Bosanac v Commissioner of Taxation

RELEVANT LEGISLATION 3 Section 39B of the Judiciary Act relevantly provides as follows: 39B Original jurisdiction of Federal Court of Australia Scope of original jurisdiction (1) Subject to subsections (1B), (1C) and (1EA), the original jurisdiction of the Federal Court of Australia includes jurisdiction with respect to any matter in which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth. … 4 Section 5 of the ADJR Act relevantly provides as follows: 5 Applications for review of decisions (1) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit Court for an order of review in respect of the decision on any one or more of the following grounds: (a) that a breach of the rules of natural justice occurred in connection with the making of the decision; (b) that procedures that were required by law to be observed in connection with the making of the decision were not observed; (c) that the person who purported to make the decision did not have jurisdiction to make the decision; (d) that the decision was not authorized by the enactment in pursuance of which it was purported to be made; (e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made; (f) that the decision involved an error of law, whether or not the error appears on the record of the decision; (g) that the decision was induced or affected by fraud; (h) that there was no evidence or other material to justify the making of the decision; (j) that the decision was otherwise contrary to law. (2) The reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to: (a) taking an irrelevant consideration into account in the exercise of a power; (b) failing to take a relevant consideration into account in the exercise of a power; (c) an exercise of a power for a purpose other than a purpose for which the power is conferred; (d) an exercise of a discretionary power in bad faith; (e) an exercise of a personal discretionary power at the direction or behest of another person; (f) an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case; (g) an exercise of a power that is so unreasonable that no reasonable person could have so exercised the power; (h) an exercise of a power in such a way that the result of the exercise of the power is uncertain; and (j) any other exercise of a power in a way that constitutes abuse of the power. … 5 Section 260-5 of Sch 1 to the TAA is the source of the relevant power that the exercise of which is under attack and relevantly provides as follows: 260-5 Commissioner may collect amounts from third party Amount recoverable under this Subdivision (1) This Subdivision applies if any of the following amounts (the debt) is payable to the Commonwealth by an entity (the debtor) (whether or not the debt has become due and payable): (a) an amount of a *tax related liability; (b) a judgment debt for a *tax related liability; (c) costs for such a judgment debt; (d) an amount that a court has ordered the debtor to pay to the Commissioner following the debtor's conviction for an offence against a *taxation law. Commissioner may give notice to an entity (2) The Commissioner may give a written notice to an entity (the third party) under this section if the third party owes or may later owe money to the debtor. Third party regarded as owing money in these circumstances (3) The third party is taken to owe money (the available money) to the debtor if the third party: (a) is an entity by whom the money is due or accruing to the debtor; or (b) holds the money for or on account of the debtor; or (c) holds the money on account of some other entity for payment to the debtor; or (d) has authority from some other entity to pay the money to the debtor. The third party is so taken to owe the money to the debtor even if: (e) the money is not due, or is not so held, or payable under the authority, unless a condition is fulfilled; and (f) the condition has not been fulfilled. How much is payable under the notice (4) A notice under this section must: (a) require the third party to pay to the Commissioner the lesser of, or a specified amount not exceeding the lesser of: (i) the debt; or (ii) the available money; or (b) if there will be amounts of the available money from time to time - require the third party to pay to the Commissioner a specified amount, or a specified percentage, of each amount of the available money, until the debt is satisfied. When amount must be paid (5) The notice must require the third party to pay an amount under paragraph (4)(a), or each amount under paragraph (4)(b): (a) immediately after; or (b) at or within a specified time after; the amount of the available money concerned becomes an amount owing to the debtor. Debtor must be notified (6) The Commissioner must send a copy of the notice to the debtor. …

RELEVANT PRINCIPLES 6 Mr Bosanac places considerable emphasis on Denlay v Federal Commissioner of Taxation (2013) 211 FCR 344, a decision of Justice Logan, in somewhat similar circumstances in which his Honour found in favour of Denlay and against the Commissioner. The Commissioner, on the other hand, says that Denlay is relevantly distinguishable. It will be necessary to examine that decision. 7 Mr Bosanac also relies upon the Full Court decision in Southgate Investment Funds Limited v Deputy Commissioner of Taxation (2013) 211 FCR 274 where McKerracher, Jagot and Griffiths JJ said (at [77]): It is appropriate if we say something further regarding the criteria which may apply in determining whether or not execution of a judgment debt should be stayed. We agree with the observations of Hutley JA in Mackey at 289 that the discretion to grant a stay of the execution of a judgment debt based upon a taxation assessment involves "an open-ended discretion" and that it "is not possible to work out in advance all possible bases for the exercise of such a discretion and it would not be proper even to attempt to do so". Bearing in mind those salutary words and without wishing to be prescriptive or exhaustive, we consider that it is possible, however, to extract from the caselaw the following general principles which guide the exercise of that discretion: (a) the power to grant a stay should be exercised sparingly and the taxpayer bears the onus of persuading the Court that a stay ought to be granted in the particular circumstances; (b) great weight must be given to the clear legislative policy manifested in provisions such as ss 14ZZM and 14ZZR of the TAA which give priority to the recovery of taxation revenue notwithstanding that a taxpayer has a Pt IVC proceeding on foot. The Commissioner is placed by the legislation in a position of special advantage and is generally free to pursue recovery proceedings despite the pendency of Pt IVC proceedings; (c) the merits of pending Pt IVC proceedings may be a relevant consideration to be taken into account in the exercise of the discretion, but the court should not attempt to determine the merits unless it has sufficient material before it to do so and it should avoid speculation; (d) in cases where a judge is unable to form even a tentative view of the strength of Pt IVC proceedings, it is unlikely that the judge's discretion in refusing a stay will miscarry by reason only of the judge being unable on the material before him or her to reach a view as to the taxpayer's prospects of success in having the assessment overturned; (e) it is too narrow a view of the discretion to grant a stay of proceedings or execution merely because Pt IVC proceedings are pending, or because on review of those proceedings there appears to be an arguable case or complex questions to be determined by the AAT or the Court; (f) that is not to say, however, that the outcome of Pt IVC proceedings has to be certain in the sense that they are bound to succeed or fail. That puts the bar too high; (g) in cases where the Court considers that it is in a position to assess the merits of pending Pt IVC proceedings and that it is appropriate to do so, the weight to be attached to those merits will vary according to the relative strength of the merits. But the taxpayer needs to have more than merely an arguable case; (h) similarly, more weight would be given to the merits factor if the case is one where the Commissioner has abused his position or it is clear that the Commissioner is endeavouring to collect tax in defiance of a decision of the High Court or other superior court which is precisely in point; (i) due acknowledgment should be given to the asperity with which provisions such as ss 14ZZM and 14ZZR may operate, but in appropriate circumstances a court might consider that a stay is warranted in cases of extreme hardship to a taxpayer, noting however that: (i) the mere obligation to pay income tax of itself does not impose extreme hardship; and (ii) the possibility that the taxpayer may be bankrupted is generally not of itself an extreme hardship, however, different considerations may arise if, for example, it is demonstrated that the execution of a judgment debt would deprive the taxpayer of the financial resources needed to prosecute extant Pt IVC proceedings; (j) irrespective of the merits of pending Pt IVC proceedings, a stay will not usually be granted where the taxpayer is party to a contrivance to avoid liability to pay the tax; and (k) other considerations may need to be taken into account in determining whether to exercise the discretion in a particular case, such as any conduct on the part of the taxpayer or the Commissioner which impacts upon the efficient and expeditious conduct of Pt IVC proceedings. 8 Underlying both cases, Mr Bosanac says, is the constitutional imperative that the Commissioner must not make the final determination of his own assessments such that they are incontestable, but rather the Ch III judiciary has that role if the taxpayer invokes its jurisdiction: Deputy Commissioner of Taxation (NSW) v Brown (1958) 100 CLR 32 per Dixon CJ (at 40-41). In Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 Gummow, Hayne, Heydon and Crennan JJ (at [9]-[10]) (footnotes omitted) said: 9 The recourse to the Federal Court (and thereafter by special leave, to this Court) which is provided by Pt IVC of the Administration Act meets the requirement of the Constitution that a tax may not be made incontestable because to do so would place beyond examination the limits upon legislative power. 10 This state of affairs has two pertinent consequences. The first is that under the system provided by Pt IVC being, as to the Federal Court, a law supported by s 77(i) of the Constitution, the contestability of assessments made by the Commissioner is not confined to that measure of judicial review for jurisdictional error which is provided by s 75(v) of the Constitution and by s 39B of the Judiciary Act. The second consequence is that, as a matter of discretion, relief under s 75(v) and s 39B may be (and often will be) withheld where there is another remedy provided by Pt IVC. 9 In short, Mr Bosanac says the relevant guiding principles are that: (a) if a decision contains jurisdictional error, it is not a decision at all and therefore must be set aside (Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 (at [76])); (b) the 'developing trend' in applications made pursuant to s 39B of the Judiciary Act and s 75(v) of the Constitution is for the Court to merely identify that there has been jurisdictional error without trying to categorise it (relying on the reasoning of Gageler and Keane JJ in Wei v Minister for Immigration and Border Protection (2015) 257 CLR 22 (at [29]-[35])); and (c) where other jurisdictional errors are not identified or cannot be specifically identified, jurisdictional unreasonableness is a 'catch-all' for a broad category of jurisdictional error: Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 per Hayne, Kiefel (as her Honour then was) and Bell JJ (at [63]-[76]) and French CJ (at [23]-[31]). 10 Mr Bosanac, he says, has followed the approach in Wei, so as to focus on general jurisdictional error, the key error being the failure to consider certain items. Additionally, it is said the Commissioner proceeded on a manifest misunderstanding of the facts and the Commissioner failed to give due regard to the freezing orders and the stay that was in place. 11 Finally, Mr Bosanac also makes an argument based on the common law in relation to 'controlled money' accounts.

RELEVANT PROCEDURAL HISTORY 12 On 17 June 2015, the Commissioner commenced proceedings (WAD 291 of 2015) against Mr Bosanac (and also Ms Bosanac) seeking declarations of amounts due and payable by the Bosanacs and judgments against each in respect of their liability arising from an assessment by the Commissioner. 13 On 17 June 2015, I made freezing orders on the application of the Commissioner. The orders were varied on 22 October 2015. In July 2015, a protocol was agreed between the parties by which Mr Bosanac deposited his earnings into accounts controlled by the freezing orders (the Protocol). Mr Bosanac says that the amounts due to be deposited into those accounts were in the nature of 'controlled monies'. On 29 April 2016, I gave summary judgment in favour of the Commissioner. 14 The Pt IVC appeal was initiated by Mr Bosanac on 1 August 2016. It was set down for hearing to commence on 20 March 2017 by directions made on 22 September 2016. I ordered a stay of enforcement of the summary judgment on 12 August 2016 in Commissioner of Taxation v Bosanac (No 2) [2016] FCA 945 (Bosanac (No 2)). The parties, of course, had general liberty to apply for variation of those orders. 15 On 23 November 2016, there were further variations and orders made as to the directions in the Pt IVC appeal. 16 On 3 February 2017, an order was made that the Commissioner file and serve on Mr Bosanac a draft index for the book of agreed documents by 10 February 2017 for the purposes of the Pt IVC appeal. 17 On 14 February 2017, the Commissioner made the decision. 18 In the amended originating application for judicial review filed in these proceedings, Mr Bosanac seeks a writ of certiorari directed to the Commissioner quashing the decision and the notice, an injunction or writ of prohibition restraining the Commissioner from acting upon the notice or issuing any further purported notice, an ancillary order requiring any monies paid under the notice to be refunded and costs. The need to pursue the urgent interlocutory relief in relation to orders of the nature described above fell away once orders were made preventing the Commissioner from acting upon the notice pending further orders of the Court.

GROUNDS OF REVIEW 19 The grounds on which the relief is claimed are extensive and for completeness they are set out as follows, although the arguments advanced are more specific: B.2. Grounds of Application 1. As particularised in respect of the Judiciary Act application a subordinate officer of the Commissioner rendered the purported Decision and purportedly issued a Garnishee Notice. Particulars (1) On 8 February 2017 a subordinate officer of the Commissioner purported to issue the Garnishee Notice to Myfiziq Limited for the amount of $12, 167,585.89. (2) Subsequently, on 14 February 2017, a subordinate officer of the Commissioner purported to revise the Garnishee Notice amount to Myfiziq Limited from $12,167,585.89 to $2,112,421.36 ("the Amount"). 2. The Decision is a decision to which the Administrative Decisions (Judicial Review) Act (Cth) ("the AD(JR) Act") applies. 3. The Decision is subject to review pursuant to one or more of section 5(1) of the AD(JR) Act having regard to one or more of, or a combination thereof: a. That a breach of the rules of natural justice occurred in connection with making the Decision (s. 5(1)(a)). b. That the making of the Decision was an improper exercise of power conferred by the enactment in pursuance of which it was purported to be made ((s.5(1)(e), which is a reference to the categories set out in s. 5(2)). c. That the Decision involved an error of law (s. 5(1)(f)). d. That the Decision was otherwise contrary to law (s. 5(1)(f)). 4. The Commissioner has not at this time provided reasons for the Decision. Particulars (1) The Commissioner was requested to provide his reasons by way of email of the solicitor of [Mr Bosanac] at 12:26am on 20 February 2017. 5. The Commissioner has via letter of his solicitor dated 14 February 2017 set out some considerations which were purportedly taken into account ("the 14 February 2017 Letter"). Particulars (1) On 14 February 2017, the Commissioner did not seek to maintain the original Garnishee Notice amount but sought to reduce the original Garnishee notice amount to the Amount. (2) The Amount is purportedly the amount resulting from the amended assessments of 8 June 2016. The amended assessments of 8 June 2016 were rendered as a result of the objection decision for [Mr Bosanac] on 1 June 2016. (3) The [Commissioner] cites his reasons in paragraphs 7 and 8 of the 14 February 2017 Letter. (4) The 14 February 2017 Letter states at paragraph [8.1] that "Mr Bosanac has not lodged any objection to the amounts assessed under the 8 June 2016 amended assessments and the amounts are not otherwise contested by him" and [8.2] that [Mr Bosanac] "has not contested the amounts under the 8 June 2016 amended assessments". This is manifestly incorrect - the amendments are made in consequence of an objection decision pursuant to s. 170(1) Item 9 of the Income Tax Assessment Act 1936 (Cth) ("ITAA36'') and are part of the objection decision which is subject to an appeal filed in the Federal Court on 1 August 2016 pursuant to [Mr Bosanac's] election made under s. 14ZZ Taxation Administration Act 1953 (Cth) ("TAA'). (5) The 14 February 2017 Letter states at paragraph [8.2] that [Mr Bosanac] "has made no attempt to make any payment of the uncontested amounts". Whilst the Commissioner is manifestly incorrect in referring to the amounts arising from the 8 June 2016 amended assessments as uncontested, [Mr Bosanac] has made an attempt to pay uncontested amounts: as is particularised as follows: a. [Mr Bosanac] is being paid by his employers as an employee. b. As an employee [Mr Bosanac] is suffering PAYG withholding from his salary pursuant to the scheduled rates under the income tax law. c. Notwithstanding such PAYG withholding, [Mr Bosanac] is unlikely to have any income taxation liability for years on and after the issuance of the amended assessments around 17 June 2015 due to the operation of s. 25-5(1)(c) of the Income Tax Assessment Act 1997 which provides for the deduction of general interest charge and shortfall interest charge where the deductible interest being accrued by [Mr Bosanac] is likely to be in the order of $1.2 million per annum, significantly exceeding any taxable income of [Mr Bosanac], as reported to the Commissioner. 6. The Commissioner has by what is not set out in the 14 February 2017 Letter not considered relevant or required circumstances. Particulars (1) The Decision did not consider that amounts which were within the original amount of the garnishee notice were subject to a stay order of the Federal Court of Australia where: a. The stay order of the judgment of [Mr Bosanac] was ordered by the Federal Court on 12 August 2016 ("Stay Order"). The judgment of [Mr Bosanac] was ordered on 29 April 2016 being "$9,344,111.89 in respect of his liabilities for income tax, shortfall interest charge, administrative penalties and general interest charge accrued up to 1 December 2015 ("the Judgment Amount"). b. The original amount of the Garnishee notice included the Judgment Amount. (2) The Decision did not consider that the Stay Order was obtained by contest and was not a consensual matter where: a. The Stay Order of 12 August 2016 was obtained from the Court after the matter was contested before the Court. (3) The Decision did not consider whether the Amount [of $2,112,421.36] was also indirectly stayed as a result of the order of the Court of 12 August 2016 where: a. The Stay Order of 12 August 2016 was ordered after the amended assessments of 8 June 2016. b. The Stay Order was made pursuant to the decision of the Court of 12 August 2016 at [20], "pending the outcome of the present appeal process", where i. The Amount was also subject to the appeal process referred to by the Court (as noted, the amended assessments of 8 June 2016 were in consequence of the objection decision of 1 June 2016, and the objection decision of 1 June 2016 is subject to the appeal process commenced 1 August 2016); ii. The Court had had consideration of the entire appeal being conducted as a result of affidavit evidence tendered to the Court, where the Court noted at [11] of its 12 August 2016 decision, "By way of an annexure to an affidavit of the solicitor for the Bosanacs filed 11 August 2016, Mr Roos confirmed his professional opinion that the primary tax liability of Mr Bosanac is calculated at $2.2 million and $2.3 million. This updated evidence is on the basis of the Pt IVC appeal recently filed by Mr Bosanac and is notably consistent with Mr Roos' earlier estimate"; and iii. The Court's primary concern was that [Mr Bosanac] may be exposed to bankruptcy prior to the completion of his taxation appeal, where the Court noted at [18] of its 12 August 2016 decision: "Given that the Commissioner has declined to give any undertaking not to pursue bankruptcy proceedings, and given that it is well recognised that this is a conventional means of proceeding by the Commissioner on obtaining a judgment, it appears to be highly likely, as in Denlay, that Mr Bosanac would be exposed to bankruptcy". c. There is no evidence that the Commissioner gave consideration to whether the Amount was within the ambit of the Stay Order. (4) The Decision did not consider whether the Amount [of $2,112,421.36] was also indirectly stayed as a result of the purpose of the stay order being to avoid bankruptcy occurring by a side wind at the hands of a private creditor whilst [Mr Bosanac] is appealing the objection decision of 1 June 2016: a. Due to the existence of the freezing orders issued by the Court on 17 June 2015 in WAD 291 of 2015 and the protocol referred to in paragraph 7(b) below ("the Freezing Orders") which require that [Mr Bosanac] report his income and expenditure to the Commissioner, the Commissioner has at all times been cognisant of [Mr Bosanac's] sources of income and [Mr Bosanac's] monthly expenditure. b. The Commissioner at all relevant times has been wholly aware due to reporting to the Commissioner, including Annexure A of the Orders of 17 June 2015, that [Mr Bosanac] and his estranged spouse have significant mortgage debt. c. The Commissioner at all relevant times has been wholly aware, as a result of periodic reporting to the Commissioner as a result of the Freezing Orders (as amended) that [Mr Bosanac] has significant monthly payments to mortgagees. d. The Commissioner at all relevant times has been wholly aware as a result of periodic reporting to the Commissioner as a result of the Freezing Orders (as amended) that [Mr Bosanac] has significant monthly payments to other lenders. e. The Commissioner at all relevant times has been wholly aware as a result of periodic reporting to the Commissioner as a result of the Freezing Orders (as amended) that [Mr Bosanac] has significant monthly payments to other lenders. f. The Commissioner at all relevant times has been wholly aware as a result of periodic reporting to the Commissioner as a result of the Freezing Orders (as amended) that [Mr Bosanac] has regular income from Myfiziq Limited in the form of salary which he uses to discharge these mortgage payments. g. It is within the general knowledge of the Commissioner that if [Mr Bosanac] is denied income from regular sources to meet the mortgage payments and other lenders that [Mr Bosanac] may suffer a bankruptcy event as a result of defaulting to a private creditor. (5) The Commissioner has not given consideration to the Stay Order representing the determination of the Court that the appeal be "diligently pursued" where: a. The desire of the Court concerning the progress of the Appeal is referred to inter-alia, in the 12 August 2016 decision at paragraph [19] that it be "diligently pursued". b. The Commissioner did not consider that the Decision or the Garnishee Notice would delay the preparation of the trial in WAD349/2016 due to start on 20 March 2016. c. The Commissioner did not consider that the Decision or the Garnishee Notice would likely distract the focus of [Mr Bosanac's] lawyers away from the Appeal. d. The Commissioner did not consider that the Decision or the Garnishee Notice may, in being responded to, consume the funds of [Mr Bosanac] thereby delaying the preparation of the appeal. (6) The Commissioner did not consider whether the Commissioner was bound to seek the leave of the court pursuant to either or both of the Stay Order or the Freezing Orders prior to making the Decision, where: a. The matters set out in this paragraph 6 demonstrate that the Court has exercised jurisdiction in respect of the Stay Order for which the Court has allowed general liberty to apply. b. The matters set out in this paragraph 6 demonstrate that the Court has exercised jurisdiction in respect of the Freezing Orders (which are also information reporting orders) for which the Court can be considered to allow general liberty to apply. c. The Commissioner did not consider whether the leave of the Court was required, or whether the Court needed to be informed, prior to making the Decision. (7) The Commissioner has not given consideration to the Freezing Orders and the submission to the Court's jurisdiction in respect of the Freezing Orders (and the related information reporting) where: a. The Freezing Orders require that [Mr Bosanac] not dispose of his assets except under the terms of the freezing orders. This includes monies that [Mr Bosanac] holds in bank accounts from time to time pursuant to the orders of the Court dated 17 June 2015. b. The Commissioner has submitted to the jurisdiction of the Court in controlling the assets of [Mr Bosanac]. c. The Commissioner has given an undertaking that "without the leave of the Court" that it will not "use any information obtained as a result of the "Freezing Order" for the purpose of any civil or criminal proceedings ... other than in this proceeding [undertakings at (6) of 17 June 2015 order]. d. The Commissioner has not given consideration that the Decision and the Garnishee Notice are "jumping the gun", by taking matters into his own hands, by seeking to obtain funds that would otherwise come under the control of the Freezing Orders and the jurisdiction of the Court. (8) The Commissioner has not given consideration that the Court in granting the Freezing Orders has included an exception for living expenses and legal fees where: a. The orders of the Court as to the Freezing Orders allow the payment of authorised expenditure, including for ordinary living expenses and legal fees. b. The consideration of ordinary living expenses and legal fees is integral to the Court's decision to grant and continue the Freezing Orders. c. The Commissioner did not consider the impact of the Garnishee Notice disturbing the status quo maintained by the Freezing Orders. (9) The Commissioner has not applied relevant paragraphs of his own practice statement PS LA 2011/18 where: a. The Commissioner did not consider paragraph [108] of PS LA 2001/18 where the Commissioner states that the "ATO will not usually seek to garnishee more than 30 cents in the dollar of the amount of salary or wages payable". b. The Commissioner did not consider paragraph [112] of PS LA 2001/18 where the Commissioner states that the [sic] "the Commissioner will consider whether a garnishee would significantly prejudice the tax debtor's rights in pursuing ... [taxation] appeals". (10) The Commissioner has not considered that [Mr Bosanac] is paying off the tax debt, where: a. [Mr Bosanac] is being paid by his employers as an employee. b. As an employee [Mr Bosanac] is suffering PAYG withholding from his salary pursuant to the scheduled rates under the income tax law. c. Notwithstanding such PAYG withholding, [Mr Bosanac] is unlikely to have any income taxation liability for years on and after the issuance of the amended assessments around 17 June 2015 due to the operation of s. 25-5(1)(c) of the Income Tax Assessment Act 1997 which provides for the deduction of general interest charge and shortfall interest charge where the deductible interest being accrued by [Mr Bosanac] is likely to be in the order of $1.2 million per annum, significantly exceeding any taxable income of [Mr Bosanac], as reported to the Commissioner. (11) There is no basis for amending the above pleadings in any respect in consequence of Officer AZ's preparation of purported reasons entitled "Statement of Reasons pursuant to section 13 of the Administrative Decisions (Judicial Review) Act 1977" and dated 20 March 2017 ("the Purported Reasons" ). a. These proceedings were filed on 20 February 2017. b. The Purported Reasons are dated 20 March 2017, 28 days after these proceedings were filed. c. The Purported Reasons are not before the Court. d. To clarify and further to (11)(c) the Purported Reasons have not been annexed to any affidavit of the purported decision maker (i.e. Officer AZ). e. The Purported Reasons dated 20 March 2017 do not annexe any contemporaneous notes or memoranda which Officer AZ may have been required, pursuant to Commissioner's corporate management practice statements, to make contemporaneously at the time of the purported garnishee notice of 8 February 2017 and/or the purported revision of that notice on 14 February 2017. f. The case law of the Commonwealth is that where purported reasons are prepared after the filing of judicial review proceedings, such purported reasons can only be admitted before a Court and taken into consideration if subject to being tested by way of the purported decision maker annexing them to an affidavit and making himself or herself available for cross-examination by [Mr Bosanac]: Nezovic v Minister for Immigration & Multicultural & Indigenous Affairs (No 2) (with Corrigendum dated 12 November 2003) [2003] FCA 1263 (6 November 2003) at [55-59] per French J (as the recently retired Chief Justice of the Commonwealth then was). g. Further to (11) (f), the common law of the Commonwealth, and as a matter of common sense for the administration of justice is such that there is no requirement for a plaintiff bringing proceedings to amend his statement of claim because the defendant (even if that defendant be a subordinate officer of the executive government as the rule of law so requires it must) has handed the plaintiff an unsworn letter or document contradicting his statement of claim. h. The [Commissioner] has been repeatedly invited by [Mr Bosanac] to put the Purported Reasons before the Court as annexed to an affidavit of Officer AZ and has not (yet) done so. 7. In furtherance of the claim that a breach of the rules of natural justice occurred in connection with making the Decision (s. 5(1)(a)), [Mr Bosanac] claims: a. [Mr Bosanac] repeats the matters particularised at paragraph 5 and paragraph 6. b. The Freezing Orders ordered by the Court in WAD291 of 2015 in conjunction with the protocol agreed between the Parties as referenced in the [Commissioner's] letter of 9 July 2015 effectively operate so that [Mr Bosanac] deposits his earnings into controlled accounts to bring the control of inbound monies within the jurisdiction of the Court. c. The Freezing Orders ordered by the Court in WAD291 of 2015, in conjunction with the protocol agreed between the Parties as referenced in the [the Commissioner's] letter of 9 July 2015, result in [Mr Bosanac] reporting on his monthly expenditure to the [Commissioner] through the provision of copy bank statements and explanatory notes to the [Commissioner] and the [Commissioner] has accepted such reporting. d. The Stay Orders bring the ability of [Mr Bosanac] to prosecute his appeal within the general jurisdiction of the Court. e. The Freezing Orders issued on the ex parte application of the [Commissioner] restrict the liberties of [Mr Bosanac] and were only obtained subject to the usual caveat that [Mr Bosanac] would be allowed to undertake authorised expenditure . f. In the circumstances the Commissioner was required to afford a fair hearing to [Mr Bosanac] prior to making the Decision or issuing the Garnishee Order. 8. In furtherance of the claim that the making of the Decision was an improper exercise of power conferred by the enactment in pursuance of which it was purported to be made ((s. 5(1)(e), which is a reference to the categories set out in s. 5(2), [Mr Bosanac] sets out: a. [Mr Bosanac] repeats the matters particularised at paragraph 5 and paragraph 6. b. The matters set out at s. 5(2) include failure to take into account a relevant consideration (s. 5(2)(b)), failure to take into account relevant policy (s. 5(2)(f)) and jurisdictional unreasonableness (s. 5(2)(g)). c. The matters particularised at paragraph 6 were not considered by the Commissioner. d. The matters particularised at paragraph 6 were required to be considered by the Commissioner. e. The failure of the Commissioner to consider the matters particularised at paragraph 6 resulted in the Decision being jurisdictionally unreasonable pursuant to s. 5(2)(g). f. Alternative to 8(e), the Commissioner's decision in light of the matters particularised at paragraph 5 and paragraph 6 was wholly unreasonable. g. Pending the provision of written reasons by the Commissioner, [Mr Bosanac] notes that further grounds may be alleged. 9. In furtherance of the claim that the Decision involved an error of law (s. 5(1)(f)), [Mr Bosanac] sets out: a. [Mr Bosanac] repeats the matters particularised at paragraph 5 and paragraph 6. b. The failure of the Commissioner to consider the matters particularised at paragraph 6 resulted in the Decision being infected with an error of law contrary to s. 5(1)(f). 10. In furtherance of the claim that the Decision was otherwise contrary to law (s. 5(1)(f)), [Mr Bosanac] sets out: a. [Mr Bosanac] repeats the paragraphs for paragraph 8. 11. In furtherance of the claim for a stay pursuant to s. 15: a. [Mr Bosanac] repeats the matters particularised at paragraph 5 and paragraph 6. b. [Mr Bosanac] says a stay is necessary to ensure that he does not default on automatic drawings including mortgage payments. c. There is uncertainty how monies would be repaid from consolidated revenue of the Commonwealth if first subject to the Garnishee Notice.

EVIDENCE FOR MR BOSANAC 20 Mr Bosanac relies upon several affidavits in support. The first of those is an affidavit sworn by his solicitor, Mr Blow, on 17 March 2017 referring to the exceptions provided in the freezing orders which include: (a) the payment of ordinary living expenses; (b) the payment of reasonable legal expenses; (c) dealing or disposing with assets with the prior written consent of the Commissioner in the ordinary and proper course of business; (d) paying business expenses bona fide and properly incurred; (e) paying amounts to the Commissioner in tax liabilities; and (f) in discharging obligations bona fide and properly incurred under a contract entered into before the freezing orders, subject to giving two working days' written notice to the Commissioner of the particulars of the obligation. 21 By subsequent variation of the freezing orders, accountancy expenses were also provided for in a regime of providing written certificates setting out the expenses. A similar regime applied to written certificates setting out share trading activities, which is part of the business in which Mr Bosanac is engaged. Mr Blow also refers to the Protocol identifying a single joint bank account to be used for the purposes of the orders, the regular provision of copy bank statements for that account to the Commissioner along with explanations for any payments exceeding $250. Mr Blow produced a copy of his email to the Australian Government Solicitor (AGS) dated 23 September 2016, attaching copy bank statements pursuant to that regime. 22 Mr Blow swore a further affidavit on 17 May 2017. By this affidavit, he annexed correspondence outlining exchanges on a variety of procedural matters, including issues as to admissibility of certain evidence and revealing difficulties between the parties in reaching agreement on most matters. It specifically revealed a debate about whether the decision maker should be present at the hearing for cross-examination. In the end, he was. 23 In addition, Mr Bosanac relied upon an affidavit of Ms Provost of 14 February 2017 and Mr Blow of 16 February 2017. He did not rely on an earlier affidavit of Mr Blow of 15 February 2017. 24 Ms Provost's affidavit of 14 February 2017 was filed in support of Mr Bosanac's original interlocutory application in relation to the notice, filed on 14 February 2017 in WAD 291 of 2015. She deposed to her belief that the notice was adversely affecting Mr Bosanac's ability to meet legal fees as well as his ability to pay day-to-day expenses. She also annexed correspondence from Mr Bosanac's solicitors to the AGS outlining Mr Bosanac's original position in relation to the issuance of the notice. 25 Mr Blow's affidavit of 16 February 2017 was intended to provide information requested by the Court concerning the financial impact of the notice on Mr Bosanac as well as to confirm what financial information had been submitted to the Australian Taxation Office (ATO) via the AGS. Mr Blow deposed that Mr Bosanac was travelling abroad for work and therefore it was impossible to obtain a sworn affidavit from him personally. Consequently the information was contained within Mr Blow's affidavit as a matter of necessity. The affidavit annexed correspondence between Mr Bosanac and the AGS as examples of the financial information that was being provided by Mr Bosanac to the AGS. Mr Blow also deposed to Mr Bosanac's outstanding legal fees as well as his belief as to Mr Bosanac's monthly expenditure, monthly salary income and the payment of legal and accounting fees.

Objections to evidence of Mr Bosanac 26 First, the Commissioner objected to the admissibility of part of the evidence on hearsay grounds. In relation to Mr Blow's affidavit of 16 February 2017, objection was taken to paras 6-15 inclusive. The objection to para 11 was confined to the reference to RAB-1 and in para 15 the objection was confined to the penultimate and last sentence of Mr Bosanac's certificate. Objection was also taken to para 17, para 18 (as to the first and last sentences), para 20 and annexures RAB-1, RAB-2, RAB-3, RAB-4. Similarly, objections were taken to Mr Blow's affidavit of 17 March 2017, namely, para 9(c), RAB-3 and RAB-4 and in Ms Provost's affidavit, para 5 and para 6 and annexure TMP-1. 27 In my view, the objection on hearsay grounds in relation to all this material was well made out if the affidavits were to be relied upon in order to establish the truth of the matters thereto deposed. It appears to me that the formalities of proving the matters there deposed to have not been satisfied. 28 As I understand the position insofar as the hearsay objections are concerned, Mr Bosanac relies upon the material in order to provide evidence as to what the Commissioner was told about Mr Bosanac's finances. There appears to be an acceptance and, in any event, it must be the case that the material cannot be relied upon in a hearsay form to establish the truth of the content. The Commissioner, however, raises the concern that this distinction does not assist Mr Bosanac because Mr Bosanac has not limited his case to the allegation that the decision maker failed to take into account what Mr Bosanac, by his advisors, had informed the Commissioner. Rather, he asserts that the Commissioner proceeded on 'a manifest misunderstanding of the facts'. The Commissioner argues that to the extent Mr Bosanac alleges the existence of facts that were required to have been taken into account, but were not, the onus is on him to prove those facts. Similarly, the Commissioner argues, if what is alleged is that there was no evidence to justify the making of the decision, Mr Bosanac bears the onus of proving what the true factual position was. Mr Bosanac needs to demonstrate this if he seeks to establish that the facts relied upon by the decision maker did not exist. In neither form of the argument is proof of what is asserted, as distinct from the truth, capable of being relied upon as proof of the fact. The Commissioner makes the point that, by way of an example, Mr Bosanac argues that the Commissioner failed to take into account and did not consider that Mr Bosanac was, on the evidence held by the Commissioner, 'living hand to mouth'. That submission must be predicated upon the assumption that Mr Bosanac in fact did not have any other source of income. It is clear the decision maker reached the conclusion based on the matters referred to in the reasons that Mr Bosanac did have other sources of income. No admissible evidence has been led by Mr Bosanac to contradict that conclusion. 29 The Commissioner points out that it was open for Mr Bosanac to adduce direct evidence of his financial circumstances to the extent necessary to prove the allegations in this application. Mr Bosanac has chosen not to do so, despite having relied on an affidavit as to his financial circumstances, filed in WAD 291 of 2015, in successfully seeking an interlocutory stay of the variation. The Commissioner argued that it is open to the Court to draw from the failure to adduce such evidence that it would not support Mr Bosanac's case, relying on Jones v Dunkel (1959) 101 CLR 298. The Commissioner does not, however, object to the admission of the certificates from Mr Blow and from Mr Bosanac's accountant Mr Roos, as to his fees, nor to the Court having regard to the orders and reasons for the decision made in WAD 291 of 2015, including the original freezing orders made on 17 June 2015, the orders varying the freezing orders made on 22 October 2015 and the stay. 30 In my view, the Commissioner's contentions on the state of the evidence should be accepted. It did not appear that counsel for Mr Bosanac advanced any significant argument against those objections, seeming to contend that the arguments sought to be advanced could be made without relying on the admissible truth of the financial position from which Mr Bosanac contends. There is difficulty in this approach in relation to some of Mr Bosanac's arguments, if not all of them. 31 Objection was also taken to para 5(a) and RAB-5 of the Mr Blow's affidavit of 17 May 2017 on the grounds of relevance. However, during the hearing Mr Bosanac advised that he no longer relied on that material.

EVIDENCE FOR THE COMMISSIONER 32 The Commissioner has relied upon one affidavit, being an affidavit of a senior officer to whom the parties have referred as Director AZ. I will adopt the same terminology. Director AZ attended for cross-examination. He is a senior ATO official. 33 Director AZ refers to the history described above and the request received on 20 February 2017 for a statement of reasons to be given for the decision. 34 He finalised his written statement of reasons on 20 March 2017. In the statement of reasons he deposed to them being the reasons at the time of deciding to issue the notice and the variation. I will refer to the statement of reasons in a moment, but Director AZ also says that in making his decision that he had regard to and relied on information and documents referred to in the reasons (all of which were annexed to his affidavit), including the following: an amended notice of assessment issued on 8 June 2016 to Mr Bosanac in respect of the income years ended 30 June 2006 to 30 June 2013 inclusive. A copy of each of the amended assessments, under the hand of the Deputy Commissioner with the tax file number deleted for privacy reasons; Westpac Banking Corporation account statements for account 'V & B Bosanac Classic Plus' account number XXX dated between 14 January 2016 and 21 September 2016; an affidavit sworn by Mr Bosanac on 5 November 2015 in the appeal proceedings; Australian Securities and Investments Commission (ASIC) extracts in respect of Dominion Asset Pty Ltd, Activistic Holdings, Activistic Limited and MyFiziq obtained electronically on or about 8 February 2017; a CEO Remuneration Report lodged with the Australian Stock Exchange (ASX) by MyFiziq on 6 December 2016; and quarterly business activity statements lodged by Mr Bosanac in respect of the September 2016 and December 2016 quarters. 35 Director AZ produced and relied upon information extracted from the ATO database of its business records, including: the integrated core processing (ICP) system, which records all liabilities, payments and credits for taxpayers' income tax accounts from and including 15 January 2010. The information recorded on the ICP is input into the system either manually by employees of the ATO, based on information furnished to the ATO by the taxpayer through their tax returns, or automatically if a taxpayer lodges their returns electronically. The ICP records liabilities, payments and credits in chronological order and does not show how individual payments and credits have been allocated between different liabilities on the same account. In the course of making his decision, Director AZ reviewed the electronic information stored in the ICP in respect of Mr Bosanac and Dominion Investments (WA) Pty Ltd. He produced printouts with his affidavit; and the 'Mainframe' system, which is an older equivalent of the ICP system. In the course of making his decisions, Director AZ reviewed the electronic information stored in the Mainframe in respect of Mr Bosanac and Dominion Investments (WA), printouts of which were also attached to his affidavit. 36 Director AZ swore to the fact that he did not make any contemporaneous notes in the course of making his decisions to issue the notice and the variation as there was no requirement to prepare written reasons for his decisions.

The reasons 37 The statement of reasons provided by Director AZ pursuant to s 13 of the ADJR Act sets out the following: STATEMENT OF REASONS PURSUANT TO SECTION 13 OF THE ADMINISTRATIVE DECISIONS (JUDICIAL REVIEW) ACT 1977 NOTICES UNDER SECTION 260-5 OF SCHEDULE 1 TO THE TAXATION ADMINISTRATION ACT 1953 The Decisions 1. The decisions with respect to which reasons have been requested are the decisions made on 8 February 2017 to issue the notice pursuant to section 260-5 of Schedule 1 to the Taxation Administration Act 1953 ("the TAA'') ("the Notice") to MyFiziq Limited ("MyFiziq") on 8 February 2017 requiring it to pay to the Commissioner $12,167,585.89 in respect of money owed or may later be owed by MyFiziq to Mr Vlado Bosanac ("[Mr Bosanac]"). A notice of variation was subsequently issued to MyFiziq on 14 February 2017 reducing the amount to be paid to the Commissioner to $2,112,421.36. The Decision Maker 2. I, [Director AZ], director in the Debt Business Line in the Melbourne office of the Australian Taxation Office ("the ATO") am the decision maker in respect of the decisions referred to in the previous paragraph. 3. In making the decisions to issue the notices, I was acting as a duly authorised officer of the Commissioner. Background 4. In or around March 2014, the ATO commenced an audit into [Mr Bosanac's] affairs and as result, issued notices of amended assessments for the years ended 30 June 2006 to 30 June 2013 (inclusive) ("the Audit"). The notices were issued on 16 June 2015 and totalled the amount of $9,011,617.23 for income tax, penalties, shortfall interest charge. 5. Information obtained during the Audit from third parties and bank statements revealed receipts of undisclosed income from employment, rent, sale of assets, foreign source and other unknown sources that [Mr Bosanac] failed to declare in his income tax returns. 6. The Audit was finalised on or about May 2015. On or around June 2015, the Commissioner provided [Mr Bosanac] with written reasons of his decision to adjust [Mr Bosanac's] tax returns for the financial years ended 30 June 2006 to 30 June 2013. 7. As a result of the Audit, the following amended assessments and assessment of shortfall and administrative penalties were issued on 16 June 2015: (a) Notice of amended assessment for the year ended 30 June 2006 for the amount of $777,462.50 (b) Notice of amended assessment for the year ended 30 June 2007 for the amount of $860,761.93; (c) Notice of amended assessment for the year ended 30 June 2008 for the amount of $725,749.65; (d) Notice of amended assessment for the year ended 30 June 2009 for the amount of $442,888.61; (e) Notice of amended assessment for the year ended 30 June 2010 for the amount of $205,102.20; (f) Notice of amended assessment for the year ended 30 June 2011 for the amount of $282,796.26; (g) Notice of amended assessment for the year ended 30 June 2012 for the amount of $193,094.10. (h) Notice of amended assessment for the year ended 30 June 2013 for the amount of $151,644.32. (i) Notice of assessment of shortfall penalty the year ended 30 June 2006 for the amount of $693,549.24; (j) Notice of assessment of shortfall penalty for the year ended 30 June 2007 for the amount of $621,721.99; (k) Notice of assessment of shortfall penalty for the year ended 30 June 2008 for the amount of $400,585.16; (l) Notice of assessment of shortfall penalty for the year ended 30 June 2009 for the amount of $197,584.58; (m) Notice of assessment of shortfall penalty for the year ended 30 June 2010 for the amount of $70,787.57; (n) Notice of assessment of shortfall penalty for the year ended 30 June 2011 for the amount of $68,658.90; (o) Notice of assessment of shortfall penalty for the year ended 30 June 2012 for the amount of $30,197.67. (p) Notice of assessment of shortfall penalty for the year ended 30 June 2013 for the amount of $13,483.10. (q) Notice of administrative penalty for the year ended 30 June 2006 for the amount of $699,716.25. (r) Notice of administrative penalty for the year ended 30 June 2007 for the amount of $774,685.70. (s) Notice of administrative penalty for the year ended 30 June 2008 for the amount of $653,174.70. (t) Notice of administrative penalty for the year ended 30 June 2009 for the amount of $398,599.75. (u) Notice of administrative penalty for the year ended 30 June 2010 for the amount of $184,591.95. (v) Notice of administrative penalty for the year ended 30 June 2011 for the amount of $254,516.60. (w) Notice of administrative penalty for the year ended 30 June 2012 for the amount of $173,784.65. (x) Notice of administrative penalty for the year ended 30 June 2013 for the amount of $136,479.85. 8. On or around 11 August 2015, [Mr Bosanac] objected against the assessments referred to in paragraph 7 above. The objection decision was finalised by decision letter dated 1 June 2016 in which [Mr Bosanac's] objection was allowed in part. As a consequence of the objection decision, there were additional adjustments to the assessments. 9. Further notices of amended assessments, shortfall penalties, and administrative penalties being issued on 8 June 2016 totalling $1,113,203.24. (a) Notice of amended assessment for the year ended 30 June 2006 for the amount of $5,965.95. (b) Notice of amended assessment for the year ended 30 June 2007 for the amount of $202,350.80 credit; (c) Notice of amended assessment for the year ended 30 June 2008 for the amount of $562,108.75; (d) Notice of amended assessment for the year ended 30 June 2009 for the amount of $222,361.15; (e) Notice of amended assessment for the year ended 30 June 2010 for the amount of $43,617.95 credit; (f) Notice of amended assessment for the year ended 30 June 2011 for the amount of $120,408.05 credit; (g) Notice of amended assessment for the year ended 30 June 2012 for the amount of $6,495.60. (h) Notice of amended assessment for the year ended 30 June 2013 for the amount of $2,672.80. (i) Notice of assessment of shortfall penalty the year ended 30 June 2006 for the amount of $5,945.32; (j) Notice of assessment of shortfall penalty for the year ended 30 June 2007 for the amount of $147,807.19 credit; (k) Notice of assessment of shortfall penalty for the year ended 30 June 2008 for the amount of $358,423.17; (l) Notice of assessment of shortfall penalty for the year ended 30 June 2009 for the amount of $116,952.71; (m) Notice of assessment of shortfall penalty for the year ended 30 June 2010 for the amount of $15,331.19 credit; (n) Notice of assessment of shortfall penalty for the year ended 30 June 2011 for the amount of $29,940.00 credit; (o) Notice of assessment of shortfall penalty for the year ended 30 June 2012 for the amount of $1,430.31. (p) Notice of assessment of shortfall penalty for the year ended 30 June 2013 for the amount of $398.21. (q) Notice of administrative penalty for the year ended 30 June 2006 for the amount of $5,369.35. (r) Notice of administrative penalty for the year ended 30 June 2007 for the amount of $182,115.70 credit. (s) Notice of administrative penalty for the year ended 30 June 2008 for the amount of $505,897.85. (t) Notice of administrative penalty for the year ended 30 June 2009 for the amount of $200,125.00. (u) Notice of administrative penalty for the year ended 30 June 2010 for the amount of $39,256.15 credit. (v) Notice of administrative penalty for the year ended 30 June 2011 for the amount of $108,367.25 credit. (w) Notice of administrative penalty for the year ended 30 June 2012 for the amount of $5,845.85. (x) Notice of administrative penalty for the year ended 30 June 2013 for the amount of $2,405.50. Evidence and other Material Relied On 10. In making the decision to issue the Notices, I relied on the following: (a) the taxation liabilities totalling $12,167,585.89. The following is a breakdown of [Mr Bosanac's] tax liabilities. Financial Year Primary Tax Shortfall Interest Charge Administrative Total Penalties 2006 $783,428.45 $699,494.56 $705,085.60 $2,188,008.25 2007 $658,411.13 $473,914.80 $592,570.00 $1,724,895.93 2008 $1,287,858.40 $759,008.33 $1,159,072.55 $3,205,939.28 2009 $665,249.76 $314,537.29 $598,724.75 $1,578,511.80 2010 $161,484.25 $55,456.38 $145,355.80 $347,256.43 2011 $162,388.21 $38,718.90 $146,149.32 $553,428.71 2012 $199,589.70 $31,627.98 $179,630.50 $410,848.18 2013 $154,317.12 $13,881.31 $138,885.35 $307,083.78 GIC $1,690,884.66 PAYG-ITI $160,728.87 Total $4,072,727.02 $2,386,639.55 $3,665,453.87 $12,167,585.89

(b) Data collected during the Audit in relation to bank accounts which [Mr Bosanac] has the power to, directly or indirectly, deal with as if these were his own. (c) Information, both formally and informally, obtained from [Mr Bosanac] during the Audit. (d) AUSTRAC reports obtained during the Audit. (e) The reasons for decision dated 16 June 2015. (f) Information available on the database maintained by ASIC in respect of [Mr Bosanac's] directorship and shareholdings; (g) Information held on ATO systems in relation to [Mr Bosanac's] outstanding liabilities and lodgments; (h) Information held on ATO systems in relation to [Mr Bosanac's] associated entities' liabilities and lodgments including Dominion Investments (WA) Pty Ltd, Activistic Holdings Pty Ltd, Dominion Asset Pty Ltd, Greenday Corporate Pty Ltd, (i) Documents lodged with ASX in relation to MyFiziq Limited; (j) Commissioner of Taxation v Zumtar & others 93 ACT 4351 (Zumtar); (k) Practice Statement Law Administration 2011/18 - Enforcement measures used for the collection and recovery of tax-related liabilities ("PS LA 2011/18"); (l) Practice Statement Law Administration 2011/4 - Collection and recovery of disputed debts ("PS LA 2011/4"); (m) Practice Statement Law Administration 2011/6 - Risk management in the enforcement obligations and debt collection activities ("PS LA 2011/6"); (n) The freezing order dated 17 June 2015 and varied on 22 October 2015 in the Federal Court of Australia proceedings No: WAD291/2015; (o) The reasons of McKerracher J in granting the freezing order referred to in paragraph 10(n) above, dated 17 June 2015. (p) The stay in the proceedings granted on 29 April 2016 by McKerracher J in the Federal Court proceedings No WAD291/2015; (q) The reasons of McKerracher J in granting the stay referred to in paragraph 10(p) above, dated 29 April 2016; (r) The effect of the garnishee notice on the freezing order referred to in paragraph 10(n) above; (s) The effect of the garnishee notice on the stay referred to in paragraph 10(p) above; (t) The objection lodged by [Mr Bosanac] referred to in paragraph 8 above, and the reasons put forward by [Mr Bosanac] in support of the objection; (u) The objection decision letter dated 1 June 2016; (v) [Mr Bosanac's] appeal against the objection decision filed in the Federal Court on 1August 2016 (Part IVC Proceedings); (w) [Mr Bosanac's] tax compliance before, during and after the Audit period, including his behaviour in respect of his obligations to lodge income tax returns and his obligation to satisfy undisputed tax liabilities; (x) The tax compliance of entities controlled or influenced by [Mr Bosanac] or linked to [Mr Bosanac], before, during and after the Audit period; (y) The need by [Mr Bosanac] to have access to sufficient funds to pay his living expenses and his legal expenses to pursue the Part IVC Proceedings; and (z) [Mr Bosanac's] financial standing, including his income and assets Findings on Material Questions of Fact 11. In addition to the matters outlined in paragraphs 4 to 8, inclusive, I made the findings of fact set out in the following paragraphs 12-24. 12. [Mr Bosanac's] tax liabilities, pursuant to the amended Notices of Assessment issued on 16 June 2015 for the years ended 30 June 2006 to 30 June 2013, together with tax shortfall penalties, shortfall interest charges and general interest charges calculated to 1 December 2015 total the sum of $9,344,111.89 (Tax Liabilities). The Tax Liabilities are disputed and are presently the subject of the unresolved Part IVC Proceedings. 13. Further tax liabilities, pursuant to the amended Notices of Assessment issued on 8 June 2016 for the years ended 30 June 2006 to 30 June 2013, together with tax shortfall penalties, shortfall interest charges and general interest charges calculated to 7 February 2017 total the sum of $2,112,421.36 (Further Tax Liabilities). The Further Tax Liabilities are not disputed and do not form part of the Part IVC Proceedings. 14. Relevantly, some conclusions drawn by the Commissioner in the written reasons for decision referred to in paragraph 6 above are: (a) [Mr Bosanac] failed to return assessable income in the form of ordinary income. As a result there has been an avoidance of tax resulting in shortfall amounts. (b) There has been evasion by [Mr Bosanac] in the 2006 to 2013 years in relation to the omitted income from employment and investments, unsubstantiated deposits to bank accounts that [Mr Bosanac] controls directly or indirectly through associated entities, capital gains from the sale of properties, and foreign income. (c) Notwithstanding that [Mr Bosanac] lodged his income tax return for the years ended 30 June 2005 to 30 June 2013, these were only lodged on 25 February 2015 and the taxable income declared for financial years 2006 to 2013 were significantly understated. (d) The magnitude of the omitted and concealed income, including those earned from employment, investments, sale of properties, and foreign sources, from the Commissioner and the manner in which [Mr Bosanac] received these funds demonstrated that he intentionally disregarded his Australian taxation law obligations. 15. Based on the findings in the written reasons for decision referred to in paragraph 6 above, the significant amount of tax liabilities owed by [Mr Bosanac] and the identified risks, the Commissioner made an application for a freezing order of all of [Mr Bosanac's] identified assets, restraining [Mr Bosanac] from disposing of, dealing with or diminishing the value of any assets he holds. McKerracher J in the Federal Court of Australia made the freezing order in the terms proposed by the Commissioner on 17 June 2015 and as varied 22 October 2015. 16. [Mr Bosanac] through his legal representative also provided bank statements and some explanations identifying the nature of some payments shown on the bank statements above the agreed de minimis amount of $250. The information contained in the bank statements setting out the payments to and from the account V & B Bosanac Classic Plus account number [xxxxxx] in the name of [Mr Bosanac] showed that [Mr Bosanac] is in receipt of the following: a) On 14 January 2016, an amount of $9,375.00 from Activistic described as 'Director Fees'; b) On 15 January 2016, an amount of $11,672.44 from MyFiziq Limited described as 'MYQ Salary'; c) On 15 February 2016, an amount of $9,375.00 from Activistic described as 'Deposit FPC'; d) On 15 February 2016, an amount of $11,672.44 from MyFiziq Limited described as 'MYQ Salary' e) On 15 July 2016, an amount of $10,000 from Activistic described as 'Director Fees'; f) On 15 July 2016, an amount of $12,975.02 from MyFiziq Limited described as 'MYQ Salary'; g) On 15 August 2016, an amount of $13,771.28 from MyFiziq Limited described as 'MYQ Salary'; h) On 1 September 2016, an amount of $4,000 described as 'Transfer deposit 0000000 at Private Bank Sydney NSW'; i) On 15 September 2016, an amount of $27,500.00 described as "RTGS High Value Payment Ref No 0369232 OpenDNA Limited'; j) On 15 September 2016, an amount of $89,760.00 described as "RTGS High Value Payment Ref No 0369235 OpenDNA Limited'; k) On 16 September 2016, two amounts of $11,000.00 described as 'Deposit FPC Activistic' I) On 19 September 2016, an amount of $13,975.02 from MyFiziq Limited described as 'MYQ Salary'; m) On 21 September 2016, an amount of $132,000.00 described as 'Deposit South Perth, Sth Shore CTR WA' 17. In [Mr Bosanac's] sworn affidavit of 5 November 2015, he stated that he owns 100% shares in Dominion Investments (WA) Pty Ltd (ACN 078 465 362) ("Dominion Investments") and 100% shares in Dominion Asset Pty Ltd (ACN 152 077 346) ("Dominion Asset"). He also advised that Dominion Investments owns 628,889 shares in Activistic Limited and Dominion Asset owns 278,000 shares in Activistic Limited. ASIC records show that Dominion Asset has been deregistered by ASIC pursuant to Section 601AB of the Corporations Act 2001 since 6 December 2015. The information referred to in paragraph 16 above, and in particular Taxpayer's bank statement showing that he received an amount of $10,000 from Activistic [Holdings] on 15 July 2016 (described as 'Director Fees') and two further amounts of $11,000 received by [Mr Bosanac] on 16 September 2016 described as 'Deposit FPC Activistic', prompted further enquiries to be made and the following information was found: (a) Searches made on the ASIC database showing that [Mr Bosanac] has been a director of Activistic Holdings Pty Ltd (ACN 136 966 740) ("Activistic Holdings") since 6 May 2009; (b) Activistic Holdings is a subsidiary company of Activistic Limited (ACN 007 701 715), an ASX listed company. (c) The annual report filed with ASX for financial year ended 30 June 2016 discloses that Activistic Limited acquired Activistic Holdings and its subsidiaries on 30 April 2015. (d) On acquisition or recapitalisation, Activistic Limited issued 35,500,000 shares for cash totalling $3,905,000. 18. Regarding MyFiziq, [Mr Bosanac's] sworn affidavit of 5 November 2015, stated that 240,000 shares in MyFiziq are held by Dominion Investments and as [Mr Bosanac] is 100% shareholder of Dominion Investments, he effectively holds the said shares in MyFiziq. Further searches conducted on the ASIC database and ASX indicate that: (a) [Mr Bosanac] was appointed Executive Director and Chief Executive Officer of MyFiziq Limited (ACN 602 111 115) an ASX listed company on 17 October 2016. (b) On 31 January 2017, the team that conducted Audit forwarded to an officer who reports to me, an email alerting me to the ASX announcement in relation to [Mr Bosanac's] remuneration from MyFiziq. (c) The CEO Remuneration report lodged with ASX on 6 December 2016 advised of the key terms of [Mr Bosanac's] employment agreement including his fixed annual remuneration of $295,650 inclusive of superannuation contributions. (d) The CEO Remuneration report additionally disclosed that, based on this, and subject to shareholder approval, [Mr Bosanac] will be issued with Performance Rights on the following terms: • 1st Milestone: 2,000,000 - Upon signing first commercial transaction where the party or organisation has 5m or more active subscribers/follows. - This milestone must be achieved within 12 months of issuing this class of performance rights. • 2nd Milestone: 2,000,000 - 50,000 users or $500K annualised revenue - This milestone must be achieved within 24 months of issuing this class of performance rights. • 3rd Milestone: 2,000,000 - 100,000 users or $1m annualised revenue. - This milestone must be achieved within 36 months of issuing this class of performance rights. • 4th Milestone: 2,000,000 - 200,000 users of $2.5 [sic] annualised revenue. - This milestone must be achieved within 48 months of issuing this class of performance rights. 19. [Mr Bosanac] has personally registered for goods and services tax (GST) commencing from 23 August 2016. 20. He has lodged his September and December 2016 quarterly business activity statements indicating he is in receipt of additional income and charging GST. 21. Utilising the ATO Integrated Core Processing system, it is confirmed that [Mr Bosanac] still has not lodged his income tax returns for financial years ended 30 June 2014 to 30 June 2016 notwithstanding that he has been receiving income from consultancy and/or directorship and other sources. 22. It is also confirmed that Dominion Investments has not lodged company income tax returns for financial years ended 30 June 2005 to 30 June 2016 23. The findings outlined in paragraphs 16 to 22 above prompted debt recovery action of the Tax Liabilities and Further Tax Liabilities totalling $12,167,585.89. 24. It is noted that of the outstanding amount totalling $12,167,585.89, summary judgment on the amount of $9,344,111.89 has been obtained on 29 April 2016 and a stay of execution on this judgment was ordered on 29 April 2016. Reasons for the Decisions 25. The decisions to issue the garnishee notice on 8 February 2017, and to vary the notice on 14 February 2017 were made under section 260-5 of Schedule 1 to the TAA, which provides as follows: 260-5 Commissioner may collect amounts from third party Amount recoverable under this Subdivision (1) This Subdivision applies if any of the following amounts (the debt) is payable to the Commonwealth by an entity (the debtor) (whether or not the debt has become due and payable): (a) an amount of a *tax related liability; (b) a judgment debt for a *tax related liability; (c) costs for such a judgment debt; (d) an amount that a court has ordered the debtor to pay to the Commissioner following the debtor's conviction for an offence against a *taxation law. Commissioner may give notice to an entity (2) The Commissioner may give a written notice to an entity (the third party) under this section if the third party owes or may later owe money to the debtor. Third party regarded as owing money in these circumstances (3) The third party is taken to owe money (the available money) to the debtor if the third party: (a) is an entity by whom the money is due or accruing to the debtor; or (b) holds the money for or on account of the debtor; or (c) holds the money on account of some other entity for payment to the debtor; or (d) has authority from some other entity to pay the money to the debtor. The third party is so taken to owe the money to the debtor even if: (e) the money is not due, or is not so held, or payable under the authority, unless a condition is fulfilled; and (f) the condition has not been fulfilled. How much is payable under the notice (4) A notice under this section must: (a) require the third party to pay to the Commissioner the lesser of, or a specified amount not exceeding the lesser of: (i) the debt; or (ii) the available money; or (b) if there will be amounts of the available money from time to time-require the third party to pay to the Commissioner a specified amount, or a specified percentage, of each amount of the available money, until the debt is satisfied. When amount must be paid (5) The notice must require the third party to pay an amount under paragraph (4)(a), or each amount under paragraph (4)(b): (a) immediately after; or (b) at or within a specified time after; the amount of the available money concerned becomes an amount owing to the debtor. Debtor must be notified (6) The Commissioner must send a copy of the notice to the debtor. Setting off amounts (7) If an entity other than the third party has paid an amount to the Commissioner that satisfies all or part of the debt: (a) the Commissioner must notify the third party of that fact; and (b) any amount that the third party is required to pay under the notice is reduced by the amount so paid. 26. [Mr Bosanac] has significant liabilities that are not subject to any dispute. These liabilities amount to $2,112,421.36 (refer to paragraph 13 above). [Mr Bosanac] has not disputed and has not made any attempt to dispute his liability to this amount. However, [Mr Bosanac] has not made any payments to the Commissioner in respect of the undisputed liability. In dealing with objections and managing the associated revenue risks, the Commissioner is required to assess the risk based on [Mr Bosanac's] conduct, behaviour, and compliance with the tax law in accordance with PS LA 2011/4. 27. Review of the information available to the Commissioner prompted expeditious risk assessment and subsequent debt recovery action of the outstanding tax debts. 28. [Mr Bosanac's] failure to pay the Further Tax Liabilities which are not disputed and not subject to the stay indicates an inherent risk of his unwillingness to pay his tax debts. This places [Mr Bosanac] in a high-risk category according to the ATO's risk framework, requiring a certain course of action, in accordance with the ATO's published guidelines. His continuous non-compliance with his tax obligations - that is, failing to lodge his income tax returns and declaring incomes that he is receiving also indicate high risk. It is evident that he is receiving significant income from employment and consultancy and other sources but he is not reporting these incomes nor paying the appropriate tax on these incomes. 29. The effect of the stay of judgment was considered, with a decision made not to proceed with execution on the judgment. 30. I considered the policies and guidelines under PS LA 2011/18, PS LA 2011/4, and PS LA 2011/16, the facts and circumstances of the matter. I made my decision within the terms of section 260-5, and note that my consideration of the facts and circumstances was consistent with the policies and guidelines. 31. The garnishee notice was issued notwithstanding the matters which the court considered in making the stay order (referred to in paragraph 10(p) above), namely to allow [Mr Bosanac] to have the funds necessary to fully prosecute the Part IVC Proceedings and to prevent [Mr Bosanac's] bankruptcy. In this case, the material available to me showed that there were undisclosed assets and income sufficient for [Mr Bosanac] to proceed with the Part IVC Proceedings and to pay his living expenses. Based on that material, I determined that the issue of the garnishee to MyFiziq would not deprive [Mr Bosanac] of the funds necessary to enable him to prosecute the Part IVC Proceedings. 32. In reliance on the decision in Zumtar, I determined that the issue of the garnishee was not inconsistent with, or infringed, the freezing orders. I also determined that the issue of the garnishee was not an execution on the judgment which infringed the terms of the stay order. 33. Based on the facts set out in paragraph 24, a notice of variation was subsequently issued to MyFiziq on 14 February 2016 reducing the amount to be paid to the Commissioner from $12,167,585.89 to $2,112,421.36. 34. The reason for varying the garnishee notice was to remove any possible argument and objections by the taxpayer, which I did not consider valid arguments or objections, that the garnishee notice breached the stay order. I determined that such arguments and objections could not properly arise if the amount sought under the garnishee was amended and made referable to the amount of the undisputed Further Tax Liabilities which were not the subject of the judgment or the stay orders. In doing so, I had regard to the fact that, in the medium term at least, the amount of any expected returns to the Commissioner from MyFiziq under the garnishee would not likely exceed the undisputed Further Tax Liabilities meaning that there was no identifiable utility for the Commissioner expending time and resources responding to [Mr Bosanac's] arguments and objections that the issue of the garnishee had breached the stay order. 35. Furthermore, I considered that removing the possibility of these arguments or objections would likely have the effect of preventing any delays in the substantive tax law matter, being the Part IVC proceedings in the Federal Court, from proceeding to hearing. 36. For the reasons outlined in paragraphs 34 and 35 above, I considered that the decision to vary the garnishee was consistent with the Commissioner's obligations in subsection 15 of the Public Governance, Performance and Accountability Act 2013 to promote the proper use and management of public resources for which he is responsible and promoted the achievement of the purposes of the ATO, being the proper assessment and collection of taxes. (emphasis added)

MR BOSANAC'S SUBSTANTIVE SUBMISSIONS 38 As a distillation of his grounds of review, Mr Bosanac identifies eight broad categories of what are said to be jurisdictional error. 39 The first is that the Commissioner failed to take into account his duty to the Court that the Pt IVC appeal, which had been set down for 20 March 2017, was not 'derailed' by a garnishee notice in respect of Mr Bosanac's salary amounting to about $14,000 a month where: (a) any person would know that seeking to garnishee $14,000 a month in the context of an over $12 million contested tax matter was likely to imperil the significant and long running Pt IVC appeal proceedings. He says the inescapable consequence was that the progression to trial was in all likelihood going to be severely derailed (as it was); (b) the Commissioner has not sought to garnishee any amount within the previous 12 months; and (c) in the absence of any explanation to the contrary, the decision was seriously irrational and/or illogical. 40 Secondly, Mr Bosanac argues that the Commissioner did not consider that the decision and the variation was intercepting controlled monies as a result of the Protocol and the freezing orders, that is, the Commissioner was taking control away from the Court and putting it into its own hands. The appropriate approach, he argues, given the Commissioner's submission to the jurisdiction of the Court in the appeal, was to seek the intervention of the Court for variation of the freezing orders to allow the Commissioner to extract funds from what was 'akin to' controlled money accounts. 41 Thirdly, Mr Bosanac says the Commissioner's argument that the $2,112,421.36 sum is undisputed is 'manifestly incorrect'. That sum results from amended assessments issued on 8 June 2016 arising out of and in respect of the Commissioner's objection decision of 1 June 2016. That decision is wholly under appeal in the Pt IVC appeal. Mr Bosanac submits that the Commissioner knew that Mr Bosanac did not freshly object to the amended assessments arising out of the objection decision as this would inject a degree of circularity into a scheme which starts with an amended assessment, followed by an objection, followed by an appeal; that is, an amended assessment leads to an objection decision, which leads to an appeal. Mr Bosanac refers to s 169A(3) of the Income Tax Assessment Act 1936 (Cth) (1936 Act) which makes it clear that any opinion formed on objection is deemed to have existed at the time of the original amended assessments that were subject to objection. Mr Bosanac relies on s 170(1) and item 6(b) of the 1936 Act. 42 Fourthly, Mr Bosanac says that the Commissioner failed to take into account his knowledge that Mr Bosanac was living 'hand to mouth' and needed the income from MyFiziq to meet monthly expenditure and the Commissioner's own guidance in PS LA 2011/18 (at [108] and [112]) which provide: 108. Where the garnishee is in respect of salary or wages, the ATO will not usually seek to garnishee more than 30 cents in the dollar of the amount of salary and wages payable. However, a higher percentage may be sought where the tax debtor has another source of income or where the tax debtor's financial position indicates that it would be fair and equitable to do so. … 112. Where a tax debtor is appealing to a tribunal or court against the assessments that raised the debt, the Commissioner will consider whether a garnishee would significantly prejudice the tax debtor's rights in pursuing those appeals. (emphasis added) 43 Fifthly, Mr Bosanac says the Commissioner did not consider the will and command of the Court in Bosanac (No 2) that the parties promptly proceed to hearing in the Pt IVC appeal and that debt collection not be allowed to interfere with this. 44 Sixthly, Mr Bosanac says the Commissioner did not consider the will and command of the Court in Bosanac (No 2) that it was not just the judgment debt that was stayed, but the entirety of the debt which was the subject of the objection decision and the resulting Pt IVC appeal. 45 Seventhly, Mr Bosanac says that the Commissioner failed to consider the continuing remission of PAYG on behalf of Mr Bosanac and that Mr Bosanac was indeed paying down his debt, given the fact that he is unlikely to have any current year taxable income due to the continued accrual of General Interest Charged (GIC) and the general interest deductibility of GIC as against assessable income pursuant to s 25-5 of the Income Tax Assessment Act 1997 (Cth) (1997 Act). 46 Finally, Mr Bosanac argues that the Commissioner did not take into account the fact that the freezing orders, applied for on an ex parte basis, were only obtained from the Court on the express provision that Mr Bosanac be authorised to complete payment of 'authorised expenditure' as identified in those orders. The Commissioner failed to take into account that the express caveat to the otherwise onerous operation of the freezing orders would be hampered by a decision to garnishee Mr Bosanac's wages before they reached the bank account from which the Commissioner was aware all authorised expenses were being paid. 47 Taking all those matters into account, Mr Bosanac argues that the decision was so unreasonable, irrational and illogical that there was jurisdictional error. 48 In further submissions filed after the hearing, Mr Bosanac submitted that the debt recovery policies of the Commissioner, as understood and applied by Director AZ in his reasons and decision, had led the Commissioner into jurisdictional error because of 'this very unique case'. It was argued that Director AZ was, by policy or otherwise, wilfully blind as to the specific timing and the impending start date of the ten day Pt IVC appeal. The evidence was that the Director AZ had a general awareness of the timing of the trial without knowing the specifics. Director AZ had made the point that there should be a Chinese wall between the 'Pt IVC people' and the debt officers. Mr Bosanac submits that such an approach (as also indicated by Futuris (at [9]-[10])), overlooks the constitutional limitations which would render incontestable a taxpayer's assessment due to a debt-initiated side-wind. Mr Bosanac relies on the Full Court decision of Southgate Investment (at [77]), which does not indicate anything different from Futuris (at [9]-[10]), other than identifying that there may be circumstances where a stay on enforcement whilst Pt IVC proceedings are on foot may not always be appropriate. 49 Mr Bosanac continues to argue that his constitutional entitlement to have the Ch III Court finally determine his tax liability was not considered in making the decision or in rendering the notice or the variation. 50 Mr Bosanac relies on the fact that even without wilful blindness, Director AZ was aware that the Pt IVC appeal was 'imminent'. Of particular significance is that the Commissioner would only collect $10,000 to $15,000 per month and knew this to be the case in the context of a $12 million contested debt and a stay of judgment. In these circumstances it was 'manifestly clear that the notice and variation were seriously irrational and/or illogical'. 51 Mr Bosanac also submits that the evidence made it clear on cross-examination of Director AZ that the monies were destined for a freezing order controlled bank account from which authorised legal expenses, living expenses and potential tax payments would be made. Mr Bosanac points to the following exchange in cross-examination: So on the information before you at the time of making the decision, at least one of these MyFiziq salary payments had been made into a - an account controlled by the freezing order? - - - Correct. And at paragraph 16 of my statement, I actually do say so, at paragraph 16 subsection (b). I just .... that from memory. It just escaped me. Thank you for refreshing my memory. Okay. So you had taken into account - - -? - - - Yes. - - - that these amounts from MyFiziq - - -? - - - Mmm. - - - at paragraph 16, amounts from MyFiziq dated 15 January '16, 15 February '16, 15 July '15, 15 August '16 - 2016 - - - ? - - - Mmm. - - - 19 September 2016, those payments you were aware of - - - ? - - - Mmm. - - - which had come from MyFiziq and had been deposited into - - -? - - - Mmm. - - - the bank account which was a frozen bank account, frozen by the freezing orders? - - - Yes. So the only way the money could come out of those bank accounts, if the court orders be complied with, was under the exceptions recognised in the freezing orders? - - - Yes. So if on 8 February 2017 that garnishee had become active, do you accept that, on the evidence before you, you were intercepting money which was destined for an account frozen by the freezing orders? - - - No. Because all of the assets are frozen. Right? If you accept the bigger picture of the freezing orders as being an umbrella. So all the assets are frozen. Now, irrespective of where they go, they're frozen. I accept that. They're subject to the exceptions and limitations within the freezing order. 52 It is argued for Mr Bosanac that in intercepting controlled monies (by taking control of the monies out of the Court's hands and placing them into his own) and by interfering with the jurisdiction of the Ch III Court, which had been invoked by way of the freezing orders (where the Commissioner had subjected himself to the jurisdiction of the Court and had undertaken to allow the taxpayer to use funds to pay for any authorised expenditure), the Commissioner had committed jurisdictional error in reaching the decision and rendering the notice and its variation. 53 As to the Commissioner's contention that the additional $2.1 million liability is not contested in the Pt IVC appeal, Mr Bosanac submits that Director AZ was under a clear misapprehension of the facts in relation to the additional liability. In evidence, Director AZ expressed the view that the additional liability for $2.1 million required a fresh objection. 54 Mr Bosanac relies on Bosanac (No 2) (at [12]) where I said: I accept, consistently with the view taken in Deputy Commissioner of Taxation v Denlay [2010] QCA 217 at first instance and on appeal that, in an effective functioning sense, the capacity to pursue this complex appeal if Mr Bosanac is bankrupted would be significantly impeded and result in the requisite degree of hardship. (That is quite a different matter from my observations in Bosanac No 1 (at [75]-[79]) in the absence of any stay application to the effect that the mere possibility of bankruptcy would not constitute 'incontestability' in the legal sense there discussed.) 55 Mr Bosanac says that once it is accepted that the purpose of the stay was to allow him to diligently prosecute the Pt IVC appeal, it becomes irrational or illogical or wholly unreasonable to construe the stay to apply only to the original $9.3 million of debt and not also to the additional $2.1 million of debt. 56 This, of course, depends on whether or not the additional $2.1 million of debt is part of the Pt IVC appeal. For reasons that I will discuss below, I am not persuaded for the purpose of the present application that it is. 57 The further argument advanced by Mr Bosanac related to the fact that he was already paying tax in the form of PAYG tax. Director AZ acknowledged that he was aware PAYG tax was being taken from Mr Bosanac's salary from MyFiziq. He referred to the large interest bill which gave rise to deductions worth about $4 million in the year ended 30 June 2015 and later years. It was argued for Mr Bosanac that the result was that if his cumulative income was less than $4 million in the years ended 30 June 2015 to 30 June 2017, he would not have a current year tax liability, such that the PAYG credits being withheld would go to pay off his tax debt. Director AZ had not taken the matter into account. When it was put to Director AZ that he had no reason to believe that Mr Bosanac's income had exceeded $4 million, he said that he would not know. 58 In my view, this topic can immediately be put to one side. It does not support any ground of objection to the decision. The fact that on some speculative basis, there may be some contribution towards the very significant tax liability alleged to be owed by Mr Bosanac is not, in itself, any reason not to make the decision. 59 Mr Bosanac pressed upon the Court the United States decision of the Supreme Court in Marbury v Madison (1803) 5 US 137 (at 177), cited by the High Court for the proposition that it was emphatically the province and duty of judicial section of government 'to say what the law is'. This argument was put in response to Director AZ who appeared to express a personal view that he did not agree with the decision in Denlay. By the same token, I also accept that Denlay had been treated as being binding on the Commissioner and so the fact that he may have held a different view in relation to the approach to be taken did not in any way suggest that the Commissioner would not accept the Court's decision. 60 Mr Bosanac also complained that there was no compliance on this occasion with the standard ATO practice not to garnishee more than one-third of a salary. In this case, the decision was to garnishee 100%. Director AZ explained that the decision to garnishee 100% was because of other sources of income, of which the Commissioner had not previously been aware. Although this gave rise to much debate, in the end, the fact that there is a usual practice does not mean there can never be departure from it in an appropriate case. Capacity to exceed 30% is included within the policy. 61 Mr Bosanac concludes, in observing that jurisdictional error has been 'clearly made out', that the Court does not need to identify any particular jurisdictional error but rather conclude that there is jurisdictional error: Wei (at [29]-[35]). The decision, it is said, was wholly unreasonable, which is a catch-all type of jurisdictional error being, in the words of Lord Diplock in Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 (at 1064), cited by the majority in Li (at [71]), a decision that 'no sensible authority acting with due appreciation of its responsibilities' would have so decided, including errors such as misdirecting oneself as to the operation of the statute, taking into account irrelevant considerations or failing to take into account a relevant consideration.

CONSIDERATION 62 Director AZ was an impressive and credible witness. I accepted his testimony. His credibility was accepted by Mr Bosanac. 63 There appears to be no dispute as to the technical lawfulness of the decision. The Commissioner is entitled to give notice to a third party if a third party owes, or may later owe, money to a person who is liable to pay the Commonwealth an amount of a 'tax related liability' by virtue of s 260-5(1) and s 260-5(2) of Sch 1 of the TAA. By virtue of s 255-1 Sch 1 of the TAA, the expression 'tax related liability' means a 'pecuniary liability to the Commonwealth arising directly under a taxation law (including a liability the amount of which is not yet due and payable)'. Mr Bosanac does not contend the prescribed conditions for issuing a garnishee notice were not met, namely: (1) there is an amount of a tax related liability owed by Mr Bosanac; (2) MyFiziq owes or may later owe money to Mr Bosanac; and (3) the amount required is the lesser of the tax debt or the available money. 64 The reasons themselves make clear that the matters Mr Bosanac alleges ought to have been taken into account in making the decision, were in fact taken into account in the following way: (1) the existence of the stay (reasons (at [10(p)]); (2) the amount of the judgment in the stayed proceeding WAD 291 of 2015 (reasons (at [10(a)])); (3) the reasons for ordering the stay (reasons (at [10(q)])); (4) the ambit of the stay (reasons (at [10(s)])); (5) the ability of Mr Bosanac to meet his debts (reasons (at [10(z)])); (6) the Pt IVC appeal and Mr Bosanac's ability to pursue the Pt IVC appeal (reasons (at [10(v)] and [10(y)]); (7) the existence of the freezing order (reasons (at [10(r)]) and [15]); and (8) the contents of practice statement PS LA 2011/18 (reasons (at [10(k)])). 65 It is not apparent that there were other matters required to be taken into account, having regard to the statutory scheme. The main complaint seems to be how those matters were weighed. 66 The Commissioner rejects the contention that the decision maker was required to take into account the following matters, which the Commissioner contends (and I agree), were not relevant to the consideration of whether the variation should be issued: (1) the 'distraction' of Mr Bosanac's lawyers from preparation for the hearing on 20 March 2017; (2) whether the Court 'needed to be informed' prior to issuing the variation. The Commissioner says no such obligation could arise independently of a requirement to seek leave and is therefore not a matter the decision maker was required to take into account; and (3) MyFiziq withholding PAYG from Mr Bosanac's salary. The Commissioner says employers are obliged to pay PAYG withholding pursuant to s 12-35 of Sch 1 of the TAA. The amount of PAYG withholding is calculated according to a formula set out in Schedules imposed under s 15-25 Sch 1 of the TAA. What Mr Bosanac's likely tax obligations in the years after the income years in the Pt IVC appeal will be, and whether the PAYG withholding paid by MyFiziq exceeds that amount, is a matter of speculation. 67 There is no doubt in my view, and it does not appear to be in issue, that the the Commissioner was bound to take into account what he knew about Mr Bosanac's circumstances in deciding whether to issue the variation. It lies at the heart of Mr Bosanac's argument that the issuing of the notice in these circumstances is precisely what was firmly criticised by the Court in Denlay. 68 In my view, this is not so. That is for two reasons. The first reason is that in Denlay, the amount claimed in the garnishee notice referred to precisely the same judgment debt that was subject to an order staying execution of judgment. This is clear from [43] and [44] of his Honour's reasons, where the following appeared: 43 Judgment was entered for the Commissioner against Mr Denlay in the amount of $1,040,527.63 and against Mrs Denlay in the amount of $2,024,412.32. By the time when the s 260-5 notices were issued on 30 September 2011, their debts were, according to the recitation in those notices, $3,049,459.96 and $4,392,281.72 respectively. It is no part of the present proceedings to determine whether these specified liabilities were excessive or how the liabilities had incrementally increased in the time after entry of judgment. 44 On 14 December 2009, the Queensland Supreme Court (Ann Lyons J) made orders staying the enforcement of the judgments entered for the Commissioner against Mr and Mrs Denlay, initially until February 2010. 69 The second significant distinction, in my view, is that, in Denlay, there had been no material change in the facts since the stay judgment. This is also evident from the reasons where his Honour said (at [72]): This is not to say that the provenance of the stay of enforcement of the judgment bound the Commissioner not to issue the s 260-5 notices, only that he was bound to take the consideration into account. Of course, had the decision-maker taken into account that provenance he would, on the material before him, immediately have been confronted with an absence of anything which was not a logical consequence of what was under contemplation when the Queensland Supreme Court made that value judgment. In that sense, the Commissioner had no fresh information before him. Given this and the singular importance in this case of understanding why the stay had originally been granted, I am also prepared to conclude, exacting though the test is on the authorities which I have mentioned, that the decision to issue the notice was so unreasonable that no decision-maker, acting reasonably, could have so decided. I put matters this way because, given that the relevant consideration mentioned was not taken into account, that is reason enough in itself to quash the decision. (emphasis added) 70 It was in these circumstances that Logan J held that the same considerations that led the Court to order the stay, applied to the decision to issue the garnishee notice. 71 These factors may be contrasted with the present case as: (a) the debt pursued under the variation, if not the notice, contrary to the assertions for Mr Bosanac, is a separate debt from the judgment debt which is the subject of the stay. It now relates to further tax liabilities arising from the amended assessments issued on 8 June 2016, albeit as a consequence of the objection decision that is the subject of review in the Pt IVC appeal. This is specifically addressed in the reasons (at [13] and [26]) where Director AZ records: 13. Further tax liabilities, pursuant to the amended Notices of Assessment issued on 8 June 2016 for the years ended 30 June 2006 to 30 June 2013, together with tax shortfall penalties, shortfall interest charges and general interest charges calculated to 7 February 2017 total the sum of $2,112,421.36 (Further Tax Liabilities). The Further Tax Liabilities are not disputed and do not form part of the Part IVC Proceedings. … 26. [Mr Bosanac] has significant liabilities that are not subject to any dispute. These liabilities amount to $2,112,421.36 (refer to paragraph 13 above). [Mr Bosanac] has not disputed and has not made any attempt to dispute his liability to this amount. However, [Mr Bosanac] has not made any payments to the Commissioner in respect of the undisputed liability. In dealing with objections and managing the associated revenue risks, the Commissioner is required to assess the risk based on [Mr Bosanac's] conduct, behaviour, and compliance with the tax law in accordance with PS LA 2011/4. The additional assessments, which were issued as a result of concessions made by Mr Bosanac in the objection process concerning amounts that the Commissioner had previously allocated as being income of Ms Bosanac, were now attributed, at his request, to income of Mr Bosanac. No application has ever been made to review the decision to issue those assessments. Ms Bosanac succeeded in reducing her assessment by the amount in respect of the garnishee notice by establishing, at Mr Bosanac's request, that the income previously attributed to her was in fact Mr Bosanac's income. This amount is quite independent of the initial freezing orders and the stay application; (b) it is not correct to say, as Mr Bosanac does in his submissions, that the objection decision is wholly under appeal, if that is intended to suggest that his entire tax liability is in dispute. Even if Mr Bosanac were entirely successful on the Pt IVC appeal, he will continue to have a substantial tax liability, leaving aside any additional assessments issued on 8 June 2016. That liability is not under appeal at all; and (c) the further consideration is that, unlike Denlay, the facts known to the Commissioner through Director AZ at the time of the decision were not the same facts that were considered by the Court in ordering the stay. In particular, the decision maker took into account quite detailed information that had been obtained after the stay that indicated Mr Bosanac was in receipt of potentially significant income and had undisclosed assets not previously known to the Commissioner. Specifically, that information was set out in [16]-[20] inclusive and [28] and [31] of the reasons as set out above, including receipts of: (i) on 14 January 2016, an amount of $9,375.00 from Activistic described as 'Director Fees'; (ii) on 15 January 2016, an amount of $11,672.44 from MyFiziq Limited described as 'MYQ Salary'; (iii) on 15 February 2016, an amount of $9,375.00 from Activistic described as 'Deposit FPC'; (iv) on 15 February 2016, an amount of $11,672.44 from MyFiziq Limited described as 'MYQ Salary'; (v) on 15 July 2016, an amount of $10,000 from Activistic described as 'Director Fees'; (vi) on 15 July 2016, an amount of $12,975.02 from MyFiziq Limited described as 'MYQ Salary'; (vii) on 15 August 2016, an amount of $13,771.28 from MyFiziq Limited described as 'MYQ Salary'; (viii) on 1September 2016, an amount of $4,000 described as 'Transfer deposit 0000000 at Private Bank Sydney NSW'; (ix) on 15 September 2016, an amount of $27,500.00 described as 'RTGS High Value Payment Ref No 0369232 Open DNA Limited'; (x) on 15 September 2016, an amount of $89,760.00 described as 'RTGS High Value Payment Ref No 0369235 Open DNA Limited'; (xi) on 16 September 2016, two amounts of $11,000.00 described as 'Deposit FPC Activistic'; (xii) on 19 September 2016, an amount of $13,9 75.02 from MyFiziq Limited described as 'MYQ Salary'; and (xiii) on 21September 2016, an amount of $132,000.00 described as 'Deposit South Perth, Sth Shore CTR WA'. 72 Director AZ was certainly entitled to take into account this information so as to conclude, rightly or wrongly, but not irrationally, that the issue of the variation would not stultify the Pt IVC appeal. 73 I must accept the Commissioner's submissions that Mr Bosanac has not by any admissible evidence challenged the conclusion appearing in [31] of the reasons to the effect that Mr Bosanac has undisclosed assets and income. 74 The question for examination is the information that the decision maker had at the time of making the decision. In my view, there were quite significant differences between that information and that known by the Commissioner at the time of the stay. This is in contrast to Denlay. 75 It is, of course, possible that an inference of legal unreasonableness may be drawn where the basis for the decision is not evident or the decision is unintelligible. It is well recognised that a decision does not meet these descriptions simply because someone else may have reached a different conclusion or a court would have exercised its discretion differently. In my view, it is clear that the effect of the stay and the freezing orders were taken into account in the decision-making process as they needed to be. The existence of the stay and the freezing orders did not operate, either as a matter of law or as a matter of rationality and reasonableness in the circumstances of this decision, to prohibit the issue of the variation. 76 In a post hearing exchange of submissions and an affidavit disclosing further email exchanges, Mr Bosanac took objection to the Commissioner relying on an assertion made in evidence by Director AZ that, relevantly to his stated belief that Mr Bosanac had not disclosed the full extent of his worldwide assets, clarification had been sought but not supplied by Mr Bosanac. It was conventional to rely on this answer in submissions unless of course the answer was patently incorrect. Mr Bosanac says it was so as no such request and refusal took place prior to the decision. I do not recall this being put to Director AZ in cross-examination. I should say first that in the context of the explanation given by Director AZ, he did not say that the refusal did pre-date the decision. But rather and, without time limitation, there has been no response to requests for clarification. I accept that the relevant information is that known at the time of the decision. Despite a heated exchange in correspondence, this factual point has not been illuminated further but it seems to me that in the context of this entire significant dispute, even if Director AZ's belief was not, prior to the decision, fortified by or even based upon a failure to respond to requests for clarification, he has nonetheless given ample rational basis in his reasons for forming such a belief, even if the belief is mistaken. 77 There is, in my view, abundant information in the reasons (at [16]-[20], [28] and [31]) in relation to income and assets of Mr Bosanac which were relied upon by Director AZ. On the basis of that information, Director AZ expressed the view that the Commissioner does not believe that Mr Bosanac had disclosed all his assets. No evidence was put forward by Mr Bosanac in any admissible format as to the true facts which might render this belief incorrect. Even if the information was put forward, it was not before the decision maker at the time of making the decision. The suggestion by Mr Bosanac, both before and after the evidence, that he was living 'hand to mouth' is not supported by any evidence. Mr Bosanac has not deposed to his financial circumstances at the time the decision was made. In the absence of sound support for those assertions, the Commissioner, in the face of the factors identified in the reasons (at [16]-[20], [28] and [31]), was not bound to accept them. 78 Many of the arguments advanced for Mr Bosanac appear to challenge the fairness of the decision, but these are not factors that go to jurisdictional error. 79 In the absence of any more detailed submission from Mr Bosanac to the the contrary, I am unable to accept that the amended assessments issued on 8 June 2016 (the 2016 assessments) have been objected to and form part of the appeal in the current Pt IVC appeal, which are to be listed before another judge. As the Commissioner observes, by s 14ZL of the TAA, a taxation objection includes, relevantly, in this case, an objection by a person who is dissatisfied by an assessment. Section 14ZY provides, in effect, that the objection decision is the decision to allow the taxation objection either wholly or in part, or to disallow the objection. By s 14ZZ(1) of the TAA, a person who is dissatisfied with an objection decision may appeal to this Court. Under s 173 of the 1936 Act, an amended assessment is an assessment for all the purposes of the 1936 Act, including the right of objection if dissatisfied with an assessment under s 175A of the 1936 Act. 80 In the present situation, the facts are that after the Commissioner issued assessments to Mr Bosanac's wife, Ms Bosanac, on the basis that monies paid into jointly held accounts were properly assessable as income equally between Mr Bosanac and Ms Bosanac, Ms Bosanac objected to those assessments on the basis that those amounts were solely the applicable to her husband, Mr Bosanac. The Commissioner accepted Mr Bosanac's concession to that effect and amended Ms Bosanac's assessments accordingly. Subsequently to that, the Commissioner issued the 2016 assessments as a consequence of the reallocation of the income. The evidence in support of this is referred to by Mr Bosanac himself. Given his concessions, it is difficult to conceive of the basis on which he might have objected to the 2016 assessments under s 175A of the TAA. I accept the Commissioner's position that no such objection has been made at this stage. There has been no attempt to raise the inclusion of the additional income as an issue in the current Pt IVC appeal. It was that income, to which no objection has been raised, to which the decision (as varied) related. That additional income assessment is supplemented by the penalty and interest decision components, all of which were part of the 2016 assessments. 81 I am satisfied from the content of the reasons (at [29], [32] and [34]) and the affidavit of Director AZ (at p 28), that the effect of the stay was undoubtedly considered. Mr Bosanac does not appear to suggest otherwise. His primary submission is that, having considered the stay, the making of the decision was clearly unreasonable. 82 But the position is that the stay order I made in proceedings WAD 291 of 2015, stayed the execution of the judgment against Mr Bosanac in those proceedings. The tax liability arising under the 2016 amended assessments did not form part of the judgment comprised in the stay judgment in WAD 291 of 2015. 83 Furthermore, not only did Director AZ take into account the existence of the stay, but expressly took into account the effect of the decision in Denlay. Indeed, his cross-examination made it clear that Denlay was at the forefront of his mind when issuing a garnishee notice when a stay was in place. He was, as Mr Bosanac concedes, an extremely senior, experienced and capable officer within the ATO. I have no doubt that Director AZ did take into account Denlay, in reaching his decision. He considered the facts to be distinguishable from Denlay, the specific facts are explained above and were also explained in the Commissioner's decision. As noted, I consider that Denlay is distinguishable from this decision. 84 Despite reference by Mr Bosanac to a 'controlled fund', no arguments beyond those addressed above were raised as to a 'controlled fund'. But it should also be noted that the freezing orders themselves expressly contemplated the possibility of a garnishee notice. Paragraph 18 of annexure A to the freezing orders, dated 17 June 2015, as varied by order 3 and order 6 of the orders dated 22 October 2015, provides that nothing in the orders prevents a third party complying with the terms of a notice issued pursuant to s 260-5 of Sch 1 of the TAA. I infer that there would be good reason for the Commissioner to require such an acceptance to cater for the circumstance in which there was a belief that additional sources of income and assets may be available to the judgment debtor. That, indeed, was the basis of the making of the decision in this instance.

CONCLUSION 85 Mr Bosanac has failed to make out irrationality or any other jurisdictional error. The application must be dismissed with costs. I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.