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PRACTICE AND PROCEDURE - TAXATION - application for recusal - apprehended bias - refusal to permit late evidence - discussion regarding basis for making credibility findings - observations on limiting cross examination - balancing exercise in the light of the statutory objectives of the Tribunal - application refused

A New Tax System (Goods and Services Tax) Act 1999 (Cth) - div 165

Administrative Review Tribunal Act 2024 (Cth) - section 9(b)

AZC20 v Secretary, Department of Home Affairs [2023] FCA 1252

Commissioner of Taxation v ACN 154 520 199 Pty Ltd (in liquidation) [2025] FCAFC 146

Doggett v Commonwealth Bank of Australia [2019] FCAFC 19

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 3

MSXN and Commissioner of Taxation [2025] ARTA 2904

1. On 23 March 2026, I heard an interlocutory application that I recuse myself from continuing to hear this matter. I handed down oral reasons for dismissing that application. These written reasons are transcribed from the transcript and, subject to footnote 23 below, edited for confidentiality, grammar and syntax.

1. This is an application made this morning on 23 March 2026, to recuse myself on day eight of a part-heard hearing.
2. The matter is a re-hearing, having originally been heard over about 18 days before another Deputy President, in 2023. The matter was listed for four days before me, between the 17th and 20 November 2025, and a fifth day was put in reserve for 2 December 2025, on the basis that I would be in Melbourne and be able to hear a fifth day on that date.

1. On 14 November 2025, the Applicant amended its SFIC to include paragraph 92A, raising the issue of discretion in Division 165[1] as determined in the Commissioner of Taxation v ACN 154 520 199 Pty Ltd (in liquidation) [2025] FCAFC 146 at [205].
2. At the commencement of the hearing before me in November it was apparent that no oral evidence was to be led. I was advised early on, that is either on the 17th or 18th of November, that special leave was being sought in two unrelated 'gold' cases which had the possibility of impacting the Division 165 issue that was live in this case. One of those cases is ACN 154. The discussion that took place at that time, that is on the raising of the fact that special leave was being sought in those two matters, led to a discussion and, ultimately, an agreement that the Division 165 part of the case would be held over until after a determination of special leave was made. The last date for filing of submissions in those special leave applications was, I understand, about 19 December 2025.
3. On day three of the hearing, that is 19 November, the question of resuming the hearing in March of 2026 was dealt with.[2] On 19 November[3] the parties were asked to pencil in the dates from tomorrow[4] through to Thursday, for three days to deal with Division 165.
4. This matter was raised again on day 6 on 29 January 2026,[5] and on day 7 on 30 January.[6] It was clear by the adjournment of the hearing on day 7, 30 January 2026, that the matter was in the diary to recommence this week on 24 March, that Ms Wilson had some unavailability for the 25th because of a directions hearing in some other matter, and that the question of special leave had not yet been determined.

1. On 19 November 2025, during the course of Mr Redenbach's submissions on behalf of the Applicant, there was a lengthy exchange which traverses pages 214 through to 220 of the transcript for that day, dealing with the proposition that I should make the same credibility findings as the predecessor Tribunal had made in respect of the witnesses. Part of that,[7] deals with me raising how it is that I am to assess credibility in the absence of the opportunity to have seen and heard the witnesses myself and, particularly, Mr Jones.[8]
2. There is a discussion about the use of video for Mr Smith's[9] evidence, and I say this: [10]

Mr [Smith] brings into sharp relief the issue that arises with respect to with respect to credibility of the other witnesses because given that Mr Maisy is physically recorded, and I may have the opportunity to look at the video, I could come to my own conclusions. I understand what you are urging upon me, but it's open to me to come to my own conclusions about that. None of the other witnesses are in that position, are they?

3. Mr Smith was the only one who was video recorded. Then I say:[11]

Yes, I am just putting you on notice. I understand the reasoning that got you here,[12] but I am just saying the path that is being chosen is a path that is - unless there's a concession from the Commissioner of this effect - disadvantageous to the Applicant.

I am giving you the opportunity to express how it might be that I overcome that - how you propose I overcome that, if I am to make findings of a nature that were made on the first occasion?.[14]

5. Mr Redenbach goes on to explain[15] in the middle of page 217, what he relies on. I say:[16]

So when you say all other evidence, you said the recordings, the transcript, the witness statements, and all other evidence. So you are talking about his books and records?

6. And we talk about bank statements and invoices.
7. Then:[17]

So I'm asking you how you overcome that deficit in my ability to make that assessment. And you said that the strands that I used to do that are the recordings to the extent they are available, the transcript, the witness statement, his books and records, and the contemporaneous records that he kept.

8. This is the contemporaneous files, which were later provided under summons to the Tribunal, and which were before me on 29 January for the first time.
9. I then make the comment,[18] 'And if I were to struggle with his credibility your case would have problems.'
10. Then:[19]

DEPUTY PRESIDENT: If I were to make a negative credibility finding about your client's director, your case would have a significant problem, wouldn't it?' > > MR REDENBACH: . . . yes. It would have a problem. > > DEPUTY PRESIDENT: Yes > > MR REDENBACH: I think any case has a problem if there is a negative credibility finding, not just this one. > > DEPUTY PRESIDENT: . . . my question, is solely directed to where do I find the building blocks for credibility, from my own assessment of credibility as opposed to looking at what DP Rayment did and saying, 'Yes, that sounds right. I'll do the same thing.

11. So that was the question. And then he goes through it again, and he says, quite helpfully, 'Putting aside any issue to do with direct testimony, we say the folders, when you have them,'[20] and then he goes on to make a submission about the folders being ordinary run of the mill records.
12. And then:[21]

DEPUTY PRESIDENT: Okay. So you are not asking me to simply pick up what DP Rayment said. You're saying I can look at all these other building blocks and come to the view that the story the applicant is telling through its director is credible. > > MR REDENBACH: Yes, yes, yes.

13. We move on to other things. So that is the context in which that discussion took place; no further discussion took place on that topic that I can find.

1. After the adjournment on 30 January, the next date in the diary was a directions hearing on 10 March which had been set on the premise that the High Court special leave applications for March would be available from 6 March. When I checked the calendar, it appeared that that would not be the case, that they would not be available until the 13th[22]. That appears in the email of 25 February to the parties.
2. There was a proposal put out in that email that we vacate the 10 March directions and that if special leave was not determined either way by 13 March then this week would be vacated; if special leave was granted, it would also be vacated. I accept it was not said directly, but it must have been clear to the parties that the implication of that email was if special leave was refused, we would proceed this week. Indeed, the email said that I was available all week. Both parties responded that they were in agreement with that proposal. And indeed, on 6 March I received from the Applicant unavailable dates for later in the year, presupposing that special leave had been granted.
3. On 16 March, the Applicant advised that special leave had been refused, and also advised that a summons was being sought, and additional evidence was being sought to be able to be led from Mr Jones. I understand that there had been a discussion between the parties to that effect either the day before or possibly on Friday 13th. As I was not privy to it, I do not know the precise date.

1. I then called on a directions hearing for Thursday 19 March, which was the first date that I was available, to deal with the request for a summons and the request for additional evidence.
2. I refused to issue the summons as it would not give the witness 14 days' notice, and it would cause an adjournment of the hearing.
3. At the hearing, I was informed that the evidence that was sought to be led was a witness statement relevant to the Division 165 issue. I understand that that arises from ACN 154 at [205], which was the subject of the amendment that was made to [92A] of the Applicant's Amended SFIC, on 14 November 2025.
4. The evidence which I was told was relevant to the Division 165 issue was evidence that was necessary, as I understand it, to make good the proposition in [92A] of the Amended SFIC, filed in November of 2025, before the commencement of the hearing.
5. I refused to permit the evidence to be led. The reasons for my refusal were:

(a) First,[23] there was no prior notice against the background which I have set out above. > > (b) Secondly, actual notice of the desire to have a further witness statement was given very late. At the earliest, the Respondent was advised of its fact rather than its content on 13 March. And as I understand it, neither the Tribunal nor the Commissioner were given notice of what its likely content was until 19 March; that is, what issue it went to.

In my view, the desire to put on additional evidence, in respect of meeting what the Full Court said at [205] of ACN 154, could and should have been raised in November 2025. It could have also been raised in January 2026. The last date it should have been raised was in the response to 25 February email to the Tribunal. Notably, the 6 March response from the Applicant's solicitor fails to identify that it may be that further evidence is sought to be led.

(c) Thirdly, I refused it because there was no witness statement filed and served before me. It was proposed to be filed by Friday afternoon.

(d) Fourthly, I was concerned Mr Jones would have to have been made available for cross examination at large, and that led to the very real possibility that this week's hearing would be part-heard again.

I was not prepared to require the Commissioner to limit the cross examination to the one issue being the issue that arose on the in Division 165 discretion point. Against the background of an 18-day hearing, a multi-day re-hearing, and multi-day cross examination of Mr Jones on the last occasion, it appeared unreasonable to me to suggest that the Commissioner should be limited. Secondly, and more importantly, I was concerned about the impact on this week against the background of the adjournment to today and, of course, the unavailability of parties generally.

(e) Fifthly, I was concerned with section 9(b) of the ART Act, which is the objective of resolution of matters quickly, and with as little formality and expense as a proper consideration of the matters before the Tribunal permits.

I had advised on 25 February, that I was available all week. That changed after the 25th, and I am no longer available on Friday this week. I told the parties that during the directions hearing. So, the most that we could have had this week was four days, and potentially only three days because Ms Baker KC said that she needed Monday to prepare if further evidence was going to be led, which would only be reasonable if Ms Baker was not going to receive the evidence until close of business on Friday. That would have meant there were three days this week to deal with Mr Jone's evidence, the Division 165 issue, and the remaining submissions in respect to penalty which both parties addressed me on at the directions hearing last week.

So, whatever way you looked at it, there was no possibility of the matter concluding this week. This in turn, given the Applicant's unavailability, would mean the hearing would have to stand over until mid‑June because I am not available until mid‑May, and the Applicant's representatives are not available when I become available. So, we would have had a further adjournment this week until mid‑June at the earliest, assuming that the Commissioner was available, and assuming that no other intervening event took place.

1. So that is the background of where we landed on Thursday.

1. In December of 2025, I handed down reasons for decision in a matter called MXSN and the Commissioner.[24] It was an application for recusal. I quote what I said in that decision regarding the legal authorities.

[13] The making of an application for recusal on the grounds of apprehended bias is a very serious matter. The key question is whether a fair-minded lay observer, properly informed of the circumstances of the application, might reasonably apprehend that the decision maker has a closed mind against the party so that they might not bring a fair and impartial mind to the resolution of the proceeding. > > [14] The leading authority on the principles of recusal on the grounds of apprehended bias is Ebner v Official Trustee in Bankruptcy, where the majority said:[25] > > Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle. > > The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror. > > The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. > > . . . > > This is not to say that it is improper for a judge to decline to sit unless the judge has affirmatively concluded that he or she is disqualified. In a case of real doubt, it will often be prudent for a judge to decide not to sit in order to avoid the inconvenience that could result if an appellate court were to take a different view on the matter of disqualification. However, if the mere making of an insubstantial objection were sufficient to lead a judge to decline to hear or decide a case, the system would soon reach a stage where, for practical purposes, individual parties could influence the composition of the bench. That would be intolerable. > > [15] As is clear from Ebner, an applicant must be able to point with specificity to the conduct complained of and then demonstrate how that conduct would give rise to the apprehension of bias. The apprehension of bias must be both objective and real, not remote. > > [16] Of particular relevance to the matters raised in this application, are the observations of the Full Court in Doggett v Commonwealth Bank of Australia at [11]:[26] > > Claims of apprehended bias arise not infrequently, as they have in this appeal, in respect of interlocutory proceedings. The usual position in relation to interlocutory proceedings is that an apprehension of bias is not per se manifested by an unfavourable finding. That is because often there will be instances prior to a final decision where a judge will require steps to be taken or not taken which disappoint one side or another in a proceeding. It is inherent in the interlocutory process that such preliminary decisions are made. Unfavourable findings, in such circumstances, are not to be taken by a fair-minded person as an expression that the judge has other than an impartial and unprejudiced mind in relation to the substantive proceeding. > > [17] In AZC20 v Secretary, Department of Home Affairs,[27] Kennett J refused an application that he recuse himself from hearing a migration case, on the basis that he had previously worked as a Commonwealth lawyer and had acted for the Commonwealth on migration matters as a barrister. As Kennett J observed in that case, a 'fair minded observer' in this context has knowledge of facts relating to the circumstances relevant to the allegations, as well as knowing something of the legal system.

2. It appears to me that those observations as to the legal basis are apposite in this case.

1. Applying those principles to this matter, on a true consideration of the credibility discussion on 19 November, it is obvious that I was seeking to understand how the Applicant was putting its case, on what strands of evidence I had to determine the credibility issue. I was not making any adverse decisions to the Applicant at all. I was merely seeking the Applicant identify what the strands were. Notably, all of those strands are now before me.
2. There is no suggestion by the Applicant that those strands were insufficient as at 19 November.
3. At 19 November, the amendment to the SFIC had already been made. Indeed, given that the need for the Division 165 discretion issue having the support of evidence has been known to the Applicant, although not to the Tribunal, since at least 14 November, a fair-minded observer might conclude that the Applicant has not acted diligently in putting on the evidence it now says it needs to put on. That failure to be diligent does not change the nature of the discussion that was held on 19 November. That discussion being, what is it that the Applicant sought me to look at to determine credibility? And Mr Redenbach took me to all of those strands.
4. By refusing to allow the Applicant to lead further evidence and thereby further delay the case from final determination, a fair-minded observer would understand that the decision had nothing to do with what happened on 19 November, and that what, in fact, I was doing on Thursday last week was balancing the needs of the parties before me and, indeed, of all other parties still awaiting hearing in the Tribunal, in light of the statutory objectives of the Tribunal. A fair-minded observer would also understand that allowing the evidence to be led now would represent a fundamental shift in the Applicant's case, which would cause prejudice to the Commissioner, in addition to delay.
5. In the circumstances, I do not accept that a fair-minded lay observer, having knowledge of all the relevant circumstances, would conclude that I could not bring a fair mind to the hearing of the matter.

1. For these reasons, I dismissed the application to recuse myself.

I certify that the preceding thirty-seven paragraphs are a true copy of the reasons for the decisions herein of Deputy President C Thompson SC

..................................[sgd]..................................

[1] Being, Division 165 of A New Tax System (Goods and Services Tax) Act 1999 (Cth).

[8] A pseudonym adopted for these written reasons.

[9] A pseudonym adopted for these written reasons.

[10] Ts 19 November 2025, 214, line 38.

[11] Ts 19 November 2025, 215, line 32.

[12] That is, reasoning as to why no oral evidence was to be led.

[13] Ts 19 November 2025, 216, line 29.

[14] That is, overcome the lack of me having seen Mr Jones.

[15] Ts 19 November 2025, 217, line 24.

[16] Ts 19 November 2025, 217, line 32.

[18] Ts 19 November 2025, 218, line 44.

[19] Ts 19 November 2025, 219, line 14.

[20] Ts 19 November 2025, 219, line 31.

[23] The first and second reasons do not appear from the transcript, however my written notes of the hearing indicate I identified these two reasons, and the transcript includes the third reason commencing with the word "thirdly", from which I infer I had stated the first two.

[24] MSXN and Commissioner of Taxation [2025] ARTA 2904.

[25] [2000] HCA 63; (2000) 205 CLR 337, [6] - [8], [20].

[26] [2019] FCAFC 19.

[27] [2023] FCA 1252, [10] - [12].