Deputy Commissioner of Taxation v Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust [2016] NSWSC 1657

Supreme Court New South Wales

Medium Neutral Citation: Deputy Commissioner of Taxation v Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust [2016] NSWSC 1657 Hearing dates: 18, 19 and 26 October 2016 Decision date: 24 November 2016 Jurisdiction: Equity - Corporations List Before: Black J Decision: The Court orders that the Defendant be wound up in insolvency and Mr David Young be appointed as liquidator of the Defendant. The Plaintiff's costs of the application to wind up the Defendant be paid out of the assets of the Defendant. The Amended Summons otherwise be dismissed, the Plaintiff to pay the Defendant's costs (other than in respect of the winding up application) as agreed or as assessed. The Amended Cross-Summons be dismissed, the Cross-Claimants to pay the Cross-Defendant's costs as agreed or as assessed. Catchwords: PROPERTY — Alienation of property — where defendant was corporate trustee that held properties on trust for a discretionary trust – where defendant as trustee of the discretionary trust had significant tax debts – where defendant executed declarations of trust by which it declared it held the relevant properties on trust for certain land tax unit trusts and the defendant received units in the unit trusts – where defendant as trustee of discretionary trust redeemed units for cash and subsequently paid monies to a third party – where Australian Taxation Office alleged declarations of trust were void under s 37A of the Conveyancing Act 1919 (NSW) – whether there was intent to defraud creditors – whether declarations of trust constituted an "alienation of property" in the relevant circumstances. EQUITY – Declaratory relief – where corporate trustee sought declarations from the Court that it holds each of the relevant properties on trust for the land tax unit trusts free from any interest in favour of the corporate trustee as trustee of the discretionary trust – whether declarations sought inconsistent with corporate trustee's right of indemnity over trust assets – where liquidator to be appointed to corporate trustee may have grounds to set aside transactions – whether declarations should be made. TRUSTS AND TRUSTEES — Corporate trustee in liquidation — where corporate trustee sought orders under s 70 of the Trustee Act 1925 (NSW) removing it as trustee of certain land tax unit trusts and appointing other corporate trustees in its place – whether orders ought be made. CORPORATIONS — Winding up — where Australian Taxation Office ("ATO") applied to wind up company in circumstances where there was a debt in respect of GST liability and a judgment debt against company in respect of other tax debts – where company applied to the Administrative Appeals Tribunal ("AAT") to review the ATO's decision to reject the company's objection to taxation assessments – where no evidence of substance adduced as to likelihood of success of AAT proceedings – whether company is insolvent – whether winding up orders ought be made. Legislation Cited: - Corporations Act 2001 (Cth), ss 37A, 95A, 459A, 459P, 467, Pt 5.7B - Conveyancing Act 1919 (NSW), s 37A - Evidence Act 1995 (NSW), s 136 - Land Tax Act 1958 (Vic), s 3 - Family Law Act 1975 (Cth) - Trustee Act 1925 (NSW), s 70 - Taxation Administration Act 1953 (Cth), ss 14ZQ, 14ZZM, 14ZZR Cases Cited: - Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26; (2012) 16 BPR 30,397 - Australian Beverage Distributors Pty Ltd v Evans & Tait Premium Wines Pty Ltd [2007] NSWCA 57; (2007) 69 NSWLR 374 - Australian Securities and Investments Commission v Plymin (No 1) [2003] VSC 123; (2003) 175 FLR 124 - Australian Securities and Investments Commission, Re; Richstar Enterprises Pty Ltd v Carey (No 6) [2006] FCA 814; (2006) 58 ACSR 141 - Australian Trade Commission v Film Funding and Management Pty Ltd (1989) 87 ALR 49 - Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 39 WAR 1 - Bentley Smythe Pty Ltd v Anton Fabrications (NSW) Pty Ltd [2011] NSWSC 186; (2011) 248 FLR 384 - Betfair Pty Ltd v Racing New South Wales [1020] FCAFC 133 (2010) 189 FCR 356 - Bruton Holdings Pty Ltd (in liq) v Federal Commissioner of Taxation [2009] HCA 32; (2009) 239 CLR 346 - Campbell Street Theatre Pty Ltd (recs and mgrs apptd) (in liq) v Commercial Mortgage Trade Pty Ltd [2012] NSWSC 669 - Cannane v J Cannane Pty Ltd (in liq) [1998] HCA 26; (1998) 192 CLR 557 - Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 - Chief Commissioner of Stamp Duties (NSW) v Buckle [1998] HCA 4; (1998) 192 CLR 226 - CPT Custodians Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98 - Crowle Foundation Ltd v NSW Trustee and Guardian [2010] NSWSC 647 - Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41; (2008) 237 CLR 473 - Deputy Commissioner of Taxation v Caporale Group Pty Ltd [2011] FCA 1189 - Deputy Commissioner of Taxation v Interactive Community Planning Pty Ltd [2011] FCA 1173 - Deputy Commissioner of Taxation v Tilley Property Management Services Pty Ltd [2011] FCA 678 - Di Carlo v Kashani-Malaki [2012] QCA 320; (2013) 2 Qd R 17 - DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1980] 1 NSWLR 510 - Dywer v Ross (1992) 34 FCR 436 - Expile Pty Ltd v Jabb's Excavations Pty Ltd [2003] NSWSC 699; (2003) 46 ACSR 446 - FAI Insurances Ltd v Goldleaf Interior Decorators Pty Ltd (No 2) (1988) 14 NSWLR 643 - Federal Commissioner of Taxation v Oswald (No 6) [2016] FCA 762 - Gartside v Inland Revenue Commissioners [1968] AC 553 - Hall v Poolman [2007] NSWSC 1330; (2007) 215 FLR 243 - Inland Revenue Commissioners v Trustees of Sir John Aird's Settlement [1982] 2 All ER 929 - JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; (2016) 329 ALR 625 - Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366 Langdon v Gruber [2001] NSWSC 276 - Lewis (as liquidator of Doran Constructions Pty Ltd) v Doran [2005] NSWCA 243; (2005) 219 ALR 555 - Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 - Miller v Cameron [1936] HCA 13; (1936) 54 CLR 572 - National Provincial Bank Ltd v Ainsworth [1965] AC 1175 - Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360 - Patel v Lal [2011] NSWSC 603 - Porteous v Rinehart (1998) 19 WAR 495 - Puglia v Basol [2005] NSWSC 1271 - Re Gladstone Mortgagee No 1 Pty Ltd [2015] NSWSC 1551 - Re Goldsworthy [1969] VR 843 - Re Roma Industries Pty Ltd (1976) 1 ACLR 296 - Re Transphere Pty Ltd (1986) 5 NSWLR 309 - Royal v El Ali [2016] FCA 782 - Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation [2001] NSWSC 621; (2001) 53 NSWLR 213 - Southgate Investment Funds Ltd v Deputy Commissioner of Taxation [2013] FCAFC 10 - Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 - TS Recoveries Pty Ltd v Sea-Slip Marinas (Aust) Pty Ltd [2007] NSWSC 1410 - Wells v Wily [2004] NSWSC 607; (2004) 50 ACSR 103 Category: Principal judgment Parties: Deputy Commissioner of Taxation (Plaintiff) Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust (Defendant) Representation: Counsel: N Cotman SC/G J O'Mahoney (Plaintiff) J C Kelly SC/S Hartford Davis (Defendant)