Key Points:
Throughout 2016 a series of judgments were delivered that gave conflicting guidance to practitioners about what they should consider when accepting a voluntary administration appointment.
In a decision of interest to both secured creditors and liquidators, the High Court has now overturned a decision of the Court of Appeal of the Supreme Court of Victoria that found a liquidator was not entitled to an equitable lien to secure his reasonable costs in obtaining a settlement sum.
Section 254 of the Income Tax Assessment Act 1936 sets out the circumstances when a 'trustee' (which is defined to include a liquidator and a receiver) must account to the Commissioner, out of the proceeds of sale, for any capital gains tax (CGT) liability that would result as a consequence of the sale. Justice Logan of the Federal Court of Australia1 last Friday found that a liquidator does not have any obligation to pay under section 254 unless and until an assessment has been issued. A similar analysis would also apply to a receiver.