In the matter of Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) [2021] NSWSC 232

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) [2021] NSWSC 232 Hearing dates: 4, 6 and 7 August 2020; last submissions received 18 December 2020 Date of orders: 12 March 2021 Decision date: 12 March 2021 Jurisdiction: Equity - Corporations List Before: Rees J Decision: Creditor ordered to repay $2m in voidable transactions to liquidator, with costs. Catchwords: CORPORATIONS – voluntary administration – ATO largest creditor, owed $2.6m – ATO votes against DOCA – DOCA executed – company returns to control of director – company fails to pay tax – 6 default notices issued by deed administrators – ATO issues garnishee notice and enters into 4 payment arrangements – deed administrators seek to terminate DOCA – ATO votes for DOCA to continue – defaults continue – DOCA terminated – ATO then owed $6.9m – ATO received $2m during 'relation back' period. CORPORATIONS – unfair preferences – creditor paid by third party – whether creditor received "from the company" within s 588FA(1)(b) Corporations Act 2001 (Cth) – case law review at [9]-[39] – Cant v Mad Brothers Earthmoving Pty Ltd (in liq) [2020] VSCA 198 not plainly wrong – summary of factors for third party payments at [40] – evidentiary challenges for liquidators at [41]. CORPORATIONS – voidable transactions – whether payments made "by, or under the authority of the administrator of the deed" within s 588FE(2B)(d)(i) Corporations Act – Commissioner of Taxation v Yeo as Liquidator of Ready Kit Cabinets Pty Ltd (in liq) [2020] FCAFC 199 followed. Legislation Cited: Bankruptcy Act 1966 (Cth) Building and Construction Industry Security of Payment Act 1999 (NSW) Corporations Act 2001 (Cth) ss 439A, 444G, 445HA, 588FA, 588FE and 588FF Corporate Law Reform Act 1992 (Cth) Cases Cited: Airservices Australia v Ferrier [1996] HCA 54; (1996) 185 CLR 483 Analogy Pty Ltd (Receiver and Manager Appointed) (in liq) v Bell Basics Industries Ltd (Full Court of the Supreme Court of Western Australia, Malcolm CJ, Kennedy and Anderson JJ, 23 August 1995, unreported, BC9502636) BCI Finances Pty Ltd (In Liq) v Binetter [2018] FCAFC 189; (2018) 132 ACSR 1 BCI Finances Pty Ltd (In Liq) v Binetter (No 4) [2016] FCA 1351; (2016) 117 ACSR 18 Beveridge v Whitton [2001] NSWCA 6 Burness v Supaproducts Pty Ltd [2009] FCA 893; (2009) 74 ACSR 1 CAL No 14 Pty Ltd v Motor Accidents Insurance Board (2009) 239 CLR 390; [2009] HCA 47 Cant v Mad Brothers Earthmoving Pty Ltd (in liq) [2020] VSCA 198 Commissioner of Taxation v Kassem (2012) 205 FCR 156; [2012] FCAFC 124 Commissioner of Taxation v Yeo as Liquidator of Ready Kit Cabinets Pty Ltd (in liq) [2020] FCAFC 199 Farah Constructions Pty Ltd v Say-dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Hosking v Extend N Build Pty Ltd [2018] NSWCA 149; (2018) 128 ACSR 555 International Air Transport Association v Ansett Australian Holdings Ltd (2008) 234 CLR 151; [2008] HCA 3 Mann v Sangria Pty Ltd [2001] NSWSC 172; (2001) 38 ACSR 307 McKern v Minister Administering the Mining Act 1978 (WA) (2010) 28 VR 1; [2010] VSCA 140 N & M Martin Holdings Pty Ltd v Commissioner of Taxation [2020] FCA 1186 R v Commonwealth Conciliation and Arbitration Commission; Ex parte Association of Professional Engineers of Australia (1959) 107 CLR 208 Re Discovery Books Pty Ltd (1973) 20 FLR 470 Re Eliana Construction and Developing Group Pty Ltd (No 2) [2019] VSC 546 Re Emanuel (No 14) Pty Ltd (in liq) (1997) 24 ACSR 292 Re Evolvebuilt Pty Ltd [2017] NSWSC 901 Re Ready Kit Cabinets Pty Ltd (in liq) [2020] FCA 632 Sands & McDougall Wholesale Pty Ltd v Commissioner of Taxation (in liq) [1999] 1 VR 489; [1998] VSCA 76 Sheldrake v Paltoglou [2006] QCA 52 VR Dye & Co v Peninsula Hotels Pty Ltd (in liq) [1999] 3 VR 201; [1999] VSCA 60 Walsh (as liq of Thompson Land Ltd) v Terranova Pty Ltd (1994) 14 ACSR 432 Texts Cited: Hamilton, "Conflicting Intermediate Appellate Courts Decisions: Voidable Preferences, Third-Party Payments and the Relevance of Double–Entry Book-Keeping" (2020) 20 Insolvency Law Bulletin 207 Keay, "An Analysis of Unfair Preferences under the New Avoidance Regime" (1996) 24 Australian Business Law Review 39 Category: Principal judgment Parties: Richard Albarran and David Ross in their capacity as joint and several liquidators of Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) (First Plaintiff) Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) (Second Plaintiff)