Akers (as joint foreign representative) v Saad Investments Company Limited; In the matter of Saad Investments Company Limited (in official liquidation) [2013] FCA 738

FEDERAL COURT OF AUSTRALIA

Akers (as joint foreign representative) v Saad Investments Company Limited; In the matter of Saad Investments Company Limited (in official liquidation) [2013] FCA 738 Citation: Akers (as joint foreign representative) v Saad Investments Company Limited; In the matter of Saad Investments Company Limited (in official liquidation) [2013] FCA 738

Parties: IN THE MATTER OF SAAD INVESTMENTS COMPANY LIMITED (IN OFFICIAL LIQUIDATION) (A COMPANY REGISTERED IN THE CAYMAN ISLANDS) STEPHEN JOHN AKERS AS A JOINT FOREIGN REPRESENTATIVE OF SAAD INVESTMENTS COMPANY LIMITED (IN OFFICIAL LIQUIDATION) (A COMPANY REGISTERED IN THE CAYMAN ISLANDS), HUGH DICKSON AS A JOINT FOREIGN REPRESENTATIVE OF SAAD INVESTMENTS COMPANY LIMITED (IN OFFICIAL LIQUIDATION) (A COMPANY REGISTERED IN THE CAYMAN ISLANDS) and MARK BYERS AS A JOINT FOREIGN REPRESENTATIVE OF SAAD INVESTMENTS COMPANY LIMITED (IN OFFICIAL LIQUIDATION) (A COMPANY REGISTERED IN THE CAYMAN ISLANDS) v SAAD INVESTMENTS COMPANY LIMITED (IN OFFICIAL LIQUIDATION) (A COMPANY REGISTERED IN THE CAYMAN ISLANDS) and DEPUTY COMMISSION OF TAXATION

File number: NSD 1168 of 2010

Judge: RARES J

Date of judgment: 30 July 2013

Addendum: 30 August 2013

Corrigendum: 30 January 2014

Catchwords: BANKRUPTCY AND INSOLVENCY – private international law – UNCITRAL Model Law on Cross-Border Insolvency – Cross-Border Insolvency Act 2008 (Cth) – where no jurisdiction to wind up insolvent foreign company in Australia – whether domestic tax debt or penalty can be collected in Australia before estate transferred to jurisdiction of foreign main proceedings as recognised under the Model Law – interlocutory undertaking preventing foreign representatives from remitting Australian proceeds of sale of estate to debtor's centre of main interests in Cayman Islands, recognised as location of foreign main proceedings – where debtor's liabilities for Australian tax and penalties not admissible to proof in Cayman Islands – where Commissioner entitled with all other unsecured creditors under Australian law to pari passu distribution of estate – where previous undertakings required both parties not to take action, including Commissioner issuing notices under Taxation Administration Act 1953 (Cth), in relation to debtor's Australian assets without giving notice to the other – application by Commissioner to modify previous orders to allow recovery of assets in Australia up to amount available were he entitled to be admitted to prove for tax debts and penalties in Cayman Islands PRIVATE INTERNATIONAL LAW – construction of UNCITRAL Model Law on Cross-Border Insolvency – Vienna Convention on the Law of Treaties – whether principle of modified universalism should be applied – whether international creditors would expect distribution of assets to include payments of local tax obligations and penalties – where Model Law silent on how local forum's taxation laws may operate to diminish debtor's estate before local assets remitted to debtor's centre of main interests – where if pari passu tax and penalty debts not retained in local jurisdiction before local assets remitted to debtor's centre of main interests, all other unsecured creditors and insolvent debtor receive windfall gain – construction of Art 22(1) of the Model Law – whether Commissioner's interests as creditor were adequately protected as required under Art 22 – whether local Court has jurisdiction to make orders enabling the distribution from debtor's local assets in respect of taxation and penalty liabilities to be made before assets remitted to centre of main interests under Art 22 PRIVATE INTERNATIONAL LAW – construction of Art 6 of UNCITRAL Model Law on Cross-Border Insolvency – whether failure to modify earlier orders under Art 20 would be manifestly contrary to Australian public policy ESTOPPEL – election – whether by submitting a proof of debt to liquidators to enable him to attend meeting of creditors and receive reports, Commissioner submitted to the jurisdiction of the Grand Court of the Cayman Islands Held: Model Law did not prevent Court of the local forum making provision for pari passu payment of local tax debts and penalties from debtor's local assets before assets remitted to debtor's centre of main interests – Commissioner's interests were not adequately protected by orders under Art 20 as required by Art 22(1) of the Model Law – Commissioner permitted to seek to prove here for such rights as he may have to recover from insolvent company's assts in Australia up to the pari passu amount that he would be entitled to receive as a dividend were he able to prove for the tax debts and penalties as an unsecured creditor in foreign main proceedings