Deputy Commissioner of Taxation v JJ & Son Pty Ltd

REASONS FOR JUDGMENT 1 This matter is quite unusual. I should therefore say something about the circumstances in which, as I understand it, the orders have been made. As I understand the orders are being made on the basis that it seems likely that the winding-up order was made in the absence of the company, in circumstances in which it may have been deprived of an opportunity to appear at the hearing by the conduct of a person who has been responsible for substantial fraud upon the company, leading to non-payment of tax liability, of which the company was unaware, and upon which the winding-up petition was based. 2 It seems likely that the company's business will survive if the winding up is terminated, but less likely if the winding up continues. Mr JJ Jones, the sole director and shareholder has personally made arrangements with the petitioning creditor, the Commissioner of Taxation, for satisfaction of his debt and costs. Mr Jones has undertaken to meet any other debts of the company. Mr Jones has also arranged for payment of the liquidators' remuneration, expenses and costs. 3 The other major creditor is the Bank of Queensland, but its position seems to be secured by guarantees by Mr Jones and charges. There seem to be no other significant creditors. 4 Mr Jones' capacity and willingness to fund the ongoing operation of the company and payment of its debts provide a reasonable basis for an inference as to solvency, he being a person with relevant knowledge and a substantial interest in this matter. I proceed pursuant to rule 39.05 of the Federal Court Rules, following the decision of Hodgson J in George Ward Steel Proprietary Limited v Kizkot (1989) 7 ACLC 835. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.