Commissioner of Taxation v Kassem and Secatore [2012] FCAFC 124

Commissioner of Taxation v Kassem and Secatore [2012] FCAFC 124

The payments totalling $70,000 were made by or on behalf of Mortlake to the Commissioner during the relation back period using funds advanced by Antqip to Mortlake and applied at Mortlake's direction to pre-existing tax debts. The relevant transactions were the payments between Mortlake and the Commissioner, and...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
31 August 2012
Procedural Posture
Appeal Concerning Unfair Preferences Under S 588 FA of the Corporations Act 2001 (cth) / Appeal From Kassem and Secatore V Commissioner of Taxation [2012] FCA 152; Full Court Judgment Dismissing the Appeal
Outcome
Appeal dismissed with costs.
Legal Topics
['unfair Preferences' 'payments by Related Company' 'allocation or Reallocation of Tax Payments' 'relation Back Period' 'statutory Priorities in Winding Up']
['bankruptcy and Insolvency' 'corporations Law' 'taxation'] ['unfair Preferences' 'payments by Related Company' 'allocation or Reallocation of Tax Payments' 'relation Back Period' 'statutory Priorities in Winding Up']

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Procedural Posture

Appeal Concerning Unfair Preferences Under S 588 FA of the Corporations Act 2001 (cth) / Appeal From Kassem and Secatore V Commissioner of Taxation [2012] FCA 152; Full Court Judgment Dismissing the Appeal

Legal Issues

  1. 1 ['Whether payments totalling $70,000 made to the Commissioner from funds provided by a related company were transactions between Mortlake and the Commissioner for the purposes of s 588FA of the Corporations Act 2001 (Cth).' 'Whether the payments constituted unfair preferences where the Commissioner received more than he would receive if the transactions were set aside and he proved in the winding up.' 'Whether any requirement of unfairness or diminution of assets prevented the payments from being unfair preferences.' "Whether the Commissioner's allocation or reallocation of the payments to the superannuation guarantee charge account affected the s 588FA analysis or gave the Commissioner priority under s 556 of the Corporations Act 2001 (Cth)." 'Whether s 588FA(1)(b) requires comparison with a hypothetical winding up at the date of payment or with the actual winding up.']

Ratio Decidendi

The payments totalling $70,000 were made by or on behalf of Mortlake to the Commissioner during the relation back period using funds advanced by Antqip to Mortlake and applied at Mortlake's direction to pre-existing tax debts. The relevant transactions were the payments between Mortlake and the Commissioner, and they satisfied s 588FA(1) because the Commissioner received full payment of $70,000 whereas he would receive nothing if the transactions were set aside and he proved in the actual winding up. Any alleged substitution of creditors, asserted absence of unfairness, or later allocation or reallocation to the SGER account did not prevent the payments from being unfair preferences.

Court Disposition

Appeal dismissed with costs.

Orders

  • ['The appeal be dismissed.' "The appellant pay the respondents' costs."]