Neil Robert Cussen as Liquidator of Akai Pty Ltd (in liq) v Commissioner of Taxation [2004] NSWCA 383

Reported Decision : 51 ACSR 530 (2004) 22 ACLC 1528

New South Wales Court of Appeal

CITATION : Neil Robert Cussen as Liquidator of Akai Pty Ltd (in liq) v Commissioner of Taxation [2004] NSWCA 383 HEARING DATE(S) : 12 & 13 August 2004 JUDGMENT DATE : 22 October 2004

JUDGMENT OF : Spigelman CJ at 1; Handley JA at 125; Tobias JA at 126 DECISION : Appeal dismissed.

CATCHWORDS : CORPORATIONS - INSOLVENCY - UNFAIR PREFERENCE - whether reasonable person in ATO's position would have had grounds for suspecting insolvency - Proper interpretation of s588FG(2)(b) Corporations Act - whether test under s588FG(2)(b)(ii) is subjective or objective - Whether test under s588FG(2)(b)(ii) includes a duty to inquire - significance of various factors including late payments, preparedness to pay higher rate of interest, and false explanations for cash flow difficulties. Bankruptcy Act 1924 LEGISLATION CITED : Bankruptcy Act 1966 Corporations Act 2001 D'Aloia v FCT (2003) 203 ALR 609 Dean-Willcocks v Commonwealth Bank of Australia (2003) 45 ACSR 564 Downey v Aira Pty Ltd (1996) 14 ACLC 1068 Harkness v Commonwealth Bank of Australia Ltd (1993) 32 NSWLR 543 Lanpac International Pty Ltd v Automation House Pty Ltd [1998] VSC 9 Mann v Sangria Pty Ltd (2001) 38 ACSR 307 CASES CITED : Olifent v Workcover Corporation (SA) (1996) 185 FLR 423 Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 Re S & N (Nominees) Pty Ltd (In liq) (1986) 84 FLR 463 Re Whitgift Nominees Pty Ltd (in liq) (1983) 7 ACLR 680 Sands and McDougall (Wholesale) Pty Ltd (in liq) v Commissioner of Taxation (1996) 22 ACSR 383 Sheahan (liquidator) & Magill Constructions Holding Pty Ltd (in liq) v Workers Rehabilitation and Compensation Corporation (1991) 56 SASR 193 Sims v Celcast Pty Ltd (1998) 71 SASR 142 Smith v Deputy Commissioner of Taxation (1997) 75 FCR 339 PARTIES : Neil Robert Cussen as Liquidator of Akai Pty Ltd (in Liq) & Anor Commissioner of Taxation FILE NUMBER(S) : CA 40891/03 COUNSEL : Mr N Cotman SC / Mr G Lucarelli (Appellants) Mr M Aldridge SC / Mr P Radionoff (Respondent) SOLICITORS : Minter Ellison (Appellants) Emma Whan, Australian Government Solicitors (Respondent)