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ATO Indemnity from Directors on being ordered to repay voidable preferences (PAYG withholding remittances) includes liquidators' costs. |
In FCT v Sims (2008) NSWCA 298, an ATO Deputy Commissioner was successful in her application to be indemnified by the husband and wife tax payers, in respect of costs sought by the liquidator in his successful application to recover payments made by the company of which the husband and wife were directors, from the Deputy Commissioner as voidable. |
Whilst the Deputy Commissioner had been successful in an earlier hearing to seek an indemnity from the directors in respect of the payments she was ordered to disgorge to the liquidator, she was not successful in obtaining a similar indemnity in respect of her liability for the costs of the liquidator in these proceedings. |
The Deputy Commissioner appealed the decision to the Court of Appeal of the Supreme Court of NSW which subsequently found in favour of the Deputy Commissioner allowing her claim for indemnification of the liquidator's costs. |
The Court determined that the Deputy Commissioner was entitled to the indemnity in respect of any loss or damage in resulting from a voidable transaction order and that section 588 FF of the Corporations Act 2001 included any legal costs and interest that the Deputy Commissioner may be ordered to pay the liquidator in the result of an unsuccessful defence of a voidable transaction claim. |
