In the matter of Plutus Payroll Pty Limited & others [2017] NSWSC 1360, the Plaintiff Deputy Commissioner alleged that twelve companies participated in a syndicate for the purpose of avoiding large tax obligations to the Commonwealth. The companies were unable to pay their tax liabilities, and the Commissioner applied for the companies to be wound up for insolvency under s459P of the Corporations Act.

A corporation is not solvent unless it is able to pay all its debts when they become due and payable. A company’s failure to pay a particular debt may by itself be sufficient evidence of insolvency, unless that debt is disputed. None of the defendants have disputed the debt they owe to the Commonwealth, and the debts are substantial, ranging from $1.6 million $54.7 million. Additionally, eight of the twelve defendants have outstanding unpaid obligations to employees for wages and superannuation. Brereton J concluded that each of the defendants were insolvent, and ought to be wound up.

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