Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd

REASONS FOR JUDGMENT 1 On 25 February 2014, I made the orders set out above "on the papers". 2 On 28 November 2006, Mark Francis Xavier Mentha and Brian Keith McMaster were appointed joint and several receivers of the Mews Land improvements thereon and related development rights and approvals for the purposes of winding up the Mews Scheme (as defined in the orders of Finkelstein J dated 28 November 2006 in these proceedings) ("the Mews Receivers"). 3 The Mews Scheme and the history of relevant litigation is described more fully in, inter alia, Re GDK Financial Solutions Pty Ltd and Others; Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (2006) 236 ALR 699; [2006] FCA 1415 at [4]-[15] and Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (No 10) [2011] FCA 1496 at [2]. 4 On 20 December 2013, the Mews Receivers sought orders that: 1. The Mews Receivers are authorised to draw from the Receivership Account (as defined in paragraph 9(b) of the Orders of the Court dated 13 March 2008) the amount of $61,283.25 on account of income tax owing to the Australian Taxation Office by the Mews Scheme for the financial years ending 30 June 2012 and 30 June 2013. 2. The Mews Receivers' costs of the application for the approval sought by paragraph 1 of these orders are costs properly incurred in the exercise of their duties and powers as receivers of the Mews Scheme. 5 Simon Harris, a director employed by KordaMentha, is responsible for the day to day conduct of the file associated with the receivership of the Mews Scheme and reports to and receives instructions from the Mews Receivers. 6 By an affidavit sworn on 19 December 2013, Mr Harris deposed that on or around 16 August 2011, the Australian Taxation Office ("ATO") issued a private ruling with authorisation number 1011809364137 ("the ATO Ruling") which, inter alia, provided that the Mews Scheme is required to lodge tax returns. 7 Mr Harris deposed that the Mews Receivers engaged Ernst & Young to prepare the income tax returns for the Mews Scheme for the years ending 30 June 2012 and 30 June 2013 in accordance with the ATO Ruling. 8 Mr Harris exhibited to his affidavit the notice of assessment from the ATO for the financial year commencing 1 July 2011 and ending 30 June 2012 stating an amount payable of $51,049.55. 9 Mr Harris exhibited to his affidavit the tax return lodged with the ATO on behalf of the Mews Scheme for the financial year commencing 1 July 2012 and ending 30 June 2013. The tax return included a taxation estimate from Ernst & Young, estimating that a tax payable of $10,233.70. 10 The net tax payable or refundable for each of the financial years ending 30 June 2012 and 30 June 2013 is calculated as follows: 11 Mr Harris deposed that the Mews Scheme's total tax liability is $61,283.25, calculated by adding together the net tax payable for the financial years ending 30 June 2012 and 30 June 2013. 12 In 2012, the Mews Receivers applied for, and were granted, order authorising them to pay a tax liability of $272,095.67 owed by the Mews Scheme to the ATO for the financial years ending 30 June 2008, 30 June 2009, 30 June 2010, and 30 June 2011: Australian Securities and Investments Commission v GDK Financial Solutions Pty Ltd (No 12) [2012] FCA 1035. 13 In the light of the material filed in support, I was satisfied that it was appropriate to make the orders sought. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton.