BCI Finances Pty Limited (in liq) v Binetter (No 4) [2016] FCA 1351

FEDERAL COURT OF AUSTRALIA BCI Finances Pty Limited (in liq) v Binetter (No 4) [2016] FCA 1351 File number: SAD 5 of 2015

Judge: GLEESON J

Date of judgment: 18 November 2016

Catchwords: CORPORATIONS – directors' duties – scheme for purpose of evading or avoiding liability to pay income tax – companies did not benefit from participation in scheme – whether directors breached duties – whether breach of duties resulted in tax liabilities – whether other respondents knowingly participated in breaches of duty

Legislation: Corporations Act 2001 (Cth) Evidence Act 1995 (Cth) Foreign Evidence Act 1994 (Cth) Income Tax Assessment Act 1936 (Cth) Income Tax Assessment Act 1997 (Cth) Taxation Administration Act 1953 (Cth) Law Reform (Miscellaneous Provisions) Act 1944 (NSW)

Cases cited: Allco Funds Management Ltd (Receivers and Managers Appointed) (In Liquidation) v Trust Company (RE Services) Ltd (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) [2014] NSWSC 1251 Angas Law Services Pty Ltd (in liq) v Carabelas [2005] HCA 23; (2005) 226 CLR 507 Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd (No 2) [2005] FCA 1357; (2005) 147 FCR 235 Australian Securities and Investments Commission v Hellicar [2012] HCA 17; (2012) 247 CLR 345 Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 75 ACSR 1 BCI Finances Pty Limited v Commissioner of Taxation [2012] FCA 855; (2012) 89 ATR 861 Beach Petroleum NL v Johnson [1993] FCA 392; (1993) 43 FCR 1 Belmont Finance Corporation v Williams Furniture Ltd (No 2) (1980) 1 All ER 392 Bilta (UK) Ltd (in liq) v Nazir [2015] UKSC 23; [2016] AC 1; [2015] 2 WLR 1168 Birtchnell v Equity Trustees, Executors and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384 Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 Breen v Williams [1996] HCA 57; (1996) 186 CLR 71 Buzzle Operations Pty Ltd (In Liq) v Apple Computer Australia Pty Ltd [2010] NSWSC 233; (2010) 77 ACSR 410 Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 Commissioner of Taxation v Firth [2002] FCAFC 95; (2002) 120 FCR 450 Commissioner of Taxation v Radilo Enterprises Pty Ltd [1997] FCA 22; (1997) 72 FCR 300 Commissioner of Taxation v Rawson Finances Pty Ltd [2012] FCA 753; (2012) 89 ATR 357 Coshott v Prentice [2014] FCAFC 88; (2014) 221 FCR 450 Daniels v Anderson (1995) 37 NSWLR 438; (1995) 118 FLR 248 Department of Health v Arumugam [1988] VR 319; (1988) 30 ALR 117 Deputy Commissioner of Taxation v Austin [1998] FCA 1034; (1998) 28 ACSR 565 Deputy Commissioner of Taxation v Clark [2003] NSWCA 91; (2003) 57 NSWLR 113 Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 Evans v Federal Commissioner of Taxation (1989) 20 ATR 922; (1989) 89 ATC 4540 Ex parte Ferguson; Re Alexander (1944) 45 SR (NSW) 64 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181; (2014) 87 NSWLR 435 Greenhalgh v Arderne Cinemas Ltd [1951] Ch. 286; [1950] 2 All E.R. 1120 Grimaldi v Chameleon Mining NL [2012] FCAFC 6; (2012) 200 FCR 296 Hampton Court Ltd v Crooks [1957] HCA 28; (1957) 97 CLR 367 Hitch v Stone [2001] EWCA Civ 63, [2001] S.T.C. 214 Ho v Powell [2001] NSWCA 168; (2001) 51 NSWLR 572 In re Halt Garage (1964 Ltd) [1982] 3 All ER 1016 John Alexander's Clubs Pty Ltd v White City Tennis Club Limited [2010] HCA 19; (2010) 241 CLR 1 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722 Krstic v Brindley [2006] NSWSC 1414 Lewincamp v ACP Magazines Ltd [2008] ACTSC 69 Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Limited v Kation Pty Limited [2005] NSWSC 482 Li v The Herald and Weekly Times Pty Ltd [2007] VSC 109; (2007) ATR 81-887 Macleod v The Queen [2003] HCA 24; (2003) 214 CLR 230 Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449 Mills v Mills [1938] HCA 4; (1938) 60 CLR 150 Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Parker v Paton (1941) 41 SR (NSW) 237 Paul's Retail Pty Ltd v Sporte Leisure Pty Ltd [2012] FCAFC 51; (2012) 202 FCR 286 Permanent Building Society (in Liq) v Wheeler (1994) 11 WAR 187; (1994) 12 ACLC 674; (1994) 12 ACSR 109 Peters' American Delicacy Co Ltd v Heath [1939] HCA 2; (1939) 61 CLR 457 Pilmer v The Duke Group Ltd [2001] HCA 31; (2001) CLR 165 R v Cuenco [2007] VSCA 41; (2007) 16 VR 118 Re Hampshire Land Co [1896] 2 Ch 743 Re Marseilles Extension Railway Co Ex p. Credit Foncier and Mobilier of England (1871) LR 7 Ch App 161 RHG Mortgage Ltd v Ianni [2015] NSWCA 56 Sharrment Pty Ltd & Ors v Official Trustee in Bankruptcy [1988] FCA 266; (1988) 18 FCR 449 Rolled Steel Products (Holdings) Ltd v British Steel Corp [1986] Ch 246 Sheahan v Thompson (No 2) [2015] NSWSC 871 Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405 Smithton Ltd v Naggar [2014] EWCA Civ 939; [2015] 1 W.L.R. 189 Snook v London & West Riding Investments Ltd [1967] 2 QB 786 Spies v The Queen [2000] HCA 43; (2000) 201 CLR 603 Stone & Rolls Ltd (In Liquidation) v Moore Stephens (A Firm) [2009] UKHL 39; [2009] 1 A.C. 1391 Target Holdings Ltd v Redferns [1996] AC 421 Texxcon Pty Ltd v Austexx Corporation Pty Ltd [2011] VSC 203 Thomson v Golden Destiny Investments Pty Limited [2015] NSWSC 1176 Tobin v Ezekiel [2012] NSWCA 285; (2012) 83 NSWLR 757 Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125; (1996) 9 ANZ Insurance Cases 61-385 Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 United Group Resources Pty Ltd v Calabro (No 5) [2011] FCA 1408; (2011) 198 FCR 514 Wardley Australia Limited v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 Whitton v Regis Towers Real Estate Pty Ltd [2007] FCAFC 125; (2007) 161 FCR 20 Austin RP and Ramsay IM, Ford's Principles of Corporations Law (16th ed, LexisNexis Butterworths, 2014) Hayne, KM. "Directors Duties and a Company's Creditors" (2014) 38 MULR 795 Heydon JD, Cross on Evidence (10th ed, LexisNexis Butterworths, 1970)