Late tax bill the last straw for the ATO, which turns to the courts to wind up Queensland transport operator
By Brad Gardner | October 6, 2010
A Queensland transport operator saddled with significant debt will be wound up after it paid a tax bill two days late and failed to prove it was solvent.
Complete Liquid Transport missed a July 20 deadline to pay $39,106.97 of a $144,000 debt to the Australian Taxation Office.
The Federal Court was told the ATO received payment on July 22 and that Complete Liquid Transport failed to provide a list of creditors, balance sheets and profit and loss statements to show it was financially viable.
Justice Berna Collier says Complete Liquid Transport is insolvent because it is “unable to pay its debts as and when they become due and payable”.
“It is not in dispute that the defendant failed to comply with the plaintiff’s statutory demand. This gives rise to a presumption of insolvency,” Collier says.
According to the ATO, the company’s debt includes $101,937 in superannuation. While agreeing it owed money, Complete Liquid Transport questioned the figure.
Collier upheld the ATO’s claim because no sworn evidence was provided by company representatives disputing the debt.
“I give no weight to the defendant’s contentions disputing the amount of its indebtedness to the plaintiff,” she says.
The court heard that company documents provided to the ATO show Complete Liquid Transport lost $795,626.14 in the 2008 financial year compared to an accumulated loss of $106,164.51 the previous year.
The ATO says Complete Liquid Transport’s liabilities exceeded its assets by $795,616.14 in the 2008 financial year. No further updated information was provided to the tax office, according to court documents.
“It is clear from such material as is before the court that the financial position of the defendant is characterised by a serious deficiency of shareholder equity, significant indebtedness and a serious deficiency of assets compared with liabilities,” Collier says.
“The failure of the defendant to provide more current financial information as it agreed to do in an email on 8 July 2010 is also, in my view, telling.”
As well as disputing its superannuation debt, Complete Liquid Transport told the court it had assets worth $326,000.
However, Collier says the assets might be of little value in maintaining the company’s ongoing financial viability.
Accounting and advisory firm BDO was appointed liquidator.