Eskdale South Cattle Company Pty Ltd v Deputy Commissioner of Taxation

BETWEEN: ESKDALE SOUTH CATTLE COMPANY PTY LTD ACN 162 208 157

JUDGE: LOGAN J DATE: 23 AUGUST 2013 PLACE: BRISBANE

REASONS FOR JUDGMENT 1 On 30 July 2013, following a hearing on 22 July 2013, Collier J made orders which appointed a provisional liquidator to Eskdale South Cattle Company Pty Ltd (Eskdale) pursuant to s 472(2) of the Corporations Act 2001 (Cth) (Corporations Act). Her Honour further made provision by that order for a report to be furnished to the Court by the provisional liquidator within 14 days. Those orders were made upon the application of a Deputy Commissioner of Taxation and were made subject to the giving by that official of the usual undertaking as to damages. At the same time, by separate order and also upon the application of a Deputy Commissioner of Taxation, her Honour ordered the appointment of a provisional liquidator to Carluke Capital Pty Ltd (Carluke) with like provision for a report by the provisional liquidator. 2 An application has been made by one Carrie Ellen Grace Hofmeister and also by APA Innovations Pty Ltd (APA Innovations) to challenge, by way of a grant of leave to appeal, the making of the order appointing a provisional liquidator to Eskdale. In the case of Ms Hofmeister, her application is also for approval pursuant to s 471A(2A)(d) of the Corporations Act, to cause Eskdale to commence and proceed with the application for leave to appeal and any consequential appeal from the judgment of Collier J on 30 July 2013 appointing the provisional liquidator to Eskdale. There is an ancillary application for a stay of the execution of the orders made in respect of Eskdale on 30 July 2013 until the determination of the application for leave to appeal and that leave is given until the determination of the appeal. 3 The applications were originally set down for return on Friday, 13 September 2013. Those representing Ms Hofmeister and APA Innovations sought to have the application for leave to appeal and the related approval application under s 471A brought on earlier for the understandable reason that, whilst in place, a provisional liquidator would not just displace the ordinary management of the company but also incur, necessarily, costs in respect of the discharge of that office. 4 The Commissioner has not resisted an earlier hearing. It must be said that the provisional liquidator concerned, Mr Currie, was somewhat nonplussed by the bringing forward of the hearing of the application. Nonetheless, it seemed to me when so directing, and still does, that the interests of justice required the applications to be heard today, rather than more than a fortnight hence. Further, I have the advantage of the report contemplated by Collier J in respect of Carluke having been prepared by Mr Currie. Carluke was once, but on and from February this year is no longer, a trustee of a trust known as Carluke Capital Trust. The trustee of that trust was changed in February this year to Eskdale. 5 It is necessary to say something further of relationships in order to understand reasoning, so evident in her Honour's reasons for judgment, as to why she was moved to appoint a provisional liquidator. The Carluke Capital Trust, then known as the Hofmeister Family Trust, was settled on 8 November 1988. It is a discretionary trust. The name change occurred on 20 September 2004. The original trustee was Rabuck Pty Ltd, which changed its name to P.A. Jordan Proprietary Limited and then, on 20 September 2004, to Carluke. The trust's appointor is Mr Max Hofmeister, who is now a bankrupt. The class of primary beneficiaries in respect of the Carluke Capital Trust comprise Mr Max Hofmeister, Ms Margaret Hofmeister, Ms Bronwyn Hofmeister and Ms Carrie Hofmeister, who is one of the applicants today. 6 Carluke is presently without directors. Between 14 October 1988 and 9 August 2012, Max Hofmeister and Margaret Hofmeister were its directors. On and from 9 August 2012 until 26 February 2013, Mr Max Hofmeister was the sole director. He became bankrupt on his own petition on 26 February 2013. Eskdale is a corporation but recently on the register of corporations. It was registered in Queensland on 4 February 2013. Its sole director, company secretary and shareholder is Ms Carrie Hofmeister. 7 Another corporation of but recent birth is APA Innovations Proprietary Limited. It was registered in Queensland on 16 January this year. Ms Carrie Hofmeister has since then been its sole director and secretary. She and Ms Bronwyn Hofmeister are its only shareholders. On 4 February 2013, Eskdale was appointed as trustee of the Carluke Trust. The power of appointment is one which at the time vested in Mr Max Hofmeister. 8 Prior to that change of trustee and in its capacity as trustee, Carluke was the registered proprietor of real property in Queensland, namely, a rural property at Old Man Camp Road, Esk, a unit in Edward Street, Brisbane, another unit at Oxlade Drive, New Farm and a residential property at Towers Street, Ascot. Each of these came to be registered in the name of Eskdale upon its assumption of the office of trustee of the Carluke Trust. Those properties were each the subject of a mortgage to the National Australia Bank. 9 On 27 March this year, a deed was executed by Ms Carrie Hofmeister and Eskdale, in which, inter alios, Eskdale acknowledged a debt to Ms Carrie Hofmeister in the amount of $4,476,845. The parties to that deed acknowledged that Ms Carrie Hofmeister had requested the repayment of the loan but Eskdale had requested Ms Hofmeister to grant time in which to make payment. 10 The parties entered into an agreement in consideration of a forbearance by Ms Carrie Hofmeister and as part of the agreement Eskdale had agreed to grant a mortgage over the Ascot, New Farm and Edward Street properties. The Edward Street property was sold in June this year for $1.3 million. 11 It will be necessary to make further observations in relation to facts before her Honour later in these reasons for judgment. First, it is necessary to identify the main basis upon which it is sought to challenge the making of the order for the appointment of the provisional liquidator and also to say something in respect of the principles which attend an application for leave to appeal. Those principles are not in doubt. The root authority is a judgment of a Full Court of this Court in Decor Corporation Pty Ltd v Dart Industries Inc [1991] 33 FCR 397, particularly at pages 398 to 400. It is not necessary for an applicant for leave to appeal to prove to demonstration that the applicant is more likely than not to succeed on appeal; rather, what is necessary is that an applicant show first that the judgment concerned, is attended with sufficient doubt as to its correctness to warrant being considered by a Full Court. Next, the applicant must show that substantial injustice would result if leave were to be refused on the assumption that the judgment under challenge was wrong. 12 Before turning to the principal basis of challenge, it is convenient to deal first with whether Ms Hofmeister ought to receive a grant of leave, at least to the extent of permitting her to cause Eskdale to make the application for leave. Where a provisional liquidator is acting, the director, materially here Ms Carrie Hofmeister, cannot and must not purport to perform a function as an officer of the company: s 471A(2), Corporations Act. By s 474A(2A), an exception is provided, materially, where Court approval is granted. 13 That Ms Hofmeister has an interest in whether the provisional liquidator order was lawfully made, or would be effected by its continuance, is in my view, manifest from the material read on her behalf today. Some of that interest will already be evident from the recitation of facts which I have given. To that might be added that there is evidence that Ms Carrie Hofmeister came to the aid, in effect, of her family by assuming the role of director of Eskdale. Mr Max Hofmeister could not take up such a role because of his bankruptcy. Further, there is evidence that Ms Carrie Hofmeister was disinclined to become a director of Carluke, because of an awareness on her part of a considerable dispute between that company as trustee and the Commissioner, concerning the existence or otherwise of taxation liabilities. So it was that Eskdale was incorporated and Ms Hofmeister became a director and also a shareholder of that company. 14 I have already referred to the loan agreement which was made in March this year. That also gives an indication as to an interest which she has and that Eskdale has in the lawfulness or otherwise of the appointment of a provisional liquidator. 15 In effect, the question is whether permission should be given to a person who represents a Hofmeister interest - in the broader sense of that term - to cause the company to act as a contradictor, at least for the purposes of seeking leave to appeal. In my view, the interests of justice require Ms Carrie Hofmeister to be given that leave to cause the company to seek leave to appeal. I approach the application on the basis that the company is seeking leave to appeal consequent upon the grant of approval by Ms Carrie Hofmeister to cause it to seek such leave. 16 It should be said at once that the person presently in control of the company, the provisional liquidator, has adopted a neutral stance as to whether or not leave to appeal should be given. The provisional liquidator has, though, very properly highlighted particular parts of the report that he has furnished to the Court, as well drawn attention to authority. I record my gratitude for that. 17 To return, then, to what lies at the heart of the proposed challenge, the main question, as it was termed, is whether the Commissioner had standing to seek the appointment of a provisional liquidator. That is not exhaustive of the grounds that appear in the draft notice of appeal. That draft notice is, with all respect, noteworthy for its prolixity. That said, other grounds in one way or another, seek to challenge the exercise of a discretionary value judgment as to whether or not the appointment of a provisional liquidator was warranted. 18 The main question, truly, is one as to whether there is an arguable case in respect of standing, and then, related to that, whether substantial injustice would flow supposing the contention to be right - that there was no standing. 19 As to that main question, it is pertinent to note that her Honour's reasons for judgment make reference to a sale of the property at Old Man Camp Road, Eskdale, the sale having occurred on or about 25 March 2013 and to a transfer in respect of that property having been lodged on 8 April 2013; see paragraph 32. I have already mentioned - and her Honour's reasons for judgment at paragraph 34, make reference to - a sale on or about 13 June 2013 of the Edward Street property. Those sales of property have revenue law consequences. Those consequences were not made manifest before her Honour at the time of the hearing of the application for the appointment of a provisional liquidator. They were made manifest in a statement of affairs of Eskdale, dated 30 July 2013, signed by Ms Carrie Hofmeister. That statement referred to a goods and services tax (GST) liability to the Commissioner on the part of Eskdale in the sum of $145,500. That GST indebtedness would appear to have its origins in a GST liability of $120,000 in respect of the sale of cattle and a GST liability of $20,850 in respect of the sale of plant and equipment. 20 There is other evidence before me by way of exhibits to Ms Hofmeister's affidavit of 20 August which put the GST liability for the period 1 April 2013 to 30 June 2013 in an amount $131,563. It is not necessary today to reach any definitive conclusion as to the correct amount of the GST liability of Eskdale as trustee to the Commissioner. It may be that there were input tax credits available, such that the net amount at the end of the period was the lesser sum which appears in the draft of the business activity statement exhibited to Ms Hofmeister's affidavit of 20 August 2013. It is to be recalled that it is the net amount at the end of a period which is the liability; in other words, the amount of GST in respect of supplies less input tax credits, if any. 21 On any view, though, as at the time when the application for the appointment of a provisional liquidator was made, the Commissioner was, in law, at least a contingent creditor. I say "at least" a contingent creditor because the GST liability crystallised at the end of the period and was therefore due but was not payable until, at the earliest, 28 July or, on the evidence, perhaps later as the result of an extension to a lodgement requirement given by the Commissioner to Eskdale's accountants. 22 The Commissioner having the standing at least of a contingent creditor, if not a creditor, on any view, lends something of an academic quality to what follows. By that, I mean that, even if there is an arguable case as to another basis, that pressed before her Honour, as to the Commissioner being at least a prospective or contingent creditor, there are and were, as a matter of law, at the time other reasons flowing from the operation of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) why the Commissioner had standing. 23 The basis upon which the Commissioner sought to bring himself within the class of persons specified in s 462(2) who "may apply for an order to wind up a company" was as follows. Carluke, as trustee, had a liability to the Commonwealth payable to the Commissioner in respect of various taxation debts. Carluke incurred those debts in the course of its administration of the trust, the Carluke Capital Trust. That being so, Carluke had both a right of an indemnity and a separate, although not unrelated, right to a charge or lien in respect of trust assets in order to secure its right of indemnity. Carluke, so the Commissioner's submission went, a submission which necessarily was accepted by her Honour, was not solvent. The Commissioner as a debtor, so the submission went and so her Honour accepted, was entitled to be subrogated to the right of Carluke to an indemnity from trust assets and to the equitable charge over trust assets. That being so, the Commissioner's submission was that he was a "creditor" of Eskdale in terms of s 462(2)(b) of the Corporations Act. That is the only possibly pertinent provision in the class set out in that subsection of those who may seek an order to wind up a company. 24 A useful starting point and perhaps end point also as to that submission is Octavo Investments Proprietary Limited v Knight (1979) 144 CLR 360 (Octavo Investments v Knight). One there finds (at 367) in the joint judgment of Stephen, Mason, Aickin and Wilson JJ the following observations: It is common ground that a trustee who in discharge of his trust enters into business transactions is personally liable for any debts that are incurred in the course of those transactions: Vacuum Oil Company Proprietary Limited v Wiltshire. However, he is entitled to be indemnified against those liabilities from the trust assets held by him and for the purpose of enforcing the indemnity the trustee possesses a charge or right of lien over those assets: Vacuum Oil Company Proprietary Limited v Wiltshire. The charge is not capable of differential application to certain only of such assets. It applies to the whole range of trust assets in the trustee's possession except for those assets, if any, which under the terms of the trust deed the trustee is not authorized to use for the purposes of carrying on the business: Dowse v Gorton. In such a case there are then two classes of person having a beneficial interest in the trust assets: first, the cestuis que trust, those for whose benefit the business was being carried on; and secondly, the trustee in respect of his right to be indemnified out of the trust assets against personal liabilities incurred in the performance of the trust. The latter interest will be preferred to the former, so that the cestuis que trust are not entitled to call for a distribution of trust assets which are subject to a charge in favour of the trustee until the charge has been satisfied: Vacuum Oil Company Proprietary Limited v Wiltshire. 25 Their Honours then observed the following, which is particularly pertinent to the case presently at hand: The creditors of the trustee have limited rights with respect to the trust assets. The assets may not be taken in execution: Savage v Union Bank of Australia Ltd Re Morgan; Pillgrem v Pillgrem. But in the event of the trustee's bankruptcy the creditors will be subrogated to the beneficial interest enjoyed by the trustee: Vacuum Oil Company Proprietary Limited v Wiltshire and Ex parte Garland. 26 I am bound, naturally, to follow Octavo Investments v Knight (1979) 144 CLR 360. It is submitted, though, that it does not axiomatically follow from those observations of the High Court that the Commissioner is unarguably a creditor, or at least a prospective or contingent creditor, for the purposes of s 462(2)(b) of the Corporations Act. 27 An authority frequently cited in connection with the question of whether a person is or if not a contingent creditor is Community Development Pty Ltd v Engwirda Construction Company (1969) 120 CLR 455 (Engwirda Constructions), and in particular the following statement made by Kitto J at page 459: Not much assistance is to be gained, I think, from observations that are to be found in reported cases as to the import of the word "contingent", and I shall refer to one only. In In re William Hockley Limited, Pennycuick J suggested as a definition of "a contingent creditor" what is perhaps rather a definition of "a contingent or prospective creditor", saying that in his opinion it denoted "a person towards whom, under an existing obligation, the company may or will become subject to a present liability upon the happening of some future event or at some future date". The importance of these words for present purposes lies in their insistence that there must be an existing obligation and that out of that obligation a liability on the part of the company to pay a sum of money will arise in a future event, whether it be an event that must happen or only an event that may happen. His Honour then dealt with the particular basis put forward in that case as the foundation for the alleged status of contingent creditor which was a building contract which gave rise upon its making to obligations materially upon a building owner to pay the contract price and pay the same progressively. That particular obligation was said by his Honour (at page 459) to create the position that the building owner was bound from the time the contract was made to pay money to the builder upon a contingency; that, in his Honour's opinion, made the builder a contingent creditor of the owner. 28 I have gained particular assistance in relation to the question of what amounts to a contingent creditor from a judgment of Mansfield J in Commissioner of Taxation v Simionato Holdings Pty Ltd, material extracts of which are reported in (1997) 15 ACLC 477 (Simionato Holdings). Having referred to Engwirda Constructions, his Honour (at page 481-483) made the following observations with each of which I respectfully agree: The general question of whether regard may be had to an entity which has an arguable claim for damages against the company (it is accepted by the respondent that the Emanuel Group's claim is arguable) has been considered in a number of recent cases: Re Gasbourne Pty Ltd (1984) 2 ACLC 103; Re PMC Investments Pty Ltd (1991) 9 ACLC 1559; Thomas v Mackay Investments Pty Ltd (1997) 22 ACSR 294 and Roy Morgan (supra); and see also the cases referred to in Ford's Principles of Corporations Law, Butterworths looseleaf, para27.080. No common answer to that question emerges from those authorities. In Gasbourne (supra), R D Nicholson J recognised a bank as a contingent creditor with the appropriate status to challenge the appointment of provisional liquidators to a number of companies, first because it had proceedings extant against the companies claiming indemnity from them in respect of claims made against it by them for negligence and misapplication of money as a constructive trustee, and secondly in respect of the costs it might recover if the companies' claims against it were unsuccessful. Nicholson J of course followed Engwirda (above), but regarded the definition there adopted whilst apt to the particular facts as not "exhaustive" of the definition of contingent debt. As he pointed out, the judgment of Owen J with whom Windeyer J agreed referred with apparent approval to a number of judicial observations which conveyed a more liberal meaning to that term, namely a liability about which there may be some doubt either as to whether it will ever come into existence or when it will come into existence. The control of the Court, where there is a disputed indebtedness in proceedings, is of course available under s459P(2); it can refuse leave to the claimed contingent or prospective creditor to make a winding up application. In PMC (supra) Williams J in the Supreme Court of Queensland permitted a company claiming status as a contingent creditor, claiming to be entitled to substantial damages for breach of contract by the company sought to be wound up, to apply to wind up the company. Williams J also made the point that the Court in Engwirda was responding to the particular circumstances, rather than seeking to formulate an all embracing definition of the concept of 'contingent or prospective creditor'. He shared R D Nicholson J's view that an entity showing an arguable claim for unliquidated damages may qualify as a contingent or prospective creditor. He referred to Re Community Development Pty Ltd [1969] Qd R 1 as supporting that view. Of course, status does not ensure outcome. Leave may be refused under s459P(2). A company will rarely, if ever, be wound up on the basis of a debt which is bona fide disputed: eg Re K.L. Tractors Ltd [1954] VLR 505. On the other hand, in Thomas (supra), Owen J in the Supreme Court of Western Australia determined that an asserted contingent creditor did not have standing to make a winding up application. The circumstances of that case are, however, somewhat special. The applicant claimed status as a continent creditor because he had been promised by contract 25% of the gross profit of the company on its share trading upon termination of its share trading activities; those activities had ceased. Owen J (at 299) found that, in effect, there was no real prospect of the applicant being, or becoming entitled, to any money under that arrangement in the light of the share trading of the company, and concluded therefore that he was not a contingent creditor "in the relevant sense". His decision does not suggest that, if the share trading had been profitable, he would have reached the same conclusion. Santow J in the Supreme Court of New South Wales in Roy Morgan (supra) reached a different view. Roy Morgan Research Centre Pty Ltd ("Morgan") had purchased the business of Wilson Market Research Pty Ltd ("Wilson"), but Wilson had purported to terminate that sale on the grounds of Morgan's breaches of obligations under the sale and purchase agreement. Morgan then applied to wind up Wilson, claiming standing (inter alia) as a contingent creditor and separately brought an action against Wilson for unliquidated damages for its alleged breaches of the contract. Santow J held that Morgan was not a contingent or prospective creditor of Wilson, simply on the basis of an untried claim for unliquidated damages, and in doing so he expressly declined to follow the decision of R D Nicholson J in Gasbourne (supra). He commented as to that (at 930, and see also at 932): "The potentially fatal power to trigger winding up was not intended to be vested in those with merely arguable claims. Such claims might well turn out eventually to be without foundation, yet the company may have been destroyed or injured with no redress." I interpose that, as I read the facts in Engwirda (above), that was the factual situation which there obtained because it was unclear that, by the processes under the contract, any amount would actually become payable under it. His Honour referred to several authorities on one side or the other of the point presently under consideration, which I have not specifically referred to in this judgment. He expressed the view (at 933) that there is no compelling logic in making the class of those who can prove in a liquidation identical with those who can trigger a liquidation (his emphasis). If a person can prove in a liquidation, I do not think that there is any especial reason why that person's claim may not be relevant to determining if a company is solvent in the first place, under s459D of the Law. It is then but a short step to include such persons in the classes of those who may, by leave, make an application to wind up a company (my emphasis). There are safeguards against the consequences feared by Santow J: s459P(2) - the need for leave; the power of the court to stay or dismiss the application if the debt is bona fide disputed: General Welding & Construction Co. (Qld) Pty Ltd v International Rigging (Aust) Pty Ltd (1983) 2 Qd R 568; Stonegate Securities Ltd v Gregory [1980] Ch. 576, and in certain circumstances to treat the presentation of the application itself as an abuse of the process of the Court: L & D Audio Acoustics Pty Ltd v Pioneer Electronics Australia Pty Ltd (1982) 1 ACLC 536. It may be that the expression adopted in Engwirda of 'existing obligation' in the judgment of Kitto J was appropriate to describe the circumstances of that case, where the status was said to arise under contract; there was of course no certainty that, under the contract, any amount would ever be determined as liable to the applicant either by architect's certificate or arbitrator's determination. There is no reason apparent to me why, if uncertainty as to whether any entitlement to money may ever arise, it is necessary to confine the circumstances which might give rise to a liability to those which might arise from an existing contract, or certain types of transaction, as distinct from some other types of transaction. The focus is on the potential liability, not the source of the potential liability. The expression 'existing obligation' may carry with it no more than the concept of a transaction, or set of facts, which are already in existence upon which some future adjudication or other event may give rise to an actual liability. The source of the potential liability will be likely in many cases to be relevant to whether the potential liability will come into existence, so as to be taken into account eg when considering whether leave under s459P(2) of the Law to that claimed contingent creditor should be given. It is not necessary to determine whether "prospective liability" has a wider scope, except perhaps to observe that it may encompass the circumstance where the liability will, not may, arise at some uncertain time in the future from an existing set of circumstances. The view I have come to, therefore, is to the same effect as that of R D Nicholson J in Gasbourne and Williams J in PMC. So long as there is a claim made arising from facts, events or circumstances, including but not limited to contractual arrangements which existed prior to the winding up proceeding, that claim may qualify the claimant as a contingent or prospective creditor. The Court has control over whether such a claimant may make a winding up application under s459P(2) of the Law, and over whether to take account of it for the purposes of determining solvency under the discretion in s459D of the Law. Similar controls are available in relation to the ability of a liquidator, and on appeal the Court, to reject a 'contingent' debt sought to be proved in a winding up: s553, s554A, and Corporations Regulations reg5.6.54(2). It is a consequence of that conclusion that the term 'contingent and prospective creditor' is used consistently in those two sections in Pt5.4 of the Law, and also accords with the scope of persons who may prove in a winding up; see the conclusion in McPherson B H, The Law of Company Liquidation, 3rd ed LBC 1987 at 45. 29 There are, as was made apparent in submissions on behalf of the applicant, I believe, other views which are abroad in terms of whether the Commissioner, as a creditor of a person having a right on indemnity or, at least, arguably having that, should be regarded as a contingent creditor. There is, in short, what one might term a broad view evident, materially, from Mansfield J's judgment in Simionato Holdings, and a narrow view, nowhere better expressed than by Santow J in Roy Morgan Research Centre Pty Ltd v Wilson Market Research Pty Ltd (No 2) (1996) 39 NSWLR 311, where, at page 367, his Honour stated: The potentially fatal power to trigger winding up was not intended to be vested in those with merely arguable claims. Such claims might well turn out eventually to be without foundation, yet the company may have been destroyed or injured with no redress. 30 Some commentators suggest that a balance of more recent authority lies with Santow J's approach. That particular approach was one, as the passage quoted from Simionato Holdings reveals, exposed to Mansfield J. In the end, as the passage from his Honour's reasons for judgment quoted reveals, it did not prove persuasive to his Honour. Nor does it to me. 31 That is not, of course, to say that there is not an arguable proposition. That is one facet of the test for leave to appeal. Further, in the event that I were to sit on a Full Court, it is a subject upon which I today readily acknowledge that there is controversy and one in respect of which, notwithstanding what is a necessarily preliminary preference in Mansfield J's view, I would readily entertain argument upon an appeal and judge that argument on its merits. 32 In the end, what persuades me that there is no persuasive case for a grant of leave to appeal is that even accepting, as I do, that there is a line of authority which would support the proposition that the Commissioner, on the basis originally put, did not have standing, what remains is that there is other evidence that he was, in any event, at the time, a creditor. Of course, it must be said that there was an ability on the part of Eskdale, had it fully appreciated the consequences of its actions for the purposes of GST law, to have extinguished that particular GST liability. The position which obtains nonetheless is that the liability did exist and the Commissioner was, on any view, as a result of that, at least a contingent creditor - contingent only in the sense of a debt due but not yet payable, if not a creditor simpliciter. 33 That is not to say, either, that there are not, with respect, passages in her Honour's reasons for judgment, which, if read in isolation, might provide a basis upon which a challenge might be made. I refer, in particular, to paragraph 45, in which it is stated: The trust is indebted to the Deputy Commissioner in the amount identified as unpaid tax liabilities, as set out in the Carluke RBA. I do not accept the submission of the defendants that the reference to Carluke RBA is ambiguous, as was clear from the undisputed fact that the account number on the RBA is the ABN of the trust. The RBA clearly refers to the trust and its tax liability. I accept that the Deputy Commissioner is a creditor of the trust and, to that extent, Eskdale, in its capacity as trustee of the trust. 34 Read in isolation, that might well be thought to disclose the error of conflating the way in which trusts are treated artificially as entities for the purpose of assessing taxation liabilities with the person who is liable to pay such a tax liability. There is no ambulatory quality in the liability which falls upon a trustee at a particular time to pay liabilities which fell on a trustee at an earlier time under revenue law. That said, her Honour refers thereafter to other cases notably, Agusta Pty Ltd v Provident Capital [2012] NSWCA 26, which deal with the existence of a right of indemnity for a trustee out of trust assets. 35 Further, her Honour does make reference to a right of subrogation: see paragraph 48. The passage from Octavo Investments v Knight which I have cited establishes that there can be circumstances where a creditor enjoys just such a right of subrogation. 36 As to the facts before her Honour, there is a complete statement in her Honour's reasons for judgment of particular past transactions which gave rise in her Honour's mind to a need for the appointment of a provisional liquidator. Of course, it must be said that some of those transactions disclosed sale at market value, as the provisional liquidator has frankly opined in his report. He has equally been frank in his report to disclose others, which prima facie were not so. Her Honour did not have the benefit of that report; I do. 37 The long and the short of it is this First, I am not persuaded so far as there were discretionary value judgment aspects to the appointment of a provisional liquidator, that her Honour's reasons are attended with sufficient doubt to warrant a grant of leave. In any event, I am not persuaded that there is a substantial injustice that would flow from refusing leave. Second, I am persuaded that the Commissioner was, in any event, a person having standing, for the reasons that I have given, pursuant to s 462(2)(b). 38 That being so, it is not necessary to decide whether there was, as was also put, a yet further basis upon which the Commissioner had standing, derived from his delivery of the notice under s 260-5 in Sch 1 to the Taxation Administration Act 1953 (Cth). 39 I therefore dismiss the application for leave to appeal. 40 Application has been made on behalf of the Commissioner for costs. The provisional liquidator has also sought costs. Costs are sought against both Ms Hofmeister and APA. APA's role, it seems to me, was a subordinate one to that of Ms Hofmeister, and necessarily so upon a grant of leave under s 417A to Ms Hofmeister. Its interests were wholly protected by her being able to cause the company to seek leave to appeal. 41 Ms Hofmeister was not the applicant for leave to appeal. The company was. But it was the company under her direction, and with the approval of the Court, which sought that leave. In those circumstances, it seems to me that she truly is to be regarded as the person with the interest in substance of seeking leave; in other words, she was the directing mind, and of will and the person behind the applicant for leave to appeal. 42 That there is power to award costs against a non-party is not in doubt. A circumstance warranting an award for costs against a non-party is that the non-party is, in substance, the person with the interest in the prosecution of a case. 43 Ms Hofmeister did enjoy forensic success to the extent of being granted approval to cause the company to seek leave to appeal. That though, in my view, was a necessary incident of the application for leave to appeal itself. The substantive application for leave to appeal did not succeed. It did not succeed because, so far as the standing challenge was concerned, of a basis which was not revealed before her Honour. That basis, though, was revealed to Ms Hofmeister, at least at the time when she completed a statement of affairs for Eskdale, if not later when, with the assistance of advice from accountants, she had a draft business activity statement for the period ending 30 June 2013 prepared. 44 Each of these events occurred well prior to the hearing of today's application. It is evident from the applicants' counsels' submissions, and I readily accept, that the particular basis upon which the Commissioner came to succeed in relation to standing was not revealed to them personally until the receipt of the Commissioner's submissions today. Nonetheless, Ms Hofmeister was seized with the knowledge, it seems to me, in early August 2013, that the Commissioner was a creditor of Eskdale and a creditor who would, on any view, have fallen within s 462(2)(b) of the Corporations Act. 45 There is a separate question as to whether the provisional liquidator should have costs and, related to that, whether his costs should merely be ordered to be costs in the winding up or whether he should have the benefit of an order that Ms Hofmeister pay his costs. 46 The provisional liquidator's appearance today was necessary. I do not see any unreasonable behaviour on the part of the provisional liquidator in taking the stance which he did and making submissions drawing attention to particular authority. 47 In the circumstances, it seems to me that the order for costs should go against Ms Hofmeister, and at that should extend not just to the Commissioner's costs, but also to those of the provisional liquidator. It does not, given the subordinate role of APA, seem to me appropriate to make any order as against it. 48 There will be orders accordingly. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.