DEPUTY COMMISSIONER OF TAXATION v CLARK [2003] NSWCA 91

(2003) 45 ACSR 332 Reported Decision : 57 NSWLR 113 (2003) 21 ACLC 1063

New South Wales Court of Appeal

CITATION : DEPUTY COMMISSIONER OF TAXATION v CLARK [2003] NSWCA 91 HEARING DATE(S) : 3 March 2003 JUDGMENT DATE : 1 May 2003

JUDGMENT OF : Spigelman CJ at 1; Handley JA at 171; Hodgson JA at 172 DECISION : Appeal allowed with costs.

CATCHWORDS : CORPORATIONS - insolvent trading - where husband and wife sole directors of company - where defence to claim for indemnity if "good reason" exists for non-participation in management of company - where wife accepted appointment as director at husband's request - what constitutes "good reason" for non-participation in management - directors' duties - standard of care and skill required of directors - irreducible expectation of participation in management - whether relevant to "good reason" defence - Corporations Act 2001 (Cth) s 588FGB - STATUTORY INTERPRETATION - ejusdem generis rule - whether relevant to "good reason" defence - whether denotation of "good reason" altered due to abolition of requirement of two directors - Corporations Act 2001 (Cth) s 588FGB Close Corporations Act 1989 (Cth) ss 64, 110 Company Law Review Act 1998 (Cth) Companies Code 1981 ss 229, 556 Corporate Law Reform Act 1992 (Cth) LEGISLATION CITED : Corporations Act 2001 (Cth) ss 128, 129, 180, 198A, 588FF, 588FGA, 588FGB, 588G, 588H, 588M, 588R, 588T, 588V, 588W, 588X, 1383, 1399 Corporations Law ss 223, 232, 301, 592 Income Tax Assessment Act 1936 (Cth) ss 221P, 221YHJ, 222ALA, 222ANA, 222AOB, 222AOI, 222AOJ, 222API, 222AQD First Corporate Law Simplification Act 1995 (Cth) Insolvency Act 1986 (UK) s 214 Insolvency (Tax Priorities) Legislation Amendment Act 1993 (Cth) 3M Australia Pty Ltd v Kemish (1986) 10 ACLR 371 Australian Securities Commission v Gallagher (1994) 11 WAR 105 Australian Securities and Investments Commission v Rich (2003) 44 ACSR 341 AWA Limited v Daniels (1992) 7 ACSR 759 Baker v Campbell (1983) 153 CLR 52 Biala Pty Ltd v Mallina Holdings Limited (No 4) (1994) 13 WAR 11 Byrne v Baker [1964] VR 443 CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 Cody v J H Nelson Pty Ltd (1947) 74 CLR 629 Commonwealth Bank of Australia v Friedrich (1991) 5 ACSR 115 Corporate Affairs Commission of New South Wales v Yuill (1991) 172 CLR 319 Council of the Shire of Lake Macquarie v Aberdare County Council (1969) 123 CLR 327 Daniels v Anderson (1995) 37 NSWLR 438 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2003) 77 ALJR 40 Dempster v Mallina Holdings Limited (1994) 13 WAR 124 DPP v Williams (1998) 104 A Crim R 65 Francis v United Jersey Bank 432 A 2d 814 (NJ 1981) Garcia v National Australia Bank Ltd (1998) 194 CLR 395 Group Four Industries Pty Ltd v Brosnan (1992) 59 SASR 22 Hore v Albury Radio Taxis Co-operative Society Limited [2002] NSWSC 1130 Imperial Chemical Industries of Australia and New Zealand Limited v Commissioner of Taxation (1972) 46 ALJR 35 CASES CITED : K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 Lake Macquarie Shire Council v Ades [1977] 1 NSWLR 126 Manpac Industries Pty Ltd v Ceccattini (2002) 20 ACLC 1,304 Mattinson v Multiplow Incubators Pty Ltd (1977) 1 NSWLR 368 Metal Manufactures Limited v Lewis (1986) 11 ACLR 122 Metal Manufacturers Limited v Lewis (1988) 13 NSWLR 315 Morley v Statewide Tobacco Services [1993] 1 VR 451 O'Reilly v State Bank of Victoria Commissioners (1983) 153 CLR 1 Permanent Building Society (in Liq) v Wheeler (1994) 11 WAR 187 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Quazi v Quazi [1980] AC 744 R v Gee [2003] HCA 12 R v Regos and Morgan (1947) 74 CLR 613 R v Secretary of State for Health; ex parte Quintavalle [2003] UKHL 13 R v Young (1999) 46 NSWLR 681 Re City Equitable Fire Insurance Co Limited [1925] Ch 407 Rema Industries & Services Pty Ltd v Coad (1992) 7 ACSR 251 Statewide Tobacco Services v Morley [1993] 1 VR 423 Szelagowicz v Stocker (1994) 35 ALD 16 Tourprint International Pty Ltd (in Liq) v Bott (1999) 32 ACSR 201 Powell v Deputy Commissioner of Taxation (District Court of Queensland, 12 December 1995, unreported) Wilson v Commissioner of Stamp Duties (1988) 13 NSWLR 77 PARTIES : Deputy Commissioner of Taxation (Appellant) Carole Ellyn Clark (Respondent) FILE NUMBER(S) : CA 40767/01 COUNSEL : Mr M Aldridge SC / Mr P Rodionoff (Appellant) Mr T Alexis (Respondent) SOLICITORS : Australian Government Solicitor (Appellant) S J Von Muenster (Respondent)