C88 Project - Case Update

The Supreme Court of New South Wales has ordered the liquidator of property development company C88 Project to pay the Deputy Commissioner of Taxation’s (“DCT”) costs in connection with a directions application brought by the liquidator.

Last month, we wrote about how the liquidator sought directions from the Court as to whether he would be justified in retaining an amount (approximately $365,000) mistakenly paid to the company by the ATO. The Court could find no basis to allow him to do so, concluding that the liquidator clearly knew the amount was paid by mistake and there was no consideration given for the payment.

The liquidator proposed that each party pay their own costs of the proceedings, arguing that he acted properly in bringing the application and pointed to the desirability, as a general matter, of a liquidator seeking directions as to an issue as to which he was in doubt. The liquidator also submitted that he was not unsuccessful in the “event” and that he sought alternative orders to cater for the Court’s ultimate determination.

The Court accepted that orders were sought in the alternative. However, it found that the the liquidator had advanced the position that the DCT did not have a proprietary interest in the relevant funds at the hearing and the DCT advanced the contrary position as to which it succeeded. Accordingly, the Court found that it would be appropriate to make an order that the liquidator pay the DCT’s costs of the proceedings as costs in the liquidation of the company.

Read the decision HERE.

Professionals involved:

• Counsel for the DCT: Luke Livingston SC and Keni Josifoski of New Chambers

• Solicitor for the DCT: Craddock Murray Neumann

• Counsel for the liquidator: Daniel Neggo of University Chambers

• Solicitors for the liquidator: Macpherson Kelley