The Federal Court has refused a taxpayer an extension of time to file and serve a notice of appeal against the 2008 decision of Heerey J in Pre Paid Professional Administration Ltd v DCT (2008) 73 ATR 779. Heerey J had held that amounts held by the taxpayer were assessable administration fees and were not held as agent for other entities. The case concerned assessments for the 2005 and 2006 years.
In a February 2011 decision, the High Court quashed a February 2010 decision of the Federal Court, which refused the taxpayer company an extension of time to file a notice of appeal against the 2008 decision of Heerey J. The High Court remitted the matter to the Full Federal Court for a hearing of the company’s leave application. The High Court also ordered that the Federal Court rehear the taxpayer company’s application for an extension of time to lodge the appeal.
The taxpayer company was a wholly owned subsidiary of a US corporation which operated a business selling warrants which entitled the holder to the provision of pre-paid legal and other professional services. A “Collection Agency Deed” appointed the taxpayer as an “independent collection and administrative agent” to collect on behalf of the US corporation all payments due to it from its clients. Mr Nick Petroulias was the sole shareholder of the taxpayer company.
In its 25 January 2012 decision, the Federal Court rejected the taxpayer’s proposed grounds of appeal, as it was not satisfied the taxpayer’s proposed appeal had any prospects of success. The grounds of appeal rejected by the Court included:
- that if the primary judge was correct in finding that the taxpayer was entitled to retain funds as fees or commission under cl 6 of the Administration Agreement, he should have held that the payments made to the US corporation were made by mistake;
- alleged errors in the primary judge’s reasoning.
(Pre-Paid Professional Administration Ltd v FCT [2012] FCA 24, Federal Court, Nicholas J, 25 January 2012.)
[LTN 19, 31/1]