Australian Securities and Investments Commission v Brite Advisors Pty Ltd

1. This is an application by the Receivers of Brite Advisors Pty Ltd for an order pursuant to rule 2.13 of the Federal Court (Corporations) Rules 2000 that the Commissioner of Taxation be heard as an interested party in these proceedings.
2. The Commissioner opposes the application.
3. The application was determined on the papers. On 7 October 2025 I made orders dismissing the application and requiring the Receivers, if so advised, to make an application for a Private Binding Ruling by Friday 10 October 2025. These are my reasons for making those orders.
4. In Australian Securities and Investments Commission v Brite Advisors Pty Ltd [2024] FCA 69, I made orders for the winding up of Brite Advisors, the appointment of liquidators and the appointment of Receivers over the property, assets and undertakings held by Brite Advisors on trust for another. The background to this matter is set out in those reasons which should be read in conjunction with these reasons.
5. This is a complex receivership. Brite Advisors has a number of related entities which are incorporated in numerous countries. They provide pension administration and asset management services to investors located in various jurisdictions. Some of the investors were individuals, most were corporate trustees or administrators of foreign pension funds, and a number were Australian Self-Managed Superannuation Funds (together "beneficiaries").
6. The Receivers have now reached a point whereby they have applied to the Court for an order authorising an interim distribution to the beneficiaries. In broad terms, that involves liquidating the non-cash assets within the Brite Advisors' investment platforms and making interim pro-rata distributions to beneficiaries.
7. The hearing is important. Many of the beneficiaries rely on their investments that are the subject of this receivership for living expenses, healthcare etc.
8. One of the major issues faced by the Receivers is withholding from any interim distribution a portion of the liquidated funds against the possibility that the Receivers will be liable to pay tax to the Australian Taxation Office on, amongst other things, the capital gains arising from the Receivers' proposed liquidation of assets.
9. The potential amount is substantial - in the order of AUD $75,400,000.
10. There have been ongoing discussions between the Receivers, their solicitors, Senior and Junior counsel who specialise in tax and the ATO since March 2025.
11. On 28 March 2025 the Receivers' solicitors provided a tax issues paper to the ATO in which they sought the Commissioner's preliminary views as part of a process towards reaching an in-principle agreement before formally applying for a PBR. The discussions between the Receivers, their legal advisors and the ATO proceeded on the basis of a proposed application for a PBR.
12. In a letter dated 7 August 2025 from the Receivers' solicitors to the ATO, the Receivers confirmed that as at that date they had not made an application for a PBR.
13. In a letter dated 19 August 2025, the ATO indicated its position in a non-binding way that:

(a) the Receivers and Brite Advisors will not be liable to pay tax on behalf of non-residents under s 98(3) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936);

(b) the capital gain of a beneficiary will be disregarded under s 855-40(2) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) where the beneficiaries are a foreign resident when the Receivers make the capital gain; and

(c) the Receivers and Brite Advisors will not be liable to pay tax as trustee of the trust in respect of an amount to the extent that the amount gives rise to a capital gain that is disregarded for a beneficiary under s 855-40(2) of the ITAA 1997, for the purposes of s 855-40(3).

1. On 27 August 2025, after further communication from the Receivers' solicitors, the ATO confirmed that the Receivers and Brite Advisors will not be liable to pay tax under s 99A of the ITAA 1936 given the Receivers and Brite Advisors' position as trustees.
2. In a letter from the Receivers' solicitors to solicitors for the ATO dated 8 September 2025, the Receivers confirmed they agreed that a direction the Commissioner be given leave to be heard as an interested party to these proceedings could not determine the legal rights of the Commissioner with respect to tax liabilities of Brite Advisors but that the direction was sought to protect the Receivers from personal liability arising from the interim distribution of funds in circumstances where the precise quantum of Brite Advisors' liability to the Commissioner remained to be determined.
3. In a response to the Receivers' solicitors' letter sent 11 September 2025, the ATO's solicitors advised that:

Unless and until an application for a private ruling is made, there is no further guidance that the Commissioner can provide, either to the Receivers or to the Court. The Commissioner cannot be required to commit to a position of on the Receivers' potential future tax liability in the Proceedings, or at all, outside of the statutory mechanism contained in Part 5-5F Schedule 1 [TAA 1953].

1. The major issue which has given rise to this application is that the preliminary views of the ATO do not bind the Commissioner. That can only be achieved through a PBR consequent upon a PBR application.

1. Against that background the Receivers applied on 17 September 2025, albeit informally, that the Commissioner be added to these proceedings as an interested party. As I have noted, the application is opposed.
2. The Receivers read the fourth affidavit of Carmen Anne Leah Boothman sworn 16 September 2025 (Boothman affidavit).
3. The ATO reads the affidavits of Paul John Scott sworn 25 September 2025 (Scott affidavit) and Kellie Louise Link sworn 30 September 2025 (Link affidavit).

1. The Commissioner opposes the application on a number of grounds.
2. First, no application for a PBR has been made by the Receivers as required by Part 5-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA 1953). An application for a PBR must be made in the approved form: s 359-5(2).
3. The Commissioner refers to Division 359 which is concerned with private rulings. Section 359-5(1) provides:

The Commissioner may, on application, make a written ruling on the way in which the Commissioner considers a relevant provision applies or would apply to you in relation to a specified *scheme. Such a ruling is called a private ruling.

1. Section 359-5(1) makes it clear the Commissioner can only make a PBR on application and has no statutory power to make a PBR in the absence of an application.
2. Once an application is made the Commissioner is required to make a ruling: s 359-35. If the Commissioner has not made a ruling at the end of 60 days, an applicant may give the Commissioner written notice requiring the Commissioner to do so: s 359-50(1).
3. If made, a PBR binds the Commissioner: s 357-60(1).
4. Second, as a result of there being no application for a PBR, the Commissioner submits that granting leave to the Commissioner to be heard as an interested party will achieve no purpose because absent a PBR, the Commissioner is not bound.
5. The Receivers submit in the course of their negotiations with the ATO, they were asked not to file a PBR application until the Commissioner had refined its understanding of the facts.
6. The letter from the ATO to the Receivers' solicitors sent on 19 August 2025 to which I have referred above and which provided the ATO's preliminary view made it clear that the letter did not have the legally binding effect of a PBR under s 357-60(1) of Schedule 1 to the TAA 1953 and that as at that date, an application for a PBR had not been made to the ATO.
7. There are two fundamental problems with this application.
8. The first is that under FCCR 2.13 the Commissioner does not come within the ambit of that rule as one of the parties identified in FCCR 2.13(1). Still further, FCCR 2.13 is directed at an interested party being given leave to be heard in a proceeding without becoming a party so that strictly speaking they are not "joined".
9. Although the Court has power to join the Commissioner as a defendant, pursuant to FCCR 2.13(4) that is not sought by the Receivers. Further, in light of the matters raised by the Commissioner and the Commissioner not being bound in the absence of a PBR, there is no purpose in granting leave to the Commissioner to be heard in circumstances where:

(a) the Commissioner does not seek to be heard; and

(b) in any event, granting leave will serve no purpose.

1. The second is that in the absence of an application for a PBR, the Commissioner is not bound by the informal indication the ATO has given in its letter dated 19 August 2025.
2. The Commissioner has advised the Court, through its submissions and through the Link affidavit, that provided there is an application for a PBR by no later than 6 October 2025 and provided there are no material changes to the facts and assumptions already submitted to the ATO and relied upon by it, the Commissioner anticipates that a binding ruling could be issued by 31 October 2025: Link affidavit Annexure KLL-1.
3. A particularly frustrating aspect of this procedural dispute is that despite the Receivers wanting reassurance that they will not be held personally liable for what potentially is a very significant amount of tax, no application for a PBR has been made in circumstances where the ATO's solicitors have indicated that is what is required.
4. Accordingly, in order to cut through this completely unsatisfactory state of affairs, there will be an order that if so advised the Receivers make an application for a PBR to the ATO by on or before close of business on Friday, 10 October 2025.
5. Based on the matters in the Link affidavit, I expect the ATO will respond by providing a PBR or otherwise prior to the interim distribution hearing currently listed for 12 November 2025, however I appreciate that I am not able to make such an order.
6. It is for these reasons that the application will be dismissed.

1. There will be orders as follows:
   1. By on or before close of business (AWST) on Friday, 10 October 2025, the Receivers, if so advised, are to make an application for a private binding ruling to the Commissioner of Taxation within the meaning of Division 359 Part 5-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth).
   2. The Receivers' application is dismissed.

I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan.