Deputy Commissioner of Taxation v Bundaberg Indoor Sports Pty Ltd

The First to Third Respondents' Interlocutory Application for Stay of Enforcement

1. The interlocutory application filed 5 November 2025 be dismissed (Stay Application).
2. The First to Third Respondents pay the Applicant's costs of the Stay Application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. By an Amended Interlocutory Application filed on 28 October 2025 (the Summary Judgment Application), the Deputy Commissioner of Taxation (the Deputy Commissioner) seeks orders for summary judgment against Bundaberg Indoor Sports Pty Ltd (BIS) and Kinnest Family Pty Ltd (KF) (the first and second respondents, respectively; together, the Taxpayer Respondents) pursuant to the operation of section 31A of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) and/or rule 26.01 of the Federal Court Rules 2011 (Cth) (the FCA Rules).
2. In short, the Deputy Commissioner pursues judgment in respect of Running Balance Account (RBA) "deficit debts" that are said to be owed by the Taxpayer Respondents, and which relate to RBAs established under the Taxation Administration Act 1953 (Cth) (the TAA53). In this respect, the Deputy Commissioner relies on the content of two "Commissioner's certificates" issued under s 8AAZJ of the TAA53 on 13 October 2025 (the Commissioner's Certificates), as well as the amounts and particulars set out in certain "RBA statements" of BIS and KF (as at 10 October 2025; the RBA Statements). The import of such evidence, as well as the meaning of the above quoted phrases, will be returned to below (see infra [16] - [22]). Here, it suffices to note that, as of 10 October 2025, the RBA deficit debts of BIS and KF were $35,034,116.95 and $24,474,117.95, respectively (inclusive of a General Interest Charge (GIC)).
3. From the outset, it is noted that, on 30 September 2025, orders were made for the purposes of facilitating the hearing of the Summary Judgment Application on 14 November 2025. Those orders obliged the Taxpayer Respondents to, inter alia, file and serve any affidavit material on which they intended to rely by 22 October 2025. They did not do so. However, on 5 November 2025, the "respondents" (appearing to relevantly comprise the Taxpayer Respondents and their sole director, Mr Colin Kinnest (the third respondent)) filed an Interlocutory Application (the Stay Application) which, in broad terms, sought orders in relation to the execution of judgment (should the Court enter summary judgment against the Taxpayer Respondents). In that context, it is appropriate to deal first with the balance of the Summary Judgment Application.
4. For the reasons which follow, judgment should be entered against the Taxpayer Respondents: they have no reasonable prospect of successfully defending the claims advanced by the Deputy Commissioner and there are no issues of fact or law that require the conduct of a trial. In brief, that is because first, the evidence on which the applicant relies is prima facie evidence of RBA deficit debts which are due and payable by the Taxpayer Respondents (pursuant to Part IIB of the TAA53) and second, no other evidence has been adduced which displaces that position.

Some relevant context: the excess GST refunds, the Audit and the RBA deficit debts

1. KF was incorporated on 10 May 2017. BIS was incorporated some three and a half years later, on 11 November 2020. At all relevant times, the companies were registered for the Goods and Services Tax (GST) and had, as their sole director, Mr Colin Kinnest (the third respondent).
2. The Taxpayer Respondents are alleged to have various taxation liabilities. Given the manner in which the applicant sought to develop its case on the Summary Judgment Application, it is not necessary to delve into the minutiae of the facts and circumstances that are said to undergird that allegation; it suffices to observe that the Deputy Commissioner asserts that BIS and KF have, for many years, lodged GST returns that overstated the amount of GST paid in the course of carrying on their businesses (thus enabling them to claim artificially inflated GST refunds).
3. Relevant in this respect is the fact that on or about 14 October 2024, the Deputy Commissioner commenced an audit (the Audit) into the Business Activity Statement (BAS) lodgements of:

(1) BIS - for the period between 1 July 2021 and 30 September 2024 (the BIS Period); and

(2) KF - for the period between 1 July 2021 and 31 December 2024 (the KF Period).

1. In relation to BIS, the Deputy Commissioner ascertained that, in the BIS Period, the company had made 34 BAS lodgements and obtained GST refunds in the net amount of $16,381,396. In relation to KF, the Deputy Commissioner ascertained that, in the KF Period, the company had made 12 quarterly BAS lodgements, as well as 12 monthly Instalment Activity Statements, and had obtained GST refunds in the net amount of $10,841,348.
2. Ultimately, on the information obtained during the Audit, the Deputy Commissioner concluded that the Taxpayer Respondents were not entitled to the GST refunds which they had claimed (and received). Therefore, on 5 September 2025, the applicant issued the following documents:

(1) a Notice of Amended Assessment of Net amount to BIS in the amount of $16,118,930 (as to the net amount for the BIS Period);

(2) a Notice of Assessment for a Shortfall Penalty to BIS in the amount of $15,195,202.65 (being the penalty imposed pursuant to s 284-75 of Schedule 1 to the TAA53);

(3) a Notice of Amended Assessment of Net amount to KF in the amount of $11,590,541 (as to the net amount for the KF Period); and

(4) a Notice of Assessment for a Shortfall Penalty to KF in the amount of $10,298,105.85 (being the penalty imposed pursuant to s 284-75 of Schedule 1 to the TAA53).

1. The Taxpayer Respondents did not pay the amounts due under the above Notices within the applicable timeframes (such that GIC has since accrued on the unpaid amounts) or at all.
2. Importantly, the Deputy Commissioner has established and maintained RBAs for the "primary tax debts" of the Taxpayer Respondents. As at 10 October 2025, the RBA Statements identified a balance in favour of the Deputy Commissioner in the amount of $35,034,116.95 (in respect of BIS) and $24,474,117.95 (in respect of KF). On 13 October 2025, the Deputy Commissioner issued the Commissioner's Certificates to BIS and KF; amongst other things, they identified the companies' outstanding tax liabilities (in the amounts set out in the RBA Statements).
3. It is noted that both the RBA Statements and Commissioner's Certificates are exhibits to the affidavit of a Matthew Kristjansson (filed 15 October 2025) (the Third Kristjansson Affidavit).

Principles concerning summary judgment under the FCA Act and the FCA Rules

1. By reason of s 31A(1) of the FCA Act, the Court may give judgment for a party prosecuting a proceeding (i.e., the Deputy Commissioner) against another (i.e., the Taxpayer Respondents) in relation to the whole or any part of a proceeding if:

...

(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

Section 31A(3) offers some further colour to that proposition, noting, relevantly, that a defence need not be "hopeless" or "bound to fail", for it to have "no reasonable prospect of success".

1. The Summary Judgment Application rests, fundamentally, on the operation of such provisions; it also purports to rely upon the broadly identical terms of r 26.01 of the FCA Rules: see Zippo Manufacturing Co v Jaxlawn Pty Ltd [2011] FCA 1125 [20]; Australian Securities and Investments Commission v Cassimatis [2013] FCA 641; (2013) 220 FCR 256, 261 [13] (Cassimatis). In this context, the following propositions can be accepted as uncontroversial (albeit not exhaustive; in this respect, see, eg, Quach v Commissioner of Taxation [2019] FCA 1729 [12]; Mpinda v Fair Work Commission [2022] FCA 1111 [23] - [26] (and the authorities cited therein)):

(1) a summary judgment applicant bears the onus of persuading the Court that it is entitled to have the proceedings determined summarily: Cassimatis 271 [45].

(2) the test in s 31A of the FCA Act departs from earlier iterations of the provision: Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118, 139 [52] - [53] (Spencer); Trkulja v Google LLC (2018) 263 CLR 149, 157 - 158 [22]; see also White Industries Australia Ltd v Assistant Commissioner of Taxation [2007] FCA 511; (2007) 160 FCR 298, 310 [54]: which authorised the entry of summary judgment where a proceeding, or some part of it, was manifestly groundless or hopeless: Dey v Victorian Railways Commissioners (1949) 78 CLR 62, 91 - 92; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 129 - 130. Section 31A may reasonably be said to have lowered the bar and softened the test: Cassimatis 271 - 272 [46]; Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; (2009) 178 FCR 401, 408 [25] (Kowalski). The inquiry is now whether prosecution of the relevant part of a proceeding has no reasonable prospect of success; that does not require any "certain demonstration of the outcome of litigation": Spencer 139 - 140 [54].

(3) notwithstanding the above, the power to dismiss an action summarily must be exercised with caution and is not to be exercised lightly: Spencer 131 - 132 [24], 141 [60].

(4) the preconditions for the exercise of the power within s 31A of the FCA Act necessitates the making of value judgments in the absence of a full and complete factual matrix and full argument thereon, such that a discretion is reposed in the Court hearing the relevant application: Kowalski 408 - 409 [28].

(5) in Spencer, and despite the exultation of the majority (Hayne, Crennan, Kiefel and Bell JJ) against adoption of gloss, paraphrase or lexicon as to the criterion of "no reasonable prospect of success" (at 141 [58]), French CJ and Gummow J identified that s 31A(2) of the FCA Act requires a practical judgment as to whether the applicant has more than a "fanciful" prospect of success (at 132 [25]). Their Honours said (at 130 - 131 [22]):

... The section authorises summary disposition of proceedings on a variety of bases under its general rubric. It will apply to the case in which the pleadings disclose no reasonable cause of action and their deficiency is incurable. It will include the case in which there is unanswerable or unanswered evidence of a fact fatal to the pleaded case and any case which might be propounded by permissible amendment. It will include the class of case in the longstanding category of cases which are "frivolous or vexatious or an abuse of process". The application of s 31A is not, in terms, limited to those categories.

None of the aforementioned propositions were challenged in the course of the hearing.

The statutory regime under which the Taxpayer Respondents are said to be liable

1. The Summary Judgment Application relevantly seeks the following relief:
   1. ... Judgment for the Applicant against the First Respondent in the sum of $35,034,116.95 in respect of an RBA deficit debt pursuant to s 8AAZH of the Taxation Administration Act 1953 (Cth) inclusive of the First Respondent's tax related liabilities for amended assessments for a net amount for the periods 1 July 2021 to 30 September 2024, administrative penalties thereon, together with additional General Interest Charges to the date of judgment.
   2. ... Judgment for the Applicant against the Second Respondent in the sum of $24,474,117.95 in respect of an RBA deficit debt pursuant to s8AAZH of the Taxation Administration Act 1953 (Cth) inclusive of the Second Respondent's tax related liabilities for amended assessments for a net amount for the periods 1 July 2021 to 31 December 2024, administrative penalties thereon, together with additional General Interest Charges to the date of judgment.

1. It is important that some measure of colour be given to the aforementioned references to "tax related liabilities" and "RBA deficit debt". With respect to the former expression, s 255-1(1) of Schedule 1 of the TAA53 provides that "a tax-related liability is a pecuniary liability to the Commonwealth arising directly under a taxation law" (emphasis in original). Where an amount of such liability is due and payable, s 255-5(1) deems it to be a debt due to the Commonwealth and payable to the Commissioner of Taxation (the Commissioner). As made clear by s 255-5(2), the Deputy Commissioner may then sue "in a court of competent jurisdiction to recover an amount of a tax-related liability that remains unpaid after it has become due and payable". That process is assisted by the operation of s 350-25(a), which provides that "[i]n a proceeding to recover an amount of a tax-related liability ... a person may give evidence by affidavit".
2. With respect to the latter expression - "RBA deficit debt" - it is prudent, perhaps, to start with the design of the RBA regime in Part IIB of the TAA53. As noted in H'Var Steel Services Pty Ltd v Deputy Commissioner of Taxation [2005] WASCA 71; (2005) 59 ATR 5 (at 8 - 9 [17]), such framework was "designed as a way of facilitating the collection of a variety of different types of taxes which owe their existence to a variety of other pieces of tax legislation": see Deputy Commissioner of Taxation v Sunraysia Harvesting Contractors [2016] VSC 736 [34]; Deputy Commissioner of Taxation v O'Donoughue [2022] WASC 153 [38] - [49].
3. Section 8AAZC of the TAA53 is entitled "Establishment of RBAs". By subsections (1) - (2), any system of account established by the Commissioner for the "primary tax debts" of an entity is to be known as an "RBA". The Commissioner may establish an RBA on any basis that they determine: s 8AAZC(4): including for different types of "primary tax debts": s 8AAZC(4A). It is noted that a "primary tax debt" is defined to include any amount due to the Commonwealth directly under a "taxation law" - being, inter alia, "an Act of which the Commissioner has the general administration ...": s 2 of the TAA53 and s 995-1 of the Income Tax Assessment Act 1997 (Cth) - "including any such amount that is not yet payable": s 8AAZA.
4. Section 8AAZD of the TAA53 is entitled "Allocation of tax debts to RBAs". By subsection (1), the Commissioner may allocate a "primary tax debt" to an RBA that has been established for that type of tax debt. However, for the purposes of any such allocation, a primary tax debt cannot include GIC or an "RBA deficit debt": s 8AAZD(2). Relevantly, an "RBA deficit debt" refers to a credit balance in an RBA; specifically, it means (per s 8AAZA of the TAA53):

RBA deficit debt, in relation to an RBA of an entity, means a balance in favour of the Commissioner, based on:

(a) primary tax debts that have been allocated to the RBA and that are currently payable; and

(b) payments made in respect of current or anticipated primary tax debts of the entity, and credits to which the entity is entitled under a taxation law, that have been allocated to the RBA.

1. Sections 8AAZH and 8AAZF of the TAA53 are concerned with a taxpayer's liability vis-à-vis an RBA deficit debt. As those sections make clear, in circumstances where there is an "RBA deficit debt" for an RBA "at the end of a day", then GIC is payable on that debt (and is to be added to the balance of the RBA) and the tax debtor is liable to pay the Commonwealth the amount of the RBA deficit debt (being due and payable at the end of that day). In this context, it has been noted that "the balance of a RBA deficit debt due from time to time is a debt due to the Commonwealth, payable to the Commissioner, and recoverable by the Deputy Commissioner": Deputy Commissioner of Taxation v Triaswara [2022] FCA 1446 [23].
2. Section 8AAZI(1) of the TAA53 facilitates the recovery of an RBA deficit debt by providing that production, by the Commissioner (or Deputy Commissioner), of an "RBA statement" is prima facie evidence that the relevant RBA was duly kept, and that the amounts and particulars in the statement are correct. For context, an "RBA statement" means "a statement for an RBA, containing such particulars as the Commissioner determines": s 8AAZG: and "includes a document that purports to be a copy of an RBA statement and is signed by the Commissioner" (or their delegates): s 8AAZI(2). Further, or alternatively, the Deputy Commissioner can proceed by way of a "Commissioner's certificate" issued pursuant to s 8AAZJ, which, in broad terms, provides prima facie evidence of the matters that are contained within it: s 8AAZJ(1).
3. The effect of ss 8AAZI and 8AAZJ of the TAA53 was described in Old Kiama Wharf Co Pty Ltd v Deputy Commissioner of Taxation [2005] NSWSC 929; (2005) 55 ACSR 223 as follows (at 228 [31]):

With the benefit of the prima facie evidence which [ss 8AAZI and 8AAZJ] give the Commissioner can proceed to recover without any explanation or allocation of the amounts to a primary tax liability. ...

1. As a result, in order to contest an RBA deficit debt in debt recovery proceedings, the taxpayer must produce evidence which displaces the prima facie evidential force supplied by any RBA statement or Commissioner's certificate relating to that debt. To do so, the taxpayer must do "more" than plead that the quantum of the relevant debt is incorrect: Deputy Commissioner of Taxation v Epov [2008] NSWSC 1085 [32]. That said, it must be remembered that the relevant prima facie evidence is not conclusive of liability for the amount claimed nor transformative of the relevant legal burden of proof; such evidence may, however, be determinative where the taxpayer opts not to go into evidence (such that there is nothing before the Court to displace the force of the prima facie evidence): Naumcevski v Deputy Commissioner of Taxation [2019] NSWCA 72 [69]; see, eg, Deputy Commissioner of Taxation v Vasiliades [2015] FCA 412 [6].
2. There can be no doubt of the efficacy of the above legislative schema. In Deputy Commissioner of Taxation v Lewer [2001] VSC 114, Bongiorno J considered (at [6]) the application of s 255-55 of Schedule 1 to the TAA53 (being the statutory precursor to what is now s 350-25):

The Deputy Commission of Taxation enjoys a number of procedural advantages over ordinary litigants conferred upon him by the legislation which permits tax to be collected and arranges for the mechanism to do so. One of those advantages is the ability to conduct a trial of this nature on affidavit, provision being found in s 255-55 of Schedule 1 of the Taxation Administration Act 1953 (Commonwealth) which provides a number of items of administrative assistance to the Commissioner in proving his claim. For one thing, as I have indicated, he can proceed by way of affidavit. Secondly, he can proceed by way of an evidentiary certificate which provides prima facie evidence of the matters contained in it including matters relating to the service of assessments, the quantum of assessments and the total amount owing.

Application of the principles to the present circumstances

The prima facie tax liabilities of the Taxpayer Respondents

1. It will be recalled that the Commissioner established RBAs for the primary tax debts said to be due by the Taxpayer Respondents (see supra [11]). The debts allocated to those RBAs included the liabilities of BIS and KF under the notices of amended assessment of net amount (supra [9(1)] and [9(3)]) and the notices of assessment for a shortfall penalty (supra [9(2)] and [9(4)]).
2. Copies of the RBAs of BIS and KF as at 10 October 2025 - being the RBA Statements - were annexed to the Third Kristjansson Affidavit. It is not controversial that those copies fall within the statutory definition of an "RBA statement" (recall supra [21]). Nor is it controversial that the accounts reflected in those copies are in favour of the Commissioner (supra [11]).
3. Thus, the Taxpayer Respondents have an "RBA deficit debt" (recall supra [19]). At 10 October 2025, that debt was $35,034,116.95 (for BIS) and $24,474,117.95 (for KF). Importantly, the Commissioner's Certificates were also annexed to the Third Kristjansson Affidavit. Amongst other things, they certified that, at 13 October 2025, the amounts set out in the RBA Statements were the relevant RBA deficit debts (inclusive of GIC to 10 October 2025) of BIS and KF.
4. Pursuant to s 8AAZI of the TAA53, the production, by the Deputy Commissioner, of the RBA Statements is prima facie evidence that the relevant RBAs were duly kept, and that the amounts and particulars of the statements are correct. The Commissioner's Certificates are also prima facie evidence of the matters contained within them, including the RBA deficit debts owed by the Taxpayer Respondents: s 8AAZJ. Neither BIS nor KF have sought to lead any evidence to displace the prima facie force of the RBA Statements or the Commissioner's Certificates. Nor have they raised any defence to the Summary Judgment Application by evidence. Nonetheless, they appeared to object to judgment being entered against them on 14 November 2025.

Should summary judgment be entered against the Taxpayer Respondents?

1. On 4 November 2025, the so-called "respondents" (again appearing to only comprise the first to third respondents) filed a document entitled, "Concise Statement in Response and Defence to Summary Judgment" (the Concise Statement). Although it is not entirely clear what it sought to achieve, it relevantly identified the position of the "respondents" on the Summary Judgment Application as follows: "The Respondents oppose the Applicant's interlocutory application for summary judgment ... Save as expressly admitted, each allegation is denied". That, of course, is generally insufficient to displace the effect of the prima facie evidence now before the Court.
2. The Concise Statement proceeds to complain of various "substantial errors and irregularities" in "the short minutes of consent order", "the applicant's outline of submissions", an exhibit to an affidavit relied upon by the Deputy Commissioner and the Summary Judgment Application. What, if anything, was to be made of these materials was left entirely unclear - not in the least because, for example, no such "short minutes of consent order" were before the Court.
3. In any event, the difficulty that confronts the Taxpayer Respondents on the present application is that, in order to forestall the grant of summary judgment, it is necessary for them to adduce, at least, some evidence that the applicant is not justified or entitled to judgment in the amounts disclosed by the RBA Statements and the Commissioner's Certificates. They did not do so.
4. Here, the character of the issues with which the "respondents" cavil in the Concise Statement do not undermine the force of the Deputy Commissioner's evidence and, in the result, judgment can be granted. The RBA Statements and Commissioner's Certificates are exhibits to the Third Kristjansson Affidavit. Their veracity was not questioned, and Mr Kristjansson was not cross-examined as to their provenance. There is no reason why the Court should not act upon them.
5. Mr Peters, who appeared for the "respondents" on 14 November 2025, seemingly asserted that the Deputy Commissioner had neither provided nor served any relevant "Notice of Assessment for a Shortfall Penalty" in respect of his clients. That submission appeared to be by way of an assertion. However, it is clear that the Deputy Commissioner has produced those notices (they appear as Annexures "RJS-1" and "RJS-2" to the affidavit of a Robert Smith (filed 15 October 2025)) and served them upon the Taxpayer Respondents in the manner outlined at paragraphs [2] and [3] of that affidavit. In that regard, the objection made by Mr Peters was rather fanciful.
6. A similar complaint was also made in relation to the provision of the Deputy Commissioner's reasons for issuing the aforementioned. Again, however, the reasons that underlie the issuance of such notices appear at pages 2236 to 2320 of Exhibit "MK-1" to the affidavit of a Matthew Kristjansson (filed 5 September 2025) (the First Kristjansson Affidavit).
7. Pausing there, it is noted that the character of such a complaint is rendered largely mute by the operation (and underlying purpose) of the prima facie evidence provisions of the TAA53. The Commissioner is not obliged to produce, chapter and verse, the calculations and analysis which inform their assessments in applications of this nature (recall supra [22]). Instead, he may rely upon the content of the relevant RBA and any evidentiary certificate issued under s 8AAZJ.
8. More generally, the complaints raised by the "respondents" in the Concise Statement were, at best, technical matters. They descended into so-called "incorrect statutory citation and internal misdescriptions" as well as typographical errors. Whether those errors existed or not is neither here nor there in the present context (recall supra [23] and [31]). What is entirely clear is that the "respondents" suffered no prejudice from their existence, if they existed at all.
9. It follows that there is no impediment to the Court relying upon the prima facie evidence of the amounts owing by the Taxpayer Respondents as set out in the Commissioner's Certificates and further supported by the amounts and particulars in the RBA Statements: ss 8AAZI and 8AAZJ of the TAA53.
10. In the aforementioned circumstances, where it is clear that neither of the Taxpayer Respondents have any reasonable prospect of successfully defending the claims advanced by the Deputy Commissioner in reliance upon both the Commissioner's Certificates and the RBA Statements, judgment should be entered against them under s 31A(1) of the FCA Act. It follows that:

(1) there should be judgment against BIS in the sum of $35,034,116.95; and

(2) there should be judgment against KF in the sum of $24,474,117.95.

1. No reason was offered as to why, if judgment was entered in favour of the applicant, that costs should not follow in the ordinary course; the first and second respondents should, therefore, be ordered to pay the Deputy Commissioner's costs of the Summary Judgment Application.
2. It is noted that the Deputy Commissioner also sought, in its "Proposed Judgment Orders" that were provided to the Court on 12 November 2025, to make it pellucid that "the penal notices issued against the First to Fifth Respondents are continued in accordance with Orders 1 to 5 of the orders of Derrington J made on 30 September 2025" (for some context in relation to the issuance of such notices, see Deputy Commissioner of Taxation v Bundaberg Indoor Sports Pty Ltd [2025] FCA 1104). I agree that it is appropriate for the Orders made today to reflect this.

1. The conclusions reached at supra [38] - [40] do not spell the end of the matter. As previously mentioned, the "respondents" filed an Interlocutory Application on 5 November 2025 seeking, amongst other things, orders that "[i]f the Court enters summary judgment in favour of the Applicant in this proceeding, ... [then] execution of the Judgment be stayed until 4:00 pm on 14 July 2026". In substance, such proposal endeavours to afford the "respondents" some time in which to realise various assets and for the relevant proceeds to be applied to the indebtedness to the Commissioner; to quote from Mr Peters' outline of submissions, it sought "to permit an orderly, Court-supervised realisation of specified assets to satisfy the judgment debt, interest and costs". In light of that submission, it is appropriate to have regard to some of the principles that are accepted to bear upon the grant of stays, and which were referred to by the parties.
2. In Southgate Investments Funds Limited v Deputy Commissioner of Taxation [2013] FCAFC 10; (2013) 211 FCR 274 (Southgate), the Full Court identified various guiding principles in respect of the discretion to grant a stay of execution of judgment in the context of tax recovery proceedings (that were, at the time, subject to objections lodged under Part IVC of the TAA53 (but which had not been finally resolved)). Those "general principles" relevantly included (at 293 - 295 [77]):

(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 TAA53 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;

(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

(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 ...

1. In Deputy Commissioner of Taxation v Huang [2019] FCA 2122 (Huang), Jagot J dealt with the circumstances in which a taxpayer's application for a stay of execution of a judgment debt might be granted. In that case, the taxpayer, Mr Huang, submitted that "three considerations took the case out of the ordinary course and justified the grant of a stay"; one such consideration was the fact that some of Mr Huang's Australian assets comprised real property "which, if sold, would be worth less at the time of sale than they would be worth at the time of Mr Huang's foreshadowed Pt IVC proceedings": at [8]; see also [19]. In this respect, Jagot J observed:

[26] Otherwise I also accept the Deputy Commissioner's submissions as follows:

(1) There is no suggestion that execution of judgment would deprive Mr Huang of the financial resources necessary to prosecute the proposed Pt IVC proceedings based on Mr Huang's objections to the amended assessments.

(2) The only prejudice identified to Mr Huang is the potential loss of the appreciation in value of the Chatswood properties if the Commissioner were to execute judgment against them. Prejudice of this kind is an issue in every case where the judgment debtor owns real estate. The prejudice is ameliorated to some extent by the right of interest should Mr Huang succeed in the Pt IVC proceedings. Otherwise it is for the judgment debtor, by evidence, to prove the extent of the alleged prejudice, which Mr Huang has not done. Further, the prejudice is contingent on Mr Huang succeeding in the Pt IVC proceeding and, for the reasons given, Mr Huang has not adduced sufficient material to enable any view to be reached as to the merit of his proposed Pt IVC proceedings.

(3) The offer of security by Mr Huang should be given little weight as it was not on terms acceptable to the Deputy Commissioner.

(4) The Deputy's Commissioner's refusal to undertake to make up any shortfall from the increased value of the Chatswood properties should judgment be executed against them and Mr Huang succeed in the Pt IVC proceedings is not a weighty factor as Mr Huang has not proven by evidence the extent of loss to which he may be subject.

(5) On balance, the prejudice to Mr Huang is outweighed by the clear legislative policy which gives priority to the recovery of taxation revenue notwithstanding that a taxpayer has a Part IVC proceeding on foot: Southgate at [77].

[27] I am not persuaded that Mr Huang has discharged his onus to obtain the grant of a stay of execution of judgment. Mr Huang has not established that he has anything more than a merely arguable case on the proposed Pt IVC proceedings. Otherwise the prejudice to him through the potential loss he might suffer if judgment is executed against the Chatswood properties and he ultimately succeeds in the PT IVC proceedings is not sufficiently material to deny the Deputy Commissioner the fruits of the judgment. This is particularly so having regard to the legislative policy manifested through the statutory provisions to the effect that priority is given to the recovery of taxation revenue notwithstanding that a taxpayer has a Part IVC proceeding on foot (or proposes to do so as in the present case).

1. As a brief aside, it is noted that the application for the stay in Huang was sought to be supported by the provision of security (at [18] and [26(3)]); here, no such offer was made.

Application of the principles in the present circumstances

1. The circumstances of the present case diverge from those canvassed above - namely, the Stay Application is made in the absence of the existence of some other proceeding pursuant to which the relevant taxpayers seek to undermine or negate the Commissioner's entitlement to payment.
2. There is no evidence to suggest that the Taxpayer Respondents have lodged any objection vis-à-vis the applicant's assessment of their respective taxation liabilities or to their liabilities under the RBA Statements and Commissioner's Certificates. Nor is there evidence that proceedings are on foot to set aside, vary or alter the Commissioner's assessments. That is important. As in Southgate and Huang, the existence of such proceedings often acts as a (if not, the) catalyst for the Court to embark on a consideration of whether to exercise the discretion to grant a stay of the execution of a judgment debt based on a taxation assessment. While other catalysts exist (see, eg, Southgate 294 - 195 [77(i)]), an absence of evidence of the institution of proceedings under Pt IVC of the TAA53 removes a legitimate forensic purpose to justify the grant of a stay.
3. Here, the only forensic purpose advanced in support of the Stay Application is, per the outline of submissions filed by Mr Peters, to "preserve" the applicant's position "while leveraging the Respondents' sector-specific knowledge to avoid value loss inherent in hurried enforcement". Prima facie, that is not a sufficient reason to deny the Deputy Commissioner the fruits of his successful application for summary judgment (permanently or temporarily). Indeed, even if it were the case that some forensic foundation existed for the granting of the stay sought by the "respondents", the circumstances of this case would not justify it.
4. The first issue concerns that of whether Mr Kinnest will be able to achieve a "better outcome" (in terms of recovery) than if the ordinary process of judgment enforcement was to occur. So much gives rise to an evidential question. In this respect, paragraphs [9] and [10] of an affidavit of Colin Kinnest (filed 5 November 2025) set out his opinion that first, the sale processes which are proposed by him will "maximise net recoveries and reduce cost and risk", and, second, he is "best placed" to procure the sales "on value-maximising terms" (for various reasons).
5. Mr Kinnest was not challenged on that evidence nor is there anything in the applicant's material which undermines what he says. That said, it is to be noted that the above statements are self-serving. They do not offer any analysis or comparative analysis between steps that Mr Kinnest might take and those which a liquidator would. Indeed, there is an absence of evidence that a liquidator would not be able to achieve sales as good as or better than Mr Kinnest. Whilst it is insufficient to simply suggest that the costs of one avenue might be less than the other, I do not doubt that Mr Kinnest's knowledge of industry circumstances would probably be quite useful. Then again, as the director of the Taxpayer Respondents, it must not be overlooked that he is obliged to offer liquidators all reasonable assistance in the realisation of relevant assets. In this context, one might accept that the costs of liquidators realising assets are, at least prima facie, likely to be greater than those costs which might be incurred if Mr Kinnest undertook the task.
6. Ultimately, even if one assumes that a "better result" might be achieved in respect of the sales of those properties identified by Mr Kinnest, that does not provide a sufficient justification by which to deny the applicant their rights to execution on judgment. Whilst attainment of a better result might enure to the benefit of both parties, one must keep steadily in mind the legislative policy that is manifested in provisions such as ss 14ZZM and 14ZZR of the TAA53 and which prioritise the recovery of taxation revenue (even upon proof of extant Part IVC proceedings).
7. In the proposed minutes of order offered by the "respondents", it was proposed that there would be ongoing supervision by the Courts or Commissioner of the sale process. That, with respect, is something which should be avoided. It can only give rise to further litigation and disputation. On the other hand, if liquidators were to be appointed under the Corporations Act 2001 (Cth), they would have wide powers to investigate and realise the assets of BIS and KF and would be able to do so independently of the Courts, creditors, or, indeed, the Commissioner.
8. It is to be kept in mind that the proposal of the "respondents" is, at its core, to realise identified properties. In addition to the foregoing reasons, that is insufficient insofar as it fails to account for the existence of possible causes of action against third parties, including directors or parties associated with directors (i.e., persons who were the beneficiaries of related party transactions and the like).
9. Some of the submissions of the "respondents" also referred to the possibility of Mr Kinnest obtaining some benefit in future proceedings in other courts on the basis that if he is seen to restore losses which the Commissioner has suffered, that will be of assistance to him: "Prompt voluntary realisation and repayment are recognised as indicia of contrition and rehabilitation and can mitigate sentence exposure". It is, with respect, not particularly clear how that might be relevant in the present case but, even assuming that his willingness to assist in the recovery of assets and restoration of the Commissioner's position is relevant, that can be achieved by the provision of all reasonable assistance to the applicant or liquidators (as the case may be).
10. Furthermore, and not unimportantly, the Court cannot have any real confidence in the Taxpayer Respondents or their director being involved in the realisation of properties. At its most bland, the prima facie tax liabilities of the Taxpayer Respondents are attributable to the production of inaccurate returns to the Commissioner over several years. It is not self-evident that the Court should afford persons who have put their companies into such precarious positions, the ability to engage in further financial transactions, any misstep in which will enure to the detriment of the Commissioner.
11. One might add that, in the course of submissions, I was taken to certain paragraphs in the First Kristjansson Affidavit, where allegations were made that Mr Kinnest took steps to dissipate property or encumber it following commencement of the Audit. That was not answered in any responsive material, and that serves only to underscore the reason why the Court will not, in circumstances such as the present, allow a person who has put their companies in the position of BIS and KF to have any involvement in the recovery processes.
12. In the result, it is appropriate for the Stay Application to be dismissed. There is no reason why the Taxpayer Respondents should not pay the costs of that application.

1. These are the amended and revised reasons for judgment given on 14 November 2025. Whilst the reasons given above refine and develop those that were delivered ex tempore, the substance of what was said that day has not been changed nor has any other material change been made.

I certify that the preceding fifty-seven (57) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice .