Cayman Island liquidators have lost an appeal before the Full Federal Court, which sought to defeat a Deputy Commissioner of Taxation’s claim to recover a local tax debt from the Australian assets of a Cayman company in liquidation.
This was notwithstanding the existence of orders made under the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (UNCITRAL) recognising the Cayman liquidation.
The Full Federal Court dismissed the liquidators’ appeal and found that the Model Law allowed a variation of orders recognising the Cayman proceedings, in effect, by refusing to remit the remaining funds in Australia (around $7m) to the Cayman Islands, and by permitting the DCT to proceed against the funds within Australia for the claimed tax and penalties. The Court rejected the submission that by lodgment of proof in the Cayman Islands, the DCT became disentitled to the Modification Orders.
(Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v DCT  FCAFC 57, Full Federal Court, Allsop CJ, Robertson and Griffiths JJ, 14 May 2014.)
[LTN 93, 16/5/14]