Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) [2023] NSWCA 118 Hearing dates: 24 November 2022 Date of orders: 30 May 2023 Decision date: 30 May 2023 Before: Gleeson JA at [1] White JA at [198] Brereton JA at [201] Decision: (1) Grant leave to appeal. (2) Direct the appellant to file a notice of appeal in the form contained in the White Book within 7 days. (3) Appeal allowed on grounds 1 and 2 and otherwise is dismissed. (4) Set aside order 1 and order 3 made on 12 May 2022, and in lieu, give directions to the first plaintiffs as liquidators of the second and third plaintiffs in accordance with (5) below and make the costs order in accordance with (6) below. (5) Pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS), being Sch 2 to the Corporations Act 2001 (Cth) (Act), the first plaintiffs as liquidators of the second plaintiff, Spitfire Corporation Limited (in liq) (Spitfire), are justified in: (a) treating the amount received by Spitfire by way of research and development tax incentive refunds in the total amount of $1,989,849.09 while Spitfire was in liquidation (R&D Refunds) as not subject to a circulating security interest for the purposes of s 561 of the Act; and (b) subject to any equitable lien of the first respondents, paying the R&D Refunds to the Resilient Investment Group Pty Ltd (Resilient). (6) There be no order as to costs as between Resilient and the plaintiffs in the proceedings below, and otherwise the plaintiffs' costs of the proceeding be costs in the liquidation of the second plaintiff. (7) The fourth respondent to pay 70 per cent of the appellant's costs in this Court. (8) The first respondents' costs in this Court be paid out of the fund, being the proceeds of the R&D Refunds received by the first respondents. (9) The fourth respondent to pay the first, second and third respondents' costs in this Court. Catchwords: MORTGAGES AND SECURITIES — Personal Property Securities Act 2009 (Cth), s 340 — Where liquidators received tax refunds after winding up commenced — Where refunds arose from tax offsets for R&D expenditure — Whether refunds were "circulating assets" at relevant date — Whether refunds were "personal property" in form of an "account" — Whether entitlement to refunds chose in action against Commonwealth at relevant date — Whether refunds "arise from" providing services in ordinary course of a business of providing services of that kind (financial platform services) EMPLOYMENT AND INDUSTRIAL LAW — Identity of employer — Where employer of record was related company to parent company — Whether related company was the agent for an undisclosed principal — Where related company carried on no business activities, had no assets or revenue — Where parent company paid employees directly — Where no labour hire agreement between parent and related company — Where book debt owing by related company to parent company for employee payments the subject of deed of forgiveness EMPLOYMENT AND INDUSTRIAL LAW — Identity of employer — Agency — Whether application of undisclosed agency principles inconsistent with orthodox contractual principles for determining character of employee-employer relationship Legislation Cited: Bankruptcy Act 1924 (Cth), s 95 Bankruptcy Act 1966 (Cth), ss 122 Corporations Act 2001 (Cth), ss 51, 51C, 433(3), 556, 560, 561, Pt 5 Div 6, Sch 2 (Insolvency Practice Schedule), s 90-15 Income Tax Act 1986 (Cth), ss 5 Income Tax Assessment Act 1936 (Cth), ss 6, 161, 161AA, 166, 166A, 170, 221YB, 221YE Income Tax Assessment Act 1997 (Cth), ss 4-10, 5-5, 63-10, 67-30, 355-1, 355-20, 355-25, 355-30, 355-35(1)(a), 355-100, 355-205, 355-210, 355-305, 355-315, 355-480, 355-520, 355-525, 355-580, 701-1, 733-50, 995-1 Industry, Research and Development Act 1986 (Cth), s 27A, Pt III Personal Property Securities Act 1999 (NZ), s 16 Personal Property Securities Act 2009 (Cth), ss 10, 340 Supreme Court Act 1970 (NSW), s 101(2)(e) Supreme Court (Corporations) Rules 1999 (NSW), r 2.13(1) Taxation Administration Act 1953 (Cth), Sch 1, Pt IIB, ss 8AAZA, 8AAZC(1), (2), 8AAZD(1), 8AAZL, 8AAZLA, 8AAZLB, 8AAZLF, 250-5, 250-10, 255-1, 255-5 Tax Bonus for Working Australians Act (No 2) 2009 (Cth), ss 5, 7 Uniform Civil Procedure Rules 2005 (NSW) (UCPR), rr 42.1 Cases Cited: Addy v Commissioner of Taxation [2021] HCA 34; (2021) 394 ALR 214 Australian Securities and Investment Commission v GDK Financial Solutions Pty Ltd (in liq) (No 4) [2008] FCA 858; (2008) 169 FCR 497 Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2015] WASCA 143 Binetter v Federal Commissioner of Taxation (2016) 249 FCR 534; [2016] FCAFC 163 Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 Burns v McFarlane (1940) 64 CLR 108 Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth (2019) 268 CLR 524; [2019] HCA 20 Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 Commissioner of Taxation (Cth) v Official Receiver (1956) 95 CLR 300; [1956] HCA 24 Commissioner of Taxation of the Commonwealth of Australia v 4 Doonan Street Collinsville Pty Ltd (in liq) [2016] NSWCA 69; (2016) 332 ALR 349 Commissioner of Taxation v Carter [2022] HCA 10; (2022) 399 ALR 521 Commonwealth of Australia v Construction, Forestry, Mining & Energy Union (2000) 98 FCR 31; [2000] FCA 453 Commonwealth v Byrnes (2018) 54 VR 230; [2018] VSCA 41 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; (2022) 398 ALR 404 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174; [2011] FCA 1176 Federal Commissioner of Taxation v H (2010) 188 FCR 440; [2010] FCAFC 128 Federal Commissioner of Taxation v Offshore Oil NL (1980) 32 ALR 193 Federal Commissioner of Taxation v Travelex Ltd (2021) 271 CLR 605; [2021] HCA 8 Filatona Trading Ltd v Navigator Equities Ltd [2020] EWCA Civ 109 Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher & Barnet (as liquidators of Octaviar Administration Pty Ltd (in liq)) (2015) 89 NSWLR 110; [2015] NSWCA 85 Golden Plains Fodder Australia Pty Ltd v Millard (2007) 99 SASR 461; [2007] SASC 391 Gothard v Davey [2010] FCA 1163; (2010) 80 ACSR 56 Hardinge v Schidor [2002] NSWCA 277 Hammersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liq) (Recs and Mgrs Apptd) (2017) 52 WAR 90; [2017] WASC 152 Hammersley Iron Pty Ltd v Forge Power Pty Ltd (2018) 53 WAR 325; [2018] WASCA 163 Health Insurance Commission v Peverill (1994) 179 CLR 226; [1994] HCA 8 Keighey, Maxstead & Co v Durant [1901] AC 240 Letten v Templeton [2014] FCAFC 131; (2014) 102 ACSR 425 Loxton v Moir (1914) 18 CLR 360; [1914] HCA 89 Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 Mooney v Williams (1905) 3 CLR 1 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9; [1963] HCA 21 Pape v Federal Commissioner of Taxation (2009) 238 CLR 1; [2009] HCA 23 Pitcher v Langford (1991) 23 NSWLR 142 Quintano v BW Rose Pty Ltd [2008] NSWSC 793 Re Branded Media Holdings Pty Limited (in liquidation) [2020] NSWSC 557 Re DH International Pty Ltd (in liq) [2017] NSWSC 870; (2017) 121 ACSR 585 Re Evans; Ex parte Sweeney v Evans (1995) 61 FCR 556; (1995) 134 ALR 597 Re GB Nathan & Co Pty Ltd (in liq) (1991) 24 NSWLR 674; (1991) 5 ACSR 673 Regional Express Holdings Ltd v Australian Federation of Air Pilots (2017) 262 CLR 456; [2017] HCA 55 Re Langdon; Forge Group Ltd (recs & mngrs apptd) (in liq) [2017] FCA 170; (2017) ACSR 434 Re Mondin; Ex parte Bradshaw (1985) 6 FCR 430 Re Spitfire Corporation Limited (in liquidation) and Aspirio Pty Limited (in liquidation) [2022] NSWSC 340; (2022) 160 ACSR 394 Re Spitfire Corporation Limited (in liquidation) and Aspirio Pty Limited (in liquidation) [2022] NSWSC 579 Re RCR Tomlinson Ltd (admins appted) [2020] NSWSC 735 Reynolds Bros (Motors) Pty Ltd v Esanda Ltd (1983) 8 ACLR 422 R v Foster; Ex parte Commonwealth Life (Amalgamated Assurances) Ltd (1952) 85 CLR 138; [1952] HCA 10 Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 Shepherd v Hills (1855) 11 Ex Ch 55; 156 ER 743 Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199 Strategic Finance Ltd (in liq) v Bridgman [2013] 3 NZLR 650; [2013] NZCA 357 Sturesteps v McGrath [2010] NSWSC 169 Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545 Undershaft (No 1) Ltd v Federal Commissioner of Taxation (2009) 175 FCR 150; [2009] FCA 41 Walton v National Employers' Mutual General Insurance Association Ltd [1973] 2 NSWLR 73 Winstonu Pty Ltd v Piston [2001] FCA 541 WorkPac Pty Ltd v Rossato (2021) 271 CLR 456; [2021] HCA 23 ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; (2022) 398 ALR 603 Texts Cited: Heydon JD, Leeming MJ, Turner PG, Meagher, Meagher, Gummow & Lehane's Equity Doctrines & Remedies (5th ed, 2015, Lexis Nexis Butterworths) Category: Principal judgment Parties: Resilient Investment Group Pty Ltd (Appellant) Kate Elizabeth Barnet and Damien Hodgkinson as liquidators of Spitfire Corporation Limited (in liq) (First respondent) Spitfire Corporation Limited (in liq) (Second respondent) Aspirio Pty Ltd (in liq) (Third respondent) Commonwealth of Australia, represented by the Department of Employment and Workplace Relations (Fourth respondent) Representation: Counsel: M Hodge KC / J Burnett (Applicant) D Krochmalik (First, Second, Third respondents) M Izzo SC / C Ernest (Fourth respondent)