In the matter of Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) [2021] NSWSC 232

In the matter of Western Port Holdings Pty Ltd (receivers and managers appointed) (in liq) [2021] NSWSC 232

The Court held that direct and third party payments made to the ATO during the relation-back period were voidable as unfair preferences under s 588FA(1)(b) of the Corporations Act, since they involved diminution in the assets of the company available to creditors (whether by use of the company’s own funds, reduction...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
12 March 2021
Procedural Posture
Corporations Voidable Transactions / Principal Judgment
Outcome
Creditor (Commissioner of Taxation) ordered to repay liquidators the sum of $2,056,974.33 as voidable transactions, with interest and costs.
Legal Topics
['voidable Transactions' 'unfair Preferences' 'deed of Company Arrangement (doca)' 'third Party Payments' 'section 588 FA Corporations Act' 'section 588 FE Corporations Act' 'section 588 FF Corporations Act']
['corporations Law' 'insolvency Law'] ['voidable Transactions' 'unfair Preferences' 'deed of Company Arrangement (doca)' 'third Party Payments' 'section 588 FA Corporations Act' 'section 588 FE Corporations Act' 'section 588 FF Corporations Act']

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Procedural Posture

Corporations Voidable Transactions / Principal Judgment

Legal Issues

  1. 1 ['Whether third party payments to the ATO were ‘received from the company’ within the meaning of section 588FA(1)(b) of the Corporations Act' 'Whether payments (direct or third party) were made by or under the authority of the deed administrators for the purposes of section 588FE(2B)(d)(i) of the Corporations Act']

Ratio Decidendi

The Court held that direct and third party payments made to the ATO during the relation-back period were voidable as unfair preferences under s 588FA(1)(b) of the Corporations Act, since they involved diminution in the assets of the company available to creditors (whether by use of the company’s own funds, reduction of intercompany loan balances, or incurrence of new liabilities via loaned funds). The Court rejected the arguments that payments were made under the authority of the deed administrators for the purposes of s 588FE(2B)(d)(i); payments were made under the authority of the director following return of management under the DOCA. Consequently, the ATO was ordered to repay...

Court Disposition

Creditor (Commissioner of Taxation) ordered to repay liquidators the sum of $2,056,974.33 as voidable transactions, with interest and costs.

Orders

  • ['Order pursuant to section 588FF(1)(a) of the Corporations Act 2001 (Cth) that the defendant pay to the second plaintiff the sum of $2,056,974.33 together with interest pursuant to section 100 of the Civil Procedure Act 2005 (NSW).' "Order the defendant to pay the plaintiffs' costs of the proceedings."]