Oswals say they shouldn’t pay to be trapped in Australia by ATO
The Indian couple object to posting security for their legal fight against ANZ, because the tax office stops them leaving.
Pankaj and Radhika Oswal claim they shouldn’t have to stump up millions of dollars against costs in a 61-day trial of their billion-dollar legal stoush against ANZ because they are being kept in Australia against their will by the Australian Taxation Office.
Counsel for the controversial couple Allan Myers QC yesterday compared the Oswals to a lunatic kept in an asylum in a precedent-setting English case heard in 1940. “The Oswals have no choice,” Mr Myers told the Victorian Supreme Court.
“They’re here either until it’s found there are no taxation liabilities, or the taxation liabilities are fully discharged or they establish there is no means for them to pay the taxation liabilities.” Mr Myers added that proving the Oswals could not pay their tax bill might involve them becoming bankrupt.
Courts will not usually order security for costs against people who live in Australia, even if they have no realistic capacity to pay the eventual bill.
The ATO put a departure prohibition order on the Oswals over a $180 million tax bill last month, soon after the couple arrived in Australia to fight ANZ and others over the forced sale of Mr Oswal’s Burrup Fertilisers plant. He accuses ANZ and receivers PPB of undervaluing the plant after seizing it in December 2010 to cover a $900m loan.
The Oswals are in turn accused of misappropriating $150m from the fertiliser company for personal use.
Each side denies the other’s claims and a 61-day trial is scheduled to begin next Monday.
Mr Myers lambasted the companies that bought the plant, Yara Australia and Apache Fertilisers, for “rapaciousness” in taking millions from a $20m “holdback fund” set up after the sale and supervised by ANZ.
“These two companies made a meal of taking money from the fund, which ultimately belongs to the Oswals, subject to amounts rightfully taken from it,” he said.
Philip Solomon QC, counsel for the ANZ and the receivers, said the analogy with the lunatic in the 1940 case was flawed because that man had been resident in England for 54 years.
Rachel Doyle SC, for Yara and Apache, accused the Oswals of making a “Hotel California” case: “They’ve checked out mentally, but they can never leave.”
Justice Michael Sifris will give his decision on Tuesday afternoon.
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