The Full Federal Court has dismissed a taxpayer’s appeal seeking leave to raise a new point on appeal not raised before. The matter concerned a breach of undertaking by a SMSF. The main contention on the appeal by the taxpayer, raised for the first time, was that as a matter of proper statutory construction and application of the “agreed facts”, the Commissioner was not at material times the statutory regulator and had no power to commence the proceedings he did.
The corporate trustee of the SMSF (Interhealth Energies Pty Ltd) had given an enforceable undertaking (dated 28 February 2008) to the Commissioner under s 262A of the SIS Act to collect unpaid distributions from its investment in a unit trust and to pay the bankrupt member (Mr W) his full superannuation entitlement. The undertaking followed the member ceasing to be a director of the corporate trustee (in October 2004) although he remained a member of the fund. At first instance, in FCT v Interhealth Energies Pty Ltd [2012] FCA 120, the Federal Court held that the trustee had failed to comply with the undertakings and ordered the trustee to pay the bankrupt member his residual interest in the SMSF of $249,457.
The corporate trustee sought leave before the Full Federal Court to raise a new ground of appeal ie essentially that the Commissioner was not at all material times the statutory regulator. The Full Federal Court disagreed and dismissed the appeal. It said that to permit Interhealth to argue this issue now would be prejudicial not only to the Commissioner but also to the second respondents in the case who are the trustees of the now bankrupt estate of Mr W. The Court said that in the full range of pre-trial activities, the parties proceeded upon the presumption that the Commissioner was the regulator and it was now “far too late to turn back the clock”.
(Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund v FCT [2012] FCAFC 185, Full Federal Court, Greenwood, McKerracher and Katzmann JJ, 17 December 2012.)
[LTN 246, 19/12]