Christopher John Palmer v Commissioner of Taxation [2006] NSWSC 1253

Christopher John Palmer v Commissioner of Taxation [2006] NSWSC 1253

The company was insolvent when it made the payments to the Commissioner, the payments gave the Commissioner more than he would receive if required to prove in the winding up, and no defence under s 588FG was advanced. The payments were therefore recoverable by the liquidator as voidable unfair preferences. Because the order against the Commissioner was made in respect of taxation liabilities falling within s 588FGA(1), and Mr Stevenson was a director when the payments were made with no available defence under s 588FGB, he was liable to indemnify the Commissioner for the relevant loss and costs liability resulting from the order.

Jurisdiction
Australia
Judgment Date
06 November 2006
Procedural Posture
Application by Liquidator to Recover Payments as Voidable Transactions and Interlocutory Process by Commissioner of Taxation for Director Indemnity / Ex Tempore Judgment
Outcome
Judgment entered for the plaintiff against the Commissioner of Taxation; Commissioner obtained indemnity judgment against Mr David Eric Stevenson on the interlocutory process.
Legal Topics
['winding Up' 'voidable Transactions' 'unfair Preferences' 'insolvent Transactions' 'director Indemnity to Commissioner of Taxation' 'costs']
['corporations' 'insolvency' 'taxation' 'civil Procedure'] ['winding Up' 'voidable Transactions' 'unfair Preferences' 'insolvent Transactions' 'director Indemnity to Commissioner of Taxation' 'costs']

Case Brief

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Procedural Posture

Application by Liquidator to Recover Payments as Voidable Transactions and Interlocutory Process by Commissioner of Taxation for Director Indemnity / Ex Tempore Judgment

Legal Issues

  1. 1 ['Whether payments made by Stevenson Plumbing Services Pty Ltd to the Commissioner of Taxation on 9 December 2003 and 8 July 2004 were voidable insolvent transactions with an unfair preferential effect.' 'Whether the Commissioner of Taxation was liable to repay the payments to the liquidator under s 588FF of the Corporations Act 2001 (Cth).' 'Whether Mr David Eric Stevenson, as a director when the payments were made, was liable to indemnify the Commissioner under s 588FGA(2) of the Corporations Act 2001 (Cth).' 'Whether honesty, lack of intention to prefer the Commissioner, or lack of resources provided a defence to the indemnity claim.']

Ratio Decidendi

The company was insolvent when it made the payments to the Commissioner, the payments gave the Commissioner more than he would receive if required to prove in the winding up, and no defence under s 588FG was advanced. The payments were therefore recoverable by the liquidator as voidable unfair preferences. Because the order against the Commissioner was made in respect of taxation liabilities falling within s 588FGA(1), and Mr Stevenson was a director when the payments were made with no available defence under s 588FGB, he was liable to indemnify the Commissioner for the relevant loss and costs liability resulting from the order.

Court Disposition

Judgment entered for the plaintiff against the Commissioner of Taxation; Commissioner obtained indemnity judgment against Mr David Eric Stevenson on the interlocutory process.

Orders

  • ['Order that judgment be entered for the plaintiff against the defendant in the sum of $32,504.34.' "Order that the defendant pay the plaintiff's costs of the proceedings." 'On the interlocutory process of the Commissioner of Taxation, declaration made in accordance with paragraph one of the interlocutory process.'...