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Texts Cited: N.A.

Category: Principal judgment

Parties: Coreplex Business Advisory Pty Ltd (plaintiff)
Australian Taxation Office (defendant)

Representation: Counsel:
F Sinclair (plaintiff)
D Olthof (solicitor) (defendant)
Solicitors:
Vaikom Law (plaintiff)
Craddock Murray Neumann (defendant)

File Number(s): 2026/108609

Publication restriction: N.A.

JUDGMENT (EX TEMPORE)

1. The Deputy Commissioner of Taxation served a creditor's statutory demand on Coreplex Business Advisory Pty Ltd. The statutory demand is dated 18 February 2026. It was served on 26 February 2026. It demands payment of $437,406.74. The schedule to the statutory demand indicates that the debt is said to reflect Coreplex's running balance account deficit debt of $396,473.62 as well as amounts totalling $40,933.12 reflecting superannuation guarantee charges. Those debts are said to be owing as at 18 February 2026.

2. By an originating process filed on 16 March 2026, Coreplex applies to set aside the statutory demand pursuant to s 459G of the Corporations Act 2001 (Cth). The application was supported by an affidavit of Mr Vaikom Rajeev dated 26 May 2026. Mr Rajeev is the solicitor for Coreplex. He deposes that there is a genuine dispute as to (a) the quantum of the debt, and (b) the existence of the debt. Coreplex did not adduce any other evidence on the application.

3. The Deputy Commissioner of Taxation relied on evidence from Ms Chithra Mohanakumar who works for the Australian Taxation Office, and gives evidence about the taxation records of the Australian Taxation Office and dealings concerning the Australian Taxation Office and Coreplex.

4. The principles to be applied on an application under s 459G are well established and are not in dispute. The Deputy Commissioner of Taxation relied on the often-cited passage from the decision of Barrett J in Panel Tech Industries (Australia) Pty Ltd v Australian Skyreach Equipment Pty Ltd (No 2) [2003] NSWSC 896, and in particular drew the Court’s attention to the following passages:

[17] The test to be applied in cases of this kind has been established in several well known cases, of which those most often quoted are Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290, Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 76 FCR 452 and Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601. Those cases refer to tests of "plausible contention requiring investigation", "real and not spurious, hypothetical, illusory or misconceived" and "perception of genuineness (or lack of it)".

[18] These tests, applied in the context of a summary procedure where it is not expected that the court will embark on any extended inquiry, mean that the task faced by a company challenging a statutory demand on the "genuine dispute" ground is by no means at all a difficult or demanding one. The company will fail in that task only if it is found upon the hearing of its s 459G application that the contentions upon which it seeks to rely in mounting its challenge are so devoid of substance that no further investigation is warranted. Once the company shows that even one issue has a sufficient degree of cogency to be arguable, a finding of genuine dispute must follow. The court does not engage in any form of balancing exercise between the strengths of competing contentions. If it sees any factor that, on rational grounds, indicates an arguable case on the part of the company, it must find that a genuine dispute exists, even where any case apparently available to be advanced against the company seems stronger.

5. The Deputy Commissioner of Taxation also relied on the following passage from the decision of Greenwood J in Kortz Ltd v Data Acquisition Pty Ltd (2006) 155 FCR 556; [2006] FCA 1722:

[40] The question to be determined by the Court is not where the merits lie in any contest but simply whether there is a genuine dispute or a genuine claim. No question of the resolution of any contested question of fact arises. The only question is whether the Plaintiff has deposed to facts which give rise to a conclusion that there is a genuine dispute rather than facts which operate at such a high level of abstraction that the Court might conclude that a failure to deal with the content of the Defendant’s claim reflects obfuscation or a lack of genuineness. The supporting affidavit must depose to facts which promote the company’s case. A supporting affidavit that fails to satisfy the minimum requirements in this regard, represents a failure of jurisdiction (Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 21 ACSR 581 at 587L, 20 to 40, per Sundberg J). Although an affidavit in support of the application need not go into the evidence supporting the dispute and may assert material facts much in the nature of a pleading, a mere assertion that there is a genuine dispute coupled with a bare claim that the debt is disputed, is not sufficient. What is required, ‘in all cases is something between mere assertion and the proof that would be necessary in a court of law. Something more than mere assertion is required because if that were not so then anyone could merely say it did not owe a debt’ (John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250 at 253, L15–23 per Young J; Re Louisbridge Pty Ltd [1994] 2 Qd R 144 at 145; Dromore Fresh Produce Pty Ltd v W Paton (Fertilisers) Pty Ltd (1997) 23 ACSR 230 at 235 L6–18).

Dispute as to quantum

6. Mr Rajeev pointed to what was said to be an unexplained discrepancy in the amount in the statutory demand and amounts recorded in payment advice provided by the Australian Taxation Office to Coreplex. The alleged discrepancy is an excess in the demand over the payment advice of $24,790.50.

7. I was taken through the records of the Australian Taxation Office exhibited to the affidavit of Ms Mohanakumar that relate to the alleged taxation debt. The apparent discrepancy was explained. The payment advice referred to by Mr Rajeev concerns taxation debt as at an earlier point in time. It also relates to a different debt, being a debt of the director, not the company. There is no relevant discrepancy. The amount claimed in the statutory demand reflects the amounts owing by Coreplex to the Deputy Commissioner of Taxation as at the date of the demand by reference to the relevant running balance account and the superannuation guarantee charge statement of account, which constitute either prima facie or in some instances conclusive evidence of the debts under the relevant taxing statutes.

8. No substantive submissions were made by Coreplex in response to the evidence from the Australian Taxation Office records or the submissions from the Deputy Commissioner of Taxation based on those records. There is no genuine dispute arising from the alleged discrepancy.

Dispute as to Existence

9. Mr Rajeev's affidavit asserts that there is a genuine dispute because the majority of the alleged debt arises from the Deputy Commissioner of Taxation's treatment of various persons engaged by Coreplex as employees for the PAYG Withholding provisions, whereas Coreplex asserts that those persons were independent contractors. There are several difficulties with this argument.

10. The amount claimed by the Deputy Commissioner of Taxation as a debt on account of the PAYG withholding provisions arises because Coreplex lodged with the Australian Taxation Office business activity statements and indicated amounts that had been withheld by Coreplex on account of PAYG tax. That is, it was Coreplex who identified the amounts it withheld. This is not a case where Coreplex lodged business activity statements on the basis that persons were engaged as independent contractors and that was rejected by the Deputy Commissioner of Taxation.

11. The effect of the argument that Coreplex now wishes to make is that Coreplex was in error in withholding the amounts reflected in the business activity statements because the persons were not employees, but rather were independent contractors. This argument has only been advanced after the statutory demand was served. On the very date of the statutory demand, Coreplex advised the Australian Taxation Office that all outstanding activity statements and tax returns had been lodged. On the previous day, 17 February 2026, Coreplex lodged statements identifying amounts withheld on account of PAYG tax. The debt claimed by the Deputy Commissioner of Taxation by the statutory demand includes the amount said to have been withheld in the business activity statements lodged on the previous day.

12. The assertion from Coreplex that the Deputy Commissioner of Taxation treated various persons engaged by Coreplex as employees for the PAYG withholding provisions is unfair and incomplete. The Deputy Commissioner of Taxation asserts, in effect, that Coreplex owes a debt on account of PAYG tax withheld based on the business activity statements lodged by Coreplex.

13. The assertion that persons have relevantly been treated as employees when in fact they are independent contractors has two further particular difficulties. The first is that Coreplex may have had an obligation to withhold payments even if persons were independent contractors. That would be true if there was a voluntary agreement to withhold between Coreplex and the independent contractor within the meaning of s 12-15 of the Taxation Administration Act 1953 (Cth). It would also be the case if the independent contractors did not quote their ABN: see s 12-190. Coreplex made no attempt to engage with this matter.

14. The second is that there is nothing beyond assertion that the relevant persons were independent contractors rather than employees. Coreplex has not adduced any evidence that is capable of supporting the contention that there is a genuine dispute arising from the fact that relevant persons were independent contractors, not employees. The subtext of Mr Rajeev's evidence is that Coreplex has lodged business activity statements that are erroneous because they record amounts withheld on account of PAYG tax, and either no money was withheld or none was required to be withheld, or both.

15. There is no evidence that Coreplex has sought to lodge amended business activity statements, and no evidence at all to explain how it is that Coreplex lodged business activity statements that were erroneous. Without that, it is very difficult to say that the dispute is a genuine one.

16. It is not enough merely to assert that there is a genuine dispute, but that is, in substance, all that has been done on this application.

17. For these reasons, the originating process is dismissed with costs.

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