Silvia v Commissioner of Taxation [1999] NSWSC 299 (12 April 1999)

Last Updated: 22 April 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Silvia v Commissioner of Taxation [1999] NSWSC 299

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 1117/98

HEARING DATE{S): 12 April 1999

JUDGMENT DATE: 12/04/1999

PARTIES:

Brian Raymond Silvia (P1)

UFI Pools & Spas (Manufacturing) Pty Ltd (In Liquidation) (Receiver & Manager Appointed) (P2)

UFI Pools & Spas (Illawarra) Pty Ltd (In Liquidation) (Receiver & Manager Appointed) (P3)

Commissioner of Taxation (D)

Granville Russell Taylor (XD1)

Clive Martin Bradshaw (XD2)

Ni Jungue Lai (XD3)

Ronald Leonard Stokes (XD4)

Anthony Macri (XD5)

Kathal Kester Spence (XD6)

Denis Albert Watson (XD7)

JUDGMENT OF: Hamilton J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

P A Fury, Solicitor (P1-3)

M R Aldridge (D)

S Freund, sol (XD2-5)

R J Weber (XD7)

XD6 not represented

SOLICITORS:

Kemp Strang (P1-3)

Australian Government Solicitor (D)

Morgan Lewis Alter (XD1)

Diamond Peisah (XD2-5)

Andersen Legal (XD7)

XD6 not represented

CATCHWORDS:

PROCEDURE [107] - Supreme Court procedure - Practice under Supreme Court Rules - Separate decision of questions - When appropriate.

ACTS CITED:

Corporations Law s 588FA

Supreme Court Rules Pt 31 r 2

DECISION:

Application for separate determination of questions refused.

JUDGMENT:

~01/04/99 3

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

HAMILTON J

MONDAY, 12 APRIL 1999

1117/98 BRIAN RAYMOND SILVIA & ORS v COMMISSIONER OF TAXATION

JUDGMENT

HIS HONOUR:

1 This is an application under Pt 31 r 2 of the Supreme Court Rules for an order that two questions be determined separately from and prior to the other issues in the proceedings. Those questions are set out in the notice of motion:

"(i) Whether the receipt by the defendant of the amount of $600,000 on or about 24 October 1994 was the result of a transaction or transactions to which the second and/or third plaintiffs and the defendant were parties (even if someone else was a party) and whether that transaction or transactions resulted in the defendant receiving the amount of $600,000 from the second and/or third plaintiffs within the meaning of section 588FA of the Corporations Law.

(ii) Whether the receipt by the defendant of the amount of $50,000 on or about 21 December 1994 was the result of a transaction or transactions to which the second plaintiff and the defendant were parties (even if someone else was a party) and whether that transaction or transactions resulted in the defendant receiving the amount of $600,000 from the second plaintiff within the meaning of section 588FA of the Corporations Law."

The proceedings are, in short, for the recovery of moneys paid by a company as preferences under s 588FA of the Corporations Law. The other issues which arise are a substantive defence that the payments were received by the defendant in good faith and the defendant had no reasonable grounds for suspecting that either of the relevant companies was or would become insolvent. There is also a cross claim against directors which will be material if the transactions referred to in the questions asked to be determined separately are set aside as preferences.

2 The motion is brought by the defendant in the proceedings and supported by all the cross defendants, but opposed on behalf of the plaintiff. The defendant and cross defendants contend that the questions sought to be determined separately raise pure issues of law to be determined upon the documents. The plaintiff does not concede that this is so. The plaintiff says that a number of other contentions will be put on his behalf. One is that the payment of $50,000 referred to in the questions stands in quite different circumstances from the payment of $600,000, in that the $50,000 payment came directly out of the relevant company's bank accounts. Even as to the payment of $600,000, he seeks to, and is entitled to, put the contention that, if not only the principal document which has been referred to is examined, but other documents and other circumstances are taken into account, then that payment also can be correctly characterised as being received from the company, albeit paid by some other person.

3 I have been referred, on the defendant and the cross defendants' behalf to authority, in particular to what was said in CBS Productions Pty Ltd v O'Neill (1985) 1 NSWLR 601 at 606 per Kirby P (as his Honour then was), and to the decision of Needham J in PKIU of Australia v Clark (1976) 2 Ritchie's Supreme Court Procedure [13,006]. I do not, for a moment, dissent in any way from the views expressed by those learned judges. However, it is most important, if this procedure is to be used successfully, as indeed the learned President pointed out in the passage to which I was referred, that the occasion for its use must be a clear occasion. For instance, even things that are said to be purely questions of law in some circumstances need to be viewed for proper decision in the context of surrounding facts. In my view, it is only in quite clear cases that the separate determination of issues ought to be ordered. Great mischief can be done in the conduct of the litigation if issues are disarticulated from each other in circumstances which are inappropriate, and it is, of course, often difficult to see, at a time long before the trial and the full exposure of the issues in the case, what the interrelation of issues may be.

4 It seems to me on the material before me that there is room for, indeed, perhaps, the likelihood of, the overlapping of issues in this case, or the reflection of one issue upon another, which makes it undesirable, in my opinion, for the proposed questions for separate determination to be determined separately. Certainly it is my view on the material before me that a clear case for the exercise of the discretion in favour of separate determination has not been established. In those circumstances I propose to dismiss the notice of motion. The order of the Court therefore is that the defendant's notice of motion filed on 22 March 1999 be dismissed with costs.

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LAST UPDATED: 20/04/1999