Banq jurisdiction case could limit late start litigation

Commencing proceedings years after the deadline for such actions has expired is in for a test as the long running battle between the Commissioner of Taxation (CoT) and clients and interests associated with the notorious Banq Accountants & Advisors group flares again.

The latest outbreak involves an appeal in the Federal Court by various beneficiaries of the Banq tax evasion scheme against orders made by Justice Angus Stewart in September 2019 in respect of a series of companies wound up and deregistered by struck off ex-liquidator David Iannuzzi.

“Pursuant to section 601AH(3)(d) of the Act, when calculating the period ending three years after the relation-back day for any of the Companies, the period between the date of the deregistration of the relevant company and the date of these orders shall be disregarded.” Justice Angus Stewart.

Those orders were part of a package of consent orders agreed between the CoT and Iannuzzi which spared the former liquidator the pain of a very public conduct inquiry that the CoT had been pursuing.

Among the companies Iannuzzi wound up and deregistered was RC Group, and reinstatement of this and other deregistered entities formed part of the consent package that Justice Stewart approved.

Inevitably, orders winding up the reinstated entities and appointing liquidators were also part of the consent package.

KPMG partners Gayle Dickerson and Stephen Vaughan were duly appointed liquidators of RC Group and other entities and in addition his honour made orders excising the period between the date of the deregistration of the relevant company and the date he made the orders.

That gave the newly appointed liquidators an opportunity to investigate RC Groups’ affairs and if necessary, pursue any claims identified.

Said claims were identified and pursued. Monies were extracted from entities and those associated with them. And now they’re fighting back by attacking the legitimacy of those September 2019 orders.

The hearing commenced yesterday with an address by Senior Counsel David Pritchard on behalf of the Borg family and alleged Banq co-scheme mastermind Gino Cassiniti.

Pritchard told Justice Brigitte Markovic that his clients wanted the orders discharged.

“We were never there,” he said. “We were never given notice of those orders.”

Telling the court that the order appeared to have emanated from Iannuzzi’s lawyer at the time Pritchard said the court didn’t have jurisdiction to make such an order.

“This order was made three years after the three year period expired,” he said.

That he said, meant the liquidators’ proceedings weren’t commenced until more than six years after the relation back date.

Joining Pritchard at the bar table for the commencement of the hearing yesterday was Senior Counsel Steven College and six other senior and junior counsel backed by 15 or instructors including Minter Ellison partner Michael Hughes. The hearing resumes this morning.