1. Three grounds of review were pressed by the Applicant.[3] These were:

(a) Ground C1 - the provision of the motor vehicle by the Applicant to the director was an exempt car benefit within the meaning of section 8(2) of the FBT Act; > > (b) Ground C5 - the cost base of the motor vehicle calculated under section 136(a)(ii)(A) of the FBT Act was less than that used by the Commissioner; and > > (c) Ground C6 - the Applicant's director made the final balloon payment on the hire purchase of the motor vehicle in October 2018, so that Mr Jones beneficially owned the car from that time, pursuant to a resulting trust.

1. The question raised by Ground C5 was the inclusion in the cost base of the motor vehicle of certain items that the Applicant contended should have been excluded.
2. The parties agreed that the cost base of the motor vehicle is its purchase price, including goods and services tax (GST) and luxury car tax (LCT), but excluding on road costs totalling $20,927.35. The effect of this is that the taxable value of the motor vehicle falls to be calculated using a cost base of $325,212.65, not $346,140,[4] which the Commissioner had used in making his assessments, being the amount attributed to the cost of the motor vehicle in the Applicant's financial statements.
3. As a result of this agreement, the taxable value of the motor vehicle must be recalculated by the Commissioner in each of the relevant years. This will in turn involve a recalculation of the FBT liability of the Applicant in each of those years.

1. Remuneration by way of money, including most allowances, provided to an employee by their employer is taxable under the income tax regime. Since 1986, FBT has been payable by employers on the value of various non-cash benefits provided to employees, including, relevantly in this matter, a car benefit.
2. The FBT tax year is 1 April to 31 March. An employer is obliged to lodge an FBT return for each FBT year, and must also include the taxable value of any fringe benefit provided to an employee on their payment summary.
3. The taxable value of any fringe benefit is reduced by the amount of any employee contribution that has been made. An employee contribution is a payment an employee makes to the employer for the use of the fringe benefit. For example, it may be a contribution by an employee to the fuel costs for a car if an employer's fuel card is used by the employee to purchase fuel. Employee contributions form part of the assessable income of the employer.
4. A car is:

A *motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers.[5]

5. Section 7 of the FBT Act sets out the general rule that FBT is payable on a car benefit. Section 8 of the FBT Act sets out exemptions from the general rule. The boundaries of the exemption provisions formed the main contention in this matter which I discuss at Ground C1 below.

1. Section 14ZZK of the Taxation Administration Act 1953 (TAA) provides:[6]

On an application for review of a reviewable objection decision:

(a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and

(b) the applicant has the burden of proving:

(i) if the taxation decision concerned is an assessment - that the assessment is excessive or otherwise incorrect and what the assessment should have been; or

(ii) in any other case - that the taxation decision concerned should not have been made or should have been made differently.

1. The authorities make it very clear that for a taxpayer to discharge their burden, they must show, to the civil standard, being on the balance of probabilities, that the assessments are excessive and what the correct assessment should be.[7] The Commissioner bears no onus.
2. In this case:[8]

(a) if Ground C1 succeeds,[9] the correct assessment will be nil for each of the relevant years; and > > (b) if Ground C1 fails but Ground C6 succeeds, the correct assessment should be nil for the 2020 - 2022 FBT years, with a partial adjustment for the 2019 FBT year and no change for the remainder of the relevant years.

1. The Applicant relied on the evidence of Mr Jones and of an expert, Mr Michael Nranian. Both Mr Jones and Mr Nranian were cross examined.
2. A joint hearing bundle containing various documents including the parties' statements of facts issues and contentions (SFIC) and submissions, was filed. Excluding the SFICs and written submissions, and the witness statements and their attachments which I have marked as exhibits in their own right, I marked the documents in the hearing bundle which the parties relied on as Exhibit R3. A full list of the documents relied on as Exhibit R3 is set out in Annexure A to these reasons.[10]

1. The Applicant was incorporated in April 1999. It provides accounting and taxation services to members of the general public.[11] Mr Jones is the controlling mind of the Applicant, being its sole director, secretary and shareholder.[12] He is also an employee of the Applicant.[13]
2. On 6 October 2013, the Applicant purchased a second hand 2010 Ferrari California for Mr Jones to use to drive from his home to his work office in Marmion, a northern suburb of Perth.[14] As noted above, the car cost $346,140 including LCT, GST, and on-road costs. The purchase was financed through NAB, which entered into a commercial hire purchase agreement with the Applicant and provided the entire purchase price.[15]
3. The Applicant was never registered for FBT, and its income tax returns for the income years ending 30 June 2014 to 30 June 2022[16] (income years) do not include income from any fringe benefit employee contributions, which would otherwise operate to reduce the Applicant's liability for FBT.
4. The Applicant's income tax returns for each of the income years include deductions for various expenses associated with the use of the motor vehicle.[17]
5. The Applicant's financial reports for the 2017 to 2021 years:[18]

(a) include as an asset, motor vehicles at cost of $346,140, which I infer is the Ferrari; > > (b) report motor vehicle expenses including fuel, interest and leasing charges; however, > > (c) do not disclose any fringe benefit employee contributions.

6. The Applicant's tax returns and financial statements were prepared by an entity associated with Mr Jones and the Applicant, a proprietary limited company I will call Jones FA.[19] The registered office of the Applicant is the business premises of Jones FA, and has been since March 2011.[20]
7. In light of Mr Jones' name being used in the name of Jones FA, the co-location of the two companies, the Applicant and Jones FA, and Mr Jones' evidence in Exhibit A1 at [19] - [39], in which Mr Jones describes what he calls the "Jones Group",[21] I infer that he is also the controlling mind of Jones FA.
8. I find that Mr Jones caused the Applicant to purchase the Ferrari and enter into the funding agreement with NAB.

1. Mr Jones filed two witness statements which were marked as Exhibits A1 and A2. Each of these attached various documents, which form part of these two exhibits.
2. Mr Jones holds a relevant tertiary qualification and has considerable experience in his chosen profession. He was a registered tax agent from April 1986 until he allowed his registration to lapse shortly prior to the hearing.[22] He was also a member of three professional organisations relevant to the tax and accounting professions.[23]
3. He was responsible for the preparation and lodgement of the Applicant's income tax returns with the Australian Taxation Office (ATO), and the preparation of the Applicant's financial statements.[24]
4. At the time of the hearing, Mr Jones had been working as a tax agent for over 38 years. In 1999 he caused the Applicant to become incorporated and so has been primarily focused on the Applicant's business activities for over 26 years.
5. Mr Jones' payment summaries from the Applicant for the income years were not in evidence. However, I infer from the fact that the Applicant was not registered for FBT and the matters set out in [32] above, the taxable value of the fringe benefit provided to him was not included in his payment summaries.
6. Throughout the course of the audit and during the Applicant's objection to the FBT assessments issued to the Applicant, Mr Jones was the person who was primarily responsible for answering all queries from the ATO. From about 7 November 2022,[25] lawyers were engaged by the Applicant, and I infer they obtained their instructions from Mr Jones. The engagement of lawyers by the Applicant appears to have been in response to the ATO issuing an audit position paper in late October 2022,[26] which foreshadowed default FBT assessments being issued for each of the relevant years.
7. Mr Jones was a polite and confident witness. He was plainly advocating for a position, which is hardly surprising given his role in the Applicant and his knowledge of the issues in the proceedings.
8. On the whole, Mr Jones' written witness statements were superficial, broad brush, and lacking in detail. They were also misleading, at least in part. This was so particularly in respect to his evidence concerning car logbooks. In that regard, Exhibit A1, the first witness statement, said the following:

[70] Attached hereto marked "[XX]12" are log book records which I kept for the Vehicle for the period 1 July 2016 to 30 September 2016. > > [71] Attached hereto marked "[XX]13" are log book records which I kept for the Vehicle for the period 1 July 2019 to 30 September 2019.

9. The impression conveyed by Exhibit A1 at [70] and [71] is that the attachments are contemporaneous records of the actual kilometres travelled by Mr Jones on each day in the 3-month period covered by each of the two logbooks. As became evident in cross-examination, the logbooks are neither contemporaneous nor records of the actual kilometres travelled by Mr Jones on those dates.
10. Attachments 12 and 13 are two excel spreadsheets in identical form other than the detail contained in it. I have set out below a table extracted from attachment 12.[27]

1. In each of the spreadsheets all entries were typed, but with the addition of handwritten initials. There is nothing impermissible of itself in keeping a car logbook in this manner, provided it is accurate.
2. Mr Jones admitted in cross-examination that he constructed the spreadsheets relying on his diary entries of what he did on the dates in question, and that he used an estimate of 50 km per day for the round trip from his home to Marmion.[28] There are several issues which cause me concern about the reliability of the spreadsheets, which I set out below.

(a) The diaries are not in evidence, so there is no way in which to test the veracity of the entries. > > (b) The odometer readings of each of the two periods for which the logbooks are provided are at odds with independent records of Barbagallo Motors, which serviced the Ferrari on various dates. > > > (i) The servicing records for the Ferrari on 23 September 2016, towards the end of the period recorded in the logbook at attachment 12, records the odometer as 48,844 km, as compared to Mr Jones' record on that date of 34,282 km. > > > > (ii) The opening kilometres recorded in attachment 13, for 1 July 2019, is 65,023 km and the closing reading for that period is 67,810 km. By contrast, the Ferrari was serviced on 9 October 2018, about 9 months earlier, and recorded an odometer reading of 71,778 km.[29] It was serviced again on 13 November 2019, about 6 weeks after the end of the logbook period with an odometer reading of 85,765 km.[30] By contrast, the logbook records an odometer of 67,810 as at 30 September 2019. > > (c) The logbooks also contain other obvious discrepancies. > > > (i) On 23 September 2016, the logbook records 50 km driven for the day,[31] which is the same distance as all other dates on which Mr Jones claims he drove the car from his home to his office in Marmion, and return. However, the Barbagallo Motors invoice for the service on that date[32] records its address at 9 Frobisher Street, Osborne Park, which is a substantial distance from the Marmion office of the Applicant and where Mr Jones records in the logbook entry that he worked for that day. There is no explanation given for this. > > > > (ii) In August 2016, Mr Jones records the following entries:[33]

There is no explanation given by Mr Jones for how he drove 50 km from his home to his Marmion office on a day when he was apparently interstate in Sydney.

(d) Mr Jones lived in a riverside suburb until April 2017, and the distance between his home and the Marmion office, which is where he travelled to during the period captured in attachment 12, was 'approximately 22 kilometres'.[34] The distance claimed on the days when he records that he only travelled from home to work, is 50 km, a difference of 6 km per day or 12% per day.

(e) In respect to attachment 13, which records Mr Jones' evidence regarding the kilometres travelled in the period July to September 2019, after Mr Jones had moved to a beachside suburb, he estimates the distance to be travelled from his home to his Marmion office as 'approximately 18.5 kilometres'.[35] On each of the days on which he says he travelled from the beachside suburb to Marmion he records a round trip distance of 40 km, a difference of 3 kilometres per day, or 7.5% per day.

(f) Given the other issues I have with Mr Jones' reliability, it is not possible on the evidence led by the Applicant to be confident that Mr Jones' estimates of 'approximately 22 kilometres' and 'approximately 18.5 kilometres' are in fact a truthful account of the distances he travelled for work purposes. The Applicant's SFIC includes what appear to be GPS-generated maps showing the approximate distance between each of the two suburbs where Mr Jones lived and the suburb where his offices were, by one route in each case. Whilst these maps accord with the estimates Mr Jones makes in his evidence, they were not put into evidence, and Mr Jones did not give evidence of which of the multiple available routes between the two locations he chose for his travel. Furthermore, Mr Jones gives evidence that the office opened in Marmion in 'about 2015',[36] so that the evidence is silent as to distances travelled for work purposes for at least the FBT year ended 31 March 2014, and possibly also for that ended 31 March 2015.

(g) There is no attempt to substantiate the estimates of kilometres travelled to clients' premises which are included in attachments 12 and 13. Whilst I accept that a person in Mr Jones' position was likely to travel to clients' premises, in the absence of knowing the locations of the clients and substantiation of the visit, through production of the diary from which the logbooks were constructed, I do not accept the logbook entries as reliable.

1. The logbooks were provided to the Commissioner during the course of the audit of the Applicant's taxation affairs.[37] The initialling of the entries was done by Mr Jones after the excel spreadsheet was populated with dates, kilometres travelled, and odometer readings, and then printed. The logbooks must then have been scanned for the purpose of providing them to the Commissioner by email.[38] In my view, the logbooks were most likely constructed in about April and June 2021, shortly before they were provided to the Commissioner, following the Commissioner's requests for them.[39] They are complete fabrications, and I place no weight on them.
2. There are other instances of Mr Jones having misled the Commissioner during the course of the audit, or misled the Tribunal in his evidence. For example:

(a) Mr Jones told the Commissioner in respect to the purchase of the Ferrari,[40] > > My dearly departed mother very kindly left me some funds in her will which was used for the deposit.

This statement was not true, as NAB fully funded the purchase, something that would have been in his own knowledge or at the very least easily identifiable from the documents the Applicant held.[41]

(b) In his first witness statement Mr Jones said 'I have never used it to carry passengers'.[42] By contrast, in answer to a question from me during his evidence, he said he took his girlfriend to Margaret River on occasions in the Ferrari. At the time he made his first witness statement, he must have known that it was untrue.

1. By putting into evidence fabricated logbooks, and making the statements in [70] and [71] of his first witness statement,[43] Mr Jones and through him the Applicant, have sought to deliberately mislead the Tribunal. In addition to other instances of incorrect assertions being made to the Commissioner, this causes me to doubt the truthfulness and reliability of Mr Jones' evidence as a whole. I have in the circumstances concluded that I cannot accept the truth of Mr Jones' evidence on any matter which is in contention, in the absence of corroboration.

1. Mr Michael Nranian is an expert in car design. He provided a report dated 24 July 2024,[44] on the question of whether the Ferrari was 'designed for the principal purpose of carrying passengers' within the meaning of section 8(2)(a)(ii) of the FBT Act.
2. Mr Nranian gave oral evidence and was cross-examined. His evidence was taken by video from Wisconsin in the United States of America, at a time that was late in the evening for him. I have taken into account both the time difference and late hour, the video format of his evidence, and cultural differences between Australia and the United States in assessing his evidence. Mr Nranian was a more combative witness in cross-examination than is the norm for experts, and I found he tended to stray into advocacy for the Applicant. Both of these matters are likely explained by cultural differences, and differences in the legal systems, between our two countries. I also accept that some of the frustration Mr Nranian expressed in his answers in cross-examination came from the very late hour at which he was giving evidence. I have put these matters to one side in my assessment of his evidence.
3. I have no difficulty accepting Mr Nranian is a person with substantial expertise in the design of motor vehicles, which is relevant to one of the issues arising in ground C1 in this matter. However, as I explain later in these reasons, I do not accept his opinion that the Ferrari was not designed for the principal purpose of carrying passengers within the meaning of section 8(2)(a)(ii) of the FBT Act.

1. Section 7 of the FBT Act contains the general rule as to the provision of car benefits to employees. Exceptions to that general rule are found in section 8. It was accepted by the Applicant that the provision of the Ferrari to Mr Jones constituted a car benefit for the purposes of section 7 of the FBT Act. The argument before me was focused on the applicability of the exception in section 8(2), relevantly relying on sections 8(2)(a)(ii) and 8(2)(b).
2. The consideration of Ground C1 requires three issues to be determined, being a statutory construction issue regarding section 8 of the FBT Act, and two factual questions being whether the Ferrari was 'designed for the principal purpose of carrying passengers', and whether Mr Jones' private use of the Ferrari fell within section 8(2)(b).
3. The Applicant must succeed on each of the three issues I must consider in Ground C1 in order to be successful.

1. Set out in the table below is section 8 of the FBT Act, as it was throughout the two periods of time relevant in this matter.

Between 1 April 2013[45] and 31 March 2021

(1) Except insofar as section 7 provides that the application or availability of a car held by a person is a benefit, the application or availability of a car held by a person is an exempt benefit.

(1) Except insofar as section 7 provides that the application or availability of a car held by a person is a benefit, the application or availability of a car held by a person is an exempt benefit.

(2) A car benefit provided in a year of tax in respect of the employment of a current employee is an exempt benefit in relation to the year of tax if:

(2) A car benefit provided in a year of tax in respect of the employment of a current employee is an exempt benefit in relation to the year of tax if:

(a) the car is:

(i) a taxi, panel van or utility truck; or

(ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and

(a) the car is:

(i) a panel van or utility truck, designed to carry a load of less than 1 tonne; or

(ia) used for taxi travel, designed to carry a load of less than 1 tonne, and not a limousine; or

(ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and

(b) there was no private use of the car during the year of tax and at a time when the benefit was provided other than:

(i) work-related travel of the employee; and

(ii) other private use by the employee or an associate of the employee, being other use that was minor, infrequent and irregular.

(b) there was no private use of the car during the year of tax and at a time when the benefit was provided other than:

(i) work-related travel of the employee; and

(ii) other private use by the employee or an associate of the employee, being other use that was minor, infrequent and irregular.

1. The question to be addressed is whether section 8(2)(a)(ii) is to be construed to apply to all vehicles as contented by the Applicant, or is solely referrable to commercial vehicles, as contended by the Commissioner. It was not controversial that sections 8(2)(a)(i) and 8(2)(a)(ia) only apply to commercial vehicles.
2. In Palmonova Pty Ltd v The Commonwealth[46] the High Court considered the process of statutory construction in respect to the Protection of Moveable Cultural Heritage Act 1986 (Cth), and in doing so reiterated how it is to be conducted by a Court or Tribunal. The Court said:

[4] Statutory construction is the process of attributing meaning to statutory text. The construction of a statutory provision begins and ends with the statutory text understood in context and in light of the statutory purpose - being what the provision is designed to achieve in fact - insofar as that purpose is discernible from the statutory text and context. In the construction of a provision of a Commonwealth statute, the meaning that would best achieve the statutory purpose so discerned is to be preferred to each alternative meaning. > > [5] That being the nature of the task to which the process is directed, the "modern approach" to statutory construction, as was explained nearly 30 years ago in CIC Insurance Ltd v Bankstown Football Club Ltd in a statement repeated and endorsed many times since**:"(a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses 'context' in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means ... , one may discern the statute was intended to remedy**". Use of extrinsic material in the construction of a provision of a Commonwealth statute is guided but not governed by a non-exhaustive list of categories of material statutorily recognised to have potential to illuminate the statutory context. > > [6] Though the construction of s 14(1) of the Act adopted by the majority of the Full Court was correct, the majority saw the statutory text as so "clear" as to make material extrinsic to the Act "unnecessary to consider". Understanding context, including so much of the context as might be revealed by extrinsic material, "has utility if, and in so far as, it assists in fixing the meaning of the statutory text". Focus on the statutory text is not to the exclusion of extrinsic material that has the potential to assist in fixing its meaning. > > [7] Appreciating the context of s 14(1) of the Act involves situating the Act in its international and constitutional setting and locating s 14(1) within the scheme of the Act so situated.

3. It is clear from this that, contrary to the Applicant's submissions, I must look at the proper context of section 8(2) of the FBT Act, including by reference to extrinsic materials like Explanatory Memoranda, to discern the meaning of the text.
4. The FBT Act was part of a package of legislation introduced in 1986 aimed at taxing non-salary benefits provided by employers to employees in respect to their employment. Non-salary benefits covered by the tax include car benefits, loans, private expenses, accommodation, and other benefits. The legislative scheme is one of rules of general application, and limited exceptions from the application of those rules.
5. Section 8(2) of the FBT Act appears within Subdivision A of Division 2 of Part II of the FBT Act. Division A deals with car fringe benefits, that is, a car provided by an employer to an employee for the employee's use. The general rule is found in section 7 of the FBT Act, by which a car is deemed to be a fringe benefit if an employer provides a car to an employee in circumstances where the employee is taken to have the car available for their private use.[47] Garaging the car at home is deemed to be having the car available for private use.[48] There is no dispute that Mr Jones garaged the car at his home and therefore fell within section 7 of the FBT Act.
6. Subsection (8)(2)(a)(ii) appears on its face to exempt any road vehicle that is not designed for the principal purpose of carrying passengers, as submitted by the Applicant. However, read in its proper context, I do not regard that to be the legislative intent of the exemption.
7. The proper context of subsection (ii) includes both the Subdivision of the FBT Act in which it is situated, and the Act as a whole, informed by its statutory purpose. The statutory purpose, that is what is sought to be achieved by the legislation, is to be discerned from the text, and the context, which includes relevant extrinsic materials. The law in Australia, as most recently explained by the High Court in Palmonova, does not require me to find ambiguity in the text in order to consider extrinsic materials, including Explanatory Memoranda.
8. At the time of introduction of the FBT legislative package, the Explanatory Memorandum relevantly said:[49]

Private use of taxis, panel vans, utilities and other commercial vehicles (i.e., those not designed principally to carry passengers) will not attract fringe benefits tax if an employee's private use of such a vehicle consists solely of travel to and from work and private travel that is incidental to travel in the course of performing duties of employment.

9. From this it is clear that the intention of the bill was to provide an exemption for certain types of commercial vehicles only.
10. In 1987 section 8(2) was amended to extend the benefit of the exemption to private use of the car if the use was minor, infrequent and irregular, that is, by the inclusion of subsection 8(2)(b).[50] The law as it stood from that time until 1 April 2021 is set out in the first column of the table at paragraph [51], above. An example was used in the Explanatory Memorandum to illustrate the exemption:[51]

The exemption will now apply where the only private use by an employee of a utility consists of work-related travel and occasional use of the vehicle to remove domestic rubbish.

11. It is clear from this that the exemption was intended to remain confined to commercial vehicles.
12. A further amendment was made by the Treasury Laws Amendment (2019 Measures No 3) Act 2020,[52] in response to the rise in ride-sharing. It deleted the word 'taxi' from subsection 8(2)(a)(i), inserted subsection 8(2)(a)(ia), and amended the definition of taxi travel.[53] The Explanatory Memorandum explained the purpose of these amendments at [3.69]:

This preserves the existing policy of covering common or ordinary vehicles used for basic travel involving transporting passengers for a fare by way of a car or other motor vehicle but not including limousines. While the fringe benefits tax exemption is designed to minimise compliance costs for businesses providing basic private transport to their employees, it is not intended to support the provision of taxpayer subsidised luxurious motor vehicle transport.

13. It is clear from the text of the Explanatory Memorandum that the 2020 amendments did not intend to alter the confines of the exemption beyond vehicles with a commercial use, so that even though the exemption is now wider than it initially was, it does not extend beyond commercial vehicles.
14. It is worth noting as a matter of completeness that none of the amendments made to section 8(2) impacted what is subsection 8(2)(a)(ii) in any way other than the numbering change which came about in 1987, with the introduction of section 8(2)(b), thereby renumbering the first subparagraph as (a).
15. The amendments made in 2020 came into effect on 1 April 2021,[54] and so only impact the FBT liability of the Applicant for the last year under review. The impact of this is that even if I am wrong about the effect of the changes brought about by the 2020 amendments, given they do not impact sections 8(2)(a)(ii) and 8(2)(b), nothing turns on them in this matter.
16. Ultimately, I am of the view that the text and context of the exemption in subsection 8(2)(a)(ii) of the FBT Act leads inexorably to the conclusion that the exemption to the general FBT rule contained in that section, only applies to commercial vehicles. The 2010 Ferrari California provided by the Applicant to Mr Jones was not a commercial vehicle and was not contended by the Applicant to be one.

Designed for the principal purpose of carrying passengers

1. In case I am wrong in my conclusions regarding the statutory construction of subsection 8(2)(a)(ii) of the FBT Act, I will consider whether the Ferrari falls within the exemption in subsection 8(2)(a)(ii) of the FBT Act as being 'other than a vehicle designed for the principal purpose of carrying passengers'.
2. Despite some interlocutory disagreement on the issue, it was agreed at the final hearing that the word 'passengers' in section 8(2)(a)(ii) included the singular 'passenger'.[55]
3. The Applicant's case was squarely put on the proposition that the Ferrari was designed for the principal purpose of racing, and it was apparent from the manner in which the case was run that the Applicant contented, in effect, that being designed for racing was incompatible with being designed for the principal purpose of carrying passengers. The question therefore posed by the Applicant's case is whether the Ferrari is a racing car, or a passenger car.
4. The Ferrari is a two door, hard top, convertible style car, which was manufactured in 2010. It has four seats, two bucket seats in the front, comprising one for the driver and one for a passenger, and two small seats in the rear. Each of the four seats has a seatbelt. It has a luxurious interior, as can be seen from the many photographs of the Applicant's car in Mr Nranian's report, and the marketing brochure supplied by Ferrari, which was relied on and forms part of Mr Nranian's report at attachment 11. These marketing materials disclose leather seats, a sound system and a boot, along with the ability to fold down the rear seat and store skis or golf clubs. Mr Jones said in evidence the boot was used to accommodate two small overnight bags on his trips to Margaret River with his girlfriend. That is, the boot was designed to carry luggage.
5. In reaching his conclusion, Mr Nranian considered a range of factors set out in TD 94/19, a determination made by the Commissioner in respect to the exemption in section 8(2) and which was supplied to him as part of his instructions. The factors are:

(a) the appearance and presentation of the Ferrari;[56] > > (b) the promotional material;[57] > > (c) the marketing of the vehicle;[58] > > (d) the vehicle's specifications;[59] > > (e) load carrying capacity and passenger carrying capacity.[60]

6. TD 94/19 includes a worked example in the following terms:[61]

ABC Pty Ltd purchased a new four wheel drive station wagon for the business. The office manager of the company, Rob, is allowed to use the car for home to work travel. The vehicle has seating for 5 passengers and has a load carrying capacity of 865 kgs. Promotional literature for the vehicle emphasises its level of passenger comfort, off-road capability and "sporty" features. Little reference is made to its capacity to carry a load. It has very little room to carry anything other than luggage or tools. It is clear from the promotional literature and the vehicle's specifications that it is designed principally for carrying passengers. Any private use of the vehicle by Rob, including home to work travel, will be subject to fringe benefits tax.

7. Mr Nranian's expert opinion was:[62]

The Vehicle is not predominantly designed for carrying passengers, and at best can carry only a passenger, in addition to the driver. Rather the Vehicle is [a] highly exclusive sports car that is born to race.

8. The Macquarie Dictionary defines a sports car as 'a high-powered car, usually a two-seater with a low body, built for speed and manoeuvrability.'[63] Oxford dictionaries online define it as 'a low-built car designed for performance at high speeds, often having a roof that can be folded back.'[64]
9. By contrast, a racing car is defined as 'a car built for racing on a prepared track',[65] or 'a car designed for racing, particularly a Formula One car, being able to accelerate rapidly and travel at high speed; performance car.'[66] The terms 'sports car' and 'racing car' plainly overlap to an extent, but they are not directly interchangeable.
10. Many sports cars are driven on Australian roads including various models of common marques including BMW, Mercedes Benz, Porsche, Audi, Subaru, Ford, Toyota and Mazda. In my view 'sports car' is in essence a label used to categorise a car which tells a person about the look of the car, and some of the general physical and performance features the car might have. Other familiar categories of car are sedan, hatchback, and SUV.
11. I have no difficulty accepting that this Ferrari is quite appropriately described as a sports car. However, in my view, describing it as a sports car does not respond to the issue raised by the legislation; being a sports car does not mean the Ferrari is not designed for the principal purpose of carrying passengers.
12. The marketing material for the Ferrari, on which considerable emphasis was placed by the Applicant, gives prominence to particular aspects of the car, including its speed, sleekness, luxuriousness, ability to handle various road conditions, and ability to meet consumer needs like carry luggage, including golf clubs, skies or a snowboard. The phrase 'born to race', which forms part of Mr Nranian's opinion,[67] is used in the marketing materials.[68]
13. The car's compliance plate, which was affixed at the time of its importation to Australia notes it is category MA with 4 seats.[69] Category MA is a type of passenger car under the Australian Design Rules, published by the Australian Government and available on the website for the Department of Infrastructure, Transport, Regional Development, Communication, Sport and the Arts[70] and is a publicly available document which appears to be in wide circulation. Mr Nranian did not consider the Australian Design Rules in forming his opinion and was not provided with any instructions relevant to them.
14. Considerable emphasis was placed on the fact that the car's operating manual made it clear that the car's rear seats were not designed to carry passengers taller than 1.5 metres in height. This is plainly relevant to the safety of passengers in the rear seats. I do not accept Mr Nranian's opinion that this means the car is not primarily designed for the carrying of passengers within the meaning of the law. The emphasis in the owner's manual on the dangers of carrying people taller than 1.5 metres is in my view to protect Ferrari from liability in the event of a catastrophic injury. Similarly, the manual contains the explicit warning to not use the rear seats to transport infants. Despite this, one of the photographs in the marketing materials, extracted at [58] of Mr Nranian's Report, shows an infant booster seat in the rear of the car. The text accompanying the photo aims to inform the potential purchaser of the car's ability to meet a wide range of possible driving needs of the owner:[71]

The Ferrari California is ideal for those looking for a highly exclusive sports car, that consider driving enjoyment a value to pursue on every occasion: a weekend out of town, a long journey, shopping in the city, or simply getting to the office. The rear baggage space has a capacity which is unique for a convertible of this type. The boot, for the first time, connects directly to the rear bench or seats via the folding seat-back. When folded down, the hard-top takes up only 100 of the 340 litres in the luggage compartment, thus saving plenty of storage capacity. A wide opening of the luggage compartment level with the bottom simplifies the various operations. The large amount of space available allows two large and two small suitcases to be accommodated or, with the seat back folded down, two golf bags, skis, or snowboards.

1. The car can be driven in one of three modes: sport, comfort and CST[72]-off modes. Mr Nranian based much of his assessment on the use of Sport mode, which is described in the owner's manual as 'the ideal setting for vehicle performance' and 'for sports-style driving, under high grip conditions'.[73] The Comfort mode is 'the maximum safe driving mode. It is recommended for everyday driving'.[74] CST-off mode is a high-performance mode and carries with it the following warning 'In low to medium grip conditions (e.g. wet, icy, sandy roads), do not deactivate the CST system'.[75] Similar statements are made in the marketing brochure, which says:[76]

Comfort: . . . this is the best position for everyday use > > Sport: . . . this is the position recommended for sporty and performance driving > > CST: . . . this position gives the driver maximum driving freedom and control on a track or closed circuit.

2. It is apparent from the descriptions of the three different modes contained in the operating manual and the marketing brochure that the car is designed to be driven in comfort mode for everyday driving, for example commuting to work in a suburban environment. Comfort mode being the default mode for everyday use suggests strongly that racing is not the principal purpose of the car. The fact that an intermediary mode, being Sport mode, is also available adds to this impression. In my view if the car was principally designed for racing as contended for by the Applicant, CST-off mode would be the primary mode.
3. There was no evidence from Mr Jones as to which mode he selected for his driving. However, it appears from the operating manual and the marketing brochure that it would be extremely dangerous for the car to be driven in either Sport or CST-off modes in a suburban commuter environment.
4. I accept that the actual use of the car is not a consideration in determining whether the Ferrari was designed for the principal purpose of carrying passengers within the meaning of section 8(2)(a)(ii) of the FBT Act. I regard it unlikely that any responsible employer would provide its employee with a car which was primarily designed to be driven in a manner that is potentially dangerous to other road users, a racing car, for the employee's daily commute to work.
5. The marketing material walks a fine line in describing the technical features of the car, but also making it plain that it is intended to be used for day-to-day driving. There are numerous statements about technical innovation and power, but these are tempered with the statements which reflect what the actual use of the car is designed to be for. For example, it says the following in respect to the gearbox:[77]

Perfect also for normal daily and city use, in automatic mode the dual clutch transmission guarantees the highest values of comfort and drivability.

6. Notably, the photographs in the brochure include none of the car at a race track or similar race setting, but includes numerous city scenes and wide open roads. For example, see the photographs at pages 1227, 1230, 1232, 1234, 1236, 1249, 1253, 1260, 1264, 1267, 1271, 1275, 1283, 1287, 1300 of the hearing bundle.[78]
7. I do not accept that this highly exclusive sports car is anything other than a vehicle designed for the principal purpose of carrying passengers. The Applicant's proposition that the car is designed for the principal purpose of racing is rejected.

1. In case I am wrong in respect to the construction issue and the design issue, I next consider whether the Applicant has satisfied me that Mr Jones' personal use of the Ferrari fell within section 8(2)(b)(ii) of the FBT Act, being 'minor, infrequent and irregular'.
2. As I have set out in detail above, I am unable to accept Mr Jones' witness statements as reliable. Specifically, I have found that the logbooks were fabricated for the purposes of the Applicant's dispute with the Commissioner, and his written statements were deliberately misleading as to the accuracy of the logbooks. This causes me to have grave doubts as to the overall reliability of what Mr Jones has said in evidence other than when it is against his interest, for example the evidence of him taking his girlfriend as a passenger to Margaret River.
3. During the course of the Applicant's dealings with the Commissioner, Mr Jones described his personal use of the Ferrari variously as:
   • negligible;[79]
   • 10%;[80]
   • almost exclusively to travel between his home and [the Applicant's] place of business, save for irregular client visits on the way to or from work;[81]
   • almost exclusively for travel between Mr [Jones'] home and [the Applicant's] office in Marmion;[82] and
   • another vehicle or Ubers are used for private usage.[83]
4. Some evidence was led by Mr Jones in respect to private use in Exhibit A2. By contrast to what is set out in para [91] above, in this second statement, Mr Jones said the following:[84]

Once per year I would drive down South to Margaret River, Bunker Bay and Busselton where I had rental properties. The purpose of the trip each year was to complete property inspections of each of these properties. > > Apart from monitoring my investments, a small portion of the time down South would involve having lunch at some wineries. > > Each trip down south would be 4 - 5 days in duration. I would stay at the properties at minimal cost as a unit owner.

5. As noted above, during the course of his oral evidence, Mr Jones told me that he sometimes took his girlfriend with him to Margaret River, as a passenger, and they took two small overnight bags with them which they carried in the boot of the car. These trips were a regular feature of Mr Jones' use of the car.
6. It was accepted by the Applicant that Mr Jones' trips to Margaret River were private. No evidence was led by the Applicant to quantify the kilometres travelled during those private trips.[85] Furthermore, the disclosure of these trips came about with the filing of Mr Jones' second witness statement on about 9 June 2025, more than 5 years after the Commissioner commenced a review of the Applicant's taxation affairs, and just months prior to the commencement of the hearing. Mr Jones' private usage had been in issue throughout the audit and at all times after that.
7. When the evidence of the Margaret River trips is considered in the context of the relative lateness of its disclosure, the very broadbrush and unquantified nature of it, the prior insistence that Mr Jones effectively did not use the Ferrari for private purposes, and the unreliability of the logbooks, I cannot be satisfied that Mr Jones' private use of the Ferrari was 'minor, infrequent and irregular' as required by section 8(2)(b)(ii) of the FBT Act.[86]
8. As a result of these findings, Ground C1 fails.

1. A resulting trust is a creature of equity which was comprehensively considered by the High Court in Bosanac v Commissioner of Taxation.[87] The history of the legal response of a resulting trust was explained in the following manner:[88]

A trust of a legal estate in property taken in the name of another is taken to "result" to the person who advances the purchase money. The categories of resulting trust include trusts arising from A's payment for the conveyance of rights to B; the voluntary transfer of rights inter vivos from A to B; and the transfer of rights on a failed declared trust. The term "resulting trust" states a legal response to proved facts. The presumption of a resulting trust developed by analogy from the rule of the common law that where a feoffment, or conveyance, is made without consideration, the feoffment results to the feoffer. It arose from the common practice of the 15th to 17th centuries of those having fee simple estates in land to put them in use (the precursor to the trust) for themselves. Because words of trust were not included on the face of the conveyance and because the transfers were gratuitous, the court supplied a presumption of a declaration to uses. There were various advantages to the practice, including avoiding the hardship of feudal times, and avoiding escheat and forfeiture to the Crown in time of war, such as the Wars of the Roses. > > The presumption can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land (or other property) held on trust for him or her. The presumption cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence, and where more than one person pays the purchase price, as here, regard is necessarily had to evidence of each of their intentions.

2. The basis of the Applicant's claim that a resulting trust arises in this matter is the first of the categories mentioned in the above passage being[89] a purchase money resulting trust.[90] The "presumption" of a resulting trust is one of fact which operates similarly to a civil onus of proof. As the now Chief Justice went on to explain:[91]

The presumption will yield to an actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence. The weight to be given to the fact of a contribution having been made to the purchase price in drawing an inference as to actual intention will vary according to the totality of the circumstances of the case.

3. Gordon and Edelman JJ in Bosanac identified three categories of case which arise from the objective facts proven by evidence led by the plaintiff.[92] The first leads to an express trust, the second to no case for the defendant to answer, and the third to a weak presumption of resulting trust, in which case the defendant may seek to displace the presumption. The task of the tribunal of fact is to consider the evidence led by the plaintiff, the Applicant in this case, and ascertain which of the three categories the evidence falls into. This requires consideration of 'the parties' words or conduct at the time of the transaction or so immediately thereafter as to constitute part of the transaction.'[93]
4. The transaction to be considered in this case is the purchase of the car in 2013, not the final balloon payment made in October 2018, which is not a relevant transaction in and of itself, but merely a step in the process for repayment of the loan obtained to pay for the car.

1. Mr Jones' evidence as to the purchase of the car in 2013 is:

On 6 October 2013, [the Applicant] purchased a 2010 model Ferrari California (the vehicle").[94] > > When purchased, I had the Vehicle registered in the name of [the Applicant] for asset protection purposes but I always considered the Vehicle to be my vehicle.[95] > > The Vehicle was financed through a hire purchase facility which I arranged for [the Applicant] to enter into with NAB in or about October 2013 ("the Hire Purchase Account"). Attached hereto marked "[XX]2" is a true copy of a letter from NAB to [the Applicant] dated 7 October 2013 which set out the terms of the Hire Purchase Account. I found this document in my filing for that year's tax returns.[96]

2. Attachment 2 to Mr Jones' second statement, Exhibit A2, is a letter dated 7 October 2013 evidencing an offer from NAB for an equipment loan to purchase the Ferrari. The offer is made to the Applicant, not Mr Jones. Attachment 3 to exhibit A2 is a copy of the NAB customer account statement for the hire purchase loan for the Ferrari. The account is in the name of the Applicant.
3. Mr Jones' evidence in his first statement in respect to the final payment made to pay out the hire purchase agreement on the Ferrari was:[97]

The repayments were made by [the Applicant] except I personally made the last payment of $155,762.88 on 8 October 2018.

4. This statement sets up the Applicant's argument that the Ferrari was not beneficially held by it after October 2018 as the payment by Mr Jones led to Mr Jones personally holding the beneficial title to the car by reason of a resulting trust. One of the difficulties is that, like much of Mr Jones' evidence, the evidence was not actually true but rather a broadbrush, high level proposition where he was essentially making a submission about the finding the Applicant sought the Tribunal to make.
5. In Exhibit A2, Mr Jones gives more detailed evidence in support of the resulting trust claim. I set this out in full below:[98]

13. The monthly payments of $4,426.57 were made from the [Applicant's] NAB Business Everyday Account (Account number [redacted]) ("the Everyday Account").

14. Attached, for example, marked "[XX]4" is statement number 176 showing a payment of $4,426.47 from the Everyday Account to the Hire Purchase Account on 8 November 2013.

15. Whilst the regular monthly payments and the Vehicle expenses were paid from the Everyday Account, I always considered myself the owner and that these payments were being made instead of paying a distribution of dividends from [the Applicant] profits to me.

16. Attached hereto marked "[XX]5" and "[XX]6" respectively are copies of the Everyday Account statements for the periods 01.09.18 to 28.09.18 and 29.09.18 to 31.10.18 ("the Everyday Statements").

17. On 8 October 2018, I arranged for the sum of $155,762.88 to be transferred from the Everyday Account to pay out the balance owing on the Hire Purchase Account. This is apparent from page 2 of statement number 239 of the Everyday Statements.

18. The Everyday Statements show that as at 1 September 2018, there was only a credit balance in the Everyday Account of $18,899.39.

19. In order to accumulate sufficient monies in the Everyday Account to pay out the balance owing on the Hire Purchase Account, I made various transfers of personal funds into the Everyday Account during September and October 2018. I list these transactions below.

20. Each of the transfers appearing in the table in paragraph 22 above ("the Table") are circled in the Everyday Statements.

25. I paid out the Hire Purchase Account as my dearly departed mother had requested that I do so, as soon as I possibly could. I had received a payment from her as a beneficiary of her will and I also had some funds available as I had sold my Joondalup Accounting Office to my staff in May of 2018. These funds assisted my ability to pay out the Hire Purchase Account.

35. Attached hereto marked "[XX]12" is a copy of the 2019 Financial Statements for [the Applicant].

36. Attached hereto marked "[XX]13" is a copy of [Applicant's] Everyday Account Statements for the period June 2011 to June 2021.

1. There are two initial observations to be made about the evidence:

(a) The statements of intention are made in 2024 and 2025, which is so long after the relevant transaction, the purchase of the car in 2013, that they cannot be regarded as relevant or admissible to prove a presumption of resulting trust.[99] > > (b) In any event, the statements made by Mr Jones as to his intention are self-serving and should be viewed with considerable scepticism. Steward J explained the assessment to be undertaken of this type of evidence in the 2018 Federal Court decision in Bosanac v Commissioner of Taxation:[100] > > As Fullagar J said in Pascoe v FCT (1956) 30 ALJR 402 at 404: > > Where a person's purpose or object or other state of mind in relation to a given transaction is in issue, the statements of that person in the witness box provide, in a sense, the "best" evidence, but, for obvious reasons, they must, as Cussen, J observed in Cox v Smail ( (1912) VLR 274, at p 283), "be tested most closely, and received with the greatest caution". > > I do not accept Mr Jones' statements to the effect that he always considered the car as his own and intended that it be his own.

2. There are multiple other problems with Mr Jones' evidence. These include:

(a) Exhibit A1 at [48] says a payment of $155,762.88 made on 8 October 2018 was made 'personally' by Mr Jones: it was not, and this statement was plainly false. Exhibit A2 at [16] and [17] says the funds were paid out of the Applicant's bank account into the hire purchase account. Exhibit A2 is verified by attachment 6 which is the Applicant's bank statement, including its account name and number, which shows a payment, by the Applicant, of $155,762.88 to 'hire purchase' on 8 October 2018. Attachment 3 shows the corresponding deposit on 8 October 2018 into the NAB Hire Purchase account. > > (b) Para [14] reference to attachment 4: the document attached is a single sheet of what appears to be a bank statement. No account number and no account holder details are included in the single page extract, which means there is no verifiable support for the assertion that this is the relevant bank account of the Applicant. > > (c) Para [15] 'instead of paying a distribution of dividends from . . .profits to me': the Applicant's unaudited financial statements for the years ended 30 June 2017, 2018, 2019, 2020 and 2021, but no others, were in evidence.[101] These limited financial statements show:

In the 2018 and 2019 years the Applicant made no profit, but Mr Jones received substantial income in the form of director's fees and superannuation. The reduction in director's remuneration in 2020 is commensurate with the reduction in income of the business, which in turn is broadly consistent with Mr Jones' evidence as to the sell down of the Applicant's business,[106] albeit that evidence is very broadbrush and lacking in detail. In 2020, no dividend was paid to Mr Jones, despite a profit being made. On their face, I am not comfortable that the limited financial statements provided support the statements made by Mr Jones.

(d) Para [35]: attachment 12, a copy of the Applicant's 2019 financial statements, contains a number of differences to the version of the same document found at tab 53 of Exhibit R1. The document at tab 53 was provided by the Applicant to the Commissioner in response to a request for information made on 15 December 2021, during the course of the Commissioner's audit. The presence of differences raises an obvious question as to its veracity and reliability.

(e) Paragraph [25]: I put aside Mr Jones' statement as to his motivation in paying out the contract in October 2018, being 'I paid out the Hire Purchase Account as my dearly departed mother had requested that I do so, as soon as I possibly could'. This statement is plainly designed to evoke some sympathy however it shows Mr Jones as cynical and scheming. His further statement that 'I had received a payment from her as a beneficiary of her will . . . ', should be considered against the background of his earlier statement made to the Commissioner that he used funds from his mother's estate for the deposit on the car, a statement which was plainly untrue.[107] The objective truth is, the Applicant was contractually obliged to pay the NAB $155,762.88 in October 2018, a fact known to Mr Jones.

1. There are four partial statements for a NAB Everyday Account in evidence. The first is asserted to be the partial statement at attachment 4 of Exhibit A2, two are clearly for the Everyday Account at attachments 5 and 6 of Exhibit A2, and the fourth was provided by the Applicant to the Commissioner during the course of the audit.[108] In addition, Exhibit R1 tab 87 contains an almost full set of the account statements for the period from 2013 to 2018. It is clear from these records that the Everyday Account does not hold substantial funds, and that apart from the period leading up to the payment of the balloon payment, it rarely had a credit balance of more than $10,000. The pattern disclosed is that of funds being transferred into the account to meet obligations, including the payment of two lines of credit, various credit cards, residential rental, superannuation, and other expenses. No interest payments were made on the balance, which may explain why substantial funds were not kept in the account. The funds transferred into the account come from a variety of sources, many of those sources being, apparently, associated with Mr Jones personally. Some of these contributions are noted as 'capital'.[109]
2. The NAB Everyday Account is not the only bank account the Applicant had.[110] The Bankwest account held by the Applicant appears on its face to have been used in a manner more akin to an everyday trading account of the business, into which clients paid fees and from which some regular business expenses were paid. It too had injections of capital from sources associated with Mr Jones.

*_ There are some fundamental difficulties in the Applicant's case. The proposition put in the Applicant's SFIC is that the legal and beneficial title to the Ferrari was held by the Applicant,[111] from the time of the car's purchase in 2013, until October 2018, when the final balloon payment was made, at which time there was a transfer of the beneficial title to Mr Jones personally.[112] By this case, the Applicant would have it that the intention of the Applicant and its director as to the beneficial ownership of the car could change 5 years after the car's purchase, to the detriment of the Applicant, and the benefit of the director. A further difficulty is that no account is taken by the Applicant of the fact that, on its case, the Applicant itself met the hire purchase payments from 2013 until the final balloon payment, but a resulting trust of the entire beneficial ownership of the car was created by the balloon payment.

• Importantly, the Applicant specifically conceded that it did not contend that a resulting trust arose prior to the payment of the final balloon payment.[113] Nor did it rely on the director's pattern of putting the Applicant in funds to meet its obligations, including the obligation to the NAB for the equipment loan, as evidence of an earlier arising resulting trust.
• The Applicant's sole director at all times was Mr Jones, an appropriately educated, qualified and experienced tax agent of nearly 40 years standing. Mr Jones caused the Applicant to be incorporated and has been its sole director, secretary and shareholder since April 1999.[114]
• In October 2013, the Applicant entered into a hire purchase agreement with NAB to fully fund the purchase of the Ferrari.[115] The contract with NAB apparently obliged the Applicant to make 60 monthly payments of $4,426.47 commencing in October 2013, and a final balloon payment of $155,762.88 in October 2018. The NAB statement for the car loan shows that, consistent with the Applicant's obligations, between October 2013 and September 2018 monthly repayments of $4,426.47 were made to NAB,[116] which funds came from the Applicant's NAB Everyday Account.[117] These documents objectively evidence the Applicant's ownership of the Ferrari from the time it was purchased.
• The Applicant's financial statements show, consistently with the earlier years where it is not contented that a resulting trust arose, the company paid for expenses associated with the maintenance of the car in the years after the balloon payment was made. Given Mr Jones' understanding of taxation law arising from his many years in practice, he would have known that if the car was his, the expenses for operating it were also his personal expenses, not those of the company.
• Mr Jones was well aware that he needed to cause the Applicant to pay the balloon payment when it fell due in October 2018. There were several ways to do so, one was to pay the hire purchase agreement out and entirely discharge the liability, a second way was to refinance the agreement, there may also have been other options. At the beginning of September 2018, at a time when the Applicant had only $18,899.39 in its Everyday Account from which it paid NAB, Mr Jones would have been keenly aware of the need to ensure the Applicant had sufficient funds in the account to meet its obligation to NAB.
• In choosing to transfer funds from other accounts he controlled to the Applicant's Everyday Account, Mr Jones was ensuring that the Applicant met a substantial financial obligation it had, one he had personally benefitted from, and which he had caused the Applicant to enter into. In doing so Mr Jones is not objectively evincing an intention to hold the asset personally, rather he is acting in a manner consistent with a responsible company director and registered tax agent by ensuring that the company he controlled was able to meet a very substantial debt it had when it became due.
• Failure on the part of the Applicant to pay the balloon payment would likely have led to debt collection activities against the Applicant and possibly against Mr Jones personally if he were guarantor of the Applicant's obligations to the NAB, which one would expect he was. These possibilities in turn could have resulted in catastrophic consequences for Mr Jones personally, and for the Applicant's business.
• In deciding to purchase the Ferrari, 'a conspicuously expensive vanity project,'[118] the Applicant and its controlling mind, Mr Jones, made a choice between the options available as to who or which entity in the "Jones Group" was to own the car. That choice was made by Mr Jones as the director of the Applicant for asset protection purposes,[119] which is an objectively sound commercial reason for making it. Mr Jones' evidence of that decision is illustrative of his understanding of the legal separation between himself personally and the company. It is also relevantly an admission against interest, because it reveals his understanding of the legal consequence of the choice he made at the time of the purchase of the car.[120] By contrast, his more recently asserted intention that the car was to be his personally, is inconsistent with the legal choices he made in 2013, and inconsistent with the quite legitimate desire for asset protection, which was the reason for the choice that was made at the time of the purchase.
• The evidence plainly puts the case into the second of the three categories explained by Gordon and Edleman JJ in Bosanac, being one where no presumption of resulting trust arises.
• Furthermore, to accept now that Mr Jones could, some five years after the car's purchase, decide that he in fact holds the car personally, with no evidence to support that proposition, and against the background of him having ensured the Applicant's obligation to make the balloon payment was funded in exactly the same manner that he had funded the Applicant's multiple other obligations for many years previously, makes a mockery of the doctrine of separate corporate personality and lifts the corporate veil essentially at the whim of the director for his own benefit. Nothing said by the High Court in Bosanac supports this outcome.
• Ground C6 fails._**

1. As a result of the concession made by the Commissioner in respect to Ground C5, the assessments must be remitted to the Commissioner for recalculation in accordance with the agreed cost of the car. Other than that, the applicant is dismissed.

I certify that the preceding one hundred and twenty-two paragraphs are a true copy of the reasons for the decision herein of Deputy President Clare Thompson SC

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

Australian Taxation Office Litigation and Legal Services

EXHIBIT R3 - DOCUMENTS IN THE JOINT HEARING BUNDLE[121]**

Notice of Objection Decision and Reasons for Decision

FBT Return for the period 1 April 2013 to 31 March 2014

FBT Return for the period 1 April 2014 to 31 March 2015

FBT Return for the period 1 April 2015 to 31 March 2016

FBT Return for the period 1 April 2016 to 31 March 2017

FBT Return for the period 1 April 2017 to 31 March 2018

FBT Return for the period 1 April 2018 to 31 March 2019

FBT Return for the period 1 April 2019 to 31 March 2020

FBT Return for the period 1 April 2020 to 31 March 2021

FBT Return for the period 1 April 2021 to 31 March 2022

FBT Return for the period 1 April 2022 to 31 March 2023

Notice of Assessment - FBT for period ending 31 March 2014

Notice of Assessment - FBT for period ending 31 March 2015

Notice of Assessment - FBT for period ending 31 March 2016

Notice of Assessment - FBT for period ending 31 March 2017

Notice of Assessment - FBT for period ending 31 March 2018

Notice of Assessment - FBT for period ending 31 March 2019

Notice of Assessment - FBT for period ending 31 March 2020

Notice of Assessment - FBT for period ending 31 March 2021

Notice of Assessment FBT for period ending 31 March 2022

Respondent's letter to Applicant re finalisation of review

Applicant's email response to audit questions and attachments:

Respondent's letter to Applicant requesting further information

Respondent's email to Applicant requesting further information

Email from Applicant responding to the Respondent's request for information and attachments:

Applicant's NAB Business Everyday Account statement for account [redacted] for period 7 June 2018 to 13 June 2018 and 13 December 2018 to 19 December 2018

[Jones FA] Bankwest Business Bonus Statement for Marmion Trading account [redacted] for period 1 January to 15 January 2019

Applicant's email response to Respondent's request for further information and attachments:

[Mr Jones & Ms H] ANZ Residential Invest. Loan Statement Number 48 for Account number [redacted] from 12 January 2018 to 13 July 2018

[Mr Jones & Ms H] ANZ Residential Invest. Loan Statement Number 47 for Account number [redacted] from 13 July 2017 to 12 January 2018

[Mr Jones & Ms H] ANZ Residential Invest. Loan Statement Number 49 for Account number [redacted] from 13 July 2018 to 11 January 2019

[Mr Jones & Ms H] ANZ Residential Invest. Loan Statement Number 50 for Account number [redacted] from 11 January 2019 to 12 July 2019

[Mr Jones's] amended Individual tax return for the year ended 2019 - Rental property schedule for overseas property

Email from Applicant responding to the Respondent's request for information and attachment:

Applicant's Financial Report for the year ended 30 June 2020

Email from Applicant responding to the Respondent's request for information and attachment:

Applicant's Financial Report for the year ended 30 June 2017

Respondent's letter to Applicant requesting further information

Email from Applicant responding to the Respondent's request for information and attachments:

Applicant's Financial Report for year ended 30 June 2018

Applicant's Financial Report for year ended 30 June 2019

Respondent's email to Applicant requesting information

Applicant's email response to Respondent's request for information and attachments:

Attachment 1: [Jones] Pty Ltd (ABN [redacted]) Financial Report for the year ended 30 June 2021

Respondent's email to Applicant requesting information

Applicant's email response to request of information

Applicant's email responding to request for FBT Elections and attachment:

Notice of Non-Lodgement for Applicant for period ending 31 March 2017

Respondent's email notifying of Position Paper and attachment:

Respondent's email extending Applicant's time to respond

Respondent's email to the Applicant's response dated 6 December 2022

Applicant's letter re Objections to FBT Assessments. Attachment included as part of Exhibit A3:

Respondent's email to Applicant requesting further information to the Objection dated 28 April 2023

Respondent's email to Applicant re extension of time to provide information

Applicant's email to Respondent providing supporting information

Department of Infrastructure, Transport, Regional Development, Communications and the Arts website https://mvsa.infrastructure.gov.au/rvcs/rvd/20306:

Department of Infrastructure, Transport, Regional Development, Communications and the Arts website https://mvsa.infrastructure.gov.au/rvcs/rvd/20306:

Department of Infrastructure, Transport, Regional Development, Communications and the Arts website https://mvsa.infrastructure.gov.au/rvcs/rvd/20306:

Standard equipment or options affecting ADR Compliance

Department of Infrastructure, Transport, Regional Development, Communications and the Arts website https://mvsa-api.infrastructure.gov.au/api/v1/file/view/3/08Dec20092005

[1] A pseudonym; he is also the sole secretary and shareholder of the company.

[3] A further ground C2, which had been argued at objection was abandoned prior to the hearing of the matter.

[4] The Commissioner calculated taxable value on a cost price of $346,140 in the years ended 31 March 2014 to 31 March 2018, and $230,760 in the following years.

[5] Income Tax Assessment Act 1997 (ITAA97) section 995-1(1).

[7] George v Commissioner of Taxation (1952) 86 CLR 183; [1952] ALR 961; (1952) 26 ALJR 441; (1952) 5 AITR 360; (1952) 10 ATD 65; Commissioner of Taxation v Dalco (1990) 168 CLR 614; (1990) 90 ALR 341; (1990) 64 ALJR 166; (1990) ATC 4088; (1990) 20 ATR 1370; [1990] HCA 3; Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301; (2013) 296 ALR 497; (2013) 91 ATR 1; [2013] FCAFC 30; Trautwein v Federal Commissioner of Taxation [1936] HCA 46; (1936) 56 CLR 196; (1936) 10 ADJR 251; [1936] HCA 46; (1936) 4 ATD 81.

[8] Putting aside the impact of the ground C5 concession.

[9] As will be apparent from the discussion below, if Ground C1 succeeds, it does so for every year, likewise if it fails, it fails for every year.

[10] The SFICs were, the Applicant's SFIC filed 30 October 2024, as amended on 29 July 2025 (Applicant's SFIC); the Applicant's supplementary SFIC, filed on 9 June 2025 with paragraphs 22 and 23 struck out: ts 14 October 2025, 95-96 (Applicant's supplementary SFIC); the Commissioner's SFIC filed 3 February 2025 (Commissioner's SFIC) and the Commissioner's Amended SFIC filed 15 July 2025 (Commissioner's Amended SFIC).

[11] Witness statement of [Mr Jones] dated 30 October 2024, and attachments 1 to 20 (Exhibit A1) at [17].

[13] Whilst this was contested at the early stages of the dispute with the Commissioner, by the time the matter reached hearing in the Tribunal, there was no longer a contest regarding this fact.

[15] Supplementary witness statement of [Mr Jones] dated 10 June 2025, and the attachments 1 to 12 (Exhibit A2), attachment 2.

[19] A pseudonym. The precise relationship is unclear from the evidence.

[22] Ts 14 October 2025, 105 Ln 30 - 45.

[23] Exhibit R3, tab 62, p 308 at [10] and footnote 3.

[24] Ts 14 October 2025, 106 Ln 4 - 11.

[27] Exhibit A1, attachment 12, p 1646, excludes the blank columns.

[31] Exhibit A1, attachment 12, p 1646.

[33] Exhibit A1, attachment 12, p 1647.

[44] Exhibit A3, report dated 24 July 2024 including attachments Ex1 - Ex22.