1. Mr Nguyen lodged his application with the Administrative Appeals Tribunal (AAT) on 7 July 2024.[1] On 14 October 2024, the AAT became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth) (the Transitional Act), proceedings in the AAT that were not finalised before 14 October 2024 are to be continued and finalised by the Tribunal. Anything done in relation to the joint proceedings before 14 October 2024 is taken to have been done by the Tribunal. All references in these reasons to decisions of the AAT and the Tribunal will be collectively referred to as 'the Tribunal'.

1. Mr Nguyen was the sole director and shareholder of a company, Nailcare Pty Ltd (Nailcare) which operated three nailcare salons in and around Sydney. Nailcare was liquidated in 2017.
2. The Commissioner audited both Nailcare and Mr Nguyen personally. The latter investigation concerned Mr Nguyen's assessable income for the financial years 2014, 2015.[2] The Commissioner formed the opinion that there was fraud or evasion by or on behalf of Mr Nguyen in lodging his returns for the years ended 30 June 2014 and 2015. This was based on his belief that Mr Nguyen had unexplained and large deposits into his bank account, had systematically taken funds from Nailcare for his personal use which were not declared and had refused to provide information and records (such as company records) to the Commissioner to explain his activities. Having formed this opinion, the Commissioner was able to issue amended assessments for the financial year 2014 (which was otherwise outside the statutory amendment period).[3]
3. Mr Nguyen contended that he personally borrowed heavily from family and friends to establish his nailcare salons (the alleged loans). The alleged loans were just some of the relevant transactions in issue in respect of the Commissioner's findings which formed the basis for amended assessments issued in 2017.[4] However, Mr Nguyen has focused on them in his notice of objection and his submissions to the Tribunal in this proceeding.
4. Mr Nguyen has not been able to produce records or much in the way of corroborating evidence to substantiate either the alleged loans or the other transactions in the amended assessments. His position is that the alleged lenders are located in Vietnam and 'don't want to be involved'.[5] Mr Nguyen concedes that more than 5 years have passed since 2017 and that it may not be possible for him to obtain all the relevant evidence to support his arguments about his taxable income. He argues that the Commissioner should have engaged with the liquidator in 2017 to obtain other necessary records. There is no evidence to suggest that Mr Nguyen has personally attempted at any time to obtain these records from the liquidator.
5. Mr Nguyen has produced one statement from one alleged lender (in both Vietnamese and English).[6] The amount of that transaction was $250,000, leaving (on Mr Nguyen's case) about $500,000 in alleged loans uncorroborated. Mr Nguyen also provided some short written contentions to the Commissioner about the various transactions which are in dispute. I infer that in the absence of corroborating records, Mr Nguyen presently relies on his own evidence and submissions to explain all these transactions.
6. The Commissioner argues that mere assertions by Mr Nguyen about the loans and other transactions are insufficient to substantiate them. He contends that Mr Nguyen neither has formal records or evidence of the alleged loans.[7] He has not directly addressed, the one statement Mr Nguyen has provided but has acknowledged in his Statement of Facts, Issues and Contentions (SFIC) that in the current proceedings, (Mr Nguyen) need not do more than indicate the factual assertions in which he intends to rely on and that a trial on the merits of the asserted facts is not appropriate for the purposes of assessing whether to extend time for a notice of objection.[8]

1. It has been necessary to examine in detail the steps taken by Mr Nguyen and the Commissioner since the amended assessments issued, given the parties' various allegations about what occurred and the substantial time which has passed. A chronology of the key events is set out below.

2017 - the period between the issue of the Position Paper to the Amended Assessments

1. The Commissioner having audited Mr Nguyen, issued a Position Paper on the audit on 28 July 2017 and sought a response from Mr Nguyen within 1 month. When the Commissioner did not receive any submissions from Mr Nguyen, he finalised his audit reasons and issued notices of assessment for the financial years 2014 and 2015 on 17 October 2017.
2. I am satisfied on the evidence that Mr Nguyen was aware that the Position Paper had issued because he engaged with the Australian Taxation Office (ATO) about it and subsequently referred the Commissioner to the liquidator for Nailcare for future correspondence.[9] Mr Nguyen contends he received bad advice from his tax agent not to further engage with the ATO about the Position Paper and his own tax affairs once the liquidation of Nailcare commenced. Despite this, he was afforded an opportunity to comment and to provide further information to the Commissioner before the audit reasons and the amended assessments issued.
3. Upon receipt of the audit reasons, Mr Nguyen's tax agent informed the Commissioner that they had discontinued their services to Mr Nguyen due to lack of communication.[10] The evidence shows that the Commissioner then wrote to Mr Nguyen on the same day advising of the outcome of the audit and attaching his reasons for decision and the relevant documents were also sent to his postal address.[11] The Commissioner also led evidence to show that Nr Nguyen's mobile number and email and postal addresses have not changed since August 2019 and that following the audit, the Australian Taxation Office attempted to contact Mr Nguyen on multiple occasions but he never responded.[12]
4. Given this evidence, I cannot accept as correct, Mr Nguyen's contention that he was not aware until around April 2019 that the amended assessments issued in late 2017. There are 2 additional reasons for this finding. First, Mr Nguyen was already on notice from the Position Paper that amended assessments would issue from the following message on the cover page:

We will consider your response and any information that becomes available to us in our final position.

We will send you your assessments based on the information we have now, if:

› we don't hear from you by 28 August 2017

› any new information you give us doesn't change our position.

1. Second, the evidence shows that Mr Nguyen directly engaged with the ATO about his tax debts on 12 December 2017 (after the amended assessments issued) and advised that he planned to speak to his tax agent about his tax debt overdue lodgements. He also sought and the Commissioner granted an extension of time for that to occur.[13]

2019 - The debt recovery proceedings commence and the 1st and 2nd objections are lodged

1. Almost a year passed. Then in November 2018, the Commissioner issued a garnishee notice to the Commonwealth Bank and notified Mr Nguyen.[14] The evidence suggests that there was not much if any further action by Mr Nguyen in response.
2. Then, on 3 May 2019 (6 months later), Mr Nguyen was served with a Statement of Claim filed by the Deputy Commissioner of Taxation seeking recovery of his tax debt.[15] On 9 May 2019, Mr Nguyen filed a defence arguing that monies deposited into his accounts during the financial years 2013 to 2015 were personal loans from relatives in Vietnam (the Defence).[16] The Statement of Claim was heard 6 June 2019.
3. On 12 August 2019, Mr Nguyen tried (for the first time) to lodge a notice of objection to his statement of account (the August 2019 objection), claiming the statement of account was wrong, that the amounts deposited into his personal bank accounts were personal loans and that he could not substantiate the loans because they were from persons in Vietnam who did not wish to become involved in his tax affairs.
4. Mr Nguyen said it was only when he spoke to the Commissioner's legal representative after being served with the Statement of Claim that he realised he could lodge an objection. Having received this 'advice', he said he decided not to defend the Statement of Claim and instead pursued the objection.[17]
5. On 5 September 2019, the Commissioner obtained consent judgment in the Statement of Claim in the sum of $767,024.15.[18] It seems that in return for the consent judgment, the Commissioner undertook not to enforce judgment for 3 months while considering the August 2019 objection.
6. Almost 3 months passed. Then, between 4 December 2019 and 6 March 2020, the Commissioner attempted on 6 occasions to contact Mr Nguyen by email, by phone and by letter to discuss the August 2019 objection. On 13 February 2020, the Commissioner formally advised Mr Nguyen that the August 2019 objection was not valid 'because the law does not provide a right to be able to object to a statement of account.'
7. Mr Nguyen (with the benefit of hindsight) questions why the Commissioner and his legal representatives did not identify that the August 2019 objection as invalid as soon as it was lodged and prior to negotiating with him to secure the consent judgment on the Statement of Claim.
8. That may be something Mr Nguyen should investigate independently but it does not explain why Mr Nguyen effectively rested on his rights for 1 and a half years following the issue of the amended assessments. Nor does it explain why he did not seek professional advice about the amended assessments and his rights when they issued, particularly when the evidence shows he told the ATO in late 2017 that this is what he intended to do.
9. Mr Nguyen also did not explain why he did not proceed to lodge a second notice of objection in February 2020. I cannot accept Mr Nguyen was by this stage, unaware of the seriousness of his situation and the need to continue to take steps to protect his interests, given the legal action which had occurred in 2019.

2022 - Threats of bankruptcy, the attempted payment arrangement and the second objection

1. It appears that more than 2 years then passed without a further objection being lodged.
2. On 13 September 2022, the Commissioner issued a bankruptcy notice against Mr Nguyen.[19] Mr Nguyen received the bankruptcy notice on 2 October 2022 and called the ATO on 10 October 2022 to discuss it.[20] Mr Nguyen told the Commissioner that he still contested the amended assessments and would speak to his tax agent about them. He was advised by an ATO officer to file a notice of objection if he did not agree with the amended assessments.[21]
3. On 17 October 2022, Mr Nguyen telephoned the ATO again to discuss a payment arrangement and proposed a full upfront payment of $100,000 in return for balance of the debt being wiped. He was advised to lodge an application for release. He lodged that application the same day.[22]
4. Another 3 months passed. On 10 January 2023, the Commissioner refused Mr Nguyen's application for release. Mr Nguyen was notified by letter.[23]
5. By 10 March 2023, Mr Nguyen had engaged lawyers who lodged his second objection (the March 2023 objection), against the decision not to release him from his tax debt.[24]
6. 5 months passed. Then, on 23 August 2023, Mr Nguyen's lawyers approached the Commissioner and advised that Mr Nguyen was withdrawing the March 2023 objection so that an offer of compromise of the tax debt could be lodged.[25] The lawyers had been advised by an ATO officer that a further objection could be lodged if the offer of compromise were unsuccessful and that Mr Nguyen could seek an extension of time.[26] Mr Nguyen lodged the offer of compromise on 24 September 2023.[27]
7. On 9 November 2023, the Commissioner rejected Mr Nguyen's offer of compromise.[28]

1. 2 more months passed. Then, on 19 January 2024, Mr Nguyen lodged the current objection which was dated 16 January 2024 (the January 2024 objection) objecting to the amended assessments issued for the financial years 2014 and 2015.
2. Mr Nguyen requested that the Commissioner agree to consider the January 2024 objection as if lodged within time and submitted the additional information about the alleged loans, including the statement in Vietnamese and English about one of the alleged loans.
3. The Commissioner then took 6 months to consider Mr Nguyen's extension request. On 14 June 2024, the Commissioner refused the extension request (the review decision). He relevantly stated:

While you have asserted that the amounts included in your assessable income were loan advances, this explanation does not address or rebut the Commissioner's reasons for including all of the amounts in your assessable income, in particular:

1. withdrawals from the Nailcare accounts,
2. private expenditure met from Nailcare accounts,
3. transfers of funds from Nailcare accounts to your own accounts.

We consider that your objection does not disclose an arguable case for the objections being allowed in part or in full. [emphasis added]

1. In refusing the extension request, the Commissioner also relied upon:
   1. the period of delay (6 years having passed since the amended assessments issued);
   2. prejudice in both the Commissioner's ability to consider any objection given the period of delay; and
   3. prejudice to the Commissioner's operations given what he saw as Mr Nguyen's systematic attempts to prevent his prior attempts to manage the tax debt, including the concluded Court proceedings and the bankruptcy notice.

1. Section 14ZW of the TAA sets down the timeframes in which a person must lodge an objection to a tax assessment with the Commissioner of Taxation.[29]
2. Subsections 14ZW(2) and (3) of the TAA provide for the process of request of extension of time for lodgement of an objection:

(2) If the period within which an objection by a person is required to be lodged has passed, the person may nevertheless lodge the objection with the Commissioner together with a written request asking the Commissioner to deal with the objection as if it had been lodged within that period.

(3) The request must state fully and in detail the circumstances concerning, and the reasons for, the person's failure to lodge the objection with the Commissioner within the required period.

1. Upon receipt of a request for extension of time for an objection (the request), the Commissioner must consider and decide whether to agree to or to refuse the request (s 14ZX of the TAA). However, he has a discretion whether to agree to the request (s 14ZX(3) of the TAA).
2. Should the Commissioner refuse the request, the person may apply to the Tribunal for review of the Commissioner's extension of time refusal (s 14ZX(4) of the TAA).[30]

1. Section 14ZX of the TAA is an ameliorating provision which is designed to avoid injustice.[31] Consequently, in considering whether to grant the request for an objection to be treated as though made within time, the Tribunal should be guided by what justice in each particular case requires.
2. In considering whether to exercise the discretion to grant a request made under s 14ZW of the TAA, Hill J in Brown v the Commissioner of Taxation [1999] FCA 563 at [58]- [59] (Brown)[32] emphasised the importance of consideration of the facts of each case[33] but identified some common relevant considerations for a decision maker:

In summary when a taxpayer seeks an extension of time in which to lodge an objection the following matters will require consideration:

1. The taxpayer's explanation for the delay in lodging an objection against the assessment within the time stipulated by Parliament.

1. Whether the objection is one which, on its face, is frivolous or which in law must fail, or, to the extent that this is indeed a different test, is one in which the taxpayer has no arguable case. This matter will be considered by reference to the objection itself and such other material as the taxpayer puts before the Commissioner. It will seldom, if ever, require the decision maker to consider matters such as credit or endeavour to reconcile the evidence which the taxpayer choses to rely upon with other factual material in the possession of the Commissioner. No doubt the stronger the case the more likely that the discretion would be exercised in favour of a taxpayer even where the explanation for delay was thought not to be strong. Whether the converse is also the case need not here be considered.

1. Such other matters as the circumstances of the particular case make relevant, including, if prejudice to the Commissioner be asserted, such prejudice as is shown to arise.

What is required is the balancing of the delay; the explanation for it; the circumstances which gave rise to it and such prejudice if any as may be shown to exist to the Commissioner against the prejudice which may arise to a taxpayer who has by reason of the failure to object in time lost the right to a review of the assessment. In this balancing process the Commissioner or the Tribunal on a review will be guided by what the justice of the case requires. The balancing process should be approached on the basis that while Parliament has stipulated a time in which objections are required to be lodged it has entrusted to the Commissioner a power to extend that time in appropriate circumstances. The decision maker should not lose sight of the fact that s14ZW is an ameliorating provision designed to avoid injustice.

1. The Commissioner referred the Tribunal to the Federal Court's decision in Drake (No 2) v Minister for Immigration and Ethnic Affairs [1979] 2 ALD 634 (Drake No 2) and invited the Tribunal to consider the factors listed at paragraph 4 of PS LA 2003/7 in determining whether to exercise the discretion on Mr Nguyen's application.
2. The Tribunal recently referred to PS LA 2003/7 in another Tribunal proceeding as exhibiting 'the laudable objective of seeking consistency in decision-making'.[34] The Tribunal, in undertaking independent review, should be mindful of, but is not bound to follow an agency's policy, and must be cautious where there is concern that the policy may not lead to the correct result in a particular proceeding or may not wholly encompass the relevant statutory test.[35] Ultimately, the Tribunal must demonstrate that it has independently turned its mind to what is the correct or preferable decision based on the relevant legislative test and the material which is before the Tribunal.[36]
3. I note the wording in PS LA 2003/7. Relevantly it:
   1. does not appear to instruct a decision maker to balance the question of any potential prejudice to the taxpayer against that which may arise for the taxpayer if denied their right to object;[37] and
   2. advises the decision maker that they should not 'undertake a full-scale investigation of the merits of the issue'. I question whether that wording correctly represents the guidance in Brown.
4. Given those concerns, in reaching my decision on this application, I have preferred to rely on the words of the statute and have been informed by relevant authorities and in particular, Brown.

1. In Brown, Hill J emphasised the importance of consideration of any explanation of lack of explanation by a taxpayer for delay in lodging their objection notice while warning about the need to consider and weigh this factor against other relevant factors:[38]

In the context of an application to extend the time for lodging an objection it is clear enough that the circumstances which resulted in the objection not being lodged in time require consideration. Indeed the taxpayer's explanation for the delay, while not the sole factor, must clearly be an important factor. If there were no explanation it would be unusual for an extension of time to be granted. In some cases the explanation for the delay may be so compelling that it will almost require an extension of time to be granted. For example, where the assessment did not reach the taxpayer at all within the 60 days from being put into the post it would be rare for an extension of time not to be granted. Even where there is no particular explanation given for the delay, other than the belief that an objection would be futile, but subsequent to the expiration of time Court interpretations changed so that the possibility of the objection being successful arose, an extension of time would likely be granted.

While, therefore, the explanation for delay in lodging the objection will be an important factor, it is necessary to bear in mind that the decision maker should take into account all the circumstances of the particular case against the background that Parliament has enacted a procedure to permit extensions of time being granted. An extension should be granted where the justice of the case requires, cf Wedesweiller v Cole [1983] FCA 94; (1983) 47 ALR 528 at 531 per Sheppard J, cited with approval in the present context by Sweeney J in Fardon v Federal Commissioner of Taxation (1992) 92 ATC 4339 at 4348. Neither the Commissioner nor the Tribunal on review should approach the question of determining whether an extension of time should be granted on the basis that it will only be in an exceptional case that an extension is granted.

1. Hill J identified in Brown, a number of important questions to be asked and answered by the decision maker when considering and determining whether the delay in lodgement of the objection is excessive:[39]
   1. What are the circumstances around the delay? How did the applicant explain the basis for the delay?
   2. What is the length of time in the context of the need to ensure justice is done?
   3. Did the applicant 'rest on his rights' so as to lead the Commissioner to believe the dispute was concluded? [emphasis added]
   4. Will the delay impact the ability of either party to proceed, noting that the taxpayer is more likely to be adversely impacted here in terms of evidence, records, and witnesses?
2. Hill J also observed that the question of delay requires careful consideration in each case of the timeline which led to the lodgement of the out of time objection. In the recent decision of PTBS and Commissioner of Taxation (Practice and Procedure) [2025] ARTA 1262 (PTBS), the Tribunal analysed (with reference to other cases), how the Tribunal had grappled with the concept of delay against the merits of each particular case, emphasising that the process requires analysis of the attending delay in the context of all the relevant facts of each case.[40] A compelling example of this can be found in the Tribunal's reasons in Esso Australia Resources Pty Ltd v Commissioner of Taxation [2007] AATA 1776 to which the Tribunal referred in its reasons in PTBS.
3. Whether an applicant's delay resulted from them having 'rested on their rights' may involve particular consideration of whether a taxpayer only asserted or reasserted his rights when the Commissioner proceeds to takes steps to recover the tax owing.[41] In this context, it is insufficient to merely calculate the period of delay. What is required is consideration of whether the applicant's inactivity was such that the Commissioner was entitled to assume that the dispute was concluded.[42]
4. Another related consideration is any associated prejudice which arises from the delay for either or both parties in terms of their ability to locate relevant evidence and/or documents.[43]

1. In this case the timeline is long. It reveals a substantial period of inactivity by Mr Nguyen immediately following receipt of the amended assessments.
2. I find that between October 2017 and when Mr Nguyen was served with the statement of claim in 2019, Mr Nguyen failed to take action to preserve his position. I am satisfied on the evidence that during this period, Mr Nguyen was aware of, or should have apprehended that the audit decision and amended assessments issued in October 2017. This was a key period of time when he should have taken steps.
3. Mr Nguyen questions the correctness and quality of the advice he received from his tax agent in 2017 and also complains of the delay in his appreciating that he could lodge an objection. I cannot accept these factors adequately explain or answer his failure to act during this period. Mr Nguyen is not a qualified accountant or lawyer, but the timeline discloses that he had access to professional advice from his tax agent from July 2017 and he also told the Commissioner in December 2017 that he proposed to seek further advice. Despite this he does not seem to have engaged lawyers until early 2023. This was despite the court action taken by the Commissioner in 2019 and his being told in early 2020 that his August 2019 objection was invalid.
4. Further, even while Mr Nguyen was legally represented at a later time, he decided to withdraw his second objection so he could make an offer to settle his tax debt. Even when this offer was rejected, Mr Nguyen did not take immediately take further steps to lodge another notice of objection (waiting for more than 2 months before doing so).
5. Mr Nguyen alleges that the Commissioner's conduct later in the timeline, including his substantial delay in considering the August 2019 objection and his further delay in deciding whether to treat the January 2024 objection as being lodged within time are less than desirable. I do not deny these events occurred but I am not satisfied they can explain or ameliorate the substantial and unexplained inactivity by Mr Nguyen which has led to the substantial delay which has occurred since late 2017.

1. Next, I have considered the related question of whether Mr Nguyen could be said to have rested on his rights at any point, such as to cause the Commissioner to believe that the dispute was over.
2. The timeline discloses and I am satisfied that from at least December 2017 until May 2019 when the statement of claim was served, Mr Nguyen did not take substantial action or lodge an objection. This includes the period when the garnishee notice issued, allowing the Commissioner to recover funds.
3. I am satisfied the Commissioner would have had reasonable cause to assume during this period that Mr Nguyen did not intend to dispute the tax debt. Consistent with this the Commissioner proceeded to file and serve the Statement of Claim.
4. However, once the defence to the Statement of Claim was filed, the Commissioner was on notice that Mr Nguyen intended to mount a challenge to the debt. That is until Mr Nguyen agreed (albeit in strange circumstances) to consent to judgment and the August 2019 objection was declared invalid in early 2020 (also in unusual circumstances). I am satisfied at this point, the Commissioner may have assumed the dispute was at an end. I note he then waited before issuing a bankruptcy notice to Mr Nguyen in September 2022 - allowing further time for Mr Nguyen to take action.
5. It was only after receiving the bankruptcy notice that Mr Nguyen recommenced his activities. By 10 March 2023, the second objection was lodged by Mr Nguyen's lawyers. Throughout this period, the Commissioner would have apprehended (once again) that a challenge was afoot.
6. Then, on 25 August 2023 when Mr Nguyen (supported by legal advice) advised he was withdrawing his second objection to pursue an offer of compromise. The Commissioner may at this point have dared to hope that a further challenge might not be mounted but I am not satisfied he could have assumed the matter was resolved.
7. The timeline reads like a rollercoaster ride but I am satisfied that while Mr Nguyen has at times engaged in some vigorous activity, there were also periods where he rested on his rights that such an extent that the Commissioner was entitled to believe that the dispute was at an end. Further, the timeline reveals Mr Nguyen's periods of activity tended to follow recovery actions taken by the Commissioner.
8. Ultimately, I am satisfied that the Commissioner would have had reason to assume at particular times prior to the lodgement of the January 2024 objection, that the dispute was at an end.

1. My findings about the delay and the question of whether Mr Nguyen rested on his rights must be weighed against other relevant factors and most significantly my consideration of whether Mr Nguyen has an arguable case.
2. Hill J, in Brown refers to a list of principles identified by Wilcox J in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment [1984] FCA 176; (1984) 3 FCR 344 (a non-tax matter) and adopted by Von Doussa J in Windshuttle v Deputy Federal Commissioner of Taxation (1993) 93 ATC 4992, but addresses them in the particular context of a tax dispute,[44] and bearing in mind that a request for extension of time in s 14ZW of the TAA arises at the objection stage:

A party seeking to have the time for objection extended is not required in applying to the Tribunal for a review of an adverse decision to undergo at that stage a trial on the merits. There is little doubt that a hearing on the merits would require a close examination of all the circumstances in which the transfer to Mr Brown occurred. For the Tribunal to deal with an application for an extension of time as if it involved a trial on the merits would (unless that course was consented to by the Applicant) involve a denial of natural justice. It was not suggested that this course was consented to by Mr Brown. Had it been, then no doubt efforts would have been made to have Mr Ray present and perhaps also Mr Dickson. As it was they were not called.

It will be a rare case (unless the parties consent) that the Tribunal in considering whether the objection sought to be lodged has merit will proceed to consider for itself the facts. This is particularly so where the issue is predominantly one which involves an examination of all the circumstances of a particular transaction. No doubt an extension of time would not be granted where the facts claimed to exist do not lead to a conclusion that the assessment is excessive. An extension would likewise, perhaps, not be granted where, as von Doussa J observed, the outcome of the objection depended upon a chronology of facts and there is an issue between the parties as to whether the chronology is incorrect in some particular.

But where, as in the present case, the facts contended for by an applicant in his objection as supplemented by statements lodged with the Tribunal in connection with the application are such that it would be open to a Tribunal to find for the Applicant (and it was conceded by counsel for the Commissioner before me that this is the case), it involves legal error for the Tribunal to embark upon a trial of the merits and conclude as a result of that trial that if allowed to object out of time the objection would be futile because the taxpayer must lose. [emphasis added]

1. Hill J warns in Brown of the danger arising when a decision maker embarks upon examination of the merits of a taxpayer's case by applying standards such as would be relevant to external review of a tax objection decision. He observes the usual bar is necessarily set lower in the context of an application to lodge an objection notice as opposed to external review of an objection decision:[45]

As von Doussa J said in Windshuttle the applicant need generally do no more than indicate the factual assertions which he makes to demonstrate whether there is an arguable case. Assuming that those factual assertions could lead to a conclusion that there is, in law, a case to be made, that is usually the end of the matter. The question of what the true facts are and associated questions of credibility will usually be left to the trial.

1. Hill J also warns in Brown that assessment of the various factors relevant to whether an extension should be granted cannot be approached by scoring the various factors in a linear fashion. For example, the fact that an applicant has a more (rather than a less) compelling case is a factor which may potentially be weighed by a decision maker against any attending delay and/or any prejudice to a party/ies.

1. The Commissioner accepts that Brown provides correct guidance on the approach to this question. He contends that Mr Nguyen does not have an arguable case but then submits:
   1. Mr Nguyen will not be in an arguable position unless he can establish what his taxable income is;[46]
   2. by asserting that particular transactions took the form of loans without corroborating evidence, Mr Nguyen cannot establish no more than the fact that he was a debtor.[47] He says a translated statement is not sufficient to corroborate his claim;[48] and
   3. Mr Nguyen has not addressed or rebutted all the Commissioner's reasons and in particular:
      1. withdrawals from the Nailcare accounts;
      2. private expenditure met from Nailcare accounts; and
      3. transfers of funds from Nailcare accounts to his own accounts.
2. My concern with these submissions is that they invite the Tribunal to descend into consideration of the merits of Mr Nguyen's case. That is impermissible.
3. The first submission is that Mr Nguyen has failed to demonstrate he has an arguable case because he has not met the second limb of the test in s 14ZZK TAA. I do not accept that Mr Nguyen is required to satisfy the test in s 14ZZK for the purpose of demonstrating he has an arguable case for the purposes of s 14W of the TAA which arises at objection, not on external review.
4. Similarly, the second submission does not accord with words in [24] and [28] of Brown. Relevantly, Mr Nguyen is not seeking an extension of time to apply for review of an objection decision. He is seeking to lodge a tax objection.[49] His case and evidence must be considered in that light. As Hill J observed in Brown, the bar is necessarily set low in these cases.
5. Further, the suggestion that Mr Nguyen must provide formal records to corroborate transactions is based on an assumption which is inconsistent with the observations made by Steward J in Commissioner of Taxation v Cassaniti [2018] FCAFC 212 at [88]. The Commissioner cannot assume that a taxpayer is always required to call all material witnesses and/or to produce all material documents which support her or his or its position or to provide corroborative records to succeed on review. The Tribunal (or the Court) may accept a taxpayer's evidence as truthful and credible. It is possible that the Commissioner may also choose to do so in a particular case.

No reasonable prospects or not 'reasonably or sufficiently' arguable

1. The Commissioner next submits that the term 'no arguable case' should be read by the Tribunal as equivalent to 'no reasonable prospects of success'. In making this submission, the Commissioner has relied in submissions on Jonshagen and Commissioner of Taxation [2018] AATA 1338 (Jonshagen) and Khan v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 459 (Khan), a non-tax decision on an application for extension of time for judicial review.
2. For the reasons which follow, I do not accept this submission as correct.
3. The terms 'no reasonable prospect of success' and 'reasonable prospect of success' are commonly used by members of the legal profession when advising a client whether they are likely be successful in legal proceedings. 'Success' in this context may refer to a range of potential outcomes, including, where compensation or damages are sought, the likelihood that they would be awarded. It usually also requires assessment of evidence, including the likely strength or credit of witnesses. Relevantly, a lawyer may advise their client that a case is less than 'reasonable' and yet may still be arguable, including on appeal.[50]
4. The term 'no reasonable prospect of success' is defined in s 31A of the Federal Court Act 1976 (Cth) which deals with summary judgment. In this context, the term is defined as covering a much broader scope of cases than one where a case is hopeless or bound to fail.[51]
5. Jonshagen was appealed to the Federal Court by Mr Jonshagen.[52] On that appeal, Siopsis J uses both the terms 'reasonable prospects' and arguable case' interchangeably but these terms must be read in context of the grounds of the appeal and his findings. First, Siopsis J relevantly found (at [90]) that even if Mr Jonshagen had an arguable case, he had entered into a binding settlement deed with the Commissioner which prevented him from subsequently lodging an objection.[53] In the alternate, Siopsis J also rejected the claim that Mr Jonshagen's grounds of objection lacked prospects for success because tax authorities make it clear that Mr Jonshagen could not seek to attack the lawfulness of the amended assessments by pointing to procedural errors during the audit.[54]
6. The other authority referred to by the Commissioner, (Khan) did not concern a tax dispute. Even so, Judge Champion was careful to distinguish there between a weak case which nonetheless had some merit and a hopeless case.[55]
7. In Brown, Hill J made clear that the threshold for an arguable case was low:[56]

No doubt if the objection on the face of it is one which is frivolous or bound to fail as a matter of law it would be a futility to permit an extension of time to enable it to be considered. But this points to quite a low threshold. What is involved is whether the objection on its face discloses a case which is arguable, not whether having regard to other matters, including evidence which may not even be known to the taxpayer at the time of making the application, the case is one that the taxpayer will or will probably lose.

1. Hill J's guidance suggests a much lower bar than reasonable prospects and that the term 'arguable' means an application is not frivolous or vexatious or generally or likely hopeless (on its face).
2. The Commissioner did not provide authority to support his alternate contention that the term 'reasonably or sufficiently' arguable was the correct test to be applied. The Tribunal acknowledges but is not persuaded that the Tribunal's decision in Holm and Commissioner of Taxation [2023] AATA 3545 has application to the facts of this particular case.

1. Mr Nguyen submits that:[57]
   1. his case is not manifestly hopeless or frivolous;
   2. any factual disputes be considered cautiously at the extension stage and left for substantive hearing where credibility and oral evidence may be tested;
   3. the Commissioner's reliance on lack of documentary evidence as determinative is premature at this stage and ought to be tested at hearing;
   4. the Commissioner's contention that the absence of evidence of loan agreements precludes any review, ignores the well-established principle that the Tribunal may consider oral evidence, explanations, and cultural contexts, and that the lack of formal documentation does not automatically equate to an absence of merit;
   5. the notice of objection seeks to challenge the correctness of the Commissioner's findings about the alleged loans and Mr Nguyen has produced one statement from an alleged lender, while acknowledging that it is possible but not likely that he could obtain further statements; and
   6. Mr Nguyen cannot presently provide other corroborating records (such as loan agreements) for these outstanding alleged personal loans. However, he has provided very basis explanations for these transactions and his evidence would need to be tested.
2. I acknowledge each of these submissions. Mr Nguyen, on his own submissions appears to have a very weak case. It may be that he ultimately cannot improve on his current evidence and ultimately has poor prospects but neither of these factors mean his case is frivolous.
3. It follows that I do not accept that Mr Nguyen case is unarguable.

1. Any prejudice to the parties is further element which may be taken into account by the Tribunal.
2. In practical terms, that both parties may be able to establish prejudice. As Hill J observed in Brown, the effluxion of time may often impact a taxpayer in this regard to a greater extent than the Commissioner in terms of the production of evidence, given they bear the onus of proof under s 14ZZK of the TAA on external review and if not able to object, will be denied the opportunity to challenge the amended assessment/s. In other words, a critical approach is required to determine whether and to what extent prejudice will attend a decision to grant or refuse the application for either or both parties, based on the facts of the particular case.[58]
3. The Commissioner argues that the issues in this dispute date back to July 2013 (12 years ago). He contends that the effluxion of time will hamper his ability to test any claims on objection because witnesses' memories will have faded, documents may no longer be available and avenues of enquiry may have dried up.[59]
4. Mr Nguyen also concedes it could be difficult for him to obtain records and other evidence to support his objection. To date, he has been able to produce just one witness statement. He told the Tribunal that it was possible, but not likely, anyone else would agree to give evidence. There is also no evidence that he has made attempts to obtain other corroborating records (for example from his former accountant or the liquidator). That said, I cannot be certain whether the Commissioner attempted to obtain records from the liquidator and/or Mr Nguyen's tax agent.[60]
5. Separately, Mr Nguyen argues that he will suffer extreme prejudice if his application is refused as he will most likely be made bankrupt.

Evaluation of the potential prejudice to the parties

1. I am satisfied on the facts presented that the effluxion of time would make the obtaining of evidence and corroborating records difficult for both parties. I acknowledge that Mr Nguyen has recently managed to obtain some fresh evidence but note that he assesses his chances of obtaining any further evidence as 'not likely'.
2. In the circumstances, I find that both parties would face difficulties in obtaining more evidence or corroborating evidence should Mr Nguyen's application be granted. However, I cannot say with certainty that this would render any further investigation impossible.
3. I acknowledge the Commissioner has engaged in recovery activity and there would be expense associated with this activity which would be thrown away if the application were granted.
4. On that basis, I find that there is likely to be some prejudice to the Commissioner if the application were granted.
5. I also find there would be countervailing and more substantial prejudice to Mr Nguyen if the application were refused.

1. There were three other matters raised by Mr Nguyen in respect of his application. The first is his contention that the August 2019 objection was lodged within the statutory timeframe based on his understanding that it could be lodged any time up to 4 years after the date of service of the amended assessment. I cannot accept this for 2 reasons. First, the wording of s 14ZW of the TAA. Instead, I accept as correct, the Commissioner's submission that both the August 2019 objection and the January 2024 objection were lodged out of time.
2. Second, I accept that the August 2019 objection was not valid because it sought to challenge Mr Nguyen's statement of account. Section 14ZL of the TAA provides for objection where a taxpayer is relevantly dissatisfied with 'an assessment, determination, notice or decision, or with a failure to make a private ruling'.
3. The next issue concerns the Commissioner's fraud or evasion finding. Mr Nguyen's January 2024 objection does not include any ground concerning the fraud or evasion finding which supports the amended assessments which issued for the 2014 year. Nonetheless he now seeks to argue that this finding was incorrect. He has not provided reasons for this contention but briefly raised issue with the fraud or evasion finding in his Statement of Facts, Issues and Contentions (SFIC).[61]
4. Had Mr Nguyen lodged his notice of objection within time, or if this application were successful, I would accept that his right to amend his grounds to include a ground addressing the fraud or evasion issue would have been an easier matter.[62] That is not the case here where he is seeking to argue that the January 2024 objection should be treated as having been lodged in time.
5. It is on this basis that the Commissioner contends and I am forced to agree that the issue is not presently in contention.
6. Even if this view were incorrect, Mr Nguyen has neither foreshadowed amendment to or sought to amend his notice of objection and he has not provided any reason, any evidence or to otherwise explained his assertion that the fraud or evasion finding is incorrect or without basis.
7. A ground of objection is not required to be expressed in an overly technical or detailed way, but it must explain sufficiently the basis for a taxpayer's claim that the Commissioner's decision is wrong.[63] In this instance, where Mr Nguyen is required to demonstrate he has an arguable case, more is required from Mr Nguyen than to simply state in his SFIC without further elaboration that 'there was no evidence of fraud or evasion. It was just an opinion which led [sic] the bigger problems until today.'[64]
8. With these points in mind, I have not attached significant weight to Mr Nguyen's allegation that the Commissioner's fraud or evasion finding is incorrect.
9. The final issue concerns Mr Nguyen's contention that he was not given a proper opportunity to respond about his personal tax affairs in 2017 because the Position Paper jointly related to Nailcare and his personal tax issues. I don't accept this proposition as correct and therefore relevant to my determination of this application because:
   1. The Position Paper explains that it addresses two tax issues;[65]
   2. Mr Nguyen engaged with the ATO about responding to the Position Paper before it was finalised; and
   3. On 15 September 2017 Mr Nguyen was warned by the ATO that the audit reasons for decision would be finalised if he did not respond to the Commissioner. He failed to do so.

Evaluation of the factors relevant to the application

1. Bearing in mind the guidance in Brown,[66] the Tribunal is required to weigh the competing factors, bearing in mind the need to avoid injustice. That process should not be conducted in a binary fashion. This is not a case where a simple scoreboard can be used to reach a result.
2. Given I am satisfied that Mr Nguyen has a very weak but arguable case, I am required to weigh very carefully the countervailing factors. They must be significant to outweigh this significant factor because to refuse I accept that Mr Nguyen's application would lead to a significant and negative outcome for him.
3. In this case, I some sympathy for Mr Nguyen, particularly given the quality of his submissions on legal matters. However, I have been unable to look past the lengthy and unexplained delays and the pattern of behaviour over a number of years which would have given the Commissioner cause to believe that the dispute was at an end. While Mr Nguyen has an arguable case, it is weak and focusses on the alleged loans. Against this, the time which has passed and the early conduct in particular, is significant. The gaps in activity are not all explained. In short, Mr Nguyen has neglected to act in his own interest for substantial periods, even when he told the Commissioner he would do so. When he was roused to take action, the timeline suggests his actions were prompted by recovery action.
4. It follows that the extent and pattern of Mr Nguyen's early delay is so significant in this particular case that it outweighs the factors in favour of the extension. This combined with the difficulties which will attend for both parties in gathering evidence to progress the objection at this late stage, persuades me that the discretion to extend time should not be exercised in this case.
5. For these reasons, the decision under review is affirmed

[2] On 25 January 2017, Mr Nguyen received notice from the Commissioner of a comprehensive risk review (audit) of his income tax.

[3] Income Tax Assessment Act 1936 (Cth) s 170(1), item 5.

[4] The Commissioner alleges Mr Nguyen deposited unexplained amounts into his personal account, regularly transferred amounts from Nailcare to his mortgage account, had unexplained deposits to his home loan account, made unexplained ad significant withdrawals from Nailcare's bank accounts which appear to have been for personal use.

[6] Hearing Book Tab 10 Annexure G to application.

[8] Hearing Book Tab 56 [74] and Brown v Commissioner of Taxation [1999] FCA 563; (1999) 42 ATR 118 [24] (Brown).

[12] Hearing Book Tabs 7, 8, 9, 10, 23, 28 and 54 comprising records of engagement dated 4 December 2019, 12 December 2019 and 11 February 2020, correspondence issued to Mr Nguyen's residential address on 13th February 2020, further correspondence issued to his residential address on 6 March 2020.

[13] Hearing Book Tab 40, page 248. There was also evidence of correspondence sent by the Commissioner's officers to Mr Nguyen on 16 November 2017 (warning about impending legal action to recover the tax debt) and on 27 November 2018 and directed to his residential address notifying him that a garnishee notice had issued to the Commonwealth Bank; see also Hearing Book Tabs 23 and 24.

[29] TAA, s 14ZW(1BA) which provides that an objection can be lodged either 2 years since notice of the original

assessment was served, or 60 days after the notice of the amended assessment to which the taxation objection

relates to was served on the taxpayer, whichever periods ends last. [emphasis added].

[30] TAA, s 14ZQ - the term 'extension of time refusal decision' means a decision of the Commissioner under subsection 14ZX(1) to refuse a request by a person.

[32] See also Federal Commissioner of Taxation v Primary Health Care Ltd [2017] FCAFC 131 [15] and Zizza v Commissioner of Taxation [1999] FCA 848 [13] both of which endorsed the reasoning of Hill J in Brown.

[33] Ibid [47], as was recently emphasised by the Tribunal in PTBS and Commissioner of Taxation (Practice and procedure) [2025] ARTA 1262 [20].

[34] PTBS and Commissioner of Taxation (Practice and Procedure) [2025] ARTA 1262 (PTSB) [18].

[36] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, per Bowen CJ and Deane J page 589.

[37] PS LA 2003/7, [4]; Brown [55], [59].

[41] Issa and Commissioner of Taxation (Taxation) [2023] AATA 3067 (11 August 2023) [21].

[43] Esso Australia Resources Pty Ltd v Commissioner of Taxation [2007] AATA 1776 [40].

[44] Brown [25]-[27]. See also Zizza v Commissioner of Taxation [1999] FCA 848 [13] per Wilcox, Sackville and Sunderberg JJ.

[46] Respondent submissions [73]-[74].

[50] Nicholas Beaumont, What are Reasonable Prospects of Success, (2004) 78 ALJ 812 at 813-814.

[51] Federal Court Act ss 31A(3). This is confirmed by authorities as permitting a finding that a claim to be dismissed in a range of circumstances and is not necessarily limited to a case which is unarguable, is frivolous or vexatious. See Prior v South West Aboriginal Land and Sea Council Aboriginal Corporation [2020] FCA 808 at [27]-[29] where McKerracher J explains that the effect of the wording of s 31A was to allow the Federal Court flexibility to summarily dismiss a proceeding even where it could not be said that it was hopeless or bound to fail. See also Provide Nominees Pty Ltd V Australian Securities And Investments Commission [2024] FCA 303 at [27]- [31] per Rofe J.

[52] Mr Jonshagen had entered into a settlement deed with the Commissioner of Taxation in respect of his tax dispute. He late sought to reagitate his tax dispute by lodging an objection, arguing he had been forced to enter into the settlement deed. However, he took no action to have the deed set aside.

[55] Khan v Minister for Immigration, Citizenship and Multicultural Affairs [2024] FedCFamC2G 459 [44].

[57] Applicant's further submissions [4]-[6]-[8].

[62] Lighthouse Philatelics Pty Ltd v Federal Commissioner of Taxation [1991] FCA 667; (1991) 25 ALD 257 at 264; 91 ATC 4942 per Lockhart, Burchett and Hill JJ.

[63] TAA s 14ZU(c); Cajkusic v Commissioner of Taxation [2006] FCAFC 164 [17] per Kiefel, Sundberg and Edmonds JJ with reference to H.R. Lancey Shipping Co. Pty Ltd v Federal Commissioner of Taxation (1951) 9 ATD 267 at 273 per Williams J.