FEDERAL COURT OF AUSTRALIA Northside Deli Pty Limited, in the matter of Deputy Commissioner of Taxation v Deputy Commissioner of Taxation [2011] FCA 1474 Citation: Northside Deli Pty Limited, in the matter of Deputy Commissioner of Taxation v Deputy Commissioner of Taxation [2011] FCA 1474 Parties: NORTHSIDE DELI PTY LIMITED ACN 054 152 411 v DEPUTY COMMISSIONER OF TAXATION File number(s): NSD 1982 of 2011 Judge: JAGOT J Date of judgment: 12 December 2011 Catchwords: CORPORATIONS – application for stay of winding-up orders – where applicant asserted serious and fundamental error in taxation assessments forming basis of statutory demand – where applicant expressed intention to apply for review by Administrative Appeals Tribunal – where no evidence of error and no application for review brought – where company not otherwise trading Date of hearing: 12 December 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Solicitor for the Plaintiff: Mr B Gelonesi of GP Legal Counsel for the Defendant: Mr A J O'Brien Solicitor for the Defendant: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1982 of 2011 IN THE MATTER OF DEPUTY COMMISSIONER OF TAXATION BETWEEN: NORTHSIDE DELI PTY LIMITED ACN 054 152 411 Plaintiff AND: DEPUTY COMMISSIONER OF TAXATION Defendant JUDGE: JAGOT J DATE OF ORDER: 12 DECEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for a stay of the Registrar's orders of 2 November 2011, dated 11 November 2011, be dismissed. 2. Mr Bruno Gelonesi pay the costs of the Deputy Commissioner of Taxation as agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1982 of 2011 IN THE MATTER OF DEPUTY COMMISSIONER OF TAXATION BETWEEN: NORTHSIDE DELI PTY LIMITED ACN 054 152 411 Plaintiff AND: DEPUTY COMMISSIONER OF TAXATION Defendant JUDGE: JAGOT J DATE: 12 DECEMBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application to stay orders made by the Court on 2 November 2011. On that date the District Registrar ordered that the defendant company, Northside Deli Pty Ltd (Northside Deli), be wound up; that Neil Cusson of Deloitte be appointed the liquidator of Northside Deli; and that the costs of the Deputy Commissioner of Taxation (the Deputy Commissioner) be fixed in a certain amount. 2 These orders were made consequential on a winding-up application which, according to the chronology provided to me by the Deputy Commissioner, was filed on 29 August 2011 following the dismissal by consent of an earlier winding-up application which had been filed on 6 November 2009. 3 In short, on 23 February 2011 – after the dismissal of the first winding-up application by consent on 25 June 2010 – the Australian Taxation Office (the ATO) issued a notice of its decision on Northside Deli's objection to certain assessments of taxation. On 23 March 2011 the amended assessments were issued. On 13 May 2011, with the amended assessments still unsatisfied, the ATO issued a statutory demand. As noted above, the winding-up application was then filed by the Deputy Commissioner on 29 August 2011. The application was given a first return date of 30 September 2011, on which date the Registrar adjourned the proceeding on the basis that Mr Gelonesi, a director of Northside Deli, appeared and indicated an intention to lodge an application for review in the Administrative Appeals Tribunal (the AAT). There was a further consent adjournment on 19 October 2011 on the basis of an indication from Mr Gelonesi that certain outstanding information would be provided. However, when the matter came back before the Registrar on 2 November 2011, this had not yet occurred. Mr Gelonesi, in his submissions before me today, has indicated that he sought a further adjournment on that occasion in order for the application for review to be lodged with the AAT but that, over his objection, the Registrar made the winding-up orders set out above. 4 The present application for a stay of the Registrar's orders was filed on 11 November 2011, and was accompanied by an affidavit of Mr Gelonesi sworn 10 November 2011. That affidavit alleges that the Deputy Commissioner's amended assessments are in dispute by reason of a failure to properly apply various provisions of the Superannuation Guarantee (Administration) Act 1992 (Cth) and otherwise. It also asserts that the Deputy Commissioner did not prove that Northside Deli was insolvent for various reasons set out in the affidavit. 5 The Deputy Commissioner's position is that the stay application is misconceived and should be dismissed. The Deputy Commissioner relies on an affidavit of Shirley Fenech, sworn 2 December 2011, which annexes relevant documents including the initial taxation assessments, the notices of objection, the ATO's decision on the objections, the amended assessments, and the documents relevant to the making of the statutory demand and the winding-up application. According to Ms Fenech's affidavit, the statement of account of the Deputy Commissioner records that as at 29 November 2011 the outstanding amount owed by Northside Deli was $552,473.52. 6 Before me today Mr Gelonesi has, in effect, repeated that the amended assessments were made on the basis of what he describes in his affidavit as a "serious and fundamental error", and that the Deputy Commissioner had available to it all the facts necessary to reach a different conclusion about the amounts that should have been assessed. However, the position remains as follows. First, between 23 March 2011 and today's date no application has been made to the AAT for review of the ATO's decision, and the 60-day period within which such an application might have been made would have expired some time ago. Secondly, there remains no evidence (other than of the most vague kind) that Northside Deli is in fact solvent. Finally, Mr Gelonesi has indicated that Northside Deli is not otherwise trading. 7 In these circumstances, and leaving aside the observation of the Deputy Commissioner that the stay application cannot be brought in the name of Northside Deli (as opposed to in Mr Gelonesi's own name in his capacity as a contributory), the short answer to this application is that Mr Gelonesi has not pointed to any fact, matter or circumstance which would persuade me this is an appropriate case for the exercise of discretion in his favour. Northside Deli was provided with ample time in which to challenge the ATO's amended assessments. No challenge was made over the many months during which it had an opportunity to do so; not has it otherwise sought an extension of time. The mere assertion that the Deputy Commissioner made a "serious and fundamental" error in the assessments is insufficient, and such an error cannot be assumed in this application in Mr Gelonesi's favour. To the contrary, the assessments have been issued and, on their face, stand as evidence of the taxation debt which is due and payable and which has not been paid. Nor, as Mr O'Brien submitted for the Deputy Commissioner, is there any evidence available which would persuade me that Northside Deli is in fact solvent; and, despite references to the assets of the owners of the company, there has been no indication of any basis upon which those assets would be made available to secure the debts due and owing to the Deputy Commissioner. 8 As such, there should be no stay of the orders made by the Registrar. To the contrary, the appropriate order, as indicated by Mr O'Brien, is that the application filed on 11 November 2011 be dismissed. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 19 December 2011