The Federal Court has ordered that GIC be excised from assessments issued to several taxpayers, but that their application to stay the Commissioner’s proceedings against them (to enforce earlier summary judgments made against them by the Federal Court) be denied.
In a judgment by Kenny J of the Federal Court on 25 November 2010, a Deputy Commissioner successfully obtained summary judgment against the taxpayers under s 31A the Federal Court of Australia Act 1976 for debts totalling around $40m (including penalties). At the same time, the Federal Court refused the taxpayers’ application for a stay of the judgment pending the outcome of its objections against the assessments that gave rise to the debt.
In an earlier judgment in September 2010, the Federal Court (Kenny J) had extended freezing orders it had previously made over $30m worth of shares held by the taxpayers (5 foreign companies) from 15 September 2010 until 11 October 2010. The companies were Hua Wang Bank Berhad, Chemical Trustee Limited, Derrin Brothers Properties Limited, Bywater Investments Limited and Southgate Investment Funds Limited. The Court said each of the taxpayers was a foreign corporation and each had been involved in transfers of “significant amounts” of money out of Australia following the sale of securities. They each chose not to file tax returns in Australia and the Commissioner assessed each as liable to pay substantial amounts in tax and administrative penalties.
In the current case, the Federal Court said the orders made by Kenny J on 25 November 2010 should be varied to excise the GIC. It also said the application for a stay should be dismissed.
Further, the Court said the application for the Commissioner’s charging summonses (to charge various parcels of shares held in the names of the taxpayers to enforce the judgments entered against them by Kenny J) in relation to Hua Wang Bank and Bywater should be heard at the same time as the Pt IVC proceedings which will challenge the Commissioner’s objection decisions.
(DCT v Hua Wang Bank Berhad (No 3) & Ors [2012] FCA 594, Federal Court, Perram J, 8 June 2012.)
[LTN 111, 12/6]