Case: Deputy Commissioner of Taxation v Westpac Savings Bank Ltd (1987) 87 FLR 130
Outcome: distinguished
Furthermore, nothing in the decision of Bryson J in Deputy Commissioner of Taxation v Westpac Savings Bank Ltd (1987) 87 FLR 130 (" Westpac "), relied on by the liquidator, suggests a contrary approach. In Westpac , the bank Westpac held funds in a savings account jointly owned by three tax debtors. Westpac at 131-132. The Commissioner then issued three separate notices to the bank under s 218 of the Income Tax Assessment Act 1936 (Cth) (the 1936 Act) seeking garnishment of the funds to pay tax liabilities owed severally by the debtors: Westpac at 132. Westpac refused to comply on the grounds that it held the money in a joint account and not in a sole account of any of the tax debtors named in the notices: Westpac at 132. 24 Section 218(1)(b) of the 1936 Act, which was the predecessor to s 260-5(3)(b) of the Act, provided that the Commissioner could require a person (ie, Westpac) to pay the Commissioner money held by the person if (at 133): [the] person ... holds or may subsequently hold money for or on account of a taxpayer 25 Based on that language, Bryson J took it to be self-evident that the bank "at the time of delivery of the notices was a person (and I will call such a person the holder) falling within par ... (b) of subs (1)": Westpac at 133. The crucial question, in his Honour's view, was not whether the bank could be said to be a holder of money for or on account of a taxpayer, but "whether, when those paragraphs refer to 'a taxpayer' the identification of the holder extends in any circumstances to a holder of moneys due to or on account of a taxpayer as one of several persons for whom the moneys are held jointly ": Westpac at 133 (emphasis added). Bryson J resolved this question in the negative, with the effect that the notice was deemed invalid and the Commissioner was unable to enforce the notice: Westpac at 137. 26 Here, the circumstances are similar to those in Westpac to the extent that BJT Legal, like Westpac, is a holder within the meaning of s 260-5(3)(b) (or its substantially identical predecessor s 218(1)(b)). To that extent, then, Westpac supports Commissioner's position, not the liquidator's. However, the facts are different to the extent that the funds are held by BJT Legal for and on account of A Chaid solely, unlike in Westpac , where the bank held money on joint account. To that extent, the Commissioner's position in this case is stronger than it was in Westpac . 27 The liquidator submits that, regardless of the foregoing, the Notice could not take effect in light of the 26 October 2006 winding-up order and s 468(1) of the Corporations Act . That submission is unfounded. 28 First, it conflates the effectiveness of the Notice with the ability of BJT Legal or the company (through its liquidator) to comply with the Notice (ie, pay money to the Commissioner). Section 468(1) provides: Any disposition of property of the company, other than an exempt disposition, and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up by the Court is, unless the Court otherwise orders, void. (Emphasis added.)