Deputy Commissioner of Taxation v Take A Seat Pty Ltd [2005] FCA 1919 (13 December 2005)

Last Updated: 24 January 2006

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Take A Seat Pty Ltd [2005] FCA 1919

DEPUTY COMMISSIONER OF TAXATION v TAKE A SEAT PTY LTD

NSD 1977 OF 2005







EMMETT J
13 DECEMBER 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1977 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	TAKE A SEAT PTY LTD DEFENDANT
JUDGE:	EMMETT J
DATE OF ORDER:	13 DECEMBER 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.	The winding up be terminated on 13 December 2005.
2.	The defendant and the directors of the defendant, Sukhon Maksakul and Pathma Maksakul, pay the plaintiff’s costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD1977 OF 2005

BETWEEN:	DEPUTY COMMISSIONER OF TAXATION PLAINTIFF
AND:	TAKE A SEAT PTY LTD DEFENDANT
JUDGE:	EMMETT J
DATE:	13 DECEMBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 On 18 November 2005, a Registrar of the Court ordered that Take A Seat Pty Limited (‘the Company’) be wound up. The Registrar appointed Robert William Whitton of Lawler Partners as the liquidator of the Company and ordered that the plaintiff, the Deputy Commissioner of Taxation, have her costs in the sum of $2,606.32. By interlocutory process filed on 2 December 2005, the Company seeks, inter alia, an order under s 482 of the Corporations Act 2001 (Cth) (‘the Act’), that the winding up of the Company be terminated.

2 There are two directors of the Company, Mr Sukon Maksakul and Mrs Pathama Maksakul. The Company was incorporated on 19 June 2000 and the present directors became directors on 10 July 2000. Mr Maksakul is the beneficial owner of all of the issued shares in the capital of the Company. The Company conducts a restaurant in Manly Vale and provides the sole source of income for the two directors.

3 The winding up order was made on the application of the Deputy Commissioner of Taxation following failure by the Company to comply with a statutory demand served on the Company in respect of unpaid tax. Following service of the demand, there was some communication between the Company and officers of the Australian Tax Office, although the Company does not appear to have taken any appropriate steps to deal adequately with the demand, other than to pay some of the tax indebtedness.

4 In late October 2005, the originating process seeking a winding up order was served on the Company, indicating that the tax outstanding was $5,296.77. In late October 2005, the Company was informed on behalf of the Deputy Commissioner that, if that sum was paid before the proposed hearing, the application would be withdrawn, subject to an order for costs.

5 The return date for the winding up application was 18 November 2005. However, further tax became payable prior to that date and the Company received a letter from the Australian Government Solicitor acting for the Deputy Commissioner indicating that the tax owing to the Deputy Commissioner was $20,276. Some further payments were made, but there is no doubt that, on 18 November 2005, substantial moneys were still owing to the Deputy Commissioner in respect of tax. The Company did not appear on the return day and was informed of the winding up order and the appointment of the liquidator after those orders had been made.

6 The Company relies upon affidavits by its two directors and its accountant Mr Wanpen Lwin. Mr Wanpen Lwin has been practising in accounting and book-keeping since 1982 in Thailand and since 1992 in Australia. He has been the accountant for the Company since the financial year ended 30 June 2003.

7 One of the reasons for the liquidity difficulties experienced by the Company is the former involvement of the directors in the affairs of Siam Cuisine Restaurant Pty Limited. That business is no longer being carried on and is no longer a drain on the directors. Mr Wanpen Lwin, in his affidavit, has indicated that he will take a more active role in assisting the Company’s directors in future and will meet with the directors on a regular basis to ensure that debts are being paid and statutory obligations are being met.

8 Limited liability companies have advantages both fiscal and otherwise. However, they carry serious responsibilities for directors. The directors of the Company should be aware that they have very serious obligations if they choose to carry on business through a company.

9 The evidence before me indicates that the current liabilities of the Company amount to some $50,899.58, being tax due to the Commissioner of Taxation in the sum of $31,883.26, payments due to the Commissioner of Taxation as a consequence of failure to pay superannuation contributions in the sum of $6,410, costs of the winding up application in the sum of $2,606.32 and costs payable to the liquidator not exceeding $10,000.

10 The liquidator currently has the sum of $12,920.66 under his control and the Company’s solicitors Craddock Murray and Neumann hold the sum of $50,277. The directors have given an irrevocable authority and a direction and undertakings to the Court in the following terms:

‘We, Sukon Maksakul and Pathama Maksakul irrevocably authorise and direct...Craddock Murray and Neumann to pay from funds held by Craddock Murray and Neumann in its trust account...

(1) to the Deputy Commissioner of Taxation $24,600 and $2606.32...
(2) to the Deputy Commissioner of Taxation $3340 in relation to employee superannuation entitlement liabilities of the company;
(3) ...the costs, expenses and fees of Robert William Whitton of Lawler Partners in relation to the liquidation of the company (to a maximum of $10,000).’

11 The authority then directs and authorises the liquidator to pay to the Deputy Commissioner sum of $7,283.26 and any outstanding interest liability up to and including the date of payment of the balance of any indebtedness of the Company to the Deputy Commissioner and to pay to the Deputy Commissioner $2,800 in relation to employee superannuation entitlement liabilities of the Company.

12 The directors also undertake to:

• Cause the Company to lodge with the ATO by 20 December 2005 all returns, statements and other documents as required by law with respect to superannuation obligations of the Company;
• Pay all penalties imposed and all interest and other liabilities for which the Company is liable now or in the future, with respect to superannuation obligations arising as a result of the lodgements referred to in the previous undertaking, and
• Charge in favour of the Deputy Commissioner the balance of funds held by the liquidator as at 13 December 2005, such charge to secure payment of all liability of the Company to the Deputy Commissioner and all liabilities of the directors to the Deputy Commissioner with respect to legal costs ordered by the Court in relation to the interlocutory process filed on 2 December 2005.

13 In addition, Craddock Murray and Neumann have undertaken to the Deputy Commissioner that the claims of the Deputy Commissioner to funds held on behalf of the directors in the Craddock Murray and Neumann trust account have priority over the lien of that firm with respect to legal costs and that the payments in paragraph 1 of the irrevocable authority and direction given by the directors will be made, upon the Court making an order terminating the winding up.

14 The Deputy Commissioner, in the light of those undertakings, does not oppose the order sought by the Company. An affidavit sworn by the liquidator indicates that all creditors known to the liquidator have been paid and sufficient funds have been made available to meet the costs of the liquidation. The liquidator has no objection to the making of the order claimed by the Company.

15 In all of the circumstances, I am persuaded that it is appropriate to order that the winding up of the Company be terminated.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated: 24 January 2006

Solicitor for the Plaintiff:	Australian Taxation Office
Solicitors for the Directors of the Defendant:	Craddock Murray and Neumann
Date of Hearing:	13 December 2005
Date of Judgment:	13 December 2005