The last week has seen a flurry of interesting court decisions from State and Federal courts. Six decisions are of particular note, and each is worthy of a separate, detailed update.
Yesterday the Federal Court made unprecedented use of an obscure provision of the Corporations Act to give a distressed company a final chance to sort itself out.
Instead of winding the company up immediately, the court made a conditional winding up order, which now remains suspended over the company like a guillotine, “encouraging” it to pay its outstanding tax and lodge its outstanding BAS by particular dates – failing which a liquidator will be appointed automatically.
This update concerns a significant new risk for tax agents, which is fortunately able to be minimised by implementing a single, simple measure. Continue reading
Many of you will be familiar with the decision in Tang & Anor v. Bassili & Ors  FMCA 544, in which the Federal Magistrate’s Court said that the ATO could not use a garnishee notice to hijack the proceeds of sale of a mortgaged property.
Last Friday, that decision was overturned on appeal, and the proceeds of sale of the property concerned were ordered to be paid to the ATO, instead of the mortgagee. However, for the reasons set out below, this development is not as alarming as it might initially seem. Continue reading
On Friday, the District Court of New South Wales handed down a decision with potential relevance to any director penalty notice (DPN) claims involving a DPN issued before 1 July 2010.
In the course of handing down the decision, the court also criticised the ATO for engaging in sharp practice when it was supposed to be a “model litigant”. Continue reading
A recent Supreme Court decision has made it clear that the ATO cannot hide behind its own internal policies as an excuse not to pay a liquidator’s costs of court action to recover unfair preferences. Continue reading
In Kassem and Secatore v Commissioner of Taxation  FCA 152, the Federal Court dealt, fairly brutally, with three arguments often raised by the ATO in the defence of unfair preference claims Continue reading