It’s the fight they had to have before the fight they’re about to have. In one corner of both the undercard and the main event are Deloitte’s Neil Cussen and David Mansfield, liquidators and receivers of various entities within the Patinack Farm Holdings group once controlled by bankrupt asset trader, Nathan Tinkler.
The pair are pitted in both bouts against the Commissioner of Taxation (CoT), who wants to muscle in on the readies Cussen and Mansfield are about to realise from the sale of property in the Upper Hunter Valley owned by Tinkler’s Patinack Farm Holdings No. 5 Pty Ltd.
That sale is due to be concluded this afternoon so around 4:00pm someone is going to add 3,300 acres to their existing fiefdom but of the three security holders vying for a pay day, only Gerry Harvey’s G Harvey Nominees is in the liquidators’ view entitled to receive any funds.
The other two – the CoT and US investment bank Jeffries Group – are from what SiN has gleaned from court proceedings – holding securities over Tinkler’s former assets the validity of which Cussen and Mansfield consider questionable.
Challenging those securities with a view to having them set aside is the main event but the warm up bout was plenty entertaining as legal representatives for the liquidators faced off against lawyers and senior counsel for the CoT and for Jeffries Group over the question of where the sale proceeds should reside while the dispute around the securities is fought out.
When SiN strolled into Court 7E of the NSW Supreme Court last Friday, any suspension of hostilities seemed unlikely. The CoT – represented by senior counsel – Jeremy Giles – was incensed. What Cussen and Mansfield were proposing was nothing short of the destruction of the CoT’s security, Justice Ashley Black heard.
As holder of a second mortgage over the property the money should, Giles argued, go to his client. If the liquidators wanted to subsequently sue the Commissioner on the basis his mortgage was invalid then, as Giles put it, “I am after all the Commonwealth of Australia and if anyone is good for the debt, it’s got to be us.” His honour’s eyebrows rose not at all.
Such a proposition was, the liquidator’s barrister David McClure SC told the court, intolerable. The liquidators had accrued significant remuneration and costs getting the sale away. Their lien, McClure argued, took priority.
By the time the combatants returned to court yesterday, the CoT had agreed to discharge the mortgage to give effect to the sale and Jeffries Group had provided proof that caveats it had placed on Tinkler’s property had been lifted.
Justice Black advised that a portion of the sale proceeds should be quarantined to cover the liquidators’ remuneration and instructed parties get themselves fighting fit for when the proceedings return on October 30.
Given the liquidators regard the CoT’s second mortgage as an uncommercial transaction we could potentially see the liquidators grilling tax officials in a public examination. Let the gloves come off.