In the Matter of Oztec Pty Ltd [2012] NSWSC 1201

Supreme Court New South Wales

Medium Neutral Citation: In the Matter of Oztec Pty Ltd [2012] NSWSC 1201 Hearing dates: 16 July 2012 Decision date: 16 July 2012 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Extend time for the plaintiff to serve evidence Catchwords: CORPORATIONS - winding up - statutory demands - whether genuine dispute exists - dispute as to indebtedness to Australian Taxation Office - effect of conclusive evidence provisions in Taxation Administration Act - decision in Broadbeach Properties - those who rely on conclusive evidence provisions must do so punctiliously Legislation Cited: (Cth) Taxation Administration Act 1953, Sch 1, s 105-100, Sch 1, s 298-30 (NSW) Building and Construction Security of Payments Act 1999 Cases Cited: Deputy Commissioner of Taxation and Broadbeach Properties Pty Ltd [2008] HCA 41; (2008) 237 CLR 473 Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409 Category: Interlocutory applications Parties: Oztec Pty Ltd (Plaintiff) Deputy Commissioner of Taxation (Defendant) Representation: Mr S Oke (Director, in person) (Plaintiff) Mr Y Acheampong (Solicitor) (Defendant) ATO Legal Practice (Solicitor) (Defendant) File Number(s): 2012/101323

Judgment (ex tempore) 1HIS HONOUR: The plaintiff applies for an adjournment of the hearing of its originating process filed on 30 March 2012 seeking an order pursuant to (Cth) Corporations Act 2001, s 459G, setting aside a statutory demand served on it by the defendant Deputy Commissioner of Taxation. The Deputy Commissioner wishes to proceed with the hearing today. 2The application was first returnable before the Registrar on 1 May 2012, when it appears that it was adjourned to 7 May when it came before me as Corporations List Judge. On that day, by consent, directions were made for the defendant to serve its evidence by June, the plaintiff to serve evidence in reply by 2 July, and the matter be adjourned for directions to 9 July. Mr Oke, the plaintiff's Chief Executive Officer, appeared on behalf of the company that day, and signed the short minutes to that effect. 3The defendant's evidence was filed and served on or about 8 June 2012, in substantial compliance with those directions, albeit four days late. The plaintiff says that it did not come to the plaintiff's notice until recently. 4When the proceedings were before the court on 9 July, there was no appearance on behalf of the plaintiff, and I adjourned the matter to today, with a view to its being heard today, at least in the absence of any appearance for the plaintiff. The defendant was directed to notify the plaintiff of those directions, and duly did so. 5Today, the plaintiff appears again by Mr Oke, and seeks an adjournment to enable it to respond to the defendant's evidence. The explanation for non-appearance on 9 July, while hardly compelling, is not unacceptable, and I would not refuse an adjournment if satisfied that there was at least an argument to be had. 6The defendant, however, submits that because the nature of the debts are net GST assessments, and assessments for administrative penalties, they are covered by the conclusive evidence provisions in (Cth) Taxation Administration Act 1953, Sch 1 ss 105-100, 298-30, and that as a result of the decision of the High Court of Australia in Deputy Commissioner of Taxation and Broadbeach Properties Pty Ltd [2008] HCA 41; (2008) 237 CLR 473, even if - as the plaintiff says and the defendant disputes - an objection has been lodged in respect of the debts, there cannot be a "genuine dispute" as to their amount or existence [see also the decision of Barrett J in Mossimo Systems International Pty Ltd v Deputy Commissioner of Taxation [2010] NSWSC 1409, [26]-[28]]. 7On those authorities, it is clear that, if the conclusive evidence provisions were correctly invoked, there could not be a genuine dispute as to the amount of the indebtedness, insofar as it is reflected in assessments of the type to which those provisions refer. 8However, those who rely on conclusive evidence provisions must punctiliously comply with their conditions. For the purposes of the Taxation Administration Act, Sch 1, s 298-30, it would seem that either the original notice of assessment or "a copy of it certified by or on behalf of the Commissioner" is a precondition to invoking the conclusive evidence provision. At least in the case of the assessment of administrative penalties, the document produced in evidence is not the original, nor "a copy of it certified by or on behalf of the Commissioner". No doubt that could easily be remedied, but, as things stand, the conclusive evidence provision in that respect has not been effectively invoked. 9It may be that the same strict requirement does not apply in respect of s 105-100. In any event, because of the availability of the conclusive evidence provisions, it would seem that, if not now, at a later date, the plaintiff will encounter practically insuperable difficulties in establishing that there is a genuine dispute. 10However, the plaintiff raises two other arguments. One, which is to the effect that the creditor's statutory demand is defective, does not appear to be of substance. While the audit process might in some way affect the underlying debt, questions of deficiencies in the demand are concerned more with the form of the demand than the substance of the debt claimed, and the arguments raised in that respect did not identify any arguable defect in the form of the demand. 11The other argument, however, was that the plaintiff has an offsetting claim for research and development tax offsets, in respect of which it has lodged claims against the Australian Taxation Office. This was referred to in paragraph 20 of Mr Oke's s 459G affidavit. Some evidence, in the form of the company's 2011 tax return, and a copy of an application for an R&D tax concession, has been provided, such as to suggest that it is at least possible that it might have such a claim. 12At first sight, the rationale of the decision of the High Court in Broadbeach would not preclude a company from setting up an offsetting demand, as has been accepted to be open, for example, in cases concerning adjudication under the (NSW) Building and Construction Security of Payments Act 1999, where it is not open to dispute the debt, but offsetting demands may be raised. In those circumstances, it seems to me that the company ought to be allowed a short time to complete its evidence, and I will allow an adjournment of 21 days for that purpose.