Commissioner of Taxation (Cth) v Barnes [1975] HCA 61

High Court of Australia Barwick C.J. Gibbs, Stephen, Mason and Jacobs JJ. Commissioner of Taxation (Cth) v Barnes [1975] HCA 61

ORDER Judgment for plaintiff in the sum of $20,593.95 with costs.

Cur. adv. vult.

The following written judgments were delivered:—

Dec. 22 Barwick C.J., Mason and Jacobs JJ.

Between September 1972 and February 1973 Cowan Securities Ltd. ("the company") carried on a manufacturing business and, in the course thereof, employed a number of persons. The company was registered as a group employer under the provisions of s. 221F of the Income Tax Assessment Act 1936-1970 Cth ("the Act"), and during the said period an amount of $20,593.95 was deducted by the company from the salaries and wages of employees pursuant to s. 221C of the Act.

By deed made on 13th December 1972, the company gave to Vanbro Corporation Ltd., Soleng Pty. Ltd. and Solmark Pty. Ltd. ("the mortgagee") a charge over all and singular the assets and undertaking of the company whatsoever and wheresoever situate both present and future including uncalled and called, but unpaid, capital for the time being. The charge was to secure the payment of the principal moneys as defined. The deed provided that the charge should operate as a first floating charge as regards all freehold and leasehold property, fixtures, uncalled capital, unpaid calls, plant and machinery, and other chattels (other than stock-in-trade), books of account, vouchers, and other documents relating in any way to the business transactions of the company, and all securities, negotiable or otherwise, and documents evidencing title to or right to possession of any property at any time deposited with the mortgagee by the company, and the property mentioned in any such documents, and that the charge should operate as a first floating security as regards all other property and assets of the company charged by the deed. The amount of money owing by the company to the mortgagee was $260,000, and the deed acknowledged the agreement between the company and the mortgagee that, in consideration of the mortgagee's forbearance to petition for the winding up of the company, it would secure the said sum of $260,000 in the manner and upon the terms appearing in the deed. The term "principal moneys" was defined to mean and include this sum and all moneys then or thereafter to become owing to the mortgagee by the company including, inter alia, further advances.