(a) set aside the Trustee's decisions and make new assessments for CAP 1, CAP 3, CAP 7, and CAP 8, and > > (b) confirm the Trustee's decisions for CAP 2 and CAP 6.

6. On 17 October 2024, the Applicant applied to the Tribunal for review of the IG's decision to set aside the Trustee's decision and make fresh assessments under section 139W(2) of the Bankruptcy Act 1966 (the Act) for CAP 1, CAP 3, and CAP 8. These decisions assessed the contributions the Applicant is liable to pay towards their bankrupt estate as follows:[5]

1. At the hearing, the Respondent advised that the parties had agreed that the decision under review should be varied to reduce the income of the Applicant from Swan Hellenic for CAP 8 from $172,727.24 to $158,333.28 which necessitates amendments to the deductions allowed from the Applicant's income for CAP 8 for the purpose of s 139L(1) of the Act for:

(a) superannuation: a reduction from $19,215.91 to $17,632.57 > > (b) income tax: a reduction from $41,886.16 to $37,126.26, and > > (c) the Medicare levy: reduction from $3,070.23 to $2,814.01.

2. It was also agreed by the parties that consequently the 'Actual income threshold amount' (AITA) for CAPs 1, 3 and 8 be increased for one dependant applicable at the time of the varied decision.[6]

1. Division 4B of the Act provides, among other things, that a bankrupt who derives income during their bankruptcy is required to pay contributions towards their bankrupt estate. Section 139K of the Act sets out definitions which apply to Division 4B unless the contrary intention appears, including to define each CAP to be an annual period, commencing from the day the bankrupt became a bankrupt and each anniversary thereafter until the bankrupt is discharged or the bankruptcy annulled within that year.
2. Section 139L of the Act defines 'income' as having its ordinary meaning, subject to several qualifications outlined in that section, including, relevantly:

(v) the value of a benefit that: > > (A) is provided in any circumstances by any person (the provider ) to the bankrupt; and > > (B) is a benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 as in force at the beginning of 1 July 1992 (other than a benefit that would be an exempt benefit for the purposes of that Act if the provider were the employer of the bankrupt as an employee and the provider had provided the benefit in respect of the employment of the bankrupt); > > being that value as worked out in accordance with the provisions of that Act but subject to any modifications of any provisions of that Act made by the regulations under this Act;... > > (vii) the amount of any money, or the value of any other consideration, received by a person other than the bankrupt from another person as a result of work done or services performed by the bankrupt, less any expenses (other than expenses of a capital nature) necessarily incurred by the first - mentioned person in connection with the work or services;...

3. Section 139N(1)(a)(i) of the Act allows for income to be reduced by any amount the bankrupt pays or is likely to be liable to pay, or paid or was liable to pay during the contribution assessment period in respect of income tax.
4. Section 139S of the Act provides that the contribution that a bankrupt is liable to pay in respect of a CAP is worked out in accordance with the formula: (Assessed income - AITA) / 2. In that formula, 'assessed income' is defined to mean the amount assessed by the trustee to be the income that the bankrupt is likely to derive, or derived, during the CAP. 'Actual income threshold amount' is defined to mean the actual income threshold amount assessed by the trustee to be applicable in relation to the bankrupt when the assessment is made.
5. Section 139W(1) of the Act provides, as soon as practicable after the start of each CAP, a trustee of a bankrupt estate is required to make an assessment of the income that is likely to be derived, or was derived, by the bankrupt during the CAP, of the AITA that is applicable in relation to the bankrupt when the assessment is made and of the contribution (if any) that the bankrupt is liable to pay in respect of that period under s 139S.
6. Section 139X of the Act provides that in making an assessment of the income that is likely to be derived, or was derived, by a bankrupt during a CAP the trustee may have regard to any information provided by the bankrupt or any other information in the trustee's possession. However, section 139X(2) of the Act provides that if the trustee considers that any information provided by the bankrupt is or may be incorrect, the trustee may disregard that information and may make an assessment on the basis of what the trustee considers to be the correct information.
7. Section 139P of the Act imposes the obligation on the bankrupt to pay the contribution.
8. Section 139W(2) of the Act requires the trustee to make a fresh assessment if satisfied at any time that the income likely to be derived, or was derived, by the bankrupt during a CAP is or was greater or less than the last previously assessed amount in respect of that CAP. Section 139WA provides that there is no time limit on the making of an assessment (including the making of a fresh assessment).
9. Subdivision G of Division 4B of the Act provides for the review of an assessment made by a trustee.

1. The issues for the Tribunal to determine are whether the Applicant is liable to pay amounts different from those assessed by the Respondent for CAPs 1, 3, and 8. That is, whether in relation to:

(a) CAP 1 - the income of the Applicant within the meaning of s 139L(1) of the Act: > > > (i) excludes $4,728 referable to motor vehicle expenses > > > > (ii) excludes $19,784.22 referable to legal expenses > > > > (iii) does not include any housing fringe benefit (as opposed to the $3,837.60 assessed by the Respondent due to the operation of s 139L(1)(a)(v)), and > > > > (iv) whether the reduction required by s 139N(1)(a)(i) of the Act, in respect of income tax (including the Medicare levy), should differ from the amount assessed by the Respondent ($28,267.60). > > (b) CAP 3 - the income of the Applicant within the meaning of s 139L(1) of the Act:

(i) excludes $3,914 referable to motor vehicle expenses

(ii) does not include any housing fringe benefit (as opposed to the $3,837.60 assessed by the Respondent due to the operation of s 139L(1)(a)(v)), and

(iii) whether the reduction required by s 139N(1)(a)(i) of the Act, in respect of income tax (including the Medicare levy), should differ from the amount assessed by the Respondent ($17,109.57).

(c) CAP 8 - the income of the Applicant within the meaning of s 139L(1) of the Bankruptcy Act:

(i) excludes $3,492.96 referable to car and petrol expenses

(ii) excludes $23,733.72 referable to rent

(iii) excludes $765.55 referable to moving costs

(iv) excludes $15,818 gross or $14,379 net of GST referable to travelling, food, non-alcoholic beverages and alcohol instead of the $6,114.97 already excluded

(v) excludes $18,000 referable to a sub-contract for brochure delivery, and

(vi) does not include any housing fringe benefit (as opposed to the $4,870.54 assessed by the Respondent due to the operation of s 139L(1)(a)(v) of the Act).

1. The Applicant contends the following in relation to each CAP:

1. The Applicant's primary submission is that the expenses claimed are necessarily incurred in connection with the Applicant's work and are not of a capital nature. This Applicant submits this position aligns with the Deputy President's reasoning in Newcombe and Inspector-General in Bankruptcy (Newcombe)[7], which states:

"...the concept of income is intended to involve making a deduction for expenses necessarily incurred in connection with the bankrupt's work or services, but not a deduction for expenses of a capital nature."

2. The Applicant has continued to receive ongoing trail commissions from loans she introduced to Mortgageport in her capacity as a contractor prior to commencing employment in 2011.[8] The Applicant submits that the trail income is payable only if the loan remains on Mortgageport's books.[9] To maintain this, the Applicant says she is required to travel to meet clients and conduct regular loan product reviews, ensuring products remain suitable for their needs. She claims these reviews prevent clients from refinancing with other lenders. Accordingly, the Applicant contends that motor vehicle expenses were necessarily incurred to maintain her loan book with Mortgageport and continue receiving trail income.[10]

1. The Applicant submits that legal expenses were necessarily incurred in connection with the 'stay application', which enabled her to continue providing credit advice and maintain her loan book with Mortgageport for trail commission payments.[11]

1. The Applicant disputes the Respondent's assessment of the housing fringe benefit and submits that the revised amount should be nil. This is because the Federal Court found that the Rose Bay property was held by Ms Faina Stolyar, in trust for the Applicant and her husband, Mr Stolyar, in proportion to their contributions to the purchase price (38.1%). The property consisted of three bedrooms, of which one was occupied by the Applicant and her husband (33%).[12]

1. The Applicant submits that the final assessed net profit from her sole trading income should be added to her gross Pay As You Earn (PAYE) income and her income tax liability calculated accordingly.[13]

1. The Applicant repeats the reasons outlined in CAP 1 and submits that motor vehicle expenses were necessarily incurred to maintain her loan book with Mortgageport and continue receiving trail income. The amount should be assessed at $3,914.[14]

1. The Applicant repeats the reasons outlined in CAP 1 and disputes the Respondent's assessment of the housing fringe benefit, submitting that the revised amount should be nil.[15]

1. The Applicant submits that the final assessed net profit from her sole trading income should be added to her gross PAYE income and her income tax liability calculated accordingly.[16]

Income from Swan Hellenic - Adjustment to $158,333.25

1. The Applicant submits that provided bank transactions for the full CAP 8 period (29 September 2023 to 28 September 2024) show she was not paid a consultancy fee in September 2024; therefore, total income from Swan Hellenic should be adjusted to $158,333.25.[17] The Respondent agrees with this reduction.[18]

1. The Applicant submits as part of her duties, she is required to find, train, and support new agents. This necessitates travel by car. The Applicant submits that these expenses were necessarily incurred to perform her role as Sales Director with Swan Hellenic and meet her 2025 net revenue target of USD $5,976,304.[19]

1. The Applicant submits that the claimed rental expense was necessarily incurred to perform her work because Swan Hellenic has no physical office in Australia. Consequently, she works entirely remotely from her home, where she has established a dedicated office space equipped with a desk, chair, filing cabinet, printer, and storage for Swan Hellenic brochures and merchandise.[20]

1. The Applicant claims one-third of her moving cost from Vaucluse to Point Piper as work-related and submits that this expense was necessarily incurred to continue working for Swan Hellenic. This is because as Swan Hellenic has no physical office, the Applicant works remotely; therefore, when relocating, she also moves her home office.[21]

Travel, Food, and Beverages (Including Alcohol)

1. The Applicant submits that these expenses were necessarily incurred to generate sales. She says that her role as Sales Director and Swan Hellenic's sole representative in Australia involves sourcing and nurturing new and existing agents to grow the business. Furthermore she claims, the evidence demonstrates that these expenses relate directly to agents who provide business to Swan Hellenic.[22]

1. The Applicant submits that these expenses were not only necessary for her sales role but also critical for brand awareness. She says that Swan Hellenic is a new entrant in the Australian luxury expedition cruise market with limited recognition. She claims that delivering brochures to agents and households enhances brand visibility and, in turn, drives sales.[23]

1. The Applicant submits that there is no housing fringe benefit. This is because the Rose Bay property was sold for $16.6 million, with the Applicant and her husband holding 38.1% equity ($6.32 million). Their equity was transferred to the Point Piper property, purchased for $10.4 million, giving them a 60% interest. As they occupied one of three bedrooms (33%), this is less than their 60% ownership. The Applicant argues there is no benefit as occupation (33%) is less than ownership interest (60%).[24]

1. The Respondent sets out what it considers to be the relevant law at paragraphs [22]-[29] of its written submissions. In summary the main points are:

(a) The Act does not expressly provide for any expenses to be deducted from a bankrupt's income, however, the meaning of income referred to in s 139L of the Act and case law indicate that certain expenses should be allowed. > > (b) Section 139L(1)(a)(vii) of the Act does not apply in this proceeding, as there is no money or other consideration received by a person other than the bankrupt from another person as a result of work done or services performed by the bankrupt. > > (c) However, the ordinary meaning of 'income' within s 139L(1) of the Act refers to net income rather than gross income, similar to s 139L(1)(a)(vii). Accordingly, the income of the Applicant for the purposes of s 139L of the Act includes: > > "...the amount of any money, or the value of any other consideration, received by [the bankrupt] from another person as a result of work done or services performed by the bankrupt, less any expenses (other than expenses of a capital nature) necessarily incurred by [the bankrupt] in connection with the work or services."[25] > > (d) Deductions for income tax purposes are not automatically excluded from the concept of income under s 139L of the Act. Therefore, the allowance of any deduction for income tax purposes is neither relevant nor determinative in this proceeding. Notably, allowable deductions for income tax purposes in s 8-1(1) of the Income Tax Assessment Act 1997 (Cth) (ITAA 97) include any loss or outgoing incurred in gaining or producing assessable income which, unlike s 139L of the Act, does not require that the expense be 'necessarily incurred in connection with the work done or services performed'.[26] > > (e) The High Court has provided guidance on the meaning of 'necessarily incurred': > > "A loss or outgoing will be 'necessarily incurred in carrying on' a business if it is 'clearly appropriate' or 'adapted' for the carrying on of the business... reasonably capable of being seen as desirable or appropriate from the point of view of the pursuit of the business ends."[27] > > (f) In Re Robbins and Insolvency and Trustee Service Australia (Robbins)[28], the Tribunal considered s 139L(1)(a)(vii) of the Act in relation to a bankrupt plastic surgeon. Deputy President Gerber observed that, although there is no authority addressing s 139L(1)(a)(vii) a helpful analogy can be gained through consideration of decisions under the predecessor to s 8-1(1) of the ITAA97. > > > (i) In Robbins Gerber DP highlighted the statutory distinction between expenses 'necessarily incurred in carrying on' a business and those 'necessarily incurred in connection with' work or services under s 139L(1)(a)(vii).[29] He explained that the word 'necessarily' qualifies not expenditure related to the business but the work or services provided by the bankrupt, requiring that the expense flow directly and immediately from, or be incidental to, that work.[30] > > > > (ii) On this basis, Gerber DP held that superannuation payments above the statutory limits were non-deductible because they were not a necessary end to the applicant's continued performance of surgical services and lacked the requisite immediacy. Similarly, management fees charged by a related entity were deductible only to the extent of actual administrative costs. Mark-ups imposed for income-splitting and tax benefits were considered voluntary and therefore not 'necessarily incurred'.[31] > > > > (iii) Gerber DP drew on Mason J's reasoning in R v Hunt; Ex parte Sean Investments Pty Ltd [1979] HCA 32; (1979) 180 CLR 322, which distinguished between costs incurred involuntarily and those undertaken voluntarily. Voluntary cost being those opted for by the person to attain some purpose other than that obviously attributable to the expense. > > (g) The phrase 'in connection with' requires a direct and necessary link between the expense and the earning of income.[32]

2. Consistent with these legal principles, the Respondent contends the following in relation to each CAP:

1. The motor vehicle expenses claimed were not excluded from income because the Applicant failed to prove that any part of the expenses was necessarily incurred in connection with work or services resulting in trail income from Mortgageport. The entitlement to trail income arose from loans placed prior to bankruptcy, and ongoing expenses years later were not required to maintain that entitlement. The Respondent submits that the Applicant's assertion that regular review prevented the clients from looking to refinance to another lender is speculative and should be given little weight. The Respondent further submits that the decision of former clients to refinance their loans was entirely beyond the Applicant's control, and that if the Applicant had not incurred these expenses, she would still have received the same trail income.[33]

1. The Respondent argues that the Applicant's income under s 139L(1) of the Act should not exclude the claimed $19,784.22 in legal expenses for four main reasons:[34]

(i) Incorrect quantum - The claimed amount includes funds deposited into trust accounts rather than actual legal expenses incurred. Only amounts paid out of trust in payment of legal fees can qualify, not deposits. > > (ii) Lack of proof of incurrence - The Applicant has not proven that she personally incurred all the claimed legal expenses, as required by s 139L(a)(viii) of the Act. She failed to provide specific invoices or evidence from bank statements substantiating the expenses during the relevant contribution assessment period. > > (iii) No connection with work done or services performed - The Applicant has not established that any of the claimed expenses were incurred in connection with work done or services performed by her that generated either her salary or trail income from Mortgageport. The nature of the legal expenses is unclear on the face of the documents before the Tribunal and does not demonstrate any connection to the Applicant's employment or income‑producing activities. The Respondent maintains that this lack of connection remains even if, as the Applicant contends, the legal proceedings related to defending fraud allegations associated with accepting a loan application from a third‑party mortgage broker. > > (iv) Expenses not necessarily incurred - The Applicant has not established that any of the claimed expenses were necessarily incurred in connection with the work or services that generated her salary or trail income from Mortgageport. The work giving rise to the trail income was performed prior to bankruptcy, and her ongoing entitlement to that income did not require the incurrence of further expenses years after the loans settled. Even if the expenses related to defending fraud allegations, this does not make the legal expenses necessary. To the extent the Applicant contends the expenses were required to continue working or providing credit advice, the defence of criminal charges is private in nature and does not reduce income under s 139L of the Act, consistent with the Tribunal's decision in Taxpayer v Federal Commissioner of Taxation.[35]

1. In respect of the housing fringe benefit for CAP 1, the Respondent submits that some facts are not in dispute. During CAP 1, the Applicant was provided with rent‑free lodging at the Rose Bay Property, being the principal residence of her mother‑in‑law, Faina Stolyar. The property was held on a resulting trust for the Applicant and her husband in proportion to their contributions, being 38.1% in total. The agreed market rent for the property as a whole was $1,200 per week.[36]
2. The Respondent therefore contends that the sole issue is the correct method of calculating the market value of the Applicant's current housing right. The Respondent further contends that the Applicant's calculation is misconceived because upon bankruptcy, any joint tenancy was severed and only the Applicant's equitable interest formed part of the bankrupt estate. Further, the Applicant's housing right was not limited to the occupation of a single bedroom, as the property was also occupied by her husband and daughter. No basis exists to vary the assessed housing fringe benefit.
3. The Respondent submits its calculation adopted an orthodox approach. First, the market rent was reduced to reflect the Applicant's 19.05% equitable interest, leaving $971.40. Secondly, that amount was divided by three to reflect shared occupation with two other adults, producing a weekly value of $323.80. Thirdly, the $250 statutory exclusion was applied, leaving a weekly fringe benefit of $73.80, which was annualised to $3,837.60.[37]

1. The Respondent submits the Applicant had substantial carried‑forward non‑commercial business losses available to fully offset her net self‑employment income pursuant to s 35‑10(2) of the ITAA97. As a consequence the Respondent submits, during CAP 1 there was no amount that the Applicant paid, was liable to pay, or was likely to become liable to pay in respect of income tax or the Medicare levy on any such self‑employment income.[38]

1. The Respondent repeats the reasons outlined in CAP 1 and submits that motor vehicle expenses were not necessarily incurred.[39]

1. The Respondent repeats the reasons outlined in CAP 1 and disputes the Applicant's assessment of the housing fringe benefit.[40]

1. The Respondent repeats the reasons outlined in CAP 1 and submits there was no amount that the Applicant paid, was liable to pay, or was likely to become liable to pay in respect of income tax or the Medicare levy on any such self‑employment income.[41]

1. The Respondent submits that the Applicant has not established that the claimed expenses were incurred, or necessarily incurred, in connection with the work done or services performed by her that resulted in the receipt of income from Swan Hellenic.[42]
2. The Respondent also submits, that even if the expenses were work‑related, the Applicant had a contractual entitlement to reimbursement under clause 5.3 of the Executive Consultant Agreement with Swan Hellenic. There is no evidence that she sought reimbursement of these amounts, notwithstanding that she claimed reimbursement for other expenses. Had the Applicant been reimbursed, the amount would have been included as both income and a business expense in CAP 8, producing no net effect on her contribution liability. Alternatively, if the expenses were not 'work‑related' as characterised under Executive Consultant Agreement, they were not necessarily incurred in connection with the work done or services performed that generated her income.[43]
3. In any event, the Respondent submits that given the nature of the engagement the Applicant has failed to demonstrate the expenses were necessarily incurred in connection with the work done or services performed. She was engaged as Director of Sales on a fixed consultancy fee of $190,000 per annum, payable monthly, which was not contingent on the achievement of specific outcomes, targets, or attendance requirements.[44]

1. The Respondent submits that any amount paid as a rental bond does not constitute rent, as it is refundable to the payer subject to the property being returned in an undamaged condition. Accordingly, there is no basis to exclude the $2,133.33 claimed in respect of a rental bond from the Applicant's income for the purposes of s 139L(1) of the Act.[45]
2. In relation to the balance of the claimed amounts ($21,600.39), the Respondent submits that the Applicant has failed to apply an appropriate method of apportionment for personal use of the properties by herself and by others. The Respondent contends that for any portion of rental expenses to reduce gross income for income contribution purposes, the Applicant must establish, for each property, the total floor area and the floor area set aside for work use, consistent with the approach adopted for income tax deductions under s 8‑1 of the ITAA97.[46]
3. The Respondent therefore contends that, in the absence of any evidence of the relevant floor areas for the properties in question, and in the absence of the Applicant's 2024 income tax return, the Tribunal is left with no evidentiary basis upon which to assess the claim. The Respondent further contends that the Tribunal cannot make assumptions or engage in broad‑brush estimations where the Applicant has failed to discharge her onus of proof.[47]

1. The Respondent submits that the Applicant contends that the amount claimed represents one‑third of the total moving costs, however this figure exceeds the GST‑exclusive amount actually paid, and it is unclear what the additional amounts relate to or whether they were incurred at all.[48]
2. The Respondent further contends that even if the $1,687.64 GST‑exclusive amount was incurred, the method of apportionment applied is not appropriate. The moving costs relate to items associated with personal use of the premises by the Applicant and by other occupants. For any portion of the moving expenses to reduce the Applicant's gross income for income contribution purposes, the Respondent submits that the Applicant must establish the total floor area of the Vaucluse Property and the floor area of the room set aside for work use. Apportionment based on the relevant proportion of floor space would then be appropriate. The Respondent submits as the Applicant has adduced no evidence to establish these matters, no reduction can be made.[49]

Travel, Food, and Beverages (Including Alcohol)

1. The Respondent submits that a further reduction of the Applicant's income within the meaning of s 139L(1) of the Act to exclude an additional $15,818 gross or $14,379 net of GST should not be made as the Applicant has not established that the expenses claimed were incurred in connection with the work done or services performed by the Applicant which resulted in the receipt of income from Swan Hellenic, or that any part of those expenses was necessarily incurred.[50]
2. The Respondent also submits that the Applicant had a contractual entitlement to reimbursement of work‑related expenses from Swan Hellenic and there is no evidence that reimbursement was sought or refused. In the absence of such evidence, the Respondent submits that the Tribunal should not be satisfied that the expenses were necessarily incurred by the Applicant personally.[51]
3. The Respondent further submits that the Tribunal should not accept the Applicant's submission that the expenses were necessarily incurred as part of business development, including entertaining agents to promote Swan Hellenic products. This is because under s 32‑5 of the ITAA97 expenses relating to 'entertainment', defined in s 32‑10 ITAA97 to include food, drink or recreation, are not deductible, even where business discussions occur unless an exception set out in Subdivision 32‑B applies. The Respondent submits that none of those exceptions apply.[52]
4. The Respondent therefore submits that while this matter arises under the Bankruptcy Act, the treatment of entertainment expenses under the ITAA97 supports the conclusion that the expenses claimed were not necessarily incurred in connection with the work done or services performed by the Applicant to derive income from Swan Hellenic.[53]

1. The Respondent submits that the Tribunal should not be satisfied that any reduction should be made to the Applicant's income for the purposes of s 139L(1) of the Act in respect of brochure delivery. In particular because:

(a) the Applicant has not established the existence of the asserted sub‑contract > > (b) the Applicant has not established that any services were provided pursuant to that asserted sub‑contract > > (c) the Applicant has not established that any part of the $18,000 was incurred in connection with the work done or services performed by the Applicant which resulted in the Applicant's receipt of income from Swan Hellenic, and > > (d) the Applicant has not established that any part of the $18,000 was necessarily incurred in connection with the work done or services performed by the Applicant which resulted in the Applicant's receipt of income from Swan Hellenic.[54]

2. In addition, the Respondent submits that the Applicant had a contractual entitlement to reimbursement of work‑related expenses from Swan Hellenic, and there is no evidence that reimbursement of this amount was sought or refused.[55]

1. The Respondent submits that no reduction should be made to the assessed housing fringe benefit. This is because the Federal Court did not declare that any part of the Point Piper Property was held on trust for the Applicant or the Trustee. Rather, the Court declared that the Point Piper Property was subject to an equitable charge securing payment to the Trustee of 38.1% of the net proceeds of sale of the Rose Bay Property.[56]
2. The Respondent submits that the declaration recognised an equitable interest in the proceeds of sale and gave rise to an equitable charge. The Respondent further submits that an equitable charge does not confer any proprietary or possessory interest in the charged property, but only a right of enforcement by judicial process. As the charge did not confer on the Applicant any right of possession of the Point Piper Property, it provides no basis for any reduction to the assessed housing fringe benefit.[57]
3. The Respondent submits that the market value of the Applicant's current housing right in respect of the Point Piper Property was $4,218.75. That value was appropriately determined by taking the mean of four independent rental appraisals provided by qualified real estate agents familiar with comparable properties in the area. The Respondent submits that excluding one appraisal would amount to an impermissible substitution of lay opinion for professional expertise. The Respondent further submits that there is no basis to doubt the competence or independence of any of the appraisers, including Ray White, or the reliability of their assessment of potential rental income.[58]

1. For convenience, I address the issues thematically rather than by reference to each individual CAP, as in several instances the applicable legal principles do not differ according to the CAP under which the issue arises. In addition, the findings reached on particular issues necessarily have a flow‑on effect for the assessment of subsequent matters arising across the various CAPs.
2. The parties are not in material dispute about the applicable legal principles identified at [37] for determining whether an expense should reduce the Applicant's income. The main dispute instead concerns whether the IG has applied those principles correctly and consistently, and whether the evidentiary requirements to establish the claimed expenditure - including whether deductibility for income tax purposes necessarily implies deductibility for bankruptcy purposes - have been satisfied.
3. By contrast, there is a material dispute regarding the applicable legal principles relevant to reductions for income tax and the correct method of calculating the market value of the Applicant's housing right.

1. At the hearing, for CAP 1 the Applicant remained adamant that the motor vehicle expenses were necessarily incurred in order to maintain her loan book with Mortgageport for her to continue to receive the trail income.
2. Ms Ensor cross‑examined the Applicant as to whether it was necessary for her to meet clients in person and conduct home visits, given the availability of alternative modes of communication that did not require travel. It was also put to the Applicant that she could not control the decisions ultimately made by her clients regarding their loan arrangements.
3. The Applicant gave evidence that CAP 1 pre‑dated the COVID‑19 pandemic, at a time when in‑person engagement with clients was more common. She accepted that she could not control the decisions made by her clients; however, she maintained that in‑person visits were necessary to ensure that clients' needs were being properly addressed and to mitigate the risk of clients seeking alternative lenders, including by offering product variations or encouraging clients to remain with their existing loan arrangements.
4. The Respondent's submission proceeds on the premise that all work and services by the Applicant which result in the Applicant's receipt of the trail income was done or performed prior to the Applicant's bankruptcy and her entitlement to this trail income did not necessarily require the incurrence of any further expenses many years after the loans settled.[59]
5. That premise is inconsistent with the evidence presented by the Applicant of the practical and commercial realities of her mortgage broking activities. The Applicant gave evidence that her ongoing engagement with clients, including reviews and in‑person visits, was directed towards maintaining lending relationships and ensuring client needs continued to be met. Those activities were not disconnected from the receipt of trail income, which was contingent upon loans remaining on foot. The evidence was not to the effect that her actions guaranteed client retention, rather, the evidence was that the Applicant took steps to support and maintain existing loan relationships
6. Consistent with the authority in Robbins, whether an expense is 'necessarily incurred' depends on provision of the particular work or services performed by the bankrupt.[60] In this context, the expenditure must be appropriate to the Applicant's professional operations as a mortgage broker, and must flow directly and immediately from, or be incidental to, that work. Put another way, the test requires a direct and immediate connection between the expenditure and the activities by which the income is derived.
7. As the cross-examination of the Applicant confirmed, mortgage broking is a client‑facing profession. The Applicant's oral evidence was that maintenance of client relationships through personable and ongoing communication is a necessary and required part of carrying out that work. Expenditure incurred for that purpose therefore flows directly and immediately from the performance of the income‑earning activities and is properly characterised as incurred in the course of carrying on that work.
8. I find that the expenses are of a kind capable of being necessarily incurred in connection with the Applicant's work and are therefore capable of being deducted. This finding is consistent with the deductions allowed for stationery, telephone, internet, and bank fee expenses, which were accepted as necessary to enable the Applicant to continue communicating with Mortgageport customers.[61] Those expenses likewise related to trail commission income derived from loans referred by the Applicant to Mortgageport prior to the commencement of her bankruptcy. I acknowledge the Respondent's submission that the Applicant could have continued to receive the commission without taking any action. However, taking no action would increase the risk that customers the Applicant introduced to Mortgageport might switch lenders, resulting in the Applicant receiving less income from ongoing trail commissions.
9. Although there is a basis for allowing expenses of this kind, it is still necessary to decide whether the evidence shows that all the claimed expenses were actually and necessarily incurred for the Applicant's work, and that none were personal. The Applicant claims that 81% of her motor vehicle expenses during the CAP period were work‑related.
10. This examination is necessary because, as the Respondent contends and I also appreciate, the differences between the bankruptcy regime and the income tax legislation mean that it cannot be assumed that deductions available for income tax purposes are automatically applicable in the bankruptcy context.
11. The Act contains no express provision excluding income tax deductions from the definition of 'income' in s 139L of the Act, nor does it identify such deductions as amounts capable of reducing the contribution payable by a bankrupt under s 139N of the Act. Ms Ensor contended had Parliament intended income tax deductions to operate in that way, it would have been straightforward to make express provision to that effect.
12. As noted in the reasons for the decision under review, the fact that deductions are claimed in a tax return - even where properly allowable for taxation purposes - does not determine their treatment for the purposes of the Act.[62] While the decision under review calculated amounts for stationery, phone, internet, and bank fees by reference to income tax returns for 2017 and 2018, this was done as a guide only and not because of any statutory requirement.[63]
13. The Applicant provided a list of Mortgageport clients. However, she did not provide probative evidence of meeting schedules, appointment records, or invitations that might demonstrate the extent of her engagement with those clients. In the absence of such evidence, the Tribunal is not satisfied that the list, of itself, supports or explains the claimed business‑use proportion.
14. The Applicant also provided receipts and bank statements in respect of the various expenses and a log book for a 12 week period.[64] However, there was no other probative evidence to support or explain the claimed business‑use proportion of 81%, beyond materials prepared for taxation purposes. In the absence of evidence substantiating that apportionment, the Tribunal is not satisfied that the expenses, to the extent claimed, were necessarily incurred in the derivation of the trail commission income or that they were not of a private nature.
15. The findings made above in respect of the motor vehicle expenses claimed by the Applicant during CAP 1 apply equally to CAP 3. Those claims suffer from the same lack of probative evidence.
16. The issues arising in relation to the motor vehicle expenses claimed by the Applicant for CAP 8 share similar characteristics with those identified in CAP 1 and CAP 3. Although the Applicant claims a business-use proportion of 77% for CAP 8, there is an absence of probative evidence to substantiate the apportionment between business and private use.[65]
17. Additionally, the different circumstances associated with a new client base, together with the post‑COVID‑19 context in which alternative modes of communication had generally become accepted and commonplace, raise the possibility that the Applicant's preference for communicating in person, rather than virtually, rendered the expenditure voluntary rather than necessary.
18. At the hearing, the Respondent submitted that the Applicant's preference to visit people in person for conversations was a matter of personal choice and not a necessary expense in the sense described in Robbins - that is, an expense compulsorily required by the activity rather than voluntarily incurred.
19. During cross‑examination, it became clear that the Applicant preferred in‑person contact and placed significant value on such engagement, despite working remotely, which ordinarily necessitated the use of virtual communication methods. Cross‑examination revealed that the Applicant undertook the relevant travel as a matter of choice and personal preference, rather than out of necessity. This renders the expenditure voluntary in the relevant sense.
20. The evidence includes an email from the Applicant to the IG in which she states that she is required to sign up new agents across Australia, travel to train them, and take them out for coffee, lunch, and dinner.[66] A similar assertion was made by the Applicant during cross‑examination. However, no evidence was adduced to demonstrate that, following the pandemic, face‑to‑face meetings had resumed as standard practice within the industry.
21. I find that the evidence did not sufficiently establish that the Applicant was obliged to incur the motor vehicle expenses in order to perform her role as Sales Director with Swan Hellenic or to meet her revenue targets for the year. In particular, there was no evidence of any contractual requirement for in‑person attendance, no documentary material specifying that client engagement or sales activities necessitated physical travel, no records demonstrating that clients expected or required face‑to‑face meetings, and no contemporaneous logbooks (aside from that prepared for income tax purposes) or travel schedules linking specific trips to mandatory work activities. In the absence of such evidence, I am not satisfied that the expenditure was necessary rather than voluntary.
22. The Respondent contended at the hearing that, even if the expenses were accepted as having been necessarily incurred by the Applicant in connection with the work or services performed, they ought to have been claimed back from Swan Hellenic. The Respondent further submitted that the Applicant's failure to seek reimbursement indicates that the expenses were not, in substance, work‑related.
23. Under the contract between the Applicant and Swan Hellenic Cruises, Swan Hellenic agreed to reimburse the Applicant for 'all work related expenses'.[67]
24. In closing submissions, the Applicant contended that she would have claimed these business expenses from Swan Hellenic if she was able to do so and that she has proven that the expenses are necessary, connected to her work and not of a capital nature.
25. However, those submissions cannot be accepted without careful examination of the contractual arrangements and the evidence relied upon.
26. The executive consultant agreement relied upon in evidence provides, at cl 5.1, that the Applicant's consultancy fee of $190,000 is inclusive of annual leave and sick leave, and that the Applicant is responsible for her own superannuation obligations. Clause 5.3 then separately provides that the company will reimburse the Applicant for all work‑related expenses, which are payable in addition to the monthly consultancy fee.[68]
27. The evidence relied upon by the Applicant includes a letter from Swan Hellenic's Chief Commercial Officer (CCO) dated 11 July 2024, which confirms that the Applicant is engaged as an independent consultant and is responsible for all her office rental expenses and all 'related business expenses'. The letter lists those business expenses as including statutory superannuation, annual leave, sick leave, internet, mobile phone, printer and stationery, and entertainment.[69] Notably the list does not include car related expenses.
28. However, the inclusion of items such as annual leave, sick leave and statutory superannuation in that list sits uneasily with the expressed terms of the executive consultancy agreement. Clause 5.1 of the Executive Consultancy Agreement provides that the Applicant's $190,000 consultancy fee is inclusive of annual leave and sick leave and that the Applicant bears responsibility for her own superannuation (which is a statutory obligation arising by operation of law irrespective of any contractual position). Those items are components of the remuneration and statutory framework, rather than expenses incurred.
29. When cross-examined on this issue, the Applicant acknowledged that initial travel expenses for training and a pre-committed conference were reimbursed by Swan Hellenic. Subsequent travel costs were self-funded, despite being incurred for business development activities such as signing and training agents. The June letter from the COO was to clarify that the Applicant was responsible for costs necessary to achieve sales targets.
30. As the Respondent pointed out, the date of the letter - which was issued after the Respondent's decision and before the application for review was lodged with the Tribunal - suggests that the letter was created for the purpose of the review.
31. The letter does not legally vary the contract between the parties because clause 16 of the Executive Consultancy Agreement stipulates that any variation to the agreement will have no force or effect unless it is reduced to writing and signed by both parties. The Applicant conceded that no such written and executed variation exists. Accordingly, the purported 'clarification' letter cannot legally alter the terms of the Agreement.
32. I find that the timing of the letter's creation also affects its evidentiary weight. The letter was not prepared contemporaneously with the relevant events but was created after an adverse decision and/or in anticipation of review. Accordingly, it is less reliable. In light of this and the matters outlined above, I consider the letter from Swan Hellenic to have limited probative value.
33. In closing submissions, the Applicant contended that the Respondent's allowance of deductions for stationery, telephone and internet expenses was inconsistent with its position that all work‑related expenses were reimbursed by Swan Hellenic and therefore not deductible. While I accept that this may reflect an apparent inconsistency, it does not, of itself, justify the allowance of these disputed deductions. The allowance of deductions for stationery etc was accepted on the basis that the Applicant was required to work entirely from home.[70]

1. The Applicant contends that legal expenses were necessarily incurred to enable her to continue providing credit advice and maintain her loan book with Mortgageport and receive trail commission payments.
2. The Respondent disputes this for four reasons set out above and summarised below:

(a) Incorrect Quantum: The claimed $19,784.22 includes trust deposits, not actual legal fees paid. Only amounts disbursed for legal services qualify. > > (b) Insufficient Proof: The Applicant failed to provide invoices or bank evidence showing she personally incurred these expenses during the relevant period. > > (c) No Connection to Income-Producing Activities: The expenses are not shown to relate to work or services generating her salary or trail income. Even if linked to defending fraud allegations, this does not establish a nexus to employment or income generation. > > (d) Not Necessarily Incurred: The trail income arose from pre-bankruptcy work and did not require further expenses. Further defence of criminal charges is private in nature and does not reduce income under s 139L.

3. The Applicant says she incurred the legal fees to fight the charge against her for alleged fraud from accepting a loan application from a third-party mortgage broker.[71]
4. The Applicant's employment was terminated by Mortgageport on or about 20 January 2017 due to serious misconduct including failure to notify Mortgageport of criminal charges against her in addition to her bankruptcy.[72]
5. As the Respondent was unable to identify any case law or non-binding authority concerning the reduction of income under section 139L of the Act in relation to legal expenses, Ms Ensor referred to Tribunal decision in the income tax context: Taxpayer v Federal Commissioner of Taxation (Taxpayer).[73] That case involved legal expenses incurred by the applicant in challenging a banning order issued by ASIC, which prohibited the applicant from providing financial services for five years, and in defending criminal charges for insider trading. Ms Ensor correctly observed that, although the decision is not binding on this Tribunal, it is relevant by analogy and useful because it considered issues similar to those arising in this matter, namely:

(a) the necessary connection between the legal expenses incurred by a person and what is productive of their income, and > > (b) the characterisation of legal expenses as income or capital in nature, and/or whether they are of a personal nature.

6. In relation to paragraph (a) in Taxpayer, the Senior Member concluded, based on several authorities, that the relevant question was whether the outgoing was incurred in the course of gaining or producing actual or expected income.[74] The Senior Member held that the words in section 8-1(1)(a) of the ITAA97 require more than a mere causal connection between the expenditure and the derivation of income.[75] What must be demonstrated is a closer and more immediate connection.
7. In Taxpayer, the taxpayer's employment in the stockbroking and financial services industry had been terminated prior to the incurring of the legal expenses. The Senior Member contrasted this situation with that in Commissioner of Taxation v Day (Day)[76] where the taxpayer, a public servant, maintained an ongoing employment relationship with his employer.[77] In Day, the legal expenses were incurred in connection with preserving that relationship in the context of disciplinary proceedings under the Public Service Act 1922.
8. In Day, Gummow, Hayne, Heydon and Kiefel JJ held that, in determining what was productive of the taxpayer's assessable income, it was necessary to consider the full scope of the taxpayer's role as a public servant.[78] The taxpayer's status as a public servant rendered the standards imposed by the Public Service Act 1999 and its disciplinary procedures relevant. Viewed in this light, the Court concluded that what was productive of the respondent's income encompassed compliance with those standards.[79] Their Honours further observed that whether expenditure has been incurred 'in gaining or producing' income requires consideration of the scope of the taxpayer's operations or activities and their relevance to the expenditure, rather than the taxpayer's subjective purpose in incurring it.[80] Accordingly, the Court stated that, in many cases, the objective relationship between the expenditure and that which is productive of income will provide a sufficient answer to the inquiry.[81]
9. As explained above, although Ms Nguyen's employment ended with Mortgageport in January 2017, she continued to earn trail commissions. The Applicant would earn the said commissions provided that the relevant mortgage loans remained with Mortgageport.
10. The Applicant contends that the legal expenses were necessarily incurred to enable her to continue providing credit advice and maintain the loan book with Mortgageport, thereby ensuring payment of trail commission.[82] In essence, the Applicant submits that these expenses are connected with the work performed or services provided by her, which resulted in salary from Mortgageport.
11. The Tribunal is not satisfied that this proposition is supported by sufficient evidence. The Applicant's Statement of Issues, Facts and Contentions, together with the invoices provided, do not establish the requisite degree of connection between the legal expenditure and the derivation of assessable income. It is unclear whether the expenses were incurred in producing the Mortgageport income or in relation to matters that are unrelated or related to matters that do not fall in CAP 1.
12. The evidence comprises letters, invoices, trust account receipts and trust account statements from Armstrong Legal. One invoice records an amount of $1,650 (GST inclusive) for preparation, conference and attendance at a hearing in the Burwood Local Court on 20 January 2017.[83] Another invoice records an amount of $1,390.93 conference with counsel and court appearance at the same court.[84] The nature of the criminal charges is not apparent from these invoices. Further, the amounts shown in the trust account statement cannot be reconciled with the receipts tendered. The T‑Documents include a link to an article published in The Adviser reporting that the Applicant was found guilty on 30 March 2017 of mortgage fraud committed in 2005 and not discovered until 2014.[85] On the evidence before the Tribunal, it is also not possible to determine the quantum of the expenses with any certainty.
13. Even if the evidence were sufficient to establish the necessary connection between the expenses and the Applicant's income‑producing activities, a further issue arises concerning the exclusion of legal expenses relating to criminal charges. The question is whether, as in Taxpayer, the occasion of the outgoing is properly characterised as the criminal charges themselves.[86] If the expenses were incurred to avoid penal or other consequences of a potential criminal conviction, rather than in the course of producing the Applicant's income, then the relevant occasion is the criminal proceedings, not the earning of income, and the expenditure cannot be excluded.
14. In relation to the considerations in paragraph (b), I am inclined to agree with the Respondent's submission that the expenses are either or both of a capital or private nature.
15. The Applicant submits that the legal expenses were incurred to enable her to continue working in the industry. However, as the Respondent notes, an analogy may be drawn with the circumstances in Taxpayer in relation to the criminal charges, where the Tribunal considered whether the legal expenses in that matter constituted non‑deductible capital expenditure under s 8‑1(2)(a) of the ITAA97.[87] In that case, the expenses were found to relate to the preservation or restoration of the taxpayer's profit‑yielding structure rather than the derivation of income, leading to their characterisation as capital in nature.
16. The Applicant, both in her oral evidence and written submissions, emphasised the importance of contesting the criminal charge because it threatened her continued ability to participate in the industry and maintain her loan book. Therefore, the advantage sought was the preservation of her ability to operate within the financial services sector in order to preserve the profit‑yielding structure she had established through her work with Mortgageport - an enduring, structural benefit rather than an ordinary working expense. On that basis, the expenses can be properly characterised as capital in nature.
17. Even if that conclusion is incorrect, tηε legal expenses can also be characterised as private in nature. The occasion for the outgoing was the criminal charges themselves, and the expenditure was incurred to avoid the personal consequences of those charges.
18. And if that conclusion is incorrect, the evidence before the Tribunal is insufficient to establish the requisite connection between the expenditure and the derivation of the Applicant's income.
19. Accordingly, I accept the Respondent's submission that, for these reasons - and in the absence of any statutory provision in the Act requiring such expenses to be allowed - there is no basis on which the Tribunal could conclude that the amount should be excluded from the Applicant's assessable income.

1. In relation to CAP 1, the sole issue in dispute between the parties concerns the calculation of the Applicant's housing right.[88]
2. It is not in dispute that 38.1% of the Rose Bay property in which the Applicant resided during CAP 1 was held on a resulting trust for the Applicant and her husband[89], and that the fair market rental value of the property during CAPs 1 and 3 was $1,200 per week.[90] However:

(a) The Applicant contends that she occupied only 33% of the property, which is less than her 38.1% beneficial ownership. On this basis, she submits that no housing fringe benefit arises. Her calculation is:

• $1,200 (market rent)
  • less $457.20 (being 38.1% of $1,200)
  • divided by 3 (being one third of occupancy)
  • less $250 (being a fringe benefit under the definition of 'fringe benefit' in cl 23(1) of Sch 2 to the Bankruptcy Regulations)
  • equals -$2.40 (i.e., a nil fringe benefit).

(b) The Respondent also proceeds on the basis that the Applicant occupied 33% of the property. The Respondent submits that, when the Applicant's beneficial interest under the resulting trust is taken into account, the appropriate adjustment is half of 38.1%, being 19.05%. On that basis, the Respondent calculates the fringe benefit as:

• $1,200 (market rent)
  • less $228.60 (being 19.05% of $1,200)
  • divided by 3 (being one third of occupancy)
  • less $250 (being a fringe benefit under the definition of 'fringe benefit' in cl 23(1) of Sch 2 to the Bankruptcy Regulations)
  • multiplied by 52
  • equals $3,837.60.

3. The Respondent submits that the Applicant's proposed method of calculation is flawed because it fails to recognise that, following her bankruptcy, the Applicant held only a 19.05% equitable interest in the Rose Bay property. The Respondent contends that the onset of bankruptcy severed the joint tenancy, such that each party was no longer seized of the whole property jointly. At the hearing, Ms Ensor described this as a critical aspect of bankruptcy law and referred the Tribunal to relevant High Court authority. In Trustees of the Property of Cummins (a bankrupt) v Cummins (2006)[91] the Court accepted that bankruptcy severs a joint tenancy. This principle was reaffirmed in Peldan v Anderson[92] where the court stated:

"As was accepted by this Court in Cummins, it is established that the onset of bankruptcy works a severance of a joint tenancy. Upon sequestration, unity of title is destroyed. On this basis, all that fell into the bankrupt's estate was an interest as tenant in common..."

4. The Applicant's written submissions suggest that she is unaware of the legal effect of bankruptcy on the holding of title. However, at the hearing, the Applicant maintained that the property continued to be held in joint tenancy. She argued that this situation differs from the more common scenario in which only one member of a couple becomes bankrupt. The Applicant contended that if the property were held as tenants in common there would be a separate trustee and separate legal proceedings etc. In essence, she asserted that her estate and her husband's estate operated as a single entity.
5. I do not accept this submission. It misstates the legal position. Although the sequestration order made on 29 September 2016 applied to both the Applicant's and her husband's estates, [93] this does not alter the legal effect that the Applicant's bankruptcy had on the joint tenancy. As the Trustee's statement in the Tribunal documents explains, although the affairs of the two estates are often co‑mingled in practice, the estates themselves are administered separately.[94]
6. The authorities referred to above make clear that a joint tenancy is severed upon the onset of bankruptcy. Accordingly, the Applicant did not retain an equitable entitlement to the whole of the 38.1% interest. Her equitable interest was reduced to a fixed share held as tenant in common. It follows that she cannot deduct that full percentage amount from the market rental value when calculating her housing right.
7. The Respondent further submits that it is incorrect for the Applicant to assert that her housing right related solely to the occupation of one bedroom, as she acknowledged that she and her husband also accommodated their daughter.[95] I find, however, that the Applicant's submission refers to the one bedroom she and her husband occupied and is intended to denote the one‑third proportion of overall occupancy.[96]
8. The same reasoning applies equally to CAPs 1 and 3, as the Applicant resided at the Rose Bay property during both relevant periods.
9. Accordingly, I accept the Respondent's calculation of the housing right for both CAP 1 and CAP 3.
10. In relation to CAP 8, two issues arise. The first somewhat mirrors the argument advanced by the Applicant in respect of the earlier CAPs, namely that her and her husband's occupation of the relevant property during the period was less than the equitable interest she held in the property, such that no housing fringe benefit arises. The Applicant states that this is because on the sale of the Rose Bay property her and her husband's 38.1% equity transferred to the Point Piper property.[97]
11. The alternative second argument advanced by the Applicant - while maintaining that she did in fact hold an equitable interest in the property she occupied during the CAP - is that, if her interest is disregarded, the appropriate market rental value should be assessed at $3,691 per month, being the average of the valuations provided by three real estate agents experienced in the Point Piper rental market.
12. In relation to the first issue, the Respondent submits that the Applicant's calculation is flawed. This is because the declarations made by the Federal Court was that the Point Piper Property was subject to a charge securing payment to the Trustee (in his capacity as the trustee of her and her husband's bankrupt estate) of 38.1% of the Rose Bay proceeds, not that part of the Point Piper Property was held on trust for the Applicant or the Trustee.[98]
13. The Respondent submits that unlike the Rose Bay property, in respect of which a resulting trust was found to exist, the Federal Court declarations did not confer upon the Applicant any equitable ownership or proprietary entitlement in the Point Piper property. Further, the court's orders set out the accounting to be made of the net sale proceeds of Rose Bay that the Applicant and her husband pay the Trustee 38.1% of the net sale proceeds.[99]
14. The Respondent submits that the declarations operated only to create a charge securing the payment of a monetary amount.[100] The Respondent also contends that the charge was declared not for the benefit of the Applicant personally, but for the benefit of the Trustee in respect of the Applicant's bankrupt estate. On this basis, the Respondent argues that the Applicant cannot treat the Point Piper property as one in which she held a beneficial interest for the purpose of calculating her housing right.[101]
15. The Respondent's counsel referred the Tribunal to relevant High Court authority Hewett and Others v Court and Another;[102] and Chief Commissioner of Stamp Duties (NSW) v Buckle (1998)[103] to support their contentions that an equitable charge securing payment of money is not a legal or equitable proprietary interest in real property. It does not transfer title, create a beneficial interest, or confer any right to possession of the land. The chargee's (being the trustee in this case) sole enforcement mechanism is to seek a judicial order for sale of the property.
16. I am satisfied, consistent with the declarations and orders of the Federal Court and the applicable authorities, that the Applicant did not hold a right to possession of the Point Piper property during the relevant period. The evidence establishes that the property was subject to a charge which conferred upon the Trustee an entitlement to pursue equitable execution in enforcement of that charge. In those circumstances, there is no basis upon which to reduce either the percentage proposed by the Applicant (38.1%) or the percentage determined in respect of CAP 1 and CAP 3 (19.05%).
17. In relation to the second issue, the Respondent submits that the Applicant's housing right in respect of the Point Piper property was appropriately determined by calculating the mean of four rental appraisals given by qualified real estate agents operating in suburbs adjacent to Point Piper because there was not an agent in Point Piper.
18. Rental appraisals for the Point Piper property were obtained from several agencies. First, in April 2024, The Agency provided an appraisal indicating an expected rental of between $3,500 and $4,000 per week; the nearest office of that agency to the property is located in Surry Hills. Secondly, on 15 April 2024, Richardson & Wrench (Elizabeth Bay/Potts Point) appraised the property at approximately $3,500 per week. Thirdly, on 16 April 2024, Ballard Property in Double Bay assessed the likely rental return at between $3,750 and $4,000 per week. Finally, on 17 April 2024, Ray White in Double Bay provided a higher appraisal in the range of $5,500 to $6,000 per week.[104] The Respondent has therefore assessed the market value of the Applicant's current housing right as $4,218.75.[105]
19. The Applicant submits that the appropriate average rental value is $3,691 per week, being the average of the three appraisals provided by agents with experience in the Point Piper rental market. The Applicant contends that the Ray White appraisal should be excluded from consideration.[106] The Respondent, however, submits that there is no proper basis for excluding any of the appraisals. It is argued that Ray White is a well‑known and reputable real estate agency, and that the Applicant has not adduced any expert evidence explaining why that appraisal should be regarded as inappropriate or unreliable.
20. At the hearing, Ms Ensor submitted that the difference between the Ray White valuation and the other valuations obtained from real estate agents was not statistically significant. Ms Ensor noted, however, that a "sense check" could be undertaken by multiplying the $4,000 per month that the Applicant agreed to pay her mother‑in‑law by four, which would result in a figure not inherently dissimilar from the Respondent's calculated average.
21. In my view, the Ray White valuation, which exceeds the other valuations by approximately 50%, constitutes a material departure. I consider this divergence sufficiently significant to render reliance on the Ray White valuation inappropriate and unfair for the purpose of determining the value of the Applicant's housing right. This conclusion is further reinforced by the fact that, in January 2024, Justice Markovic of the Federal Court accepted that the property was not ready for sale - a finding that necessarily indicates the condition of the property would have adversely affected its rental potential.[107]
22. In Nguyen v Inspector‑General in Bankruptcy,[108] one of the valuations was set aside (for different reasons), leaving three real‑estate valuations to determine the market rental value of the property. The Deputy President was satisfied that the 'consensus demonstrated by the local agents as to likely rent achievable suggests that the appraisals are likely to be accurate.' [109]
23. Similarly, I consider that the consensus demonstrated by the three agents - The Agency, Richardson & Wrench, and Ballard Property - indicates that these appraisals are likely to be accurate.
24. I therefore remit the matter to the Respondent with the direction that the market rental value of the Point Piper property for the relevant period was $3,750 per week.

1. Section 139N(1)(a)(i) of the Act provides that income is reduced by any amounts paid, or likely to be payable during the period for income tax (excluding provable debts). Section 139K of the Act confirms that 'income tax' includes the Medicare levy.
2. During CAP 1, the Applicant earned income from Mortgageport and from her sole trader business. The Respondent applied a reduction of $28,267.60 under s 139N(1)(a)(i) of the Act, reflecting PAYG withholding and the Medicare levy. No reduction was applied for the sole trader income.[110]
3. During CAP 3, the Applicant earned income from Nexus Holidays, MSC Cruises (Australia) Pty Limited, and from her sole trader business. The Respondent applied a reduction of $17,109.57 under s 139N(1)(a)(i) of the Act reflecting PAYG withholding and the Medicare levy. No reduction was applied for the sole trader income.[111]
4. The Applicant contends that further reductions should have been made during both CAPs to reflect tax and Medicare levy on her sole trader profit.[112] No reason is provided to support this assertion.
5. In Newcombe, the Deputy President considered the proper construction of s 139N(1)(a)(i) of the Act, which - although amended since that decision - was in a materially similar form for present purposes. The Deputy President observed that the provision contemplates four alternative bases for reducing the assessed income of a bankrupt, namely:
   • any amount that the bankrupt pays during the CAP in respect of income tax
   • any amount that the bankrupt is likely to be liable to pay during the CAP in respect of income tax
   • any amount that the bankrupt paid during the CAP in respect of income tax, and
   • any amount that the bankrupt was liable to pay during the CAP in respect of income tax.[113]
6. The Deputy President further noted that the subsection does not specify which of these four alternatives is to be preferred in a given case. However, the apparent purpose of the provision is to ensure that a bankrupt's income is assessed on an after‑tax basis for the purpose of calculating contribution liability. Accordingly, the reduction for tax is not calculated by reference to the tax ultimately assessed in respect of a CAP, but instead by reference to the amount paid, or the amount the bankrupt was liable or likely to be liable to pay, during the relevant CAP.[114]
7. I accept the Respondent's argument that no further deductions are warranted because no liability to pay tax arose during CAP 1 and 3. This is because under s 35‑10(2) of the ITAA97, the Applicant had sufficient carried‑forward non‑commercial business losses to wholly offset any net self‑employment income. This is clearly indicated in the Applicant's income tax returns for financial years 2016/2017, 2017/2018, 2018/2019 and 2019/2020Cl.[115] As a result, no tax or Medicare levy was paid, payable, or likely to be payable in CAP 1 and 3 on that income.

1. For CAP 8, the Applicant claims rental and bond expenses for workspace used in the Vaucluse and Point Piper properties, as well as in several other residences occupied during the period. She states that Swan Hellenic does not maintain a physical office in Australia, requiring her to work remotely on a full‑time basis from her home. The Applicant says she established a dedicated workspace in each property and provided photographs showing a desk, chair, filing cabinet, printer and storage for Swan Hellenic brochures and merchandise.[116] She contends that the claimed rental expense of $23,733.72 was necessarily incurred in order for her to perform her duties for Swan Hellenic. The Applicant's Statement of Issues, Facts and Contentions includes a table detailing the expenses claimed and the basis on which each expense is asserted.[117]

1. The Respondent's position is that the Applicant's income, within the meaning of s 139L(1) of the Act, does not exclude the amount of $23,733.72 said to be referable to rent, for the following reasons:

(a) an amount paid as a rental bond is not 'rent'. A rental bond is refundable to the payer, subject to the property being returned undamaged. There is accordingly no basis to exclude the $2,133.33 claimed in respect of a rental bond from the Applicant's income, and > > (b) as to the remaining amount claimed ($21,600.39), the method of apportionment adopted by the Applicant for distinguishing work‑related use from personal use - both by herself and by others occupying the properties - is not appropriate.[118]

2. The Applicant argues that the $6,400 rental bond should be excluded from her income on the basis that it constitutes a rental expense incurred during the relevant period.[119] This appears to stem from the fact that, in her submissions, the Applicant does not distinguish between rent actually paid and the rental bond, instead grouping both under the heading of 'rental expenses'. That characterisation is incorrect. A rental bond is not a rental expense but a refundable security deposit, and therefore it is not an amount expended in the course of producing assessable income. Because the bond is refundable, the Applicant does not incur any loss or outgoing unless some portion of the bond is forfeited due to damage or unpaid rent - an occurrence that has not been alleged in this case.
3. In respect of the rental expenses set out in the table above, Ms Ensor submitted that - even disregarding the absence of evidence (save for the Vaucluse and Point Piper properties) as to whether the Applicant actually resided at those premises - the method of apportionment proposed by the Applicant is not appropriate.
4. Having undertaken a detailed reconciliation of the table above, the Applicant's bank statements for the relevant period[120], and the information provided to the Inspector‑General during the internal review process[121], I am unable to reconcile the sum of $29.00 attributed to 'REA - Rose Bay' or the sum of $1,910.71 attributed to 'Vaucluse'. The Applicant's bank statements reflect a payment of $3,910.71 made on 27 December 2023 for 'rent' so this could be a transposing error. In relation to the remaining amounts, I am satisfied that there is sufficient evidence that those expenses were incurred in the CAP in question. I am also satisfied that the expenses claimed were necessarily incurred in the course of the work undertaken and the services performed by the Applicant for Swan Hellenic, from which she derived her income. The evidence establishes that she was unable to perform her duties at Swan Hellenic's premises, and her working from home was not a matter of personal choice or convenience.
5. However, I accept the Respondent's submission that, for any proportion of rental expenses to be deducted from the Applicant's gross income for income‑contribution purposes, the Applicant must establish, for each relevant property, both (a) the total floor area of the premises and (b) the floor area of the space set aside exclusively for her work‑related use. This requirement accords with the apportionment methodology adopted by the Commissioner of Taxation for deductions under s 8‑1 of the ITAA97.
6. As noted earlier in relation to motor vehicle expenses, the expenses capable of reducing assessable income for bankruptcy purposes are not necessarily identical to those allowable as deductions for income tax purposes. The Applicant must provide primary evidence demonstrating that the expenses were in fact incurred, and in the relevant period. Mere reliance on income tax returns does not satisfy that evidentiary burden.
7. In my view, this does not preclude the Tribunal from drawing guidance from income tax principles to assist with quantifying expenses for bankruptcy purposes, particularly where specific bankruptcy guidance is limited. The adoption of such principles promotes both accuracy and consistency. Indeed, during the hearing, the Applicant accepted that the application of income tax principles applied to this circumstance would not materially alter the outcome.
8. Accordingly, I remit the matter to the Respondent with a direction to obtain from the Applicant the information necessary to apply the appropriate method of apportionment for rent deductions according to the methodology under the ITAA97.

1. The Applicant claims moving expenses incurred in relocating from one residential property to another during CAP 8. She submits that, because Swan Hellenic does not maintain a physical office in Australia, each time she moves residence she is also effectively required to move her office. On that basis, she claims one-third of the total moving costs.[122]
2. The Respondent's SIFC states that, on 6 January 2024, Holloway Removals & Storage issued an invoice in the Applicant's name for a relocation from the Vaucluse Property to the Point Piper Property in the amount of $1,856.40, including GST of $168.76. On 8 January 2024, a payment of $1,856.40 was debited from the Applicant's Westpac Bank account with the transaction description 'DEBIT CARD PURCHASE HOLLOWAY REMOVALS ZETLAND AUS'.[123]
3. As noted in the Respondent's SIFC, the amount claimed by the Applicant - $765.55 - exceeds one‑third of the total moving cost.[124] Accordingly, the claim is inconsistent with the Applicant's asserted apportionment methodology, which the Respondent submits is, in any event, inappropriate.[125]
4. The Respondent submits that, for any portion of the moving expenses to be deductible from the Applicant's gross income for income contribution purposes, the Applicant must establish the total floor area within the Vaucluse Property and the floor area of the room in that property that was set aside exclusively for work purposes.[126] The determination of this issue depends on the Applicant providing the Respondent with information above in relation to the rent, so that an appropriate apportionment methodology can be applied. Accordingly, I remit the matter to the Respondent with a direction to apply the relevant calculation once the necessary information regarding the total floor area used for work - relative to the rent expenses - has been provided.

Travel, Food, and Beverages (Including Alcohol)

1. In the Decision Under Review, the Respondent excluded an amount of $6,114.97 from the Applicant's income on account of travel, food, non‑alcoholic beverages and alcohol.[127] This was an amount which was reimbursed from Swan Hellenic for travel expenses.[128] The Applicant now seeks a further reduction of her income, within the meaning of s 139L(1) of the Act, to exclude an additional $15,818 gross (or $14,379 net of GST).[129]
2. The Applicant submits that, because Swan Hellenic does not maintain a physical office in Australia, she is required to meet with agents and clients offsite, either at their offices or at any other location they request.[130] She further contends that, in the ordinary course of business development, 'entertainment expenses' are necessarily incurred in order to build rapport with agents, who in turn promote and sell Swan Hellenic products to their clients.[131]
3. The Respondent submits that the additional expenses should not be allowed for two reasons. First, the Applicant has not established that the expenses were incurred in connection with the work or services that generated her income from Swan Hellenic. Secondly, the Applicant has not shown that the expenses were necessarily incurred for the purpose of producing that income.[132]
4. As the Respondent has already submitted in relation to the vehicle expenses, the Applicant's contract with Swan Hellenic expressly provides her with a right to reimbursement for work‑related expenses and there is no evidence that she sought, or was refused, reimbursement for the amounts now claimed. It is the Respondent's view that an expense cannot be regarded as 'necessarily incurred' where the Applicant has chosen not to exercise her contractual entitlement to reimbursement.[133] Ms Ensor also contended at the hearing that the Applicant's failure to seek reimbursement indicates that the expenses were not, in substance, work‑related. It was further contended that even if the expenses were accepted as having been necessarily incurred by the Applicant in connection with the work or services performed, they ought to have been claimed back from Swan Hellenic.
5. At the hearing, the Applicant strongly asserted that cultivating and maintaining relationships with agents was essential to achieving her sales targets, and that failure to meet those targets could result in termination of her contract with Swan Hellenic. She also stated that, given the company's precarious financial position, seeking reimbursement would likely have been futile. These beliefs appeared to be genuinely and firmly held. However, the Act requires something more. The Applicant must demonstrate that the expenses were incurred in connection with the derivation of income and were necessarily incurred for that purpose; her subjective belief, regardless of its sincerity, is insufficient to meet those requirements.
6. The other issue with these expenses is as the Respondent points out is whether they should not be deducted because they relate to the providing of entertainment.[134] Section 32.5 of the ITAA prohibits deductions for entertainment expenses. Section 32.10 defines entertainment to mean accommodation or travel to do with providing entertainment by way of food, drink or recreation. It also clarifies that a person is taken to provide entertainment even if business discussions or transactions occur and provides examples of what is not entertainment which includes meals on business travel overnight. Subdivision 32B of the ITAA97 contains the exceptions to the general prohibition in s 32‑5. These exceptions are narrowly drafted and apply only in specific, clearly-defined circumstances.
7. The Applicant has provided the following evidence:

(a) an income‑and‑expenses spreadsheet setting out monthly travel, food, non‑alcoholic beverage and alcohol expenses from 1 September 2023 to 15 September 2024 > > (b) bank transaction records for the same period to substantiate the expenses listed in the spreadsheet > > (c) invoices corresponding to some of the expenses in the spreadsheet > > (a) email correspondence between the Applicant and her agents arranging and confirming meetings, training sessions and meals.[135]

(a) the spreadsheet contains all of the Applicant's expenses for CAP8 and is not a breakdown of the specific expenses claimed. It is therefore not possible to determine from the spreadsheet alone whether the expenses were necessarily incurred in connection with the work that generated the Applicant's income. > > (b) the email correspondence shows that it was the Applicant who initiated restaurant meetings, rather than the agent or client. The emails also show that the COO of Swan Hellenic was present in Australia and New Zealand and that it was proposed that she also attended the engagements referenced.[136] > > (c) a number of expenses are for Uber trips, but it is not possible to determine, on the evidence provided, whether all or any relate to work purposes, particularly given that the dates overlap with rental car expenses. > > (d) similar difficulties arise with accommodation and meal expenses - for example, there are several substantial meal expenses claimed for 1 July 2024 in addition to an expense of $358.30 for Brooklyn Wine (the agreed restaurant location in the emails).[137] The total expenses claimed for that day amount to $881.83, which appears excessive and is not supported by the other evidence before the Tribunal, raising doubts as to whether all of the purchases were work‑related.[138] > > (e) The inability to reconcile all the expenses incurred that are claimed in the table prepared by the Applicant[139] with the receipts provided by the Applicant in the T-Documents. In the absence of any contemporaneous record of sales strategy or training programme the gaps in this evidence means I am unable to determine if the expenses were necessarily incurred or if all or any of the expenses were of a private nature.

9. I am also concerned that the Applicant did not seek reimbursement from Swan Hellenic, particularly given evidence that the COO was present in Australia and travelling from overseas to attend many of the engagements. This again suggests that the expenses may not have been, in substance, work‑related, or alternatively that they were voluntarily incurred and extended beyond the expenses directly connected with generating income.
10. Even if my conclusions regarding the evidence are incorrect, I must also consider whether the expenses should be disallowed because they constitute entertainment. Although deductibility under income tax law is not determinative for the purposes of s 139L(1) of the Act, it is instructive. As stated above, the test under the Act is stricter, requiring a direct connection between the expenditure and the work or services performed. It would be anomalous to allow deductions for bankruptcy purposes when those same expenses would be disallowed for income tax purposes. The Applicant has herself characterised the expenses as 'entertainment'.[140] As noted, this prohibition extends to travel relating to the provision of food, drink or recreation. I have considered whether any exceptions apply, particularly the 'seminar' exception. Although there is evidence of two 'training sessions' in Byron Bay and the Gold Coast provided by an 'experienced expedition leader',[141] I am unable to determine whether these activities meet the definition of 'seminar' in s 32‑65 of the ITAA.
11. For these reasons, I am of the view the Applicant has not established that the expenses were necessarily incurred in connection with the work or services that generated her income from Swan Hellenic.

1. For CAP 8 the Applicant is claiming an amount of $18,000 should be deducted from her gross income for income contribution purposes for a sub-contract for brochure delivery.
2. The Respondent opposes the deduction, submitting that the Applicant has not established:

(f) that the asserted sub‑contract existed > > (g) if it existed, that any services were performed under it > > (h) that the expenditure was connected with income earned from Swan Hellenic, or > > (i) that the amount was necessarily incurred, particularly given the Applicant's contractual entitlement to reimbursement of work‑related expenses and the absence of any evidence that she sought such reimbursement.

3. The Applicant and her husband, Mr Stolyar, were each cross‑examined extensively in relation to this issue.
4. The other evidence before the Tribunal is a number of invoices from Ian Stolyar to Beth Stolyar for 'brochure delivery fee':[142]

1. Cross examination established that there was no written contract between the Applicant and Mr Stolyar, nor were there any written schedules, plans, or other documents identifying the work Mr Stolyar was to do. It also established there was no marketing strategy, whether prepared by the Applicant or by Swan Hellenic, explaining how the circulation of printed brochures formed part of the overall sales strategy.
2. Mr Stolyar's evidence also revealed a number of other matters:

(a) his motivation for doing the work was to help his wife achieve her targets and to earn some money so he could get his car repaired > > (b) the rate of $40 per hour was derived from a conversation with relatives about what shelf stackers at supermarkets receive, as well as enquiries made by the Applicant to courier companies > > (c) he used a backpack to carry the brochures, would place them in his car, and then park and walk around the streets delivering them > > (d) the Applicant would tell him in which suburbs to deliver the brochures but did not specify which parts of those suburbs > > (e) he did not keep written records of where he delivered brochures or the time he spent delivering them > > (f) he delivered brochures most days for two to three hours, and would do so after his dialysis treatment (which occurred three days per week), provided he was feeling well and it was not raining. The frequency of delivery also depended on the number of brochures and the areas needing coverage. > > (g) he was provided with an invoice template by the Applicant, which he completed by estimating the hours worked based on memory - generally two to three hours per day, amounting to about 10-15 hours per week, or at minimum 10 hours per week. The Applicant would tell him not to give her an invoice if she had not been paid by Swan Hellenic.

3. The Applicant also gave evidence that the delivery of brochures was necessary to build brand awareness and to generate leads from clients and agents. She explained that hand‑delivering brochures into people's letterboxes was essential given the prestige nature of Swan Hellenic's cruises and the client base she was seeking to attract. She stated that, without undertaking this work, she would not have met her sales targets and that her contract would have been terminated by Swan Hellenic for non‑performance. She also said that it was an inexpensive way to increase brand awareness while at the same time giving her husband, who has a chronic kidney disease, some exercise.
4. The Respondent put to the Applicant that the real purpose of incurring the brochure‑delivery expense, and of paying Mr Stolyar, was to reduce her tax liability.
5. The Applicant rejected that proposition, giving evidence that this was not true and that brochure delivery was essential to her business. She stated that, had she not engaged Mr Stolyar to perform the work, she would have paid someone else to do it. She further stated that the fee paid to Mr Stolyar - $40 per hour - was not excessive and was, in fact, cheaper than courier costs.
6. What the cross‑examination of both witnesses revealed is that the hours reflected in the invoices do not represent an actual record of the time spent delivering brochures. Rather, they are no more than a guesstimate, as no contemporaneous record of time spent, nor any schedule of deliveries, exists from which an accurate calculation could be made. The oral evidence of both witnesses as to the time worked was vague and imprecise. That evidence did not permit the Tribunal to verify, with any degree of certainty, the amounts claimed in the invoices. By way of example, invoice 004 is a blurred document; although the invoice date cannot be discerned, it can be ascertained that it relates to work undertaken in May and June 2024. This period overlaps with the amounts invoiced for those same months in invoices 003 and 005. The existence of such overlap is significant because it prevents the invoices from being reconciled with each other or with the oral evidence; creates the possibility of double‑counting; and contributes to inflated totals - 85 hours being claimed for May and 60 hours for June - which are inconsistent with Mr Stolyar's own evidence that he worked approximately 10-15 hours per week. The overlap therefore undermines the reliability of the invoiced hours and diminishes the probative weight that can be given to them. At the hearing, the Applicant explained that the additional hours claimed for June were attributable to travel to Queensland, and that the increased hours in May were due to the launch of a new season. However, in the absence of delivery schedules or other contemporaneous records, this oral evidence cannot be verified.
7. Ms Ensor directed the Tribunal to the decision in Robbins to submit that the hand‑delivery of brochures by another person was a voluntary expense incurred because it suited the Applicant's preference to increase her sales in order to obtain a bonus, rather than being necessarily incurred in a compulsory sense to obtain the annual consultancy fee. The difficulty with this submission is that it was not established on the evidence that the Applicant was motivated solely by the prospect of obtaining a bonus, and, in any event, any bonus would form part of her overall income and not operate to sever the connection between the expense and the work performed.
8. I am, however, of the view that all or part of the expenses were incurred for the purpose of income‑splitting and obtaining associated tax benefits, rather than because they were an intrinsic or unavoidable part of the Applicant's work. The reasoning in Robbins is directly relevant in this respect. The factors identified at [283] indicate that some of the payments were made voluntarily for a particular purpose, rather than being expenses necessarily incurred in the performance of the Applicant's duties.
9. Consistent with Robbins, even if the evidence were sufficient to establish that the expenses were necessarily incurred, it would also need to be established that the expenditure did not exceed what was reasonably required for the work performed. Any identifiable 'mark‑up' component of the brochure delivery payments would not meet the test of being necessarily incurred and would therefore not be deductible. As such, it would not operate to reduce income for the purposes of s 139L of the Act.
10. In light of these matters, the Tribunal is not satisfied that any reduction to the income of the Applicant can be made under s 139L of the Act. The Applicant has not proved that any part of the $18,000 paid was necessarily incurred in connection with the work done or services performed by her that resulted in her receipt of income from Swan Hellenic.

1. There is no doubt that the Applicant represented herself admirably and presented persuasive submissions to the Tribunal. However, I cannot overlook the numerous evidentiary gaps which ultimately mean that the Applicant has not established that all of the expenses were necessarily incurred in connection with the work she performed and the services she provided that generated the relevant income. To satisfy this test, the Applicant was required to demonstrate that she was compelled or obliged to incur the expenses - objectively, and without reference to her own subjective reasoning - and not merely that they were voluntary, incurred as a matter of personal choice or convenience, or private in nature. On the evidence before me, this threshold has not been met, except in respect of the rent and moving expenses.
2. The Applicant has also failed to establish, in respect of the claimed legal expenses, that they were income‑producing rather than capital in nature, as required for deductibility.
3. The Applicant further advanced forceful submissions concerning what she contended was the correct income tax reduction applicable to CAPs 1 and 3. Although her position may be regarded as a novel construction of the relevant provision, it cannot be accepted when orthodox principles of statutory interpretation are applied - principles which give primacy to the ordinary meaning of the statutory text, read in its proper context and consistently with the statute as a whole.
4. A similar interpretation issue arises in relation to the Applicant's contention that the housing fringe benefit amounts for the CAPs should be reduced to nil. The Applicant advanced a novel interpretation of the declarations made by the Court concerning the Rose Bay and Point Piper properties. Those submissions cannot be accepted in light of the clear wording of the declarations and the applicable law. However, I accept that an adjustment should be made to the market rental value of the Point Piper property. One of the four rental appraisals obtained for the purpose of determining that value is plainly an outlier, and its inclusion would distort the proper assessment of the housing fringe benefit.
5. Therefore under 105(c)(ii) of the ART Act I have decided it is appropriate to set aside the reviewable decision and remit the matter to the decision-maker for accurate assessment of the contribution periods in accordance with my reasons above and the directions that:

(a) the market rental value of the Point Piper property for CAP 8 is $3,750 per week > > (b) amounts representing rent and moving be allowed if the necessary information is received from the Applicant regarding floor-area the total floor area of the premises and; the floor area of the space set aside exclusively for her work‑related to allow the method of apportionment under the ITAA97 to be applied > > (c) the Applicant's income from Swan Hellenic for CAP 8 is $158,333.28 > > (d) the AITA applying at the time of the new decision should be applied for each CAP.

Ms Courtney Ensor for and on behalf of the Inspector-General in Bankruptcy

Exhibit B - Supplementary Tribunal Documents Bundle 18 March 2025

Exhibit C - Supplementary Tribunal Documents Bundle 23 June 2025

Exhibit A1 - Applicant's Supplementary Tribunal Documents

Exhibit A3 - Applicant's Statement of Issues, Facts and Contentions.

[6] Respondent's written submissions at [79].

[7] [2004] AATA 1320 at [44].

[10] Applicant's written submissions, p. 2.

[18] Respondent's Statement of Issues, Facts, Contentions (RSIFC) at [75].

[19] Applicant's written submissions, p.3.

[26] Respondent's written submissions at [23].

[27] Spriggs v FCT [2009] HCA 22; (2009) 239 CLR 1 at [75].

[28] (1998) 29 AAR 15.

[29] Respondent's written submissions at [25].

[35] [2013] AATA 783; (2013) 97 ATR 680.

[36] Respondent's written submissions at [39].

[59] Respondent's written submissions at [30].

[73] [2013] AATA 783; (2013) 97 ATR.

[76] Commissioner of Taxation v Day (2008) 236 CLR 163; (2008) 250 ALR 388; (2008) 83 ALJR 68; (2008) 70 ATR 14; [2008] HCA 53.

[88] Respondent's written submissions at [40]; Applicant's written submissions p. 2.

[89] Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 5) [2024] FCA 37,

[90] In Nguyen and Inspector-General in Bankruptcy (Taxation) [2021] AATA 3318 the Deputy President held that the fair market value of the Rose Bay property during the three year period between 29 September 2016 and 28 September 2019 was $1,200.

[91] [2006] HCA 6; (2006) 227 CLR 278 at [14].

[92] [2006] HCA 48; (2006) 227 CLR 471 at [48].

[94] Exhibit A, p. 734. The statement regarding so-mingling was made in relation to the Applicant's income assessment.

[95] Respondent's written submissions at [43].

[96] Exhibit A3 at [78]; Applicant's written submissions p. 2.

[98] Respondent's written submissions at [72]-[73].

[99] Scott (Trustee), in the matter of Stolyar (Bankrupt) v Stolyar (No 5) [2025][ FCA 37 at [7] and [31].

[100] Respondent's written submissions at [72]-[73].

[102] (1983) 46 ALR 87; [1983] HCA 7.

[103] (1998) 151 ALR 1; [1998] HCA 4.

[105] Respondent's written submissions at [72].

[108] [2021] AATA 3318.

[110] Respondent's written submissions at [47].

[111] Respondent's written submissions at [55].

[115] Exhibit A, page 1353, Applicant's income tax return for 1 July 2016 to 30 June 2017 shows deferred non-commercial business losses from prior year of $99,902 and negative income of $87,166; Exhibit A, page 1372, Applicant's tax return for 1 July 2017 to 30 June 2018 shows a deferred non-commercial business losses from prior year of $87,166 and a negative income of $66,562; Exhibit A, page 1394, Applicant's tax return for 1 July 2018 to 30 June 2019 shows a deferred non-commercial business losses from prior year of $66,562 and a negative income of $39,553; Exhibit A, page 1386, Applicant's tax return for 1 July 2019 to 30 June 2020 shows a deferred non-commercial business losses from prior year of $39,553 and a negative income of $20,573.

[118] Respondent's written submission at [16].

[126] Respondent's written submissions at [66].

[129] Respondent's written submissions at [68].

[132] Respondent's written submissions at [68].

[133] Respondent's written submissions at [68].

[136] Exhibit A at pp. 65, 71, 73 and 95.