The ATO Tue 9.4.2013, issued a Decision Impact Statement on the Full Federal Court’s decision in Southgate Investment Funds Limited v DCT [2013] FCAFC 10. In that case, the Full Court unanimously allowed a company taxpayer’s appeal from an earlier court decision denying the taxpayer a stay of execution (in relation to a grant of summary judgment for $9.7m for its tax debts) pending the hearing of its appeal.
The ATO noted that the taxpayer had appealed from the decision of Perram J in DCT v Hua Wang Bank Berhad (No 3) [2012] FCA 594, who had refused a stay of enforcement of a charging summons made in favour of the DCT. His Honour relied upon DCT v Broadbeach Properties Pty Ltd (2008) 69 ATR 357, [2008] HCA 41 as authority that in the exercise of his discretion to grant a stay, he was prevented from considering the merits of a Pt IVC application as a relevant factor.
The ATO said the Full Court identified the relevant principles for an exercise of discretion to grant a stay. It also noted the Full Court had distinguished Broadbeach in context and had not restricted the analysis of Broadbeach in any way.
[LTN 66, 9/4/13]
[FJM Note: In Broadbeach Properties the High Court held that it is not open to a taxpayer served with a statutory demand for a tax debt, where the Commissioner has the advantage of ‘conclusivity’ provisions, to seek to have that demand set aside on the basis that there is a ‘genuine dispute’ because the liability is contested elsewhere under Part IVC of the Taxation Administration Act 1953 – and likewise, that it is not open to taxpayers to seek to have the statutory demand set aside under the Court’s discretion. Having said that, the Court retains a discretion as to whether to put a company into liquidation or not, and similarly, the issue about whether the execution of a judgement ought be stayed is quite separate also.]