NSW Caselaw
New South Wales Supreme Court
CITATION : Young & Anor v Commissioner of Taxation [2010] NSWSC 288
HEARING DATE(S) : 25 February 2010
JUDGMENT DATE : 20 April 2010
JURISDICTION : Equity Division Corporations List
JUDGMENT OF : Palmer J
DECISION : Application granted.
CATCHWORDS : CORPORATIONS – Unfair preference payments – whether payment made to Commissioner is a payment to which the company is a party – whether payment to Commissioner is a transaction for the purposes of s 588FA(1), s 588FC and s 588FF(1).
LEGISLATION CITED : Corporations Act 2001 (Cth) – s 9, s 588FA, s 588FC, s 588FF, 588FGA(2).
CATEGORY : Principal judgment
David Gregory Young (First Plaintiff) PARTIES : Essential Outsourcing Pty Ltd a.t.f. for the D. Cain Family Trust (in liq) The Commissioner of Taxation (Defendant) Darren Cain (Respondent)
FILE NUMBER(S) : SC 2009/00289181
R.D. Marshall (Plaintiffs) COUNSEL : S. Golledge (Defendant) F. Austin (Respondent)
Gillis Delaney Lawyers (Plaintiffs) SOLICITORS : ATO Legal Services (Defendant) John Byrnes & Associates (Respondent)
2009/00289181 Young & Anor v Commissioner of Taxation
JUDGMENT
20 April, 2010
Introduction
1 The Plaintiffs are a company in liquidation and its liquidator. They seek to recover from the Defendant ("DCT") an amount of $128,367.23 as an unfair preference pursuant to Corporations Act 2001 (Cth) s 588FA and s 588FF ("the Act"). The payment to the DCT was made, allegedly on behalf of the company, in satisfaction of its liability for PAYG withholding tax. The DCT disputes its liability to repay the money as a preference upon only one ground, to which I will come in a moment. However, in case it is found liable to the liquidator, the DCT claims indemnity from the company's sole director, Mr Cain, pursuant to s 588FGA(2). 2 It is not disputed that the company was insolvent at the time of the payment to the DCT. The sole issue is whether the payment of $128,367.23 on 2 August 2007 was "a transaction" for the purposes of s 588FA(1), s 588FC and s 588FF(1). 3 "Transaction" is defined in CA s 9 as: "in Part 5.7B, in relation to a body corporate or Part 5.7 body, means a transaction to which the body is a party, for example (but without limitation):
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