Crosbie v Commissioner of Taxation [2003] FCA 922

Crosbie v Commissioner of Taxation [2003] FCA 922

Because an order under s 588FF requires the court to be satisfied on facts that the transaction is voidable, satisfaction cannot be achieved merely by a consent judgment. Since the Commissioner would not contest the applicants' claim and the former directors faced potential indemnity liability under s 588FGA, justice required that the cross-respondents be granted leave to defend the applicants' claim, on terms that they be bound by decisions in that action and treated as parties on costs issues.

Jurisdiction
Australia
Judgment Date
02 September 2003
Procedural Posture
Corporations Voidable Transaction Proceeding With Cross Claim for Director Indemnity / Application by Cross Respondents for Leave to Defend the Applicants' Claim Against the Respondent
Outcome
Leave granted to the cross-respondents to defend the applicants' claim against the respondent on terms.
Legal Topics
['voidable Transactions' 'unfair Preferences' 'insolvent Transactions' 'director Indemnity to Commissioner of Taxation' 'third Party Procedure' "leave to Defend Plaintiff's Action"]
['corporations Law' 'taxation' 'practice and Procedure'] ['voidable Transactions' 'unfair Preferences' 'insolvent Transactions' 'director Indemnity to Commissioner of Taxation' 'third Party Procedure' "leave to Defend Plaintiff's Action"]

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Procedural Posture

Corporations Voidable Transaction Proceeding With Cross Claim for Director Indemnity / Application by Cross Respondents for Leave to Defend the Applicants' Claim Against the Respondent

Legal Issues

  1. 1 ['Whether the court can be satisfied that a transaction is voidable under s 588FF by entering consent judgment without examining the facts.' "Whether the cross-respondents should have leave to defend the applicants' claim against the respondent for the purpose of challenging insolvency."]

Ratio Decidendi

Because an order under s 588FF requires the court to be satisfied on facts that the transaction is voidable, satisfaction cannot be achieved merely by a consent judgment. Since the Commissioner would not contest the applicants' claim and the former directors faced potential indemnity liability under s 588FGA, justice required that the cross-respondents be granted leave to defend the applicants' claim, on terms that they be bound by decisions in that action and treated as parties on costs issues.

Court Disposition

Leave granted to the cross-respondents to defend the applicants' claim against the respondent on terms.

Orders

  • ["The cross-respondents have leave to defend the applicant's claim against the respondent on terms that: (a) they be bound by all decisions made in that action; and (b) they be treated as if parties to the action on any issue relating to costs."]