Commissioner of Taxation v Lane

• Jurisdiction: Australia Federal only
• Judgment Date: 06 November 2020
• Neutral Citation: [2020] FCAFC 184
• Date: 06 November 2020
• Court: Full Federal Court (Australia)

Federal Court of Australia

Commissioner of Taxation v Lane [2020] FCAFC 184

Appeal from:	Lane (Trustee), in the matter of Lee (Bankrupt) v Deputy Commissioner of Taxation [2017] FCA 953 Lane (Trustee), in the matter of Lee (Bankrupt) v Commissioner of Taxation (No 3) [2018] FCA 1572
File numbers:	QUD 514 of 2017QUD 941 of 2018
Judgment of:	ALLSOP CJ, PERRAM and FARRELL JJ
Date of judgment:	6 November 2020
Catchwords:	BANKRUPTCY AND INSOLVENCY – exercise of bankrupt trustee’s right of exoneration from trust assets – discussion of the nature of the right of exoneration – whether right of exoneration “property divisible among the bankrupt’s creditors” or trust property – whether the proceeds of the right of exoneration are to be distributed to all creditors or only to trust creditors – whether the priority regime in s 109 of the Bankruptcy Act 1966 (Cth) applies to the proceeds of the right of exoneration ; BANKRUPTCY AND INSOLVENCY – where bankrupt held assets in his capacity as trustee of a trading trust – where proceeds from sale of trust assets distributed to trust creditors– where trust creditors claim on personal estate of bankrupt – whether in distribution of personal assets of bankrupt “hotchpot” principle applies ; BANKRUPTCY AND INSOLVENCY – recovery of preference payment – where trustee exercised right of exoneration to discharge taxation liability – where payment void under s 122 of the Bankruptcy Act 1966 (Cth)– whether proceeds from preference recovery action are to be distributed to all creditors or only to trust creditors
Legislation:	Bankruptcy Act 1966 (Cth) ss 58, 108, 109, 116, 122, sch 2 Corporations Act 2001 (Cth) ss 433, 555, 556, 560 Bankruptcy Regulations 1996 (Cth) r 6.02
Cases cited:	Adsett v Berlouis[1992] FCA 549; 37 FCR 201 Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v Deputy Commissioner of Taxation [2014] FCAFC 57; 223 FCR 8 Albert Gregory Ltd v C Niccol Ltd (1916) 16 SR (NSW) 214 Attorney General for New South Wales v Perpetual Trustee Company (Limited) [1940] HCA 12; 63 CLR 209 Australian Securities and Investment Commission v Idylic Solutions Ltd [2009] NSWSC 1306; 76 ACSR 129 Australian Securities and Investment Commission v Letten (No 20) [2012] FCA 1283; 92 ACSR 630 Banco de Portugal v Waddell (1879–80) 5 App Cas 161 Bathurst City Council v PWC Properties Pty Limited[1998] HCA 59; 195 CLR 566 Boensch v Pascoe [2019] HCA 49; 375 ALR 15 Bradken Limited v Norcast S.ár.L[2013] FCAFC 123; 219 FCR 101 Brady v Stapleton [1952] HCA 62; 88 CLR 322 Bruton Holdings Pty Ltd (in liquidation) v Commissioner of Taxation of the Commonwealth of Australia[2009] HCA 32; 239 CLR 346 Burns Philp Trustee Co Ltd v Viney [1981] 2 NSWLR 216 Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; 368 ALR 390 Chief Commissioner of Stamp Duties for New South Wales v Buckle [1998] HCA 4; 192 CLR 226 Cleaver v Delta American Reinsurance Company (in liquidation)[2001] 2 AC 328 Commissioner of Taxation of the Commonwealth of Australia v Linter Textiles Australia Ltd (in liquidation)[2005] HCA 20; 220 CLR 592 CPT Custodian Pty Ltd v Commissioner of State Revenue of the State of Victoria [2005] HCA 53; 224 CLR 98 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties[1980] 1 NSWLR 510 Edwards v Freeman (1727) 2 P Wms 435; 24 ER 803 Ex parte Cooper; In re Zucco (1875) 10 Ch App 510 Ex parte Wilson,In re Douglas (1871–72) 7 Ch App 490 Federal Commissioner of Taxation v Jaques[1956] HCA 40; 95 CLR 223 Fouche v Superannuation Fund Board [1952] HCA 1; 88 CLR 609 Hall v Robinson 8 Ired 56 (1847) Harmer v Commissioner of Taxation of the Commonwealth of Australia [1991] HCA 51; 173 CLR 264 In re Ford, Ex parte The Trustee [1900] 2 QB 211 In re Gordon,Ex parte Navalchand [1897] 2 QB 516 In re Hobourn Aero Components Limited’s Air Raid Distress Fund, Ryan v Forrest[1946] Ch 86 In re Lead Company’s Workmen’s Fund Society [1904] 2 Ch 196 Inre Matheson Brothers Limited (1884) 27 Ch D 225 Inre Oriental Inland Steam Co, Ex parte Scinde Railway Co (1874) LR 9 Ch App 577 In re Printers and Transferrers Amalgamated Trades Protection Society [1899] 2 Ch 184 In re Suco Gold Pty Ltd (in liquidation) (1983) 33 SASR 99 In re Yagerphone, Limited [1935] Ch 392 Jones (Liquidator)v Matrix Partners Pty Ltd, in the matter of Killarnee Civil & Concrete Contractors Pty Ltd (in liq) [2018] FCAFC 40; 260 FCR 310 JT International SA v Commonwealth[2012] HCA 43; 250 CLR 1 Kite v Mooney, in the matter of Mooney’s Contractors Pty Ltd (in liq) (No 2) [2017] FCA 653 Livingstone v Commissioner of Stamp Duties(Qld) [1960] HCA 94; 107 CLR 411 Miller v Sawyer 30 Vt 412 (1858) NAKratzmann Pty Ltd (in liq) v Tucker (No 1)[1966] HCA 72; 123 CLR 257 NA Kratzmann Pty Ltd (in liq) v Tucker (No 2)[1968] HCA 44; 123 CLR 295 New Cap Reinsurance Corporation v Faraday Underwriting [2003] NSWSC 842; 177 FLR 52 NW Robbie & Co Ltd v Witney Warehouse Co Ltd [1963] 1 WLR 1324 Octavo Investments Proprietary Limited v Knight [1979] HCA 61; 144 CLR 360 Pearce v Piper (1809) 17 Ves 1; 34 ER 1 Re Alfred Shaw & Co Ltd, Ex parte Mackenzie(1897) 8 QLJ 93 Re Amerind Pty Ltd (receivers and managers appointed) (in liq) [2017] VSC 127; 320 FLR 118 Re Byrne Australia Pty Ltd [1981] 1 NSWLR 394 Re Byrne Australia Pty Ltd (No 2) [1981] 2 NSWLR 364 Re Enhill Pty Ltd [1983] 1 VR 561 Re Fiorino;Fiorino v Woodgate[1994] FCA 181 Re French Caledonia Travel Service Pty Ltd (in liq) [2003] NSWSC 1008; 59 NSWLR 361 Re Fresjac Pty Ltd (in liq); Campbell v Michael Mount PPB(1995) 65 SASR 334 Re HIH Casualty and General Insurance Ltd [2005] NSWSC 240; 190 FLR 398 Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) [2016] NSWSC 106; 305 FLR 222 Re Standard Insurance Company Limited [1968] Qld R 118 Re Ward; Thomas v L G Abbott & Co Ltd (1950) 16 ABC 214 Registrar of the Accident Compensation Tribunal v Commissioner of Taxation[1993] HCA 1; 178 CLR 145 Sedgwick Collins and Company v Rossia Insurance Company of Petrograd [1926] 1 KB 1 Selkrig v Davis 2 Rose 291 Steel v Dixon(1881) 17 Ch D 825 Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; 145 CLR 330 Truax v Corrigan257 US 312 (1921) Trustee of the Property of O’Halloran, in the matter of O’Halloran v O’Halloran [2002] FCA 1305 WASherratt Ltd v John Bromley (Church Stretton) Ltd [1985] QB 1038 Westpac Banking Corporation v Bell Group Ltd (in liq)(No 3) [2012] WASCA 157; 44 WAR 1 Wik Peoples v Queensland [1996] HCA 40; 187 CLR 1 Williams v Lloyd; Inre Williams [1934] HCA 1; 50 CLR 341 Willmott v London Celluloid Co(1886) 31 Ch D 425; (1886) 34 Ch D 147 Woodgate, in the matter ofBell Hire Services Pty Ltd (in liq) [2016] FCA...