Jonshagen and Commissioner of Taxation (Taxation) [2018] AATA 1338 (23 May 2018)

Income Tax Assessment Act 1936 (Cth) - s 8-1, Part IVA

Taxation Administration Act 1953 (Cth) - s 14ZL, s 14ZW(1), s 14ZW(1)(aa)(ii), s 14ZW(2), s 14ZW(3), s 14 ZX, s 14ZX(1)

Brown v Federal Commissioner of Taxation (1999) 99 ATC 4516; [1999] FCA 563

Federal Commissioner of Taxation v Sleight [2004] FCAFC 94; (2004) 136 FCR 211

Federal Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2010] FCAFC 94; (2010) 186 FCR 410

Re Jonshagen and Commissioner of Taxation [2015] AATA 380

Jonshagen v Commissioner of Taxation [2016] FCA 1545

1. This is an application for the review of the Commissioner's decision to refuse the Applicant's request for an extension of time to lodge an objection against an amended notice of assessment for the year ended 30 June 2000.

1. Full and detailed descriptions of the background of and circumstances relevant to this matter are set out in the Tribunal's decision in Re Jonshagen and Commissioner of Taxation [2015] AATA 380 (the Previous Application) at [3]-[29] and in the judgment of Siopis J in the Federal Court in Jonshagen v Commissioner of Taxation [2016] FCA 1545 (the Federal Court Appeal) at [5]-[35]. The Tribunal adopts the descriptions of the background as set out in those paragraphs.
2. The Previous Application was for the review of the Commissioner's decision to refuse the Applicant's request for extensions of time to lodge objections to the amended tax assessments for the years ended 30 June 1998 and 30 June 1999 issued by the Commissioner on 18 July 2003. The Commissioner's decisions were affirmed by the Tribunal. The Applicant then applied to the Federal Court for an extension of time to appeal on a question of law from the decision in the Previous Application under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). The Applicant's application was dismissed by the Federal Court.
3. The Applicant was a participant in the Chalice Bridge Estate 1998 Project (the Project). This was a winery project located at Rosa Glen, south east of Margaret River in Western Australia.
4. On 27 September 2000 the Applicant lodged his income tax return for the year ended 30 June 2000 (T3) claiming a deduction of $2,997 relating to his participation in the Project (T3 at p 20).
5. On 9 October 2000 the Commissioner issued a notice of assessment to the Applicant (T6) in accordance with the Applicant's income tax return.
6. In August 1998 and September 1999 the Applicant had lodged income tax returns for the years ended 30 June 1998 and 30 June 1999 respectively. Those tax returns had also claimed deductions relating to the Applicant's participation in the Project and assessments for those years had similarly been issued by the Commissioner in accordance with the tax returns filed by the Applicant.
7. The Commissioner reviewed the Project and formed the view that fees paid in relation to the Project were not deductible under s 8-1 of the Income Tax Assessment Act 1936 (Cth) (ITAA Act).
8. By letter dated 18 January 2001 (the Position Paper)(T7) the Commissioner advised the Applicant of his view. The primary basis for the Commissioner's view was that Part IVA of the ITAA Act applied to the Project. The relevant parts of the Position Paper are set out in [11] of the Tribunal's decision in the Previous Application and [20] of Justice Siopis's judgment in the Federal Court Appeal.
9. Relevantly the Position Paper did not identify particular income tax years or returns, but rather spoke in general terms of the Project and the Commissioner's view that claims for the Project subscription fees were not deductible. The Position Paper (T7 at p 67) advised that the Commissioner proposed amending the Applicant's income tax assessments to disallow the deductions which had been allowed in the assessments issued on the basis of the tax returns filed by the Applicant.
10. On 14 February 2002 the Commissioner announced a settlement offer to participants in mass-marketed investment schemes, including the Project. The settlement offer was said to close on 21 June 2002.
11. On 8 May 2002 the Commissioner advised the Applicant that amended income tax assessments would issue in respect of his participation in the Project.
12. On 24 May 2002 the Applicant was, at his request, granted an extension of time for acceptance of the settlement offer from 21 June 2002 to 5 July 2002.
13. On 25 June 2002 the Applicant sought a further extension of time for acceptance of the settlement offer on medical grounds. The details of this application are set out in [26] of Siopis J's judgment.
14. On 26 June 2002 the Commissioner advised the Applicant that no further extension of time would be granted.
15. On 8 July 2002 the Commissioner received the deed of settlement (the project settlement deed) (T9) executed by the Applicant on 21 June 2002 (T9 at p 81). The Applicant also executed four other deeds of settlement on 21 June 2002 relating to other schemes in which the Applicant had been involved and in relation to which the Commissioner had offered settlements.
16. Under the terms of the project settlement deed the Commissioner agreed to allow a deduction equal to the cash payment contributed by the Applicant to the Project (other than amounts for specified capital items) and to remit any tax penalty and interest to nil.
17. The project settlement deed included the following relevant terms:

...I wish to settle this dispute on the following terms.

My obligations

I agree that in settling this matter I will:

...

not lodge an objection/s nor request an amendment or review in respect of the matter;

...

not seek any review of any matters dealt with under this settlement under the Administrative Decisions (Judicial Review) Act 1977 or other legal avenues;

...

pay all outstanding debts relating to my participation in Chalice Bridge 1998 either in full within 14 days of receipt of the amended assessment notice or within an agreed period by entering into and meeting the terms of a payment arrangement acceptable to the Tax Office; and

...

General

I acknowledge that in settling this matter:

...

no promises, threats or inducements have been made to me;

this settlement is commercial in nature; and

...

(Original emphasis)

1. On 18 July 2003, the Commissioner issued the Applicant with an amended income tax assessment for each of the 1998, 1999 and 2000 income tax years (T11 and T17-T19 of T-documents in the Previous Application) which reflected the terms of the settlement agreed in the project settlement deed.
2. What followed is described by Siopis J at [32]-[35] of his judgment in the Federal Court Appeal as follows:
   1. In the decade following his execution of the project settlement deed, Mr Jonshagen made complaints regarding statements that had been made in the ATO position paper about the project. These complaints were made to officers of the ATO, the Commonwealth Ombudsman and to members of Parliament. In essence, Mr Jonshagen complained that the ATO position paper contained false statements.
   2. Mr Jonshagen complained, in particular, about the following statements in the ATO position paper
      • (a) "[t]he arrangements the taxpayer entered into were structured so that they received a tax refund greater than the cash contributions they were required to make under the project agreements";
      • (b) "[t]he tax deductions claimed by the Growers for the management fees far exceed their cash outlay. If the tax savings exceed the cash contributions, the taxpayer is able to make a profit from the tax deduction alone"; and
      • (c) "[t]ax savings generated the necessary funds to meet the required cash payments by the participants on the top marginal tax rate".
   3. In his complaints to the officers of the ATO, Mr Jonshagen stated that because of what he referred to as the false information in the ATO position paper, the ATO should set aside the project settlement deed and his assessments should be amended so that the deductions which he originally claimed in respect of the project, should be allowed. In response, the ATO consistently declined to set aside the project settlement deed, or to amend the assessments to allow the project deductions.
   4. Mr Jonshagen's complaints and the responses thereto, are summarised at [20]-[27] of the Tribunal's reasons for decision of 29 May 2015, and I will not repeat them in these reasons for judgment.
3. The Tribunal similarly relies on the summary of the complaints raised by the Applicant set out in [20]-[27] of the Tribunal's decision in the Previous Application.
4. On 7 May 2014 the Applicant sought an extension of time to lodge objections in respect of the income tax assessments issued for the years ended 30 June 1998 and 1999. These amended assessments had been issued on 18 July 2003 at the same time as the amended assessment for the year ended 30 June 2000. All of the amended assessments had been issued to reflect the agreement set out in the project settlement deed (see [18] and [19] above).
5. On 20 December 2016 the decision in the Federal Court appeal was handed down.
6. On 20 April 2017 the Applicant requested an extension of time to lodge an objection against the amended assessment for the tax year 2000 issued on 18 July 2003.
7. On 10 July 2017 the Applicant received the Commissioner's advice that he had decided to refuse the request for an extension of time.
8. On 4 August 2017 the Applicant made this application to the Tribunal.

1. Section 14ZL of the Taxation Administration Act 1953 (Cth) (TAA Act) provides:

(1) This Part applies if a provision of an Act or of regulations (including the provision as applied by another Act) provides that a person who is dissatisfied with an assessment, determination, notice or decision, or with a failure to make a private ruling, may object against it in the manner set out in this Part.

(2) Such an objection is in this Part called a taxation objection.

14ZW When taxation objections are to be made

(1) Subject to this section, the person must lodge the taxation objection with the Commissioner within:

• (aa) if the taxation objection is made under section 175A of the Income Tax Assessment Act 1936:
  • (i) if item 1, 2 or 3 of the table in subsection 170(1) of that Act applies to the assessment concerned-2 years after notice of the assessment is given to the person; or
  • (ii) otherwise-4 years after notice of the assessment concerned is given to the person; ...

1. In the present case s 14ZW(1)(aa)(ii) of the TAA applies. Accordingly, the last day on which an objection could be lodged in relation to the amended assessment issued by the Commissioner on 18 July 2003 was 17 July 2007.
2. Subsection 14ZW(2) of the TAA Act provides;
   • (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. Subsection 14ZW(3) provides:
   • (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.
4. Section 14ZX of the TAA Act provides:
   • (1) After considering the request, the Commissioner must decide whether to agree to it or refuse it.
   • (2) ...
   • (3) ...
   • (4) If the Commissioner decides to refuse the request, the person may apply to the Tribunal for review of the decision.

1. The only issue for determination by the Tribunal is whether the Applicant should be granted his request for an extension of time under s 14ZX(1) of the TAA Act to lodge an objection to the amended notice of assessment for the tax year ended 30 June 2000.

1. The following material was before the Tribunal:
   • (a) Exhibit A1 - Applicant's Statement of Facts, Issues and Contentions received on the 18 November 2017 including attachments;
   • (b) Exhibit A2 - email dated 25 February 2018 from the Applicant to the Tribunal, the Legal Profession Complaints Committee (LPCC) and various officers of the Commissioner containing submissions and attaching a bundle of documents including:
     • (i) a document titled "Letter RE ATO/Chalice Bridge Wine Project & a Settlement Proposal - 25 February 2018";
     • (ii) a letter to the Tribunal and the ATO dated 17 November 2017; and
     • (iii) an annotated copy of the Commissioner's Statement of Facts, Issues and Contentions.
   • (c) Exhibit A3 - email dated 27 February 2018 from the Applicant to the Tribunal and the Commissioner attaching:
     • (i) a document titled "Directions on the Commonwealth's obligation to act as a model litigant - Post 1 March 2006 Version 165";
     • (ii) a document titled "Letter RE ATO/Chalice Bridge Wine Project & a Settlement Proposal - 25 February 2018";
     • (iii) a letter to the Tribunal and the ATO dated 17 November 2017; and
     • (iv) an annotated copy of the Commissioner's Statement of Facts, Issues and Contentions.
   • (d) Exhibit A4 - email dated 27 February 2018 from the Applicant to the Tribunal, officers of the Commissioner and the LPCC;
   • (e) Exhibit A5 - email dated 27 February 2018 to the Tribunal, officers of the Commissions and the LPCC attaching:
     • (i) submission dated 27 February 2018;
     • (ii) submission dated 17 November 2017; and
     • (iii) attachments including an annotated copy of the Federal Court Decision of 20 December 2016, documents titled appendices 1-3, a letter to Siopis J dated 17 January 2017, a letter to Senior Member Walsh dated 30 November 2015.
   • (f) Exhibit A6 - a bundle of documents handed to the Tribunal at the hearing on 1 March 2018 including:
     • (i) a document titled "Presentation AAT Perth Hearing 1-March-2018";
     • (ii) an annotated copy of the Commissioner's submissions dated 28 February 2018; and
     • (iii) a document titled "Why are we here?".
   • (g) Exhibit R1 - the "T-documents" including (T1-T19)(pp 1-158);
   • (h) Exhibit R2 - the Commissioner's Statement of Facts, Issues and Contentions dated 16 October 2017 (Commissioner's SFIC); and
   • (i) Exhibit R3 - Commissioner's submissions dated 28 February 2018.
2. The Tribunal also had before it the T-documents filed by the Commissioner in the Previous Application. A copy of these documents was provided to the Applicant.
3. As a general observation, the submissions made by the Applicant and his Statement of Facts, Issues and Contentions (Applicant's SFIC), in large part were a re-run of the arguments that he raised in the Previous Application seeking extensions of time to object to the assessments issued in respect of the 1998 and 1999 income tax years. In particular the main thrust of the Applicant's submissions and the Applicant's SFIC was that the assessment in respect of the income tax year 2000, like the assessments for 1998 and 1999, was incorrect because it was based on the Position Paper which was erroneous and factually incorrect. These are fundamentally the same arguments that were dealt with in the Previous Application and which were also addressed in the Federal Court Appeal.
4. The application was heard by the Tribunal on 1 March 2018. The Applicant represented himself and the Commissioner was represented by Ms Thompson.

1. As was noted by Senior Member Walsh at [35] of the Previous Application, the considerations relevant to an application for an extension of time to lodge an objection to an assessment are set out in the Federal Court's decision in Brown v Federal Commissioner of Taxation (1999) 99 ATC 4516; [1999] FCA 563 (Brown v FCT). Hill J at [58] and [59] summarises the position as follows:

[58] 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.
2. The circumstances attendant upon that delay.
3. 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.
4. 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.

[59] 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

[56] ...For present purposes I am prepared to accept the view of von Doussa J in Windshuttle that an applicant should show that he or she has an arguable case. 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.

The effect of the judgment in the Federal Court Appeal

1. While the task that this Tribunal would normally undertake in an application for an extension of time to lodge an objection would be to apply the considerations laid out in Brown v FCT and the other relevant cases, in the present case the Tribunal must first consider the effect of the decision in the Previous Application and, more importantly, the effect of the decision in the Federal Court Appeal by which this Tribunal is bound.
2. The Federal Court Appeal dealt primarily with the Applicant's application for an extension of time to appeal a question of law from the decision in the Previous Application, after the Applicant failed to make such application to the Federal Court within the prescribed time. The judgment of the Federal Court also dealt with questions of law which critically impact the present application.
3. The Federal Court found as follows:

The effect of the project settlement deed

[70] I propose to deal first with this aspect of the application because of the potentially decisive effect on Mr Jonshagen's application, if the Commissioner's contentions on this issue are accepted.

[71] The Commissioner contended that Mr Jonshagen's proposed appeal on a question of law enjoys no prospect of success because he had entered into the project settlement deed, whereby he had agreed to give up his right to file objections in respect of the impugned amended assessments, and that the deed was legally binding.

1. His Honour went on to consider the arguments raised by the Applicant against the Applicant being bound by the terms of the project settlement deed and concluded:

[89] In those circumstances, the Commissioner is entitled to continue to rely upon the project settlement deed as comprising and evidencing a legally effective waiver by Mr Jonshagen of his statutory right to object to the impugned amended assessments.

[90] It follows, therefore, that even if Mr Jonshagen had an arguable case that the project arrangements were not a scheme which was entered into or carried out for the purpose of giving a tax benefit, Mr Jonshagen would, nevertheless, by reason of having entered the project settlement deed, be precluded from seeking to ventilate that case by the lodging of objections to the impugned amended assessments.

[91] Therefore, Mr Jonshagen's contention that it was manifestly unreasonable for the Tribunal to have decided that he was precluded from lodging an objection to the impugned amended assessments, is without merit.

[92] The consequence of this finding is that it is unnecessary for me to consider whether there is merit in Mr Jonshagen's contention that the Tribunal acted in a manifestly unreasonable manner in concluding that his proposed objections based on his claims that the ATO position paper contained false information, did not give rise to an arguable case that he had a valid objection.

[93] This is because, as I have mentioned, even if Mr Jonshagen did have an arguable case, that the impugned amended assessments were excessive, the Commissioner and the Tribunal would, nevertheless, be justified in finding Mr Jonshagen was precluded from objecting on the grounds that he had waived his right to do so.

1. It should also be noted that the Applicant in the present case seeks to run the same arguments that he did in the application which resulted in the decision in the Previous Application. Notwithstanding that the Federal Court found that the Applicant had no prospect of success because he had waived his rights to object by entering into the project settlement deed, His Honour did go on to consider the merit of the substance of the objection sought to be made by the Applicant. As noted earlier, the objections that the Applicant sought to raise in the Previous Application are materially the same as those which he raises in the present application. Siopis J found as follows:

[95] Notwithstanding my finding that Mr Jonshagen has no prospect of success in his proposed appeal because of having entered into the project settlement deed, I will have regard, briefly, to Mr Jonshagen's contention that the Tribunal's decision that his proposed objections did not give rise to an arguable case that the impugned amended assessments were excessive, was manifestly unreasonable.

[96] As I have mentioned, Mr Jonshagen's proposed objections are founded on the allegation that the impugned amended assessments are not lawful because they were based upon an ATO position paper which contained false statements. That position paper was published at least two years prior to the issuing of Mr Jonshagen's impugned amended assessments.

[97] The difficulty for Mr Jonshagen's proposed objections is that there is authority that the production of a notice of assessment will be conclusive evidence of the due making of the assessment, and that it is not open to challenge the lawfulness of the making of the assessment, because errors were made in the process leading up to the making of the assessment (Federal Commissioner of Taxation v Sleight [2004] FCAFC 94; (2004) 136 FCR 211 (Sleight); Federal Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2010] FCAFC 94; (2010 186 FCR 410 at [55]-[59]).

...

[101] Accordingly, Mr Jonshagen's proposed objections, directed as they are to impugning the lawfulness of the making of the amended assessments by reference to errors made in the ATO position paper, as part of the process leading up to the issuing of the amended assessments, fall short of constituting objections which would enjoy a reasonable prospect of success.

1. Two things arise out of the judgment in the Federal Court Appeal. The first is that if the project settlement deed applies to the assessment for the income tax year 2000 as well as the income tax years 1998 and 1999, then the Applicant has waived any right that he had to object to the amended assessment issued by the Commissioner for the income tax year 2000. The project settlement deed is a complete answer at law to any objection that the Applicant would seek to make to the amended assessment for the 2000 tax year issued by the Commissioner.
2. The second thing arising out of the judgment in the Federal Court Appeal is that even if the Applicant was not prevented by law from making the proposed objection, the objection has no reasonable prospect of success for the reasons set out in [95] to [101] of the judgment in the Federal Court as set out in [44] above.

Does the project settlement deed cover the amended assessment issued for the income tax year 2000?

1. "Fact 4" of the Applicant's Statement of Facts, Issues and Contentions is as follows (Exhibit A1):

FACT 4 - The 2002 Settlement does NOT apply to Tax year 2000

Please see Attachment Fact 4 - The 2002 Settlement does NOT apply to Tax year 2000 - for documentary evidence to support:

→ 28-March-2002 Letter from Commissioner Carmody Introducing the CBW Settlement

→ 8-May-2002 Letter from Commissioner C Field

This is the letter where I'm informed my 1998 and 1999 tax returns will be amended-those amendments were finally issued on 11-June-2002

I never received a warning or reason for why my 2000 returns were also amended

- this just happened by adding to my tax debt in 2003

→ "Expected benefits if you choose to settle" calculation from the ATO

I CONTEND that the Commissioner can NOT arbitrarily, and without notifying me, claim that the settlement allows him to disallow payments I made to the project in tax return year 2000

1. The 28 March 2002 letter from the Commissioner to which the Applicant refers did say that "[t]he settlement opportunity applies to 1998-99 and earlier years" (Exhibit A1, Attachment 4). It is also the case that the letter from Assistant Commissioner C Field dated 8 May 2002 to which the Applicant refers advised that (Exhibit A1, Attachment 4):

...amended assessments will issue to you in the near future to give effect to the disallowance of deduction(s) relating to CHALICE BRIDGE ESTATE 1998 claimed in respect of the years ended 30 June 1998 and 30 June 1999. The reasons for our decision to amend the assessments were outlined in our letter of 18 January 2001 (the Position Paper).

1. While it is the case that some of the correspondence sent by the Commissioner referred to the income tax years 1998 and 1999, the primary subject of all of the correspondence, including the Position Paper, was the issue of the deductibility of fees paid in relation to the Project. Taking into account: (a) the context in which that correspondence was sent and; (b) the total content of the correspondence, there would have been no reasonable basis for a recipient of the correspondence to have thought that the correspondence and the proposed settlement was limited only to the income tax years 1998 and 1999. The matters raised by the Commissioner in the correspondence obviously had application to any return or assessment in which deductions in respect of the Project were claimed.
2. In any event the parties are bound by the terms of the project settlement deed. Its terms are unequivocal and are not limited to any particular tax year. The opening paragraphs of the project settlement deed (T9 at p 80) are:

This settlement deed relates to all amounts due by me as a result of my participation in Chalice Bridge 1998. It is not intended in any way to compromise or settle any other amounts due by me to the Tax Office for any other unrelated issue.

I accept that the Commissioner contends that I am not carrying on a business for the purposes of the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 with respect to my participation in Chalice Bridge 1998.

1. Although it is not critical to the construction of the project settlement deed, insofar as the Applicant asserts that he thought that the project settlement deed related only to 1998 and 1999, the Tribunal notes that on page 1 of schedule 2 to the deed (T9 at p 82) the Applicant included income declared in his 2000 income tax year return. At the hearing the Applicant was unable to explain why, if he thought that the deed related only to 1998 and 1999 income tax years, he included reference to the 2000 income tax year. In the end, however, the operation of the deed is governed by its terms which apply across the board to the Applicant's participation in the Project, irrespective of which income tax year a deduction may be claimed.
2. As the Tribunal finds that the project settlement deed applies to the 2000 objection that the Applicant seeks to raise, then for the same reasons set out in the judgment in the Federal Court Appeal, the Tribunal finds that the Applicant's proposed objections have no reasonable prospect of success. The Tribunal notes that no appeal from the decision in the Federal Court Appeal has been commenced by the Applicant nor has the Applicant commenced any proceedings to set aside the project settlement deed. In that regard the Tribunal notes Siopis J's finding at [84] of his judgment in the Federal Court Appeal that:

[84] It follows, therefore, that unless the Commissioner, being the other party to the project settlement deed, agrees to set aside the project settlement deed; or a court of competent jurisdiction orders that the project settlement deed be set aside on a ground which is recognised under contract law, the Commissioner is entitled to treat the project settlement deed as being in effect, and, consequently, to rely upon the efficacy of that deed.

1. While it is not necessary for the Tribunal to address the other considerations to which Brown v FCT refers (see [38] above) given the Tribunal's finding that the Applicant's proposed objections have no reasonable prospects of success, the Tribunal does, for the sake of completeness, also find that the Applicant's delay in lodging the objection to the amended assessment issued on 18 July 2003 and seeking an extension of time to do so would weigh heavily against the granting of the extension of time.
2. The amended assessment for the income tax year 2000, based on the agreement reached in the project settlement deed executed in June 2002, was issued on 18 July 2003, the same day that the amended assessments for the income tax years 1998 and 1999 based on the project settlement deed were also issued. As noted at [20] above, Senior Member Walsh in the decision in the Previous Application sets out in great detail what occurred between July 2003 when the amended assessments were issued and the Applicant finally requesting an extension of time to object to the amended assessments in respect of the income tax years 1998 and 1999. The request for an extension of time to lodge the objections to the amended assessments for 1998 and 1999 was only made to the Commissioner in August 2014, that is, over seven years after the expiration of the four year period for objections to have been lodged. When that request was refused by the Commissioner, the Applicant made the Previous Application to the Tribunal in November 2014.
3. The Applicant provided no explanation as to why he waited until April 2017 (nearly 10 years after the expiration of the objection period) to request an extension of time to lodge an objection to the assessment issued for the income tax year 2000. That assessment was issued on the same day as the assessments for income tax years 1998 and 1999, in relation to which the Applicant requested an extension of time to object in August 2014, yet for some reason (which has not been explained) the Applicant waited a further three or more years to request the extension of time to object to the assessment for the 2000 income tax year
4. Insofar as the Applicant may seek to argue that the assessment issued in respect of the 2000 income tax year was different because it was not covered by the project settlement deed (which would not be a valid reason anyway), the Applicant was on notice prior to his requesting the extension of time for the objecting to the 1998 and 1999 assessments that the Commissioner considered an objection to the 2000 assessment to be in the same category. Paragraph [24] of the decision in the Previous Application refers to an email from Mr McGrade of the Commissioner as follows:
   1. On 29 April 2014, Mr McGrade responded, by email, to Mr Jonshagen's email of 28 April 2014l (sic). In his email of 29 April 2014, Mr McGrade stated that Mr Jonshagen's email of 28 April 2014:

...incorporating by reference, as it does, your on-line complaint of 26 Feb 2013, probably does satisfy the requirements of a valid objection against the relevant amended assessments for the years ended 30 June 1998, 30 June 1999 and 30 June 2000 which disallowed your claimed deductions relating to the Chalice Bridge 1998 Project.

However, the objection will be well out of time in terms of the time limits specified in s 14ZW of the Taxation administration (sic) Act. But, as mentioned previously, you have a right to request an extension of time, and the Commissioner has a discretion to grant that extension, under s.14ZX of the Taxation Administration Act. If the Commissioner refuses to grant you that extension (which, without wanting to pre-empt anything, is possible in this case given the time that has passed since those assessments issued) then you have the right to ask the Tribunal to review any such decision to refuse to extend time.

1. On 7 May 2014, Mr Jonshagen requested an extension of time to lodge an objection against the 1998 and 1999 Amended Assessments.

1. Accordingly, even if the Applicant was under the mistaken belief that for some reason the assessment for the income tax year 2000 was to be treated differently to the assessments for income tax years 1998 and 1999, the email of 29 April 2014 from the Commissioner would have put him on notice that if a request was to be made for an extension of time to lodge an objection under s 14ZX of the TAA, that request should also include the assessment for the income tax year 2000.
2. In the end there was nothing put forward by the Applicant that would explain, let alone justify, the delay of nearly 10 years in making the request for an extension of time under s 14ZW(2) of the TAA.

1. In his submissions filed on 28 February 2018, the Commissioner also raised the following:

(28) Several other matters are relevant to the exercise of the discretion:

• (a) the applicant has breached an express term of the Deed by lodging the application for an extension of time;
• (b) an extension of time will undermine the purpose of the Deed, which is to allow the parties to resolve the disputed assessments by agreement and to avoid the costs and uncertainty of litigation;
• (c) allowing an objection to go ahead at this time and in the face of the Deed and the earlier decision against Mr Jonshagen in this Tribunal and the Federal Court will undermine the wider public confidence in the administration of the taxation laws in circumstances where the settlement entered into with Mr Jonshagen was part of a wider settlement process entered into with many taxpayers, that process being undertaken to bring to an end disputes arising out of mass marketed schemes;
• (d) whilst not all taxpayers entered into settlement arrangements, as Schedule 1 demonstrates, that litigation has been concluded now for over a decade;
• (e) if this extension is granted and an objection is determined against Mr Jonshagen for the reasons articulated above, including the Deed of Settlement, it is reasonable to assume that this litigation will continue for another 3 or 4 years, through the Tribunal and the Federal Court; and
• (f) the respondent will suffer prejudice if the present application is allowed being:
  • (i) he will not be able to consider all relevant documents as, given the settlements and the effluxion of time, he no longer holds documents relating to the Project;
  • (ii) he has carried on his business on the basis that all matters in dispute between himself and the applicant were finalised by entry into the Deed; and
  • (iii) he faces the potential of other taxpayers who have entered similar deeds seeking to reopen their settlements, more than 15 years after they were entered into.

1. As a result of the Tribunal's finding that the project settlement deed does cover the assessment issued for the 2000 income tax year and the Tribunal's findings on the effect of the decision in the Previous Application and the judgment in the Federal Court Appeal which cause the application to fail, there is no need to consider the other matters raised by the Commissioner. Notwithstanding that, the Tribunal agrees that the terms of the project settlement deed preclude the Applicant from making the present application and that the Commissioner would be prejudiced by the very considerable delay in the Applicant making the request for an extension of time to object to an assessment some 10 years out of time.

1. The Tribunal finds that the project settlement deed does apply to the assessment issued by the Commissioner in respect of the 2000 income tax year. That being the case, for the reasons set out in the decision in the Previous Application and the judgment of the Federal Court in the Federal Court Appeal, the Applicant's objection has no reasonable prospects of success. Further, the Applicant has failed to provide any adequate explanation for the very substantial delay in making the request for the extension of time under s 14ZX of the TAA and that the Commissioner would be prejudiced by such delay if an extension of time were granted.
2. The Tribunal also finds that the terms of the project settlement deed bar the Applicant from making this application.
3. For the reasons set out above the Tribunal finds that the Commissioner's decision to refuse the extension of time to lodge an objection was correct. Accordingly, the Tribunal affirms the decision under review.

I certify that the preceding 63 (sixty-three) paragraphs are a true copy of the reasons for the decision herein of Deputy President S Boyle

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