First Plaintiff v Second Plaintiff

First Plaintiff v Second Plaintiff - [2014] VSC 613 - VSC 2014 case summary — Zoe

[29]

Hi Mark,

I have mapped out your job and am confident we can assist you.

There are a number of things that need to be done to ensure a smooth transition into your new structure.

You will require a new Company and Trust to purchase the business from the existing entity and continue trading.

You will require a new Company and Trust to purchase the Assets of the existing structure and protect them moving forward.

You will also require a new Company and Trust to take an assignment of your arrangement with TTM.

The equipment currently owned will need to be valued by a proper Valuer to ensure a proper price is paid for the equipment to ensure the Liquidator does not question the transaction.

There will also need to be a sale agreement for the existing business, and transactions for this and the sale of the equipment arranged and managed.

Any ongoing debtors at the time of liquidation will need to be moved over into the new entity, and any creditors that you wish to pay will also need moving over into the new entity.

The above is a broad indication of what needs to be done, but does not go in to the minutia [sic] of every single transaction, but will result in your current two companies being put in to Liquidation with our preferred Liquidator, and the set up of three new structures as above.

It is estimated that this will save you approx $400,000 in Tax, $300,000 approx will be owed by the end of October, and we expect to be able to run the existing structure for a further 2-3 months quite comfortably at which time a further $90,000 approx will be owing in Tax.

There is also approx $100,000 owing in Superannuation with a further $10-20,000 owing by the time of Liquidation. This combined with other Tax savings should produce an overall benefit of approx $500,000.

Although indicating a fee of $60,000 to $75,000 at our meeting on Monday, having spoken with the Liquidator and the Valuers, we have calculated our fee at $85,000 (+GST) which is to be paid over the next 2-3 months from the savings being made, basically the funds that would normally be allocated to the ATO will be allocated to us.

We will take over managing any correspondence with the ATO and covered in our fee is the costs of the Liquidator, Valuer, Company and Trusts to be set up, all contracts and management of the transactions, all advice and instructions to accountants and or other parties including Solicitors if required. Any costs levied by Solicitors are not included in our fees.

To commence we would require an upfront payment of $20,000 and a weekly or bi weekly payment thereafter with all fees being payable prior to the Liquidation of both Entities.

Also enclosed is our ongoing advice in relation to the dispute with Pavjo and the transfer and realisation of Lots 4 & 5 in the Subdivision for TTM.

We trust the above is acceptable and look forward to working with you on these matters.

Regards,

Steve Marks

SME's R Us P/L ...

[145]

The first issue to consider is the challenge by Mr Scott to the standing of Liberty to seek to set aside the non-party subpoenas. Counsel for Mr Scott submitted that having regard to the language of Rule 42.10, a party does not have standing to object to the production of a document pursuant to the subpoenas. Emphasis was placed on the specific provisions as to the right to challenge in Rule 42.10. In particular under Rule 42.10(8)(a), the person named in the subpoena can notify the Prothonotary of any objection to production before the day specified for delivery of the documents in the subpoena. Under Rule 42.10(8)(b) a person, other than a party, who has a "sufficient interest" can also object in the same way. On the other hand Rule 42.10(9) simply states that if a party has any objection to inspection by another party of a document, it should notify the Prothonotary before the date specified in the subpoena. There is nothing in the Rules stating that the party who is the opponent of the party seeking the subpoenaed non-party documents can object to their production or challenge the subpoena itself. Counsel also relied upon the authority of Re ACI International[37] where it was held that an objection to production of subpoenaed documents on the grounds that the contents are confidential is not a ground for having a subpoena set aside.

If the issue were simply one of "standing", it might be said that, in our adversary system, any party has an obvious interest in denying access to subpoenaed documents which may be relevant and used against it. In the present case the documents plainly concern the affairs of the first plaintiff and related companies. On the other hand, the provisions of Rule 42.10 are detailed and on their face appear to be intended to define with precision the precise rights of the parties and subpoenaed persons. The provisions do not give a party itself the right to object to production. The issue is also complicated by the fact, as noted above, that Mr Scott agreed to the procedure being followed of advising the person subpoenaed that the plaintiff was objecting and that those objections would be dealt with. In those circumstances Mr Scott may well be estopped from arguing a lack of standing.

In light, however, of the conclusions I have reached on the substantive issues, it is not necessary to resolve the standing issue and it is better left to another occasion.

At a glance

Court

Decision date

Before

Source

Judgment (372 paragraphs)

Parties

Legislation Cited (24)

Cases Cited (21)