Bruce Gleeson.
A legal stoush over a deed of company arrangement (DoCA) approved in defiance of the administrators’ recommendation kicked off yesterday with a judge telling the ATO it would need to do more than rely on the plaintiff’s case if it wants to replace the current deed administrators with a liquidator more to its liking.
In hearing from the parties’ legal representatives Federal Court judge Brigitte Markovic told Khaled Metlej for the Deputy Commissioner of Taxation (DCoT) that if the tax office wants the Dalma Form Specialist Pty Ltd (DFS) DoCA terminated, the company wound up and its preferred liquidator appointed, it would need to make its own application via an interlocutory process.
Further, her honour said that the ATO would need to include in any such application evidence of a $100 million-plus payroll fraud the ATO alleges has been perpetrated by individuals associated with the Dalma Group, of which DFS was a part. iNO makes no suggestion of wrongdoing.
The judge made the remarks at the first case management hearing of proceedings initiated by the NSW Chief Commissioner of State Revenue, which is seeking to have the DFS DoCA set aside.
The Chief Commissioner began the legal action on behalf of Revenue NSW on April 29, two weeks after a majority of creditors by number and by value voted in favour of the DoCA at the reconvened second meeting of DFS creditors on April 12.
The DoCA was executed on April 26, at which point the DFS administrators Bruce Gleeson and Daniel Soire of Jones Partners became deed administrators while control of the company reverted to the director, Jason Ivan Andrijic, 39 of Chatswood.
Revenue NSW sought to lodge a proof of debt ahead of the second meeting for $11.374 million in unpaid payroll tax but meeting chairman Soire admitted the proof for $1.00 based on legal advice.
This was because, the court heard yesterday, Revenue NSW had not at that point issued a formal determination in respect of the amount owed.
A proof for more than $2 million lodged by Helm Advisory’s Stephen Hathway as liquidator of related entity Admin Form Pty Ltd was also admitted at the meeting for $50,000 based on the issuance of credit notes.
Admin Form’s director Girishbhai Chandulal Patel, 57 of Griffith returned to his native India one day after he was appointed and Andrijic told the second meeting his only means of communication was via WhatsApp messages that automatically deleted every 24 hours.
Hathway is also the ATO’s preferred liquidator and may end up in control of DFS and funded to investigate if the Chief Commissioner and DCoT succeed.
Appearing for Gleeson and Soire was barrister Daniel Krochmalik while Farid Assaf SC appeared on behalf of DFS as second defendant. Assaf also sought leave to appear on behalf of five other unidentified parties whom he insisted must be joined “to regularise the proceedings”.
Krochmalik said that while his clients would not oppose a winding up order they reserved their rights in respect of any allegations of misconduct which may be brought against them by the Chief Commissioner or DCoT in respect of their conduct of the administration.
He said his clients had had no notice of the fraud allegations made at the reconvened second meeting of creditors, which prompted Metlej to tell her honour that in fact the ATO had written to Gleeson and Soire advising them that it was investigating a potential illegal scheme involving the Dalma Group and its moving minds in early January.
Indeed Jones and Soire told creditors at the second meeting that it was the allegations brought by the ATO that prompted them to unilaterally adjourn on February 7 for the full 45 days so as to enable them to further investigate the claims.
Her honour made orders requiring the ATO to file its interlocutory application along with any supporting evidence by May 17 and listed there matter for further case management on May 21.
Further reading:
NSW Revenue moves to topple Jones Partners pair
Collision imminent: VAs and ATO heading for court
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