In its recent decision of Chief Commissioner of State Revenue v CCN Holdings Trust Pty Limited [2014] NSWCA 42, the New South Wales Court of Appeal denied the Commissioner of State Revenue leave to pursue appeals against two companies which had executed DOCAs.


In 2007, the troubled Cross City Tunnel (Tunnel) was sold by the CCT Group to a consortium of ABN Amro and Leighton Contractors.  Following that transfer, the Commissioner issued duty assessments to two companies within the CCT Group (Companies) for more than $40 million under the Duties Act 1997 (NSW). 

The Companies successfully overturned those assessments in separate Supreme Court proceedings.  On 13 September 2013, the Commissioner lodged a notice of appeal, but on that same day, the Companies were placed into voluntary administration.  Shortly after, receivers were appointed to the CCT Group.

In October 2013, creditors of the Companies executed DOCAs, which were designed to maintain the status quo while the receivers could effect sales of the remaining assets of the CCT Group.

Issue in the proceeding

The issue before the NSW Court of Appeal was whether the Commissioner should be granted leave under section 444E of the Corporations Act 2001 (Cth) to continue with the appeal in circumstances where it was uncertain whether there would be any surplus funds for distribution to unsecured creditors.

The Commissioner argued that leave should be granted because:

  • even if the Commissioner were not given leave, he could lodge a proof of debt and it would likely be rejected leading to an inevitable appeal;
  • the Companies potentially had other sources of funds including indemnities and claims in negligence; and
  • the case had significant precedential value, as it involved a “very common scheme”.


Gleeson JA, sitting alone, denied the Commissioner leave to continue with its appeal against the Companies.  His Honour focused on the fact that it was uncertain whether there would be any surplus funds for distribution to unsecured creditors.  This was relevant because the courts should not give their imprimatur to ‘fruitless actions’.

His Honour held that:

  • evidence received from the administrators suggested that, if there were no surplus funds, the Companies would be wound up, and the liquidators were then unlikely to accept any proofs of debt;
  • the other sources of funds were speculative, and the Commissioner had put forth little or no evidence on this point; and
  • the Commissioner had not lead any evidence as to whether the duty minimisation tactics were common, meaning that the court could not make a finding based on precedential value.

However, his Honour did hold that the Commissioner could reapply for the appropriate leave in the event that surplus funds were available for distribution after the sale of the CCT Group assets.


This decision confirms the Court’s reluctance to grant leave to proceed against companies in external administration.

The decision also stresses the importance of preparing comprehensive evidence in support of leave applications, especially in respect of any alleged prejudice caused by the court denying leave.