 296 cited Date of hearing: 1 April 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 11 Counsel for the Plaintiff: Mr R Derrington SC Solicitor for the Plaintiff: Australian Taxation Office Legal Services Branch Counsel for the Defendant: The Defendant did not appear IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 24 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: CROFTWORTH PROPERTY HOLDINGS (NO 2) PTY LTD ACN 108 807 227 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Croftworth Property Holdings (No 2) Pty Ltd ACN 108 807 227 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 25 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: BLAXLAND GARDENS PTY LTD ACN 127 861 090 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Blaxland Gardens Pty Ltd ACN 127 861 090 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 27 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: FENSTATE PTY LTD ACN 112 692 798 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Fenstate Pty Ltd ACN 112 692 798 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 28 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: KINSWATER PTY LTD ACN 093 130 815 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Kinswater Pty Ltd ACN 093 130 815 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 29 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: CROFTWORTH PROPERTY HOLDINGS (NO 1) PTY LTD ACN 106 280 666 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Croftworth Property Holdings (No 1) Pty Ltd ACN 106 280 666 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 30 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: HEIDELBERG INVESTMENTS PTY LTD ACN 105 533 033 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Heidelberg Investments Pty Ltd ACN 105 533 033 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 31 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: CROFTWORTH PROPERTY HOLDINGS PTY LTD ACN 108 807 254 Defendant JUDGE: LOGAN J DATE OF ORDER: 1 APRIL 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Croftworth Property Holdings Pty Ltd ACN 108 807 254 be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth). 2. Ian Currie, an official liquidator, be appointed liquidator of the company. 3. The plaintiff's costs be fixed in the sum of $6,192.44 and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). 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 QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 24 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: CROFTWORTH PROPERTY HOLDINGS (NO 2) PTY LTD ACN 108 807 227 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 25 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: blaxland gardens pty ltd acn 127 861 090 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 27 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: fenstate pty ltd acn 112 692 798 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 28 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: kinswater pty ltd acn 093 130 815 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 29 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: croftworth property holdings (no 1) pty ltd acn 106 280 666 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 30 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: heidelberg investments pty ltd acn 105 533 033 Defendant IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 31 of 2011 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Plaintiff AND: croftworth property holdings pty ltd acn 108 807 254 Defendant JUDGE: LOGAN J DATE: 1 APRIL 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 These reasons for judgment must be read in conjunction with the reasons for judgment which I previously delivered in respect of winding-up applications brought by the Commissioner in respect of a group of companies, which I described in my previous judgment as the Croftworth group of companies: Deputy Commissioner of Taxation v Croftworth Property Holdings (No 2) Pty Ltd [2011] FCA 296. 2 When these matters were last before the Court there was in evidence the prospect of offshore finance for the members of that group which, if obtained, would have seen the payment in full of the amounts outstanding to various unsecured creditors, including notably, in respect of debts owed to the Commonwealth and payable to its Chief Revenue Officer, the Commissioner under various Commonwealth revenue laws. 3 When the various applications were called on this morning there was no appearance by, or on behalf of, any of the defendant companies. That, in itself, is eloquent as to the fate of the winding-up applications. 4 In evidence this morning is an affidavit from a Mr Rosta of the Australian Taxation Office. Exhibited to that affidavit is material touching upon deeds of company arrangement in respect of companies which, in a broad sense, might be described as related by common directorship to the companies in the Croftworth group. I was informed that the affidavit had been prepared in anticipation of the contingency that the defendant companies might be placed in administration. I can, on that basis, see how the whole of the affidavit may have been relevant in that regard. There is no evidence before me of that contingency coming to pass. 5 There is, though, a separate relevance in Mr Rosta's affidavit. That arises from the evidence which he provides of a deed of company arrangement in respect of Corymbia Estates Pty Ltd. Under that deed one of the defendant companies, Fenstate Pty Ltd (Fenstate), is to provide half a million dollars in funds to creditors of Corymbia Estates by 31 March 2011. Mr Rosta deposes that, as at the date of the swearing of his affidavit, which was 31 March 2011, Fenstate had not made such a payment. The Commissioner, on behalf of the Commonwealth, is it seems, one of the creditors affected by that particular deed of company arrangement. 6 The relevance for present purposes of the liability of Fenstate under that deed is that the particular liability is a notable absentee from the indebtedness of Fenstate described by Mr Knight in his affidavit filed on 18 March 2011. It was upon Mr Knight's evidence, in his capacity as financial controller of the companies in the Croftworth group, that I relied in particular in determining that it was appropriate to adjourn the various winding-up applications to today. There is therefore a prima facie, unexplained absence of candour on the part of Mr Knight in that affidavit. 7 Also in evidence is an affidavit from Ms Cameron, another officer in the Australian Taxation Office, to which is exhibited material touching upon the company St James Capital Ltd (St James Capital), the address for which, on the previous occasion, was given at Empire House, 6th Floor, 175 Piccadilly, Mayfair, London, in the United Kingdom. Suffice it to say, the corporations search conducted on behalf of the Commissioner in respect of St James Capital gives, as the situation of that company's registered office a different London address, namely 10 Gloucester Place. That particular address is one disclosed in the annual return received for filing in the United Kingdom Companies Office on 28 April 2010. 8 It is, of course, possible that there may have been a change of address so that it is not necessarily inconsistent with the situation as revealed earlier this month. Nor is it necessarily inconsistent that Mr Alexander, the author of the correspondence from St James Capital, which was influential on the previous occasion, is not listed in the company return as filed as a director at that stage of that company. Nonetheless it does sound an interrogative note which, when added to the absence of candour to which I have referred and the absence of an appearance, by or on behalf of the companies, and the absence of any evidence of the flow of funds as apprehended on the previous occasion, and the presumption under the Corporations Act 2001 (Cth) of insolvency, more than persuades me that there should be no further adjournment of the winding-up applications. 9 Rather, upon being satisfied that the presumption as to insolvency is not displaced by any other evidence and that the Commissioner is a creditor, I make the following orders: 1. In respect of each of the companies, an order that each be wound up in insolvency under the provisions of the Corporations Act 2001 (Cth); and 2. That in each instance Mr Ian Curry, an official liquidator, be appointed liquidator of the company. 10 As to costs, there is, unlike on an earlier occasion when I encountered an application for legal costs on behalf of the Commissioner (Deputy Commissioner of Taxation v Clear Blue Developments (No 2) (2010) 190 FCR 111), compliance with the rules of this Court in relation to the presence of a solicitor on the record. 11 In those circumstances, there being evidence as well that the named person, Mr Tanna, is both on the roll of practitioners kept under the Judiciary Act 1903 (Cth), as well as entitled to practice under the laws of a State, I further order in each case that the plaintiff's costs be fixed in the sum of $6,192.44, and reimbursed in accordance with s 466(2) of the Corporations Act 2001 (Cth). I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 14 April 2011