Faced with over $1 million in claims for unpaid wages and superannuation made by Plutus workers after the NSW Supreme Court ordered the company wound up in October 2017, liquidators Tim Norman and Sal Algeri of Deloitte asked the court to determine whether they were justified in finding that some of the claims were not priority claims.

In a judgment delivered on Friday, Justice Ashley Black found that Norman and Algeri were entitled to form this view after evidence by Norman showed that many workers were hired by third party host businesses or labour hire companies and not by Plutus or any of its associated companies

“I am satisfied that the form of the direction sought by the liquidators is appropriate, so far as it applies to an assumed state of facts and leaves the liquidators to determine whether those facts are established in respect of a particular employee. I am also satisfied that, if each of the assumed facts are established in respect of a worker or workers, then the liquidators would properly proceed on the basis that he, she or they were not employees of the companies,” Justice Black said.

The facts to be determined by the liquidators include that the worker in question provided services to a business other than Plutus, that they never were physically present working at Plutus’ offices, that they did not report to anyone at Plutus, and that they did not have to notify anyone at Plutus if they took time off.

However, Justice Black noted that the ability to define worker claims as not being employee claims only extended to a certain class of workers.

“It appears that, when the liquidators were appointed as provisional liquidators of the companies, in excess of 4,500 persons were regularly paid by the companies. Some of those persons were employees of the companies who worked in their payroll business, such as management and administrative staff who were employed under employment contracts, and this application does not concern those persons,” the judge wrote.

Plutus offered what were thought to have been legitimate payroll services to a number of entities including in the government sector and contracted its services out to related companies, which are also being wound up.

Funds which were kept aside for PAYG tax and GST and which were meant to have been remitted to the ATO were allegedly taken by these contracted firms and laundered as loans, consulting fees and property investments.

After an Australian Federal Police investigation, which led to charges being laid, the Deputy Commissioner of Taxation applied to wind up Plutus and the associated companies in June 2017, saying they owed “large amounts” of unpaid tax and penalties.

Norman, Algeri and Ezio Senatore, also from Deloitte, were appointed as liquidators in October 2017. Senatore stepped down from the role in October last year.

One of the alleged conspirators, Joshua Kitson, was convicted for three years in August after pleading guilty to his role in the scheme. Kitson was the general manager of Plutus.

Others who have been charged include Simon Anquetil, the founder of Plutus; Adam and Lauren Cranston, son and daughter of former ATO deputy commissioner John Cranston; Jason Onley, former Channel Nine and Foxtel commentator; Dev Menon, tax lawyer at Clamenz Partners; and Sevag Chalabian, another lawyer who formerly represented jailed Labor minister Eddie Obeid.

The Deputy Commissioner of Taxation was represented by Courtney Ensor, instructed by Australian Government Solicitor. Norman and Algeri were represented by Jack Hynes, instructed by MinterEllison.

The case is In the matter of Plutus Payroll Australia Pty Limited.