1. In March 2017, the Australian Taxation Office (ATO) decided to conduct an audit of the Applicant's affairs which included conducting title and asset searches and obtaining information from financial institutions with which the Applicant has accounts.[2]
2. On 17 August 2018 the Applicant lodged his ITRs for the Relevant Years with the ATO.
3. In his ITRs the Applicant declared that:[3]

(a) he was not an Australian citizen; > > (b) his postal address was a post office box in Springwood; > > (c) his home address was at Residential Property 2; > > (d) during the financial year ended 30 June 2013, he derived a net income of $23,178 from rent receipts and capital works deductions of $14,341;[4] > > (e) during the financial year ended 30 June 2014, he derived a net income of $42,020 from rent receipts and capital works deductions of $3,970 and other rental deductions of $15,356;[5] > > (f) during the financial year ended 30 June 2015, he derived a net income of $39,100 from rent receipts and capital works deductions of $3,970 and other rental deductions of $18,940;[6] and > > (g) during the financial year ended 30 June 2016, he derived a net income of $39,100 from rent receipts and capital works deductions of $3,970 and other rental deductions of $18,940.[7]

4. On 24 August 2018 the ATO issued notices of assessment (NOAs) for each of the Relevant Years based on the information provided in the ITRs by the Applicant.[8]
5. On 29 August 2018 the ATO advised the Applicant that it had completed its audit of his circumstances and determined that the net amount of tax payable for the Relevant Years was $3,314,793.02 plus shortfall and general interest charges. The ATO decided the Applicant was an Australia resident for tax purposes for the Relevant Years, and that it would issue amended NOAs.[9] In the Respondent's view the Applicant had "significant deposit transactions through [his] bank account which were used to fund [his] lifestyle and acquire assets".[10]
6. The ATO's position was:[11]
   1. ATO Position: Yes. It is the Commissioner's view that you received income from known and unidentified sources, and the amounts shown in Table 1 form part of your assessable income under section 6-5 and 102-50) of the ITAA 1997.

1. The ATO used what is known as the "Asset Betterment" method to determine the Applicant's income. The ATO explained the basis of the method in its Audit Reasons for Decision as follows:[12]
   1. This method is based on the principle that if your net assets (assets less liabilities) as at 30 June of a particular year are compared with your net assets as at 30 June of the previous year, the increase (or betterment) will represent your correct taxable income for that particular year, after adjustments have been made for Items which may have affected the increase, e.g. private expenditure, non-taxable receipts, capital gains or losses.
2. The ATO analysed the Applicant's bank accounts, account transfers, assets (real estate holdings and motor vehicle holdings) and any capital gains/losses on asset sales.
3. In the Relevant Years, the ATO determined that significant deposits had been made into the Applicant's accounts through international fund transfers. The Applicant says these amounts were primarily gifts from his father.
4. The ATO obtained information that during the Relevant Years the Applicant was the registered owner of four properties:

(a) a first residential property (Residential Property 1); > > (b) a second residential property (Residential Property 2); and > > (c) two commercial properties (hereafter referred to as Unit 11 and Unit 12).

5. The ATO obtained information that during the Relevant Years the Applicant appeared to be the owner of the following motor vehicles and number plates:[13]

6. We obtained information about your motor vehicles you held during the audit period. The details of these motor vehicles are shown in Table 5 below:

(d) the Applicant had made a capital gain on the sale of Residential Property 1 of $61,250;[14] and > > (e) funds in the Applicant's bank accounts had been used for payments of personal expenses and to make loan repayments. The Commissioner considered those payments represented income from unidentified business activities and were therefore assessable as ordinary income under section 6-5 of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997).

2. The ATO also found "private loans" of $504,540 comprised of $30,000 to YLX and $474,540 to the Applicant's family.
3. The Commissioner concluded the Applicant:[15]

(a) had not declared his "true income"; > > (b) "actively and knowingly omitted" his income from his ITRs without credible explanation; and > > (c) had engaged in "a blameworthy act or omission ... best described as fraud or evasion" and therefore the Commissioner could amend his ITRs for the Relevant Years.

4. The ATO contended that the Applicant had attempted to avoid tax through fraud or evasion and as a result it was empowered to amend the Applicant's ITRs outside of the ordinary time allowed (two or four years) to do so under section 170 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936).
5. The ATO also imposed the following penalties pursuant to section 284-75(1) of the Tax Administration Act 1953 (Cth) (TAA) for having made false or misleading statements in his ITRs for the years ended 30 June 2013 to 30 June 2016:[16]

1. The ATO imposed administrative penalties for failing to lodge his ITRs by the due date pursuant to section 286-75(1) of the TAA.[17]
2. The ATO imposed Shortfall Interest Charge (SIC) under section 280-100 of the TAA for the unpaid tax for any of the income years ended 30 June 2013 to 30 June 2016.
3. As a result of its findings the ATO issued the following Amended NOAs for the Relevant Years on 4 September 2018.[18]
4. The Amended NOAs provided as follows:

1. On 22 October 2018 the Applicant lodged an objection with the ATO in relation to the Amended NOAs for the Relevant Years (and also to the penalties and interest charges imposed).[23]
2. The Applicant contended that the Amended NOAs for the Relevant Years were incorrect because, among other things: [24]

(a) they were based on "incorrect assumptions and conclusions" and an "unqualified and improper application of the asset betterment test"; > > (b) the amounts in the ITRs were correct; > > (c) he is not domiciled in Australia for taxation purposes and therefore only needs to lodge ITRs in relation to income derived from Australia sources; > > (d) he resides in PNG; > > (e) during the Relevant Years he received monetary gifts from relatives which were not income; and > > (f) some of the funds received from relatives were used to purchase assets in Australia.

3. The Applicant contends that he is not a resident of Australia because: [25]

(a) he resides in PNG where he operates businesses originally established by his father; > > (b) the house in PNG in which he resides is owned by PNG Company 1. The Applicant provided a copy of a lease agreement of the property which shows the Applicant as tenant and PNG Company 1 as landlord;[26] > > (c) he meets his taxation obligations in PNG; > > (d) he maintains assets in Australia which are utilised by himself and family members when in Australia; > > (e) he intends to remain in PNG as a resident whilst he discharges his paid role in the family's business affairs; > > (f) he "remains connected to Australia but considers it to be a place of opportunity and security for his family to be raised"; > > (g) the statutory income attributed to him by the Respondent as being a Capital Gain arose from an asset (Residential Property 1) which was exempt from CGT as main residence pursuant to section 118-110 of the ITAA 1997; and > > (h) money received from his father (a citizen of Malaysia and resident of PNG) were either gifts or loans, not income.

4. The ATO requested more particulars from the Applicant of the loans and gifts, the Applicant's family movements and companies the Applicant was involved in.[27]
5. On 25 August 2020 the ATO advised the Applicant that his objections had not been allowed.[28]
6. On 20 October 2020 the Applicant applied to this Tribunal for review of the ATO's decision.[29] The Tribunal has jurisdiction to review the decision pursuant to section 25 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), and Part IVC of the TAA.
7. The Applicant summarised his case as follows:[30]

(a) The Commissioner's assessments are excessive.

(b) He has a reasonable explanation for his increase in wealth over the Relevant Years, primarily the gifts from his father.

(c) The Vincents' expert report sets out every transaction in his bank account and identifies where the money came from and where it went. To the extent that transactions remain uncategorised, there is sufficient evidence before the Tribunal as to the source of funds and the nature of his expenditure for it to conclude that none of those transactions were assessable income. The Applicant has therefore positively proved his "actual taxable income" and, in doing so, has identified the amount of money for which tax is levied by the assessment exceeds the actual substantive liability of the taxpayer.

(d) As all of the transactions have been identified and explained, the Applicant's taxable income is as set out in his income tax returns for the Relevant Years.

(e) That being so, the Applicant does not need to provide a further calculation to identify his assessable income for the Relevant Years. However, if (which is submitted would not be the case) the Tribunal is not satisfied in relation to one or more transactions and therefore determines that the funds represent assessable income, the Applicant provides an Excel spreadsheet that enables the Tribunal to add or deduct various items.

1. The issue for determination by the Tribunal are whether:

(a) in relation to the 2013 income year: > > > (i) whether the Applicant was a "resident" of Australia, for income tax purposes within the meaning provided in section 6(1) of the ITAA 1936; > > > > (ii) whether the Applicant's taxable income for the 2013 income year was $23,178; and > > > > (iii) whether the Applicant's taxable income was less than $1,483,902 for the 2013 income year, being the amount assessed by the Commissioner in the Further Amended Assessment for the 2013 income year, rendering the assessment excessive; > > (b) in relation to the 2014 income year: > > > (i) whether the Applicant was a "resident" of Australia, for income tax purposes within the meaning provided in section 6(1) of the ITAA 1936; > > > > (ii) whether the Applicant's taxable income was $42,020 for the 2014 income year; and > > > > (iii) whether the Applicant's taxable income was less than $883,237 for the 2014 income year, being the amount assessed by the Commissioner in the Further Amended Assessment for the 2014 income year, rendering the assessment excessive; > > (c) in relation to the 2015 income year: > > > (i) whether the Applicant was a "resident" of Australia, for income tax purposes within the meaning provided in section 6(1) of the ITAA 1936; > > > > (ii) whether the Applicant's taxable income was $39,100 for the 2015 income year; and > > > > (iii) whether the Applicant's taxable income was less than $1,024,133 for the 2015 income year, being the amount assessed by the Commissioner in the Further Amended Assessment for the 2015 income year, rendering the assessment excessive; and > > (d) in relation to the 2016 income year: > > > (iv) whether the Applicant was a "resident" of Australia, for income tax purposes within the meaning provided in section 6(1) of the ITAA 1936; > > > > (v) whether the Applicant's taxable income was $35,992 for the 2016 income year; and > > > > (vi) whether the Applicant's taxable income was less than $414,459 for the 2016 income year, being the amount assessed by the Commissioner in the Further Amended Assessment for the 2016 income year, rendering the assessment excessive; and > > (e) whether penalties and interest charges have been correctly applied.

2. Prior to the hearing the Respondent determined that the tax rates it applied were incorrect. As a result, the Respondent seeks an order that the decision under review be varied on the basis that:[31]

(a) the Applicant is to be assessed as an Australian resident in the Relevant Years; and > > (b) the relevant administrative penalties and SIC amounts are to be recalculated accordingly.

1. Section 166 of the ITAA 1936 provides the Commissioner must make an assessment of the taxable income of a taxpayer based on the ITRs and any other information in his possession.
2. "Assessment" is defined, relevantly in section 6, as follows:

"assessment" means: > > (a) the ascertainment: > > > (i) of the amount of taxable income (or that there is no taxable income); and > > > > (ii) of the tax payable on that taxable income (or that no tax is payable); and > > > > (iii) of the total of a taxpayer's tax offset refunds for a year of income (or that the taxpayer can get no such refunds for the year of income)

3. The Commissioner has the power to make default assessments of the amount upon which in his or her judgment income tax ought to be levied, and that amount shall be the taxable income of that person for the purpose of section 166 of the ITAA 1936 if (section 167, ITAA 1936):

(a) any person makes default in furnishing a return; or > > (b) the Commissioner is not satisfied with the return furnished by any person; or > > (c) the Commissioner has reason to believe that any person who has not furnished a return has derived taxable income.

4. Amended assessments are taken to be "assessments" for the purposes of the ITAA 1936: section 173, ITAA 1936.

1. Section 175A of the ITAA 1936 sets out when a taxpayer can object to an assessment. It provides:

1. A taxpayer who is dissatisfied with an assessment made in relation to the taxpayer may object against it in the manner set out in Part IVC of the Taxation Administration Act 1953. 2. A taxpayer cannot object under subsection (1) against an assessment ascertaining that:

(a) the taxpayer has no taxable income; or > > (b) the taxpayer has an amount of taxable income and no tax is payable.

1. Subsection (2) does not prevent the taxpayer from objecting against an assessment if the taxpayer is seeking an increase in:

(a) the taxpayer's liability; or > > (b) the total of the taxpayer's tax offset refunds.

1. Section 14ZZK(b)(i) of the TAA provides that the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been. The reason for this, was recently explained by Logan J in Anglo American Investments Pty Ltd (Trustee) v Commissioner of Taxation [2022] FCA 971 (Anglo American), at [115], is that "the Commissioner, unlike a participant, is a stranger to transactions forming the taxable facts".
2. In Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63 (Trautwein), Latham CJ found as a general rule:

[2]. "...the taxpayer must... show, not only negatively that the assessment is wrong, but also positively what correction should be made in order to make it right or more nearly right."

3. The High Court in Federal Commissioner of Taxation v Dalco [1990] HCA 3; 168 CLR 614 (Dalco) explained that where the Commissioner and taxpayer have not agreed on the assessment:[32]

"... the Commissioner is entitled to rely upon any deficiency in proof of the excessiveness of the amount assessed to uphold the assessment ... unless the [taxpayer] shows by evidence that the assessment is incorrect, [the default assessment] will prevail."

4. The Commissioner is under no obligation to tender evidence in support of its assessments, Mason J explained this in Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81:

[6]. "The Act does not place any onus on the Commissioner to show that the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence."

5. The Full Federal Court in Gashi v Federal Commissioner of Taxation [2013] FCAFC 30; 209 FCR 301 (Gashi) explained the taxpayer's burden in relation to asset betterment assessments as follows:

A taxpayer who seeks to establish that a s 167 assessment based on the asset betterment method of calculation is excessive must positively prove his or her "actual taxable income" and, in doing so, must show that the amount of money for which tax is levied by the assessment exceeds the actual substantive liability of the taxpayer: Dalco at 623-5 and Trautwein at 88. The taxpayer must show that the unexplained accumulated wealth was from non-income sources. The manner in which a taxpayer discharges that burden is not defined or specified - it varies with the circumstances: Dalco at 624.

1. ... In addressing a s 167 assessment based upon an asset betterment statement, a taxpayer must account for an unexplained increase in assets. The taxpayer must explain the source or sources of those assets and then identify whether that source, or those sources, are taxable. Put another way, if the disclosed "actual" taxable income does not explain the increase in assets, then the taxpayer is unlikely to have discharged the burden of establishing the assessment is excessive. And, of course, that unexplained increase in assets cannot be viewed in isolation - it must also take into account the expenditure during that period.
2. Consistent with that view, even if a taxpayer was able to prove that an item in the asset betterment statement was wrong or should not have been included, but did not adequately explain the source or sources for the otherwise unexplained increase in wealth, the taxpayer would not discharge the onus under s 14ZZO of the TAA.

3. The Full Federal Court in Gashi referred to Ma v Commissioner of Taxation [1992] FCA 530; 37 FCR 225 (Ma) at 230, where Burchett J said the burden may be discharged by:

...providing acceptable evidence of how he spends his time, and demonstrates a reasonable explanation for any appearance of the possession of assets, he will generally discharge his burden of proof unless some positive reason is shown why he is to be disbelieved. ... > > (emphasis added)

4. The standard of proof a taxpayer must meet is the civil standard of the balance of probabilities, not the criminal standard of beyond a reasonable doubt. The onus of proof was recently addressed by Derrington J in Condon v Commissioner of Taxation [2023] FCA 561 (Condon). This decision was handed down after this matter had been reserved. Derrington J explained it as follows:

5. The standard of proof that the taxpayer must meet is the civil standard, being the balance of probabilities: McCormack v Federal Commissioner of Taxation [1979] HCA 18; (1979) 143 CLR 284 (McCormack v Federal Commissioner of Taxation) at 301 per Gibbs J. However, there is no stipulation as to how the standard can be met. That will no doubt vary with the circumstances of each case.
6. In Condon, Derrington J reiterated that it is not a legal requirement for the applicant taxpayer to prove matters only by reference to contemporaneous records. He also reiterated that not being able to "adduce every piece of evidence available in relation to each issue".[33]
   1. A taxpayer is not required to prove matters by reference to contemporaneous primary documentation: cf Commissioner of Taxation v Clark [2011] FCAFC 5; (2011) 190 FCR 206 at 225 [64] - [66] per Edmonds and Gordon JJ. Nor are they required to adduce every piece of evidence available in relation to each issue: Commissioner of Taxation v Cassaniti [2018] FCAFC 212; (2018) 266 FCR 385 (Cassaniti) at 409 [88] per Steward J (with whom Greenwood and Logan JJ agreed).
7. Derrington J referred to Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1; (1983) 44 ALR 607 (Allied Pastoral Holdings) at 10 - 11_,_ where Hunt J (as his Honour then was) considered that:

... it is not obligatory for a taxpayer, before he can discharge his burden of proof, to call all the material witnesses and to produce all the material documents which support his evidence ... It is certainly wiser for the taxpayer to do so in most cases so as to ensure that his own evidence is accepted, but even where he does not do so the tribunal of fact may nevertheless be sufficiently impressed with the taxpayer as a witness that his evidence is accepted without such corroboration or without the whole of such corroboration.

8. Derrington J then addressed the extent to which a taxpayer's own evidence can be relied upon and the necessary precision in satisfying the civil standard of proof:
   1. Although a decision-maker will, in the evaluation of the evidence, be cautious of a taxpayer's self-serving statements, they are not "prima facie unacceptable": McCormack v Federal Commissioner of Taxation at 302: and the arbiter of fact is entitled to accept them where the taxpayer is regarded as truthful. Moreover, the taxpayer is not required to corroborate each piece of evidence that is adduced before it can be accepted: Cassaniti at 409 [88].
   2. Mathematical precision is not required in order to prove on the balance of probabilities what the correct assessment should have been. The Court is entitled to decide the appeal by reference to estimates upon inexact evidence: Allard v Commissioner of Taxation (1992) 24 ATR 493 at 499 per Hill J. This approach was adopted by Burchett J in Ma at 233 in relation to an assessment based on the asset betterment method. His Honour said:

Furthermore, the making of estimates upon inexact evidence, which is so much a feature of both judicial and administrative decision-making, cannot be uniquely excluded from appeals against betterment assessments. To refuse to consider the credit, not only of the Applicant, but also of his independent and unchallenged witnesses, simply because the effect of the evidence was to support his accountant's generalisations about double-counting rather than to hit upon a precise figure, was to fall into an error of law. > > ...

9. ... general evidence of a person's financial dealings may be sufficient for the taxpayer to succeed in an appeal of an Objection Decision

Does the Applicant have to prove that every item in an asset betterment statement was incorrectly included as assessable income?

[I]t is insufficient for the Applicant to prove that some items should have been excluded from the assessment as non-taxable income and that he must prove that his taxable income is limited to the amount he alleges, which as a matter of practicality, means he must prove that all other amounts are not taxable income.

2. The Respondent referred to Commissioner of Taxation v Ross [2021] FCA 766; 174 ALD 77 (Ross) at [48] where Derrington J said, in relation to asset betterment assessments:
   1. In order to establish that an assessment under s 167 is excessive, a taxpayer must positively prove their "actual taxable income" and, in doing so, must demonstrate that the amount of tax levied by the assessment exceeds their actual substantive liability: Gashi [63]; Dalco at 623-625; Trautwein at 88; Ma v Federal Commissioner of Taxation [1992] FCA 359; (1992) 37 FCR 225 (Ma) at 230; by, in effect, furnishing a return of actual income which involves establishing both

1. The manner in which the taxpayer can discharge the burden may vary with the circumstances but "absent agreement with the Commissioner to confine the issues for determination in a Pt IVC proceeding, the Commissioner is entitled to rely upon any deficiency in the taxpayer's proof of the excessiveness of the amount assessed in seeking to uphold the assessment": Gashi [61]. See also Dalco at 624.
2. There may be cases where the amount of taxable income depends upon the legal complexion of known facts or upon specific factual questions. In such a case, a taxpayer may successfully discharge the onus by establishing that the Commissioner included in their taxable income amounts which ought not to have been included: Dalco at 624. However, such a situation would only arise where the Commissioner agrees to a process which is different to that described above by confining the scope of the dispute between him and the taxpayer to certain enumerated amounts. One might expect some clear expression of that agreement, involving as it does an abandonment of the advantages accorded to the Commissioner in s 167 in respect of defaulting taxpayers.
3. No agreement to confine issues, such as that referred to by Derrington J in Ross, has been reached here. Therefore the Respondent is entitled to rely on any deficiency in the Applicant's proof of excessiveness.[35]
4. This issue was addressed in Condon. Derrington J said support for the "all or nothing" approach can be found in the decision of Nettle J in Bosanac v Commissioner of Taxation [2019] HCA 41; (2019) 374 ALR 425 (Bosanac (HC)). That case was also an asset betterment case. Derrington J rejected the applicant's argument, which is the same argument that was put here, and said:

[40] In the absence of any such agreement in this case, the Commissioner was correct to submit that Mr Condon's onus required him to identify what was his contended actual taxable income, and to prove that the amount contended for was the full extent of his assessable income. In doing so, he was required to provide acceptable explanations and evidence to the effect that his monetary receipts (other than wages from the TPAIA) and increases in wealth during the Relevant Years were from non-taxable sources. If he was able to do so, and his evidence was accepted, then the onus would be discharged.

Mr Condon must prove what his income was in the Relevant Years

[48] It follows that Mr Condon's submission to the effect that he might "chip away" at the Commissioner's assessments must be rejected. In the context of his appeal from the assessments under s 167, it was instead incumbent on him to prove what his income was in the Relevant Years and that his income, so proved, was less than that assessed by the Commissioner. If he failed in this endeavour, the assessments were to stand.

1. Residency status is relevant for tax purposes because it determines what "income" is to be included in a person's assessable income.

Income according to ordinary concepts (ordinary income)

2. Your assessable income includes income according to ordinary concepts, which is called ordinary income .

Note: Some of the provisions about assessable income listed in section 10-5 may affect the treatment of ordinary income.

3. If you are an Australian resident, your assessable income includes the *ordinary income you *derived directly or indirectly from all sources, whether in or out of Australia, during the income year.
4. If you are a foreign resident, your assessable income includes:

(a) the *ordinary income you *derived directly or indirectly from all *Australian sources during the income year; and

(b) other *ordinary income that a provision includes in your assessable income for the income year on some basis other than having an *Australian source.

1. In working out whether you have derived an amount of *ordinary income, and (if so) when you derived it, you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct.
2. Section 6-10 of the ITAA 1997 provides:

3. Your assessable income also includes some amounts that are not * ordinary income.

Note: These are included by provisions about assessable income. > > For a summary list of these provisions, see section 10-5.

4. Amounts that are not *ordinary income, but are included in your assessable income by provisions about assessable income, are called statutory income.

Note 1: Although an amount is statutory income because it has been included in assessable income under a provision of this Act, it may be made exempt income or non-assessable non-exempt income under another provision: see sections 6-20 and 6-23. > > Note 2: Many provisions in the summary list in section 10-5 contain rules about ordinary income. These rules do not change its character as ordinary income.

5. If an amount would be *statutory income apart from the fact that you have not received it, it becomes statutory income as soon as it is applied or dealt with in any way on your behalf or as you direct.
6. If you are an Australian resident, your assessable income includes your *statutory income from all sources, whether in or out of Australia.
7. If you are a foreign resident, your assessable income includes:

(a) your *statutory income from all *Australian sources; and

(b) other *statutory income that a provision includes in your assessable income on some basis other than having an *Australian source.

1. "Australian resident" is defined in section 995-1 of the ITAA 1997 to mean "a person who is a resident of Australia for the purposes of the [ITAA 1936]".
2. "Resident or resident of Australia" is relevantly defined in section 6(1) of the ITAA 1936 as follows:

resident or resident of Australia means:

(a) a person, other than a company, who resides in Australia and includes a person [the residency test]:

(i) whose domicile is in Australia, unless the Commissioner is satisfied that the person's permanent place of abode is outside Australia [the domicile test];

(ii) who has actually been in Australia, continuously or intermittently, during more than one-half of the year of income, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and that the person does not intend to take up residence in Australia; or [the 183 days test]

(iii) who is:

• (A) a member of the superannuation scheme established by deed under the Superannuation Act 1990; or
• (B) an eligible employee for the purposes of the Superannuation Act 1976; or
• _(C) the spouse, or a child under 16, of a person covered by sub-_subparagraph (A) or (B); [superannuation test][36]

1. Courts have held that in order to be taken to have resided in Australia one needs to consider "the nature, duration and quality of physical presence [of a person] in a particular place as well as [their] intention".[37]
2. The following citations are from well-known authorities on the ordinary meaning of the word "resident":
   • in Levene v Inland Revenue Commissioners [1928] AC 217:[38]

[T]he word 'reside' is a familiar English word and is defined in the Oxford English Dictionary as meaning 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live in or at a particular place.' > > (emphasis added)

"if [the meaning of reside] has any definite meaning I should say it means according to the way in which a man's life is usually ordered > > (emphasis added)

• A person who spends time in a country as part of the "ordinary course of his life" could be considered as "ordinarily resident" in that country: Commissioner of Inland Revenue v Lysaght [1928] AC 234, Lord Buckmaster (at 248);
• "in determining a person's residence, the intention of that person may be vital": Comcare Australia (Defence) v O'Dea (1999) 87 FCR 451, 455;
• Determination of a person's residence is a "'question of degree and ...fact": Federal Commissioner of Taxation v Miller [1946] HCA 23; 73 CLR 93, 103;
• Physical presence in a country is not determinative on its own,[39] "one must consider the amount of time that he spends in that place, the nature of his presence there and his connection with that place": Revenue and Customs Commissioners v Grace [2009] STC 2707 (Grace), 2710;
• Residency incorporates "some degree of continuity or some expectation of continuity": Grace, 2710;
• "a person is not entitled to claim to be a resident at a given town merely because he pays a short, temporary visit. Some assumption of permanence, some degree of continuity, some expectation of continuity is a vital factor which turns simple occupation into residence": Fox v Stirk; Ricketts v Registration Officer for the City of Cambridge [1970] 2 QB 463, 477;
• "a person does not necessarily cease to be a resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place ... together with an intention to return to that place and an attitude that the place remains "home": Hafza v Director-General of Social Security [1985] FCA 201; 6 FCR 444 (Hafza) [14].

1. In Harding v Commissioner of Taxation [2018] FCA 837; 108 ATR 137 (Harding) (at [46]) the Court referred to topics that "constitute indicators or objective facts" which are often considered relevant "to the determination of the nature and quality of a person's presence in or association with a particular location" such as:[40]

(a) the person's physical presence in Australia; > > (b) the person's nationality; > > (c) the history of the person's past residence and movements; > > (d) the person's mode of life and habits; > > (e) the frequency, regularity and duration of the person's visits to Australia; > > (f) the person's purpose for visiting or leaving Australia; > > (g) the remaining family and business ties with Australia in comparison to any other foreign country; and > > (h) the maintenance of the place of abode.

2. Derrington J said these factors are not a "rigid formula for the determination of whether a person is a resident".[41]
3. A person can have two residences concurrently.[42]

The 'Domicile and Permanent Place of Abode' Test

1. Section 10 of the Domicile Act 1982 (Cth) provides:

The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his home indefinitely in that country

2. The expression a 'place of abode' "has been equated with the concept of home or residence": Harding, at [124]. In Harding, at [34], Derrington J said:

"the concept of 'continuity of association' is an evaluative tool to be applied...to ascertain whether a person has a retained usual place of abode in a place or 'lives' where he is not usually located"

3. In Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836; 116 FCR 180, 197-198 [78] Emmett J explained:

When comparing two places of abode of a particular person, in order to determine whether one is the usual place of abode, it is necessary to examine the nature and quality of the use to which the person makes of each particular place of abode. It is then possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the usual place of abode. > > (emphasis added)

1. While an applicant may have been in Australia for more than half of a financial year, this will not be sufficient to satisfy the 183-day test, when their usual place of abode is outside Australia and where they have no intention to take up residence in Australia.
2. The Explanatory Notes on Amendments Contained in a Bill to Amend the Income Tax Assessment Act 1922-29 (Cth) (the Income Tax Assessment Bill 1930 (Cth)), provided that this qualification was enacted "in order that there may be no danger of treating as residents persons who are purely visitors".[43]
3. In Harding (Full Ct) Davies and Steward JJ said (at [39]) that the 183-day test:

... is, initially, concerned with a person who is physically present in Australia for most of a given year of income. The exception to it probably applies to a person who is physically present in Australia for the required number of days but who would not be considered to be an Australian [resident] because he or she is only a temporary visitor of this country for a period of time. That period might even extend to a term of years. > > (emphasis added)

4. Davies and Steward JJ referred, with approval, to the judgment of Sheppard J in Applegate v Commissioner of Taxation [1978] 1 NSWLR 126; 8 ATR 372 where he said (at 134):

... "place of abode" may mean the house in which a person lives or the country, city or town in which he is for the time being to be found. I am of the view that the latter is the meaning of the expression used in s 6(1) of the Act.

1. Australia has a tax treaty with PNG for the avoidance of double taxation.[44]
2. The Agreement between Australia and the Independent State of PNG for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income [1989] ATS 37 (PNG Agreement) came into force on 29 December 1989.
3. The PNG Agreement sets out when a person is a "resident" of Australia or PNG relevantly as follows:

4. For the purposes of this Agreement, a person is a resident of one of the Contracting States:

(a) in the case of Australia, if the person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of PNG, if the person is a resident of PNG for the purposes of PNG tax.

1. A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from sources in that State.
2. Where by reason of the preceding provisions of this Article a person, being an individual, is a resident of both Contracting States, then the status of the person shall be determined in accordance with the following rules:

(a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person;

(b) if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State in which the person has an habitual abode;

(c) if the person has an habitual abode in both Contracting States, or if the person does not have an habitual abode in either of them, the person shall be deemed to be a resident solely of the Contracting State with which the person's personal and economic relations are the closer.

1. Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, then its status shall be determined in accordance with the following rules:

(a) it shall be deemed to be a resident solely of the Contracting State in which its place of central management and control is situated;

(b) if its place of central management and control is not situated in either Contracting State, it shall be deemed to be a resident solely of the Contracting State in which it was incorporated.

1. The Applicant was represented at the hearing by Ms D A Skennar KC and Ms F Chen of Counsel. The Respondent was represented by Ms C J Conway of Counsel.
2. All witnesses provided witness statements in addition to their oral evidence.
3. The following witnesses gave evidence on behalf of the Applicant (in the following order):

Consolidated statement - June 2022, exhibits 1 to 100

1. The major issue between the parties concerns deposits (referred to by the parties as "inflows") of $2.6 million the Applicant received from his father. The Applicant says the reason for the increase in the Applicant's wealth was a result of the acquisition of Residential Property 2 in 2013. The Applicant also purchased Unit 11 in that financial year. Residential Property 2 was purchased for $2.9 million. $1,141,335 of the purchase price was contributed by the Applicant's father to the Applicant as a gift.[54]
2. The Applicant contends:[55]

(a) he receives deposits into his personal bank account that constitute gifts from his father; > > (b) the gifts from his father are "towards the expenditure associated with the need to ensure the safety of the most vulnerable members of the family, prior to their eventual return to PNG; > > (c) the gifts from his father "were not in consideration for goods or services the Applicant provided"; > > (d) he earns income in PNG which is "derived wholly outside of Australia and is subject to the income tax regime of PNG".

3. The Applicant's father explained that while the size of the monetary gifts given to his children seems like a lot of money to most people, he had the financial capacity to do so.[56]
4. Mr John Thynne, director in the forensic division of Vincents Accountants, was instructed by the Applicant to conduct an analysis of the Applicant's accounts. Mr Thynne prepared two reports for the purpose of this hearing.[57]
5. Schedule D to Mr Thynne's Report sets out a summary of the receipts in the Relevant Years.
6. Based on instructions from the Applicant, Mr Thynne recorded the following inflows for the 2013 financial year:

(a) gifts from the Applicant's father - $1,176,115; > > (b) the Applicant had other inflows into his account, including: > > > (i) a transfer of savings - $92,718; > > > > (ii) interest in rent - $31,000; and > > > > (iii) international money transfers from JC - $285,000.

7. The Applicant contends that these inflows were not assessable income.
8. The Applicant contends that net asset position for 2013, which impacts the other years, is primarily the purchase of Residential Property 2 and Unit 11.
9. Schedule D of Mr Thynne's Report sets out that most of the money has come in from overseas into his bank account, all of which the Applicant says was non‑assessable income.
10. The Applicant says his net asset position in the subsequent years does not vary greatly.

(a) 2014 - his net asset position increased by approximately $95,000; > > (b) 2015 - his net asset position increased by approximately $172,000; and > > (c) 2016 - his net asset position decreased by approximately $460,000.

11. The Applicant submitted that "in a broad sense the change in asset position in those years is explained by the Applicant making additional loans to friends and receipt of money by way of the sale of motor vehicles". The Applicant says he also continued to receive significant gifts from his father: $829,000 in 2014, $501,000 in 2015, and $95,000 in 2016.[58]

1. A chronology prepared by the Respondent is set out in Annexure A to this Decision. The Applicant agreed with the chronology other than with respect to item A39.[59] The Tribunal accepts the uncontradicted facts.

1. The Applicant gave evidence via video link from Singapore.
2. The Applicant was born in Malaysia and his passport was issued by PNG.[60] The Applicant has three sisters.
3. The Applicant went to school in PNG. In 1990 he went to Singapore to complete his schooling. He visited Australia for the first time in 1988 to attend World Expo in Brisbane and again during the 1994 holidays.[61]
4. In 1997 the Applicant came to Australia on a student visa to undertake an English language skills course. He then continued tertiary studies at a Queensland university enrolling in a Bachelor of Business Management.
5. In 2000 the Applicant met his wife, an Australian citizen of Chinese heritage.
6. Between 1997 and 2003 the Applicant spent an average of 324 days per financial year in Australia.[62]

1. The Applicant gave evidence that as part of his being the eldest son in a Chinese family he attends to his parents' personal and business affairs as and when requested.[63] For example, he arranges to pay their bills, organises their travel and so on. The Applicant says it is common practice in his family for his father to give money to him and his sisters in order to maintain their lifestyles. The Applicant says this could include gifts to purchase property, cars, or money to spend at their own discretion.

1. In 2003 the Applicant began working in his father's businesses which are headquartered in PNG.
2. The family businesses in PNG are operated by PNG Company 1 and PNG Company 2. PNG Company 2 is owned and controlled by the Applicant's father.[64] The Applicant says he has always "been groomed to take over the family businesses in PNG".[65] This was confirmed by the Applicant's father.[66]
3. PNG Company 2 manages assets in PNG. PNG Company 1 focuses on the retail sector owning and operating a supermarket and department store in PNG.
4. As part of his role as general manager of the family businesses in PNG, he oversees the daily operations of PNG Company 1 and is required to travel to other countries regularly. His income is paid for by PNG Company 1. At the hearing the Applicant confirmed that PNG Company 1's remuneration covers of the cost of his and his family's accommodation, transport, travel, and other living expenses.[67]
5. The Applicant provided a copy of the salary and wages statements of earnings from PNG Company 1 for the calendar years 2013 through 2017.[68] PNG Company 1 also makes superannuation contributions on the Applicant's behalf into a superannuation fund in PNG. The Applicant provided a copy of his superannuation fund's member annual statement for 2014, 2016 and 2017.[69]

1. The Applicant continued his relationship with his wife who remained in Australia after he returned to PNG in 2003. The Applicant married in November 2004 after his wife committed to relocating with the Applicant permanently in PNG.
2. The Applicant is currently married and has three children under 18 years of age.
3. In November 2004 the Applicant and his wife lived at Residential Property 1.[70] In August 2005, after the birth of his first child the Applicant's wife relocated to live with the Applicant in PNG. Prior to the birth of his other two children, in 2008 and 2015, the Applicant's wife relocated to Australia to be closer to family.
4. In 2005 the Applicant applied for spousal visa so that he could more easily visit Australia with his wife. The Applicant contends that it is difficult as a PNG citizen to obtain a holiday visa to Australia. The Applicant was granted an Australian spousal visa at the end of 2008.
5. In May 2008 after the birth of their second child the Applicant's wife again returned with the two children to live with the Applicant in PNG.
6. In August 2008 the Applicant was granted permanent residency in Australia.[71]
7. The Applicant says he has lived in the same apartment in PNG since 2009. The apartment is his home and is large enough to accommodate his entire family.
8. In 2005, there were disputes between his father and some cousins, in relation to a joint venture in PNG which resulted in the Applicant's father being sacked from the joint venture. The Applicant's father commenced court proceedings against his nephews.[72]
9. In 2010, as a result of the father's family dispute, there was an assassination attempt on his father's life in PNG.[73] His father was shot and transported by medivac to Australia for treatment. As a result of these events the Applicant's parents, his wife and children fled PNG for Australia. The Applicant said as the only son, the burden to remain in PNG to operate the businesses, despite the personal risks, fell on him.
10. The extended family dispute culminated in the Applicant's father being paid the amount of PGK 30,000,000 (which is the equivalent of AUD$12,700,000 today) (Settlement Funds) on 29 July 2010 in return for his share in the investment company.[74] This settlement was recorded in an agreement entitled "Share Sale Agreement, Release and Indemnity".[75] The Applicant says his father loaned the Settlement Funds to PNG Company 1 and PNG Company 2. The Applicant's father states that he invested most of the money into the companies which enabled PNG Company 1 to pay down some loans with the bank, and that he also used some of the money to help out his children with "houses and things".[76] The Applicant's father says when he withdraws money from PNG Company 2 and PNG Company 1, he treats the withdrawals as repayment of his loans.
11. In 2011, once his father had recovered from the assassination attempt, the Applicant's parents and family, including his two children moved to Singapore.[77]
12. The Applicant explained to the ATO that the reason for his family moving from Australia to Singapore was because:[78]

In 2009, there was an assassination attempt on the Taxpayer's father in PNG. As a result, the Taxpayer's father, mother and his direct dependants temporarily moved to Australia which was a safe haven for the family and for his father to receive ongoing medical treatment for his bullet wound. > > This was a very turbulent time for the family and the threat of assassination was ongoing. > > As such, with the taxpayer's parents being non-Australian citizens, the Taxpayer organised for his parents to move to Singapore with the Taxpayer's wife and children in 2011. > > The Taxpayer then organised for his mother to obtain residency in Singapore and become the guardian for their two grandchildren [PQBZ's son and daughter] in order for them to attend school in Singapore and gain respect for their Asian heritage and culture. > > During this entire period, the Taxpayer continued to reside in PNG to manage his Father's business interests whilst visiting the family from time to time.

13. In 2012, the family decided that the parents, his wife, and children would move to Australia where both families could help with his children's upbringing, and where they could be involved with the Applicant's sisters and his sisters' children. At this time, it was still unsafe for his family to return to live with him in PNG. At the hearing the Applicant said there were still safety and security risks, such as risks of abduction and ransom demands, to his family if they came to PNG.[79]
14. The Applicant says he stayed longer in Australia in the 2013 financial year due to a skiing accident in Victoria which resulted in his having to have an operation and physiotherapy treatment is Australia.
15. The Applicant says he joined his wife and children where possible in school holidays and between his work commitments in PNG.
16. In June 2013, with the assistance of his father the Applicant purchased Residential Property 2 for $2,880,000.[80]
17. It was intended that the Applicant's wife and children would reside in Residential Property 2 which would allow his children to go to school in Australia pending their reuniting with the Applicant in PNG. The Applicant said he had no intention of making Residential Property 2 his primary residence.
18. The Applicant says he spent longer in Australia during the 2015 financial year due to his wife and children returning to reside in Australia. The Applicant said his wife suffered from postnatal depression after the birth of the third child and as a result he travelled to Australia more frequently to support her.
19. On 13 July 2015 the Applicant re-entered Australia with the intention of moving his family back permanently to Australia from Singapore. [81]
20. The Applicant says since 2016 he has continued to visit Australia for the purpose of visiting his immediate and extended family, to attend business meetings and assist his father in maintaining his business interests. The Applicant said he still intends for his family to move back to PNG when it is safe.
21. It is not in dispute that the Applicant spent the following days in and out of Australia in the Years of Income:[82]

1. It is not in dispute that during the Relevant Years:

(a) when the Applicant returned to Australia, the Applicant would stay at the family home;[83] > > (b) when the family were absent from Australia their residential properties were not rented out;[84] > > (c) the Applicant owned multiple motor vehicles registered in Queensland;[85] > > (d) the Applicant owned investment Property 3;[86] > > (e) the Applicant owned two commercial properties in Brisbane;[87] > > (f) the Applicant was a director of 10 Australian proprietary companies.[88]

2. The transactions are elaborated on further below.

1. The Applicant said that his father assisted him to purchase Residential Property 1 in November 2004 as part of a wedding gift which is traditional within his family.[89] The Applicant said it is also part of his culture to show a wife's family that he would be a suitable husband. Residential Property 1 was purchased for the Applicant in his wife's name.[90]
2. Residential Property 1 was purchased on 4 November 2004 for $715,000 and was sold on 28 February 2014 for $960,000.

1. The Applicant organised through KBL, a credit and mortgage broker, to obtain a LowDoc Loan to assist with the purchase of Residential Property 2. KBL also gave evidence at the hearing (see paragraphs ‎326-‎342 below).
2. The Applicant said KBL recommended this loan because of the difficulty obtaining supporting and verifying documents from PNG.[91]
3. The LowDoc Loan Application dated 22 April 2013 was for $1,800,000 to purchase Residential Property 2 (which the Applicant represented was worth approximately $3,000,000).
4. The Loan Application recorded the Applicant's:[92]

(a) annual income as $650,000 gross; > > (b) principal residence as Residential Property 1; > > (c) net worth as nearly $58,000,000; > > (d) motor vehicles as: > > > (i) a Lamborghini Gallardo worth $400,000; > > > > (ii) Mercedes C65 worth $150,000; > > > > (iii) Audi Q7 worth $100,000 > > > > (iv) Porsche Cayenne worth $155,000; > > (e) Australian bank balance of $1,290,000; > > (f) Overseas bank balance of $2,000,000; > > (g) Investment Property 3 worth $800,000; > > (h) Investment Unit 11 and Unit 12 as worth $250,000 each; > > (i) Employment as self-employed at Company P;

5. This information was declared to be correct by the Applicant.
6. The Applicant says he provided his asset information to KBL for the purposes of his loan application. He says it was not a complete asset and liability statement.
7. The Applicant says he does not recall ever saying he received $650,000 in income.[93] He says it did not occur to him that he was attesting to all of his actual income but rather his anticipated income. He also says his anticipated income included all anticipated receipts of funds, such as gifts from his father, not just receipts that were assessable. The Applicant said it was a reference to how much money he could consolidate.[94] During re-examination the Applicant said the money from his father was not income but gifts or loans.[95]
8. Residential Property 2 was purchased on 27 April 2013 for $3,030,542 and was still held as at 30 June 2016.[96] The Applicant paid for the property in the following instalments:
   • $200,010 on 26 April 2013;
   • $88,010 on 29 April 2013;
   • $138,960 on 30 May 2013;
   • $1,163,712 on 7 June 2013;
   • $1,439,850 on 11 June 2013 by way of bank advance.

1. In 2013 the Applicant purchased a small commercial property, Unit 11, for $202,500. The Applicant says he applied for finance in the amount of $121,500 and ultimately received $108,000. He says he had a meeting with a broker, KBL, to establish a basis for which he could seek funding. The Applicant says he also had acquired investment Property 3.
2. Unit 11 was purchased on 28 February 2013 for $221,650 and was still held as at 30 June 2016.

1. On 6 September 2012 there is a transaction in the Applicant's account for $108,000 with the description "DRAW DOWN NETT ADVANCE". The Applicant says this transaction is a drawdown of a loan from Sandhurst Trustees relating to the purchase of the Unit 12.[97] The Applicant says he initially purchased Unit 12 using the cash available in his bank accounts. He subsequently applied for a NoDoc loan using the Unit 12 property to secure the loan and was advanced the amount of $108,000 on 6 September 2012 (see paragraph &#8[98]).98
2. The Applicant said KBL recommended this loan because of the difficulty obtaining supporting and verifying documents from PNG.[99]
3. Unit 12 was purchased on 20 January 2012 for $222,750 and was still held as at 30 June 2016.

1. During the Relevant Years the Applicant was a director and/or shareholder of 10 Australian companies.[100] The Applicant says he did not derive any income from those companies.
2. The Applicant was the sole director and/or shareholder of the following Australian companies:
   • Company A
   • Company B
   • Company C
   • Company D
   • Company F
   • Company H
   • Company I
   • Company J
   • Company K
   • Company L
3. At one stage the Applicant also a director of Company P which had become a supplier of goods to the PNG companies in 2009.[101] An ASIC company search indicates that the Applicant was a director, together with his sister and father, between 2002 and 2017.[102]
4. The Applicant said at the time the companies were registered, the registration application form stated that an Australian company must have at least one director resident in Australia. As he had residency status in Australia, he understood that he satisfied that requirement. He did not understand that meant he had a permanent place of abode in Australia.

1. The Applicant says Company A and Company B were registered in October 2013 on behalf of his father who wanted to invest in Australia. He thought it be easier for the companies to be registered in the Applicant's name as he had a spousal visa. The Applicant says the companies were not successful as he was not able to invest sufficient time in Australia to make them successful because he continued to live and work in PNG in the family businesses.
2. An ASIC company search of Company B indicates that:[103]

(a) it was incorporated in October 2013; > > (b) the Applicant was the sole director; and > > (c) it was deregistered in October 2020.

3. An ASIC company search of Company A indicates that:[104]

(a) it was incorporated in October 2013; and > > (b) the Applicant was, and remains, the sole director.

1. The Applicant states that had he known "such matters could have interested the ATO" he would have kept a ledger of all relevant transactions where he received gifts from his father. Instead, he says he has had to recreate those records. The Applicant said he had an independent specialist accountant, Mr John Thynne, undertake an analysis of the financial support provided by his father during the Relevant Years.

1. The Applicant says the bank accounts held by him during the Relevant Years, some of which were shared with his wife, are identified in schedule B of Mr Thynne's Report.[105]

1. The Applicant says during the Relevant Years he owned property, either in his own name or shared with his wife, as identified in Schedule B of Mr Thynne's Report.

During the Relevant Years the Applicant owned several motor vehicles, in his own name or shared with his wife, as identified in schedule B of Mr Thynne's Report.

1. In the 2016 financial year the Applicant caused the motor vehicles and accessories to be sold as identified in schedule D of Mr Thynne's Report.

1. The Applicant says the Family Trust purchased a Lamborghini Huracan on 10 March 2014.[106]
2. The Applicant says he is not the owner of this vehicle. The Applicant's signature is on the invoice.[107]
3. Part of the purchase price for the Lamborghini Huracan was paid for by the trade in of the Lamborghini Gallardo.[108]
4. The Lamborghini Gallardo was registered in the Applicant's name. The Applicant and his father each paid half of the purchase price for the Lamborghini Gallardo in February 2012.[109] This purchase is outside the Relevant Years under consideration here.

1. The Applicant says the Family Trust purchased the Range Rover for $172,500 on 15 October 2015.[110]
2. The Applicant says the Range Rover is not registered in his name and he does not own the vehicle. The Applicant says the Family Trust name was used as the customer's name because his parents were driving the vehicles and did not want them in his name if they were fined.[111]
3. The Applicant says he did not pay for the Range Rover. The Applicant's father provided a copy of the invoice from the car dealership made out to "[Family Trust]" dated 13 October 2015.[112] The Applicant's signature is on the invoice.[113]
4. The price for the Range Rover was $172,600.
5. On 8 October 2015 the Applicant's father transferred the amount of $95,000 to the Applicant and requested that he use those funds to pay the balance purchase price for the Range Rover on behalf of the Family Trust. This is confirmed by the Applicant's father.[114]
6. The Applicant says on 15 October 2015 he withdrew the amount of $90,510 from his account to pay the balance purchase price as directed by his father.[115] This is confirmed by his father.[116]
7. The Applicant's father says the Range Rover was purchased for him to use when in Australia. One of the Applicant's sisters uses the car when her father is not in Australia and the car is kept at her house.[117] The Applicant's sister's evidence is outlined in paragraph ‎299 below.

1. In July 2012 the Applicant said his friend, LS, needed help to purchase a Cabo boat from GLB at Paradise Point in Queensland. The boat was registered in the Applicant's name because he had a Queensland licence which permits the vessel to travel through Australian waters to PNG where it was handed over to the new owner.[118] The Applicant's Marine Licence expired on 5 February 2022.[119]
2. The bill of sale of the vessel names LS as the correct owner and the invoices were addressed to LS.[120]

1. The Applicant owned a number of numberplates as identified in schedule B to Mr Thynne's Report.

1. The Applicant says that during the Relevant Years it was his usual practice to transfer money from his account ended #5903 to his other accounts.

1. The Applicant says that during the Relevant Years he regularly lent money to friends and family, and he did not charge interest for any of these personal loans.

1. The Applicant says in about 2014/2015 he received a phone call from a friend, JZ, the husband of YLX. JZ said that YLX was buying a house in Sydney but was short of funds to settle on the property and asked to borrow some funds.
2. The Applicant says he lent $50,000 to YLX from one of his Australians accounts. The loan was in part repaid to him in the amount of $30,000 on 2 May 2016.[121] He also recalls receiving the payment of $10,000 into a PNG account and the remainder of the loan was part repaid in the amount of $10,000 on 12 October 2019.[122]
3. The Applicant provided a bank receipt showing $10,000 was transferred to the Applicant on 12 October 2019 and a copy of a text from YLX confirming the transfer of $10,000. There is no indication of the date of the text.

1. The Applicant says he has known KBL for over 25 years. The Applicant says he has loaned money to KBL as and when he needed it. For example, on 10 July 2012 he loaned KBL $10,000 using the description "[KBL] Loan Debit Transfer [PQBZ] 06".
2. The Applicant says he recalls at one stage purchasing a Nissan GTR at an auction with KBL on a 50-50 basis.[123] But he could not recall the specific details. The loans to KBL were not documented in a formal agreement and did not incur interest because KBL is a close friend. The Applicant says he trusted he would be repaid as and when KBL had the funds available.
3. The Applicant identifies the following deposits in his accounts from KBL and his wife in repayment of the loans he provided:[124]

(a) $6,600 on 1 August 2012; > > (b) $6,000 on 3 April 2013; > > (c) $40,000 on 13 November 2014; > > (d) $2,000 on 7 October 2015; > > (e) $660 on 14 March 2016.

(a) PLN is a close friend who resides in PNG; > > (b) he has known PLN for 25 years; > > (c) he has lent money to PLN on occasions; > > (d) because of their friendship there is no written recording of the loan arrangements, and he did not charge interest; > > (e) he trusts PLN to repay him when he can; > > (f) he received the following repayments from PLN:[125] > > > (i) $2,000 on 15 August 2012; > > > > (ii) $500 on 3 April 2013; > > > > (iii) $500 on 10 October 2013; > > > > (iv) $2,200 on 8 November 2013; > > > > (v) $3,510 on 20 November 2013.

2. The Applicant purchased a camera for PLN in Singapore and PLN repaid him on 18 December 2013.[126] PLN wanted the camera as a gift for his partner and did not want his partner to see the transaction on his bank statement.

(a) LLBH is a personal friend he has known since 1997; > > (b) he started a company, Company E, with LLBH in 2007; > > (c) he started another company, Company G, with LLBH in 2010; > > (d) LLBH ran the day-to-day operations and the Applicant provided advice when requested; > > (e) he lent money to Company E and Company G and this was often done by way of investing in the business; > > (f) he loaned the following amounts to Company E and Company G: > > > (i) on 26 July 2012 he lent Company G $20,000 (described in the Applicant's bank statement as "[Company G] Loan Debt Transfer [PQBZ] 06";[128] > > > > (ii) in March 2013 he lent Company E $40,000 (two $20,000 payments in March 2013) to purchase a white Ford Ranger;[129] > > > > (iii) in November 2013 he lent Company E $60,000 (described in the Applicant's bank statement as "[LLBH] to [Company E] Debt Transfer [PQBZ]";[130] > > (g) in March 2014 the Applicant, LLBH and another started Company H and Company F; > > (h) in 2016 the Applicant, LLBH and another decided to trade under the name Company L; and > > (i) he has resigned as a director of Company L.

2. The Applicant also says on 8 August 2012 he lent LLBH $10,000 (described in the Applicant's bank statement as "LLBH Loan Debt Transfer [PQBZ] 06206".[131]
3. At the hearing the Applicant said the money to make the investments in Company G and Company E came from his father.[132]

1. On 11 November 2013 the Applicant says he received $830 from a friend, Wu, as a wedding gift. The Applicant no longer has any contact with Wu.

(a) in 2012 JW resided in the property next to Residential Property 1; > > (b) JW kept an eye on Residential Property 1 when the Applicant and his family were outside of Australia for any significant period of time; > > (c) in or around June 2012 he lent JW approximately $20,000. The loan was not documented and was provided on an interest-free basis; > > (d) on 14 December 2012 JW requested a further small loan of approximately $30,000. The Applicant loaned the money to JW from his PNG account. The loan was not documented and did not accrue interest. The Applicant provided a copy of an email from JW to the Applicant sent on 14 December 2012 requesting the $30,000 loan;[133] > > (e) JW failed to pay the initial loan; > > (f) in early May 2014 the Applicant became aware that JW was working in PNG. The Applicant contacted JW regarding the repayment of the loans; > > (g) on 5 May 2014 the Applicant entered into a loan agreement and acknowledgement of debt with JW. The Applicant provided the following documents:[134] > > > (iv) an "acknowledgement of debt" signed 5 May 2014 in which JW acknowledges that he owes the Applicant PGK 40,000 from the balance of the loan in June 2012; > > > > (v) a copy of the loan agreement dated 26 May 2014 where JW agreed to repay the Applicant by way of monthly instalments. > > (h) from January to October 2015 the Applicant received $500 and weekly repayments from JW totalling $20,000 in repayment of the loan amounts.

2. At the hearing the Applicant said the balance owing has subsequently been paid by JW's daughter.[135]

1. The Applicant's evidence is that:[136]

(a) in early 2013 his friends of 15 years Mr T and Mr M asked him to invest in a new commercial cleaning business. They needed capital to purchase cars and equipment; > > (b) his friends sent him an email with a proposal on 4 September 2013. A copy of the email was provided to the Tribunal.[137] > > (c) because of his relationship with Mr T and Mr M he agreed to invest $100,000 and act as director and secretary of Company B; > > (d) he paid the accountants' fees to set up Company B and related trusts. The Applicant provided the Tribunal with a copy of the accountants' invoices;[138] > > (e) he recalls part of the investment money was used to purchase a Nissan vehicle for the company. He made two payments of $18,485 and $20,000. The Applicant provided the Tribunal with a copy of emails confirming the purchase and a copy of relevant bank statements;[139] > > (f) he made a further capital investment of $51,515 on 22 October 2013. The Applicant provided the Tribunal with a copy of relevant bank statements;[140] > > (g) he was not involved in the day to day running of the business; > > (h) he recalls his friends informing him of a big contract which required further investment of $100,000 to purchase equipment and material; > > (i) in mid-2014 he invested a further $100,000; > > (j) once Company B had completed its contractual obligations it ceased to trade; > > (k) his capital investment was repaid in two $100,000 instalments on 7 August 2015 and 10 August 2015; and > > (l) Company B has been deregistered.[141]

2. Company B was deregistered in October 2020.
3. Mr T's evidence is summarised at paragraphs ‎351-‎364 below.

1. The Applicant's evidence is that in January 2016 he entered into a verbal agreement to purchase a watch for his friend, FT, during his trip to Singapore.
2. The Applicant said he then agreed to sell the watch to FT for $40,000 to be paid in instalments. He did not enter into any formal agreement with his friend for the purchase.
3. The Applicant said he received four payments of $10,000 each from FT in the first half of the 2016 financial year.[142]
4. The Applicant provided a letter dated 15 December 2021 stated to be from FT confirming the Applicant's evidence.[143]

1. The Applicant said prior to 2000 he lent $19,800 to a school friend, HLS. The loan was repaid to him in the financial year ending 2016.

1. The Applicant says that he received Medicare refunds totalling $145.20 in the 2014 income year and $145.80 in the 2015 income year.

1. The Applicant said that during the Relevant Years, his father transferred to him the amount of $2,948,080 of which his share was $2,601,475 for various reasons including:

(a) the purchase of Residential Property 2; > > (b) renovations; > > (c) currency hedges; > > (d) to fund new businesses. > > (e) purchase of furniture; > > (f) family maintenance; and > > (g) gifts.

2. The Applicant's father confirmed the Applicant's evidence.[144]
3. As referred to earlier, the Applicant and the Applicant's father gave evidence that from time to time the Applicant's father draws money out of PNG Company 1 and PNG Company 2, which is accounted for in the original loans to both PNG Company 1 and PNG Company 2, and these monies are then gifted to the Applicant.
4. The Applicant says his father provides these gifts "towards the expenditure associated with my direct and extended family's costs of living while residing away from PNG, particularly in Australia prior to their eventual return".

(a) in early 2013, he decided to purchase Residential Property 2; > > (b) on 12 February 2013, he received an amount of $225,480 from his father as a gift of which $112,740 was his share; > > (c) on 27 April 2013 he entered into a contract for the purchase of Residential Property 2; > > (d) in May 2013, he received the following gifts from his father for the purpose of purchasing Residential Property 2:

• $221,950 on 1 May 2013;
  • $200,000 on 15 May 2013;
  • $92,043 on 16 May 2013;
  • $92,264 on 22 May 2013; and
  • $154,799 on 29 May 2013.

(e) the gifts from his father were accounted for through a reduction of his father's loan to PNG Company 1. The Applicant's father confirmed this evidence and provided documents on PNG Company 1 letterhead called "2013- [APPLICANT'S FATHER] LOAN REPAYMENT LEDGER - TRANSFER TO [APPLICANT]",[146] and "2014- [APPLICANT'S FATHER] LOAN REPAYMENT LEDGER - TRANSFER TO [APPLICANT]".[147] It was put to the Applicant that he had prepared the ledgers. The Applicant denied preparing the ledgers and said staff in PNG were not as educated, and this document would have been within their capabilities.[148] > > (f) Residential Property 2 settled in June;[149] and > > (g) the total amount received from his father in 2013 and 2014 for the purpose of purchasing Residential Property 2 was $1,141,335. At the hearing the Applicant acknowledged that some transfers may not have been accounted for.[150]

(h) he received $68,455 from his father as a gift for the renovation and maintenance of Unit 12 on 28 August 2012 (see Schedule H, Mr Thynne's Report); and > > (i) this gift was mistakenly attributed to the Unit 11 property instead of Unit 12;

2. The Applicant's father says he cannot recall exact details, but he believes he sent some money for renovations. The Applicant's father says he has no independent recollection of transferring $68,455 but has no doubt, having been shown a bank statement that it was transferred for these renovations.[151]

1. In the Relevant Years, the Applicant received the total of $512,730 from his father by way of currency hedges as follows:
   • 6 September 2012 in the amount of $92,820;
   • 23 November 2012 in the amount of $137,980;
   • 20 February 2013 in the amount of $36,930;
   • 12 March 2013 in the amount of $100,000;
   • 28 August 2013 in the amount of $100,000;
   • 30 May 2014 in the amount of $45,000.
2. The Applicant's evidence is:[152]

(a) the PNG Kina has always been susceptible to currency fluctuation; > > (b) to minimise his father's risk of currency fluctuations diminishing his assets, his father had a practice of transferring money from PNG Kina into AUD which was a more stable currency; > > (c) he holds the money for his father and if he ever asked for it to be transferred back, or used to pay for anything he would do it; > > (d) his father allows him to use these amounts for discretionary spending. > > (e) to the best of his recollection, the amounts received on 12 March 2013 and 28 August 2013 were used by the Applicant to complete the purchase of Residential Property 2.

(a) his father wanted to invest in Australia as he saw it as a stable investment; > > (b) his father would transfer money to him in Australia for the purposes of investing in Australia in either businesses or real property investments such as his father's development (Park Development); > > (c) the funds are repayable on demand; > > (d) the funds were his father's money that he took out of PNG Company 1;[154] > > (e) due to the high risk of crime in PNG the deposits were usually made by staff members of his father's businesses and sent to him in Australia; > > (f) he received a total of $565,000 from his father to fund new businesses and make investments during the Relevant Years as follows:

• 26 November 2013 in the amount of $200,000;
  • 7 March 2014 in the amount of $170,000;
  • 28 April 2014 in the amount of $100,000;
  • 11 August 2015 in the amount of $95,000.

2. The Applicant's father says he does not recall the individual transactions, but recalls sending money to his son for his businesses and to help him start Company G and Company E.[155]

(a) his father transferred funds to him in Australia for his family's maintenance, gifts to ensure fairness between himself and his sisters, and for the purchase of furniture for Residential Property 2; > > (b) his father often gifts money to him and his sisters; > > (c) his father gifted significant amounts of money to his sisters in order for them to purchase their homes as he did for the Applicant; > > (d) he received the following amounts from his father for family maintenance and living costs during the Relevant Years:

• 13 June 2014 in the amount of $73,980;
  • 28 July 2014 in the amount of $181,000;
  • 11 September 2014 in the amount of $80,000;
  • 18 September 2014 in the amount of $80,000;
  • 4 November 2014 in the amount of $80,000;
  • 5 November 2014 in the amount of $80,000;
  • TOTAL= $574,980

1. On 2 August 2013 the Applicant says he received an amount of $140,380 from his father as a gift for the purpose of renovating and purchasing furniture for Residential Property 2.
2. From on or about November 2013 to June 2014, after the purchase of Residential Property 2 and in preparation for his wife and children coming back to live in Australia, the Applicant undertook renovations on Residential Property 2 (as identified in Schedule H of Mr Thynne's Report).

1. Between November 2013 and November 2014, the following amounts were gifted from his father for investment and family maintenance purposes and were accounted for through a reduction of his father's loan to PNG Company 1:[156]
   • $200,000 on 26 November 2013;
   • $170,000 on 7 March 2014;
   • $100,000 on 28 April 2014;
   • $80,000 on 4 November 2014; and
   • $80,000 on 5 November 2014.
2. The Applicant's father does not recall the details of individual transactions but says he recall transferring money to the Applicant for family maintenance.[157]

1. The Applicant's evidence is that during the Relevant Years he received:

(a) $204,154 from rental inflows from Unit 11 and Unit 12; > > (b) $21,730 in interest payments.

2. The Applicant says these amounts were declared in his ITRs.

1. The Applicant's evidence is that during the Relevant Years he received $35,845 in salary wages and director drawings.
2. The Applicant says these amounts were declared in his ITRs.

1. The Applicant's evidence is that during the Relevant Years he received $377,475 in cash and cheque deposits into his accounts.

1. The Applicant's evidence is that during the Relevant Years he received coin deposits of $1,141. This amount consists of change collected around the house in piggy banks and is deposited once a year.

1. The Applicant's evidence is that during the Relevant Years he received $296,197 in uncategorised inflows or deposits.
2. The Applicant says he has considered each transaction further and has made a comment in respect to each transaction that he has been able to recall.
3. Annexure PQBZ-82 to the Applicant's Statement dated 9 June 2022 is an excel spreadsheet of each inflow transaction in his bank statements with the Applicant's comments in respect to the transactions. The Applicant says where he has not made a comment, it is because he is unable to recall the purpose of the inflow. The Applicant says he has searched for invoices in relation to all inflows but has been unable to find them.

1. The Applicant's evidence is that on 21 June 2016, he received a bond refund in the amount of $2,000.
2. The Applicant says this was a refund from a holiday house that he rented at the Gold Coast for his dad's birthday. Annexure PQBZ-83 to the Applicant's Statement dated 9 June 2022 is email correspondence dated 6 to 9 June 2016 confirming the booking and an email dated 21 June 2016 from Elite Holiday Homes relating to the security deposit (bond) refund.

1. The Applicant's evidence is that during the Relevant Years he received the following reimbursements.
   1. Zeekler Investments
2. In July 2012, the Applicant says he became aware of an investment opportunity for Zeekler, also known as Zeek Rewards, which purported to be an internet-based penny auction company. The Applicant invested $10,000 into Zeekler in July 2012.
3. On 8 August 2012, he invested a further $10,000 into Zeekler.
4. By August 2012, it became known that Zeek Rewards was a fraudulent scheme which had induced some 900,000 investors by representing that the investments were generating profits. Annexure PQBZ-84 to the Applicant's Statement dated 9 June 2022 is an article relating to the fraudulent scheme Zeek Rewards.
5. As a result, of the scheme being found to be fraudulent, the second payment made on 8 August 2012 in the amount of $10,000 was unable to be invested into the scheme and was refunded to the Applicant on 21 August 2012. The Applicant provided an email dated 21 August 2012 enclosing the bank receipt of the reimbursement of the $10,000 and an email dated 24 August 2012 relating to the reimbursement.[158]

1. The Applicant says it is normal in his family and culture for the eldest son to take care of his parents and see to their affairs. The Applicant says he commonly pays bills on behalf of his parents, arranges and pays for their travel, makes investments and purchases.
2. From time to time, he receives lump sum payments from his father to reimburse him for costs incurred on his behalf.
3. In the Relevant Years the Applicant says he received the amount of $624,166.98 from his father as reimbursements for expenses paid on his father's behalf.
4. This amount, as detailed below, was made up of:

(a) monies he paid to Lyndon Crouch Lawyers trust account on 14 July 2015 for the settlement of a property (approximately $400,000); > > (b) money paid to the ATO on behalf of his father (approximately $25,000); > > (c) money paid in relation to an investment unit belonging to his father (approximately $5,000); > > (d) an advance to pay for a Range Rover Sport car purchased from the Family Trust (approximately $95,000); > > (e) general reimbursements (approximately $49,000); and > > (f) expenses for Property G (approximately $50,000).

Reimbursement for payment to Crouch & Lyndon Law Practice trust account

1. The Applicant says that on 14 July 2015, he paid an amount of $400,030 to Crouch & Lyndon Law Practice Trust Account at the direction of his father, and that he was reimbursed by his father in the amount of $400,000 that same day.
2. Crouch and Lyndon were acting for his father's company, Company Q, which was purchasing properties at the Park Development.[159]
3. The Applicant provided a copy of a settlement statement relating to the purchase and a copy of two Macquarie Cash Solutions withdrawal forms showing that his father directed a total amount of $4,195,000 to be paid to Crouch & Lyndon Law Practice Trust Account leaving a balance at settlement of $300,250.[160]
4. The Applicant's father confirms this evidence.[161]

1. The Applicant says on 29 March 2016, he received an amount of $25,167 from his father which as a reimbursement of a payment he made to the ATO on his behalf. The payment was for an outstanding balance to the ATO from Company J which is a company owned by his father. An ASIC company search indicates that the Applicant and his father have been directors of Company J since 19 August 2014.
2. The Applicant provided an email from Lead Partners Chartered Accountants advising his father of the outstanding balance owing to the ATO. The Applicant and his sister were copied in that email. The Applicant also provided a copy of email trail between the Applicant and Lead Partners enclosing proof of payment from the Applicant to the ATO in the amount of $25,166.98 on 22 March 2016.[162]
3. The Applicant's father confirms that he would have instructed the Applicant to pay this amount and would then have reimbursed him.[163]

1. On 5 May 2014 he transferred an amount of $5,000 having reference "[Unit A]3902". This refers to Unit A which is owned by one of his father's companies and located in Brisbane. On 5 May 2014, he received an amount of $5,000 from his father as reimbursement for the transfer. The Applicant's father says he would have asked his son to pay this amount and then reimbursed him.[164]

1. See paragraphs ‎157-‎163 above.

1. The Applicant says he received the following further amounts from his father as general reimbursements for purchases the Applicant made on his behalf:
   • $30,000 on 6 December 2012;
   • $19,000 on 26 July 2014;
2. The Applicant says his father will generally reimburse him approximately and in round figures.
3. The Applicant's father says he transferred a "significant amount of money" to his son in the Relevant Years. He cannot recall now whether they were gifts or reimbursements for expenses. The Applicant was able to organise these transactions as he had authority over the companies' bank accounts.[165]

1. The Applicant says his father requested he arrange for some renovations on Property G. Property G was renovated between February and November 2015.
2. The Applicant says he project managed and paid for the renovations and he received the following amounts from his father as reimbursement for the renovations:[166]
   • $20,000 on 6 May 2015;
   • $10,000 on 7 May 2015; and
   • $20,000 on 31 May 2015.
3. The Applicant was able to provide some invoices incurred for the renovations but due to the passage of time was unable to provide all of the invoices and receipts.
4. The Applicant's father confirms he requested the Applicant to undertake renovations although he cannot recall the exact details or amounts.[167]

1. The Applicant says his father sent him $111,000 as follows:
   • $80,000 on 19 Jan 2015;
   • $30,000 on 28 Jan 2015; and
   • $1,000 on 2 Jan 2014.
2. Neither the Applicant nor his father can recall the specific reasons these amounts were transferred.[168]

1. During the Relevant Years the Applicant received the amount of $291,070.62 from JC.[169]
2. The Applicant says:

(a) JC is a close family friend who he has known for approximately 33 years; > > (b) there is an arrangement exists between his father and JC whereby his father lends SGD to JC; > > (c) JC repays the money in AUD to the Applicant's bank account; > > (d) the total amount lent from his father to JC was $291,070.62; > > (e) there is no loan agreement or formal documentation in place for this arrangement; > > (f) although he received the funds from JC for his father, the Applicant is not expected to repay this money; > > (g) he used these funds to pursue and maintain his father's business interests in Australia.

3. The Applicant told the Tribunal this arrangement occurred because JC wanted Singapore dollars and the Applicant's father wanted Australian dollars - it was a foreign exchange.[170]

1. The Applicant says throughout his life he has received gifts from family members other than his father. The Applicant says this is part of his cultural heritage. During the Relevant Years, the Applicant says the amount of $133,546.00 was gifted to him from family members.

1. The Applicant's cousin got married in August 2012.
2. The Applicant says that:

(a) as part of her wedding gift, he organised luxury hire cars for her to use during her honeymoon; > > (b) on 29 October 2012, he sent an email to Mr Wong with his account details so that monies can be deposited into his account as reimbursement for the gift.

3. The Applicant provided the Tribunal with a chain of emails relating to the hire of the luxury car as well as the email dated 29 October 2012.[171] The Applicant also provided a 2012 diary where he wrote down names and amounts received of people who contributed to the gift.[172]

1. The Applicant's Sister also gave evidence at the hearing.
2. The Applicant's Sister married in September 2015 in Brisbane.
3. The Applicant says:

(a) on the day of her wedding, he collected the Chinese red packet gifts on her behalf which he deposited in his account for safe keeping; > > (b) sometime after the wedding, he returned the money collected to his sister. > > (c) he does not have a record of this transaction as it is a personal transaction between siblings; > > (d) he received the amount of $7,011.00 for the purchase of wedding gifts for his two sisters.

1. The Applicant explained that as part of his cultural heritage, gifts of money in Chinese red packets are given to family and friends on important occasions such as Chinese New Year, birthdays, anniversaries and weddings.
2. In the Relevant Years the Applicant says:

(a) the amount of $29,000 was deposited into his bank account which was money received from relatives as red packet gifts for various occasions:

• $3,000 on 1 November 2012;
  • $3,000 on 19 February 2013 - on account of Chinese New Year;
  • $10,000 on 17 December 2013 - on account of his wife's birthday;
  • $13,000 on 14 July 2015.

(b) he does not recall the reason for receiving the red packets on 1 November 2012 and 14 July 2015, however it was his family's practice for his parents to give his family red packets when they visited. These amounts could have been gifted during a recent visit; > > (c) it is his practice to receive the red packets and deposit the cash into his bank account by going to a branch in Sunnybank; > > (d) the amounts represent the collective sum received from numerous red packet gifts from a number of different friends and relatives and an individual's contribution might range anywhere from $20 to $1,000; > > (e) he does not keep a record of these gifts.

1. On 31 May 2013, the Applicant transferred $92,718 from his and his wife's joint saving account in PNG to the Applicant's savings account in Australia.
2. The Applicant provided a copy of the joint PNG savings bank account statement showing that the monies were transferred from their personal savings account.[173]
3. On 24 September 2014, the Applicant transferred $22,370 into his Australian account from his PNG savings account.
4. On 18 May 2015, the Applicant transferred $22,170 into his Australian account from his PNG savings account.
5. The Applicant provided a copy of his PNG savings bank account statement showing that the monies were transferred from his personal savings account.[174]

1. On 9 February 2016, the Applicant transferred the amount of $47,225 and $46,810 from his children's PNG savings bank accounts.
2. The Applicant says he does not have a record of these transactions as he was unable to gain access to statements for these accounts prior to 2019.
3. The Applicant provided a copy of the relevant bank account statements of his children showing the transfers.[175]

(a) as part of his employment package, he receives credit cards which he is able to use at his discretion; > > (b) his general course of conduct is to withdraw lump sum amounts from his PNG credit cards when he sees an ATM. He then deposits those amounts into his personal accounts to meet expenses. > > (c) during the Relevant Years he withdrew the following amounts from his PNG credit cards and deposited them into his Australian accounts:

• $6,000 on 27/6/13
  • $9,000 on 9/7/13
  • $15,000 on 28/10/15
  • $1,000 on 30/10/15
  • $5,000 on 7/12/15
  • $15,000 on 18/1/16
  • $10,000 on 18/1/16
  • $9,950 on 18/1/16
  • $1,000 on 17/5/16

2. The Applicant provided a copy of sample account statements showing a number of withdrawals from his PNG account while he was in Australia.[176]

1. During the Relevant Years, the Applicant says he transferred $7,215,202 between his accounts as necessary.

1. During the Relevant Years, the Applicant says he spent $1,126,216 for living expenses, which included:
   • mortgage payments over the Relevant Years;
   • land tax;
   • payments made for investments including to Zeekler and Company B (see paragraphs ‎220-‎223 and ‎183);
   • cost of maintenance and renovations to properties owned by his father and to Residential Property 2;
   • childcare costs; and
   • cleaning and gardening services.

1. The Applicant says during the Relevant Years, he paid $55,281 in interest.

(a) during the Relevant Years he withdrew $799,866 in cash and cheque withdrawals; > > (b) this amount included an amount of $427,500 on 17 November 2014, though he does not recall what this amount was for; > > (c) on 25 January 2016, he withdrew an amount of $120,000 from his CBA account 5903 at the CBA Coolum Beach Branch. At the same time, on 25 January 2016 and at the Coolum Beach Branch, he deposited the amount of $120,000 into Streton Mason's Lawyers Trust Account ending in #4904 as a deposit for the purchase of a unit in the Park Development by Company K of which the Applicant and his wife are directors.

2. The Applicant provided a copy of text messages with FT who worked on the Park Development providing the trust account details and a copy of a text message in which he sent a photo of the deposit receipt.[177] The Applicant says the development was completed in 2018 and the property settled on 11 December 2018. The Applicant provided a copy of the settlement statement.[178]

1. During the Relevant Years, the Applicant says he paid $1,393 in taxation payments.

1. During the Relevant Years, the Applicant says he paid $2,160 in bank fees.

1. During the Relevant Years, the Applicant purchased two commercial properties, Unit 11 and Unit 12.
2. Unit 11 was purchased on 12 July 2012 for $230,225.[179] The Applicant paid for the property in two payments of:

(a) $20,010 on 22 February 2013; > > (b) $210,215 on 15 March 2013.

3. Unit 12 was purchased on 12 July 2012 for $212,679.[180] The Applicant paid for the property in the following instalments:

(a) $2,210 on 10 July 2012; > > (b) $210,469 on 12 July 2012.

1. The Applicant identified that during the Relevant Years, there was $1,905,396 in uncategorised outflows.
2. The Applicant says he has considered each transaction further and has made a comment in respect to each transaction that he has been able to recall.
3. The Applicant provided an excel spreadsheet of each outflow transaction in his bank statements which have not been categorised. He says where he has not made a comment, this means he is unable to recall the purpose of the outflow. The Applicant says he has searched for invoices in relation to all outflows but has been unable to find them.[181]

1. During the Relevant Years, payments from the Applicant's account totalling $40,844 were identified in Mr Thynne's Report as possible inter account transfers.

1. During the Relevant Years, the Applicant made $9,539 in transactions that were reversed.

1. Mr Libby prepared the Applicant's ITRs for the Relevant Years. The Applicant says he relied on Mr Libby's advice as to whether he was a resident for tax purposes.[182]
2. Mr Libby's evidence is summarised in paragraphs ‎365-‎375 below.

1. In a resident return visa (RRV) application completed on 19 August 2013, the Applicant declared his residential address was Residential Property 2.[183]
2. In a RRV application completed on 16 July 2014, the Applicant declared his residential address was Residential Property 2.[184]
3. In a RRV application completed on 19 July 2015, the Applicant declared his residential address was Residential Property 2.[185]
4. In a RRV application completed on 26 July 2016, the Applicant declared his residential address was Residential Property 2.[186]
5. In outgoing passenger cards completed by the Applicant between July 2012 and June 2016, the Applicant sometimes declared he was an Australian resident, giving Residential Property 1 as his address, and at other times declared he was a resident of PNG.[187] The Applicant says a border official told him to mark himself as a resident returning to Australia because he had permanent residency as a result of his partner visa.[188]
6. At the hearing the Applicant explained that from 23 November 2015 in outgoing passenger cards the Applicant always noted that he was not an Australian resident departing temporarily because he never had any intention of living in Australia for longer than 12 months.[189]

(a) an animal registration renewal notice;[190] and > > (b) a rates reminder notice;[191]

1. In the 2013 financial year, water and sewerage notices were sent to the Applicant for Residential Property 1.[192]
2. In the 2013 financial year electricity notices for Residential Property 1 were sent to the Applicant.[193]

1. In the 2013-year insurance policy renewals were sent to the Applicant at Residential Property 1.[194]

1. The Applicant told the Tribunal:[195]

(a) he is a director for Paradise for Kids PNG (orphanage in PNG); > > (b) he assists with fundraising; > > (c) he is also the director for the J Foundation which collects money from its customers to support various entities such as Port Moresby General Hospital or other orphanages; > > (d) during COVID, he helped several companies to fundraise money to buy hospital beds to assist with the hospitals' needs in Port Moresby, in Koroba-Kopiago, in Madang and Kokopo and the Gazelle districts.

2. The Applicant also has a number of advisory appointments in PNG. He is a board member of the National Health Authority and was on the board of the COVID team when COVID began.[196]

1. The Applicant's father set out in his statement the source of some of the money which he says enabled him to make such generous monetary gifts to the Applicant:[198]

(a) PGK 30,000,000 (approximately AUD$11,000,000 in 2010[199]) from the settlement of the joint venture with his nephews;[200] > > (b) In October 2013 PNG Company 2 received a gross dividend of over PGK 6,000,000 from a business he operated with his sister in PNG, M Enterprises. The Applicant's father provided copies of PNG Taxation Office records recording the dividend.[201] M Enterprises owns property which it uses to generate rental income; > > (c) In 2014 PNG Company 2 sold its interest in M Enterprises for over PGK 19,000,000. The Applicant's father provided a copy of the executed share transfer form;[202] > > (d) various amounts from shareholdings:[203] > > > (i) in March 2012, dividend of PGK 1,200,000;[204] > > > > (ii) in February 2013, dividend of PGK 1,200,000;[205] > > > > (iii) in February 2015, dividend of PGK 2,900,000;[206] > > > > (iv) in July 2015, dividend of PGK 1,740,000; [207] and > > > > (v) in May 2016, dividend of PGK 4,060,000.[208]

The Applicant's father's evidence is also referred to in paragraphs ‎82, ‎100, ‎111-‎113, ‎161-‎163, ‎193, ‎196, ‎198, ‎202, ‎206-‎207, ‎229, ‎231, ‎233-‎235, ‎239, ‎243, ‎245, ‎299 and ‎453.

1. The Applicant's sister is the Applicant's sister.
2. The Applicant's sister's evidence was that:

(a) she was not involved with any of the businesses operated by her father and brother; > > (b) it is common in Chinese culture to give red packets as gifts the red pack packets contain money inside and are read to symbolise luck; > > (c) it is common for such packets to be given at special events such as weddings and birthdays;[210] > > (d) although the red packet tradition continues, in practice money is often transferred electronically now rather than being physically put into red packet; > > (e) when she got engaged, and subsequently married, as part of the culture, she received a number of red packets as gifts from guests; > > (f) her brother collected the red packets on her behalf and later transferred the money to her, although she cannot remember the exact date when this occurred; > > (g) her father purchased a property for her and her sister in January 2015, Property G;[211] > > (h) Property G was registered in joint names. The Applicant's sister explained that, although it was a gift for her alone, because she was not a permanent resident in Australia at that time and because the property was not a new build, Property G had to be purchased in joint names;[212] > > (i) in September 2015, prior to her wedding, her father confirmed Property G was a wedding gift; [213] > > (j) on 18 September 2020 her sister transferred her share of Property G to her (see exhibit RT-1[214]);[215] > > (k) her father stays with her when he comes to Australia; > > (l) each of her siblings has received as a wedding gift, a house or substantial deposit towards a house, from her father when they got married;[216] > > (m) her father would often buy things for her such as cars or he would pay for her renovations and give her money to cover family expenses.[217] She told the Tribunal her father would give her $20,000 to $50,000 annually.[218] > > (n) the father purchased a Range Rover Evoque 2016, registration Y...Z, which he uses when he is in Australia. The Applicant's sister says she paid for the number plate "Y...Z";[219] > > (o) she uses the Range Rover which is kept at Property G; > > (p) on 27 January 2016 she transferred $200 to the Applicant's bank account to reimburse him for tickets he had purchased to an Aqua Park on behalf of her family; > > (q) she works for Company L as a bookkeeper;[220] > > (r) the entries in the joint bank account she has with the Applicant referring to "wages" and "directors drawings" were for payments made to her.[221]

1. LLBH's evidence was that he is a close friend of the Applicant and has known him for 25 years. He says the Applicant had always encouraged him to start his own business. In August 2007 he, together with the Applicant and another, set up Company E, which is in the business of modifying and styling cars for special occasions. The trio established another company in August 2010 called Company G, which offered GPS tracking equipment for cars and tracking solutions.
2. LLBH says the Applicant came up with the capital for the businesses but was not involved in the day-to-day running of the business. He and the Applicant were directors and shareholders of Company E and Company G.
3. An ASIC company search of Company E indicates that:[223]

(a) It was incorporated on 28 August 2007; > > (b) LLBH was a director from its incorporation until 26 January 2020 > > (c) the Applicant was a director from 13 September 2012 until 26 January 2020; and > > (d) it was deregistered on 26 January 2020.

4. LLBH ran the day-to-day operations of the businesses.
5. Further companies were established with the Applicant in March 2014 - Company H and Company F.
6. Company H continued to offer GPS tracking equipment for cars and GPS tracking solutions.
7. Company F continued to modify and style cars for special occasions.
8. LLBH said the Applicant's sister was a bookkeeper in the accounts team at Company H and Company F.
9. An ASIC company search for Company F indicates that:[224]

(a) it was incorporated on 3 March 2014; > > (b) the Applicant and LLBH was appointed as directors on its incorporation; and > > (c) it is in the process of being deregistered.

10. An ASIC company search for Company H indicates that:[225]

(a) it was incorporated on 4 March 2014; > > (b) the Applicant and LLBH were appointed as directors on its incorporation; and > > (c) it is in the process of being deregistered.

11. LLBH was shown bank statements of the Applicant's that identified:

(a) a transaction occurring on 26 July 2012 for an amount of $20,000 from the Applicant described as "[Company G] Loan Debt Transfer [PQBZ] 06"; [226] > > (b) a transaction occurring on 11 November 2013 for an amount of $60,000 from the Applicant described as "Loanto[CompanyE] Debit Transfer [PQBZ] ";[227] and > > (c) two transactions on 2 March 2013 and 8 March 2013 for $20,000 each, both described as "RangerLoan Debit Transfer [PQBZ]".[228]

12. LLBH believes this was money borrowed from the Applicant to use in the Company G and Company E businesses.
13. LLBH recalled the March 2013 loans were to Company E to purchase a white Ford Ranger car.[229]
14. LLBH was shown bank statements of the Applicant's that identified a deposit occurring on 5 April 2013 with the description "Reimburse CHINA [Company E] 068903".[230] LLBH believes this would be a reimbursement of money from Company E to the Applicant for something he purchased in his travels. LLBH says he would sometimes ask the Applicant when he was overseas to purchase something the businesses required to save on shipping.
15. At the hearing LLBH acknowledged that the Applicant had lent the business $130,000 in 2012 and 2013 but said he could not remember all of the details of the money the Applicant had lent to Company G in 2012 because it was so long ago.[231]

1. LLBH says in 2016, on the advice of an accountant, it was decided to start trading under a new company name, Company L and to cease trading under Company F and Company H.
2. Company L provides the same services as Company E and Company G.[232]
3. An ASIC search of Company L indicates that:[233]

(a) LLBH and the Applicant were the directors on incorporation; > > (b) the Applicant resigned as a director on 24 February 2021; and > > (c) the Applicant's sister was appointed director on 24 February 2021.

4. The Applicant explained at the hearing that Company L is involved in providing motor vehicle accessories, including paint protection and GPS tracking.[234]

1. LLBH says the Applicant loaned money to him as well as to Company H and Company F as requested.[235]
2. LLBH told the Tribunal that because of their friendship the Applicant never charged him interest for any money he borrowed and never asked for to be repaid. Despite this, he says he always repaid the loans.[236]
3. The loans from the Applicant were never documented.
4. LLBH said he did not recall the exact details, but in 2012 he borrowed money from the Applicant. He cannot recall when he repaid this loan.
5. LLBH was shown bank statements of the Applicant's that identified a transaction occurring on 8 August 2012 for an amount of $10,000 from the Applicant to LLBH with the description of " LLBH Loan Debit Transfer [PQBZ] 06206";[237]
6. LLBH believes this was money he borrowed from the Applicant to use personally.
7. LLBH was shown bank statements of the Applicant's that identified a transaction dated 16 November 2012 which shows he paid $4,000 to the Applicant.[238] LLBH believes that this would have been a repayment of money that he borrowed from the Applicant at some point, although he cannot recall exactly which loan it was for.

1. KBL is a qualified credit and mortgage broker.[240] He has been a friend of the Applicant for over 25 years.
2. KBL says the Applicant "is a very generous fellow and he always helps people out" and "sometimes lends money out and doesn't always ask for the money back".
3. KBL confirms that it is customary in Chinese culture to give red packet gifts of money at special occasions as a symbol of good luck and fortune.
4. KBL says he has lent money from the Applicant. The loans were undocumented, and the Applicant did not charge interest.
5. About 10 years ago, he bought a Nissan GTR Skyline with the Applicant. KBL says the car was purchased in his name and he split the costs of any repairs with the Applicant. When he sold the car, he transferred the money back to the Applicant. He cannot recall when this occurred.

1. KBL was shown the Applicant's bank accounts and gave the following evidence in relation to a number of entries.
2. In relation to the following deposit made nearly 10 years ago, KBL thinks this was the money he returned to the Applicant for the Nissan GTR Skyline but could not recall making the transfer:[241]
   • Account Description - "Cheque deposit - [KBL] cheque" of $40,000 - 13 November 2013
3. In relation to the following deposits, KBL had "no independent recollection of making the repayments":[242]
   • Account Description - "Deposits [PQBZ] [KBL] " for $6,000 - 1 August 2012
   • Account Description - "[KBL] credit transfer [KBL's wife]" for $6,000 - 3 April 2013
   • Account Description - "Cash deposit Hamilton [KBL]" for $2,000 - 7 October 2015
   • Account Description - "[KBL] transfer " for $660 - 14 March 2016
4. He says he knows he progressively re-paid the Applicant, but he has no records for the relevant time period due to the length of time and the fact that he had moved houses multiple times.[243]

1. In 2012 and 2013 KBL assisted the Applicant, as a loan broker, in his application for a:

(a) residential LowDoc (Low Documentation) loan from Bendigo and Adelaide Bank (through MBA/One26 as a mortgage manager); and > > (b) a NoDoc commercial loan from Sandhurst Trustees (through Merchant Mortgages) (exhibit KBL-2).

2. KBL explained the meaning of NoDoc and LowDoc loans as follows:[244]
   1. NoDoc Commercial loans had different requirements and lending parameters. Usually, customers would use new trusts or companies for commercial loans and rely on rental income to service the mortgage.
   2. LowDoc Residential loans did not require a lot of documentation to apply for a loan or establish a person's income and liabilities. This form of lending was common at the time.
   3. At the time and for these LowDoc type of loans it was sufficient for the Applicant to estimate their assets and liabilities, such as their home contents, cars, or collections of items

1. The purpose of the Applicant's LowDoc loan was to obtain finance to purchase Residential Property 2.
2. KBL says he does not recall how the details of the application form were filled out but says it would have been on the Applicant's instructions.[245]
3. KBL confirmed that he had filled out the loan application form.[246]

1. The NoDoc loan was for the purchase of Unit 12.
2. In an application prepared by KBL addressed to Merchant Mortgages, KBL states:[247]

(a) under "income", "N/A"; > > (b) the Applicant has savings totalling $650,000; > > (c) the Applicant has an extensive car collection including a Lamborghini Gallardo Porche Cayenne, Mercedes, Audi Q7 and Nissan GTR.

3. On 26 June 2012 and 9 July 2012, the Applicant signed loan documents with Sandhurst Trustees and Merchant Mortgages for $108,000 in relation to Unit 12. The Applicant's wife signed the loan documents on 1 August 2012.[248]

1. PLN says he resides in PNG and is the General Manager of Company G PNG.
2. In addition to working at Company G PNG, he helps the Applicant with personal errands.
3. He has been a close friend of the Applicant for 25 years.

1. PLN says he has borrowed money from the Applicant at various times. They never recorded these loans in writing.[250] PLN says "sometimes he didn't ask me to repay him at all. He's a good friend like that and would often look after me".
2. PLN says he does not "recall the exact dates of when [he] borrowed money from or repaid money". He says he remembers the Applicant buying him a watch in Singapore.

1. PLN was shown the Applicant's bank accounts and gave evidence in relation to the following deposits made by him into the Applicant's account:[251]

1. PLN says he "believe[s] that the amounts ... were paid [by him to the Applicant] in repayment of money that I have borrowed from him".
2. The Applicant's account also shows that on 18 December 2012 there was a deposit for $950 described as "[PLN] 06". PLN says he does not recall making this transaction. He does remember asking the Applicant "to purchase a Sony compact camera for [him] from Singapore while he was there" and that he repaid the Applicant for the cost of the camera.

1. Mr T is a close friend of the Applicant and has known him for approximately 15 years. They met in PNG in 2007.[253]
2. Mr T described the Applicant as "very generous with his friends".

1. In 2013 Mr T worked with a friend at a facilities cleaning company, Company M in Sydney. A client of Company M told Mr T that he would transfer their business to him if he set up his own cleaning company.
2. Mr T says he and his friend pitched the idea to the Applicant, as they needed funding to establish the new business.[254] Mr T estimated to the Applicant that the start-up cost would be approximately $74,000. The Applicant provided an email from Mr T to him dated 4 September 2013 requesting an initial cash investment of $100,000 in return for 30% share in business.[255]
3. The Applicant contributed $100,000 initially. Mr T arranged for an accounting firm to set up trusts and companies to hold shares in the new business.
4. The Applicant was the sole director and secretary of Company B.[256]
5. The Applicant paid the establishment costs which were deducted from his initial investment. Mr T arranged for the invoices from the accounting firm to be made out to "[PNG Company 1]" attention the Applicant.[257]
6. The accountant advised that the Applicant should be a director of Company B. Company B was incorporated in Australia on 21 October 2013.
7. The Applicant paid for a work vehicle for Company B. Mr T thinks he paid $38,000 for a Nissan Navara in two instalments.[258] This amount was deducted from the Applicant's initial investment. The Applicant provided email exchanges confirming that he paid approximately $38,000 to Wyong Nissan for the Nissan purchased by Mr T and his friend.[259]
8. Mr T and friend ran the business, and the Applicant was a "sounding board" with "little involvement" in day-to-day operations.
9. On or about early to mid-2014, Company B won a contract to supply Company N. Company N is "security film which is multipurpose and can be used on any window. The film can prevent people breaking and entering and bullets going through windows".
10. To fulfill the Company N contract more capital was needed to purchase materials. The Applicant provided a further $100,000.[260]
11. Company B was deregistered once it had fulfilled its contractual obligations.[261] Mr T says he and his friend decided to repay the capital investments back to the Applicant but "can't recall who caused the payments or when they were made". Mr T says this occurred after he left Company B in 2014.[262]
12. Mr T says the Applicant was never paid:

(a) income or profits from Company B;[263] > > (b) or any interest on his capital investment; or > > (c) any dividends on his shareholding.[264]

1. Mr Libby is a chartered accountant.
2. In or about 2014, Mr Libby was engaged by LLBH to provide accounting services to Company E.
3. In or about 2018, LLBH referred the Applicant to him.

1. In July 2018, the Applicant engaged him to provide taxation preparation and lodgement services regarding his personal ITRs for the income years 2007-2016.
2. Mr Libby says he recalls meeting with the Applicant to take instructions for the preparation of his ITRs. Mr Libby says he relied on the following to prepare the ITRs:

(a) the ATO's prefilling reports relating to the interest earned; > > (b) information from EPM regarding rental income from his commercial properties; > > (c) instructions from the Applicant in respect of: > > > (i) rental income from Property 3; > > > > (ii) rental income from Unit 11 and Unit 12.

3. Mr Libby says the Applicant's instructions were that he:

(a) resides in PNG; > > (b) earns an income in PNG; > > (c) visits Australia sporadically; > > (d) does not derive salary income in Australia; > > (e) only earns investment income in Australia; and > > (f) is a tax resident of PNG.

4. Mr Libby says he accepted the Applicant was not a resident of Australia for tax purposes and lodged the Applicant's ITRs for the Relevant Years on that basis.[266]
5. Mr Libby said he included Residential Property 2 as the Applicant's address in the ITRs because that is where the Applicant wanted any correspondence to be sent.[267]

1. At the hearing Mr Libby was shown a document called "[Family Trust]".[268] Mr Libby told the Tribunal the Applicant would have requested this document be prepared. He would then have arranged for a third-party law firm to prepare the necessary document. The Deed identified the Applicant as trustee of the Family Trust. Mr Libby witnessed the Applicant's signature on the document.[269]
2. The Trust Deed is dated 2013. Mr Libby thought he had not met the Applicant until 2018.[270]
3. Mr Libby said, "it's possible I've met him before [2018]".[271]

1. Mr Thynne was engaged by the Applicant to conduct an audit of the Applicant's income tax affairs for the Relevant Years and to determine the Applicant's actual taxable income.
2. Mr Thynne is a director in the forensic division of Vincents Chartered Accountants. He is a Fellow of Chartered Accountants Australia and New Zealand and has over twenty-nine years of experience, twenty-three of which have been in the specialist field of forensic accounting.
3. No challenge was made to the Mr Thynne's expertise or of his ability to undertake the following tasks:

(a) Review the analysis undertaken by the ATO to determine whether any transactions and transfers between accounts of PQBZ have been double counted; > > (b) Determine whether the ATO has appropriately considered the sources of funds deposited into PQBZ's accounts; > > (c) Conduct a trace between PQBZ's Australian accounts up to the point of funds coming in from overseas; and > > (d) To consider if the ATO in its determination has appropriately applied the Asset Betterment Test to the affairs of PQBZ.

4. It is Mr Thynne's opinion that based on the instructions provided to him, the Amended NOAs are excessive.[273]
5. Mr Thynne explained that he:

(a) Reviewed the ATO's approach and Audit findings; > > (b) Analysed the Applicant's bank statements, including categorisation of transactions; > > (c) Reviewed of additional documents and information provided by PQBZ to determine correct asset values and categorisation of transactions; and > > (d) Compared the ATO's Audit results to findings from the detailed analysis of PQBZ's bank statements and other materials provided to me.

6. In undertaking his task Mr Thynne relied upon, among other things, the evidence of PQBZ, bank statements and contracts of sale of various assets.
7. Mr Thynne's expert reports analysed every transaction in the Applicant's bank accounts during the Relevant Years. Mr Thynne then calculated the Applicant's assessable income for each of the Relevant Years.
8. Mr Thynne explained his methodology as follows:[274]

Can you please explain the methodology you used in reaching the conclusion at paragraph 2.2?---Yes. It was quite an involved process. Essentially the process followed -

• we received hard copy versions of bank statements and the taxation officer's essentially transaction listings of each of the bank accounts.
• We transferred ... all of that to an Excel spreadsheet, ...with the categories date, description, the debit and credit transaction, together with the taxation officer's comments that were there. So, we did that for each of those bank accounts.
• We also created a running balance for each of the transactions, so we had the opening balance per the various statements that had been provided, and we kept a running balance on the way through so we could check that we'd actually picked up all of the correct values for each of the transactions... that's our way of reconciling what's correct.
• We then consolidated each of those individual bank statements into what we call our schedule C which is a consolidated listing of all transactions from all bank statements, all accounts that we actually know. From that schedule C we could still add in there all of the taxation officer's comments, and then we categorised each of those transactions based on the information we had. So, we used the comments that were actually in the actual bank statements themselves. Information had been provided by PQBZ, explanations he'd been provided with. And if we had nothing else, we also referred to what the - would've actually adopted what the taxation officer had categorised it as.

SENIOR MEMBER: For the default position (indistinct) accept the tax officer's position?---Correct, yes. From there, we actually summarised each of the categories per bank account into an annual - rolling annual schedule, so we could actually reach individual year what each - the total of each category was, those in flows and out flows, and then we summarised those into what we have as schedule D. So schedule D is a summary of our in flows and out flows essentially by category. > > Okay?---Once we'd done - - - > > I see. So you've got rental in flows and interest in flows?---Correct. So behind all of those there's a full break down. > > Right, okay?---From there, we completed the asset betterment test in the same format that we understand the tax office applied to - - - > > (Indistinct) formula set out in your expert report?---Yes, in the report. > > Yes?---So, we - that's for our schedule B. > > Right?---And a long-winded way, that's how we get to the conclusion (indistinct). > > Thank you for that explanation. Thank you. > > MS SKENNAR: For your addendum report, what methodology did you adopt?---The addendum report was really to take the information and consider our report. So, we took each of the - essentially the information we provided as we understand it was PQBZ's comments in relation to uncategorised out flows and in flows. So, where an explanation provided and we didn't have any categorisation apart from just a balance, what we hadn't allocated, we put in uncategorised in flows and out flows. So, where we had an explanation that provided better information, in most instances we reallocated it in our analysis and then that reallocation flows through. In actual effect there weren't that many transactions that affected our conclusions in schedule B. Most of them were reallocation that didn't have an effect.

1. The Respondent listed the following purported deficiencies in the evidence.
2. The Respondent contends that the Applicant's evidence was inadequate and unreliable and that he did not produce much in the way of corroborative documentation.
3. In terms of the other witnesses, the Respondent states that most had no independent recollection of the relevant transactions and produced none of their own bank accounts.
4. In relation to the quantum of 'gifts' from his father, they do not appear to accord with AUSTRAC records.[275] The Respondent noted that it may be that the Applicant's father had other bank accounts (including in Australia) that may explain the variance. This was not put to either the Applicant or the Applicant's father. The Applicant's father's financial records are not in issue here.
5. The Respondent stated in relation to the funds said to be from the Applicant's father the Applicant is unable to sufficiently establish whether the amounts received are loans or gifts or monies provided to him to invest on his father's behalf.
6. The evidence here was primarily that the money was given as a gift. The father agreed with the Applicant's evidence. Both sides of the ledger, so to speak, gave evidence.
7. The Respondent then stated, of the father, that there is no evidence that he was in a position to transfer money to the Applicant. The Respondent submitted there was a lack of contemporaneous documents. Contemporaneous documents were provided by the Applicant's father (see paragraph ‎297 above).
8. The Respondent said there was no evidence the Applicant's father "owned or had any clear title to funds transferred (i.e., that he was the legal owner of the money transferred". However, there was the evidence of the Applicant's father. There was no obligation on the Applicant's father to produce his bank accounts. There was no obligation on the Applicant to produce all documents. The Applicant's father explained how it was that he had sufficient funds to provide the amount of the money he did to the Applicant.
9. The Respondent stated the Applicant's assertions that the Lamborghini Huracan and the Range Rover ought not be considered assets of his because they were purchased by the Family Trust cannot be accepted where:

(a) a trust cannot purchase property; and > > (b) no trust documents verifying what assets the trust holds have been produced.

10. The trust deed was produced at the hearing. The invoices for the cars are signed by the Applicant as signatory as the trustee for the trust. The Respondent states the date on the trust deed (2013) is incorrect or unreliable. Mr Libby however acknowledged he may have met the Applicant before 2018. There was clearly no suggestion put to Mr Libby, or the Applicant, that it was not a document prepared on instruction by Mr Libby's firm or that someone had altered the date.
11. The Respondent states Queensland Transport records show a Lamborghini Huracan being registered to the Applicant.[276] The Applicant points out that registration of a car is not proof of ownership: Robinson v Ware [2012] QCA 70, at [50].[277]
12. In relation to the Applicant's evidence that he is the owner of the vehicles identified in Schedule B of the Mr Thynne's Report, the Respondent said it is unclear from the evidence whether all vehicles in Schedule B of Mr Thynne's Report were owned by the Applicant or whether the Audi Q7 was the Applicant's father's car or whether the Range Rover was the Applicant's father's car, or whether the Range Rover was the Applicant's Sister's car.[278] The Applicant's father and sister both gave evidence the Range Rover was the father's car which was kept at the sister's property and available to be used by her. There was no challenge to this evidence or the Applicant's evidence such that the Applicant's and his families' evidence regarding the vehicles should be disregarded.
13. In relation to the Audi Q7 submission, the Applicant notes that ownership of that car is not relevant as it was purchased prior to the base year.[279] In relation to the Range Rover there were two different Range Rovers. There was a Range Rover Sport with registration "Q...8", and a Range Rover Evoque which had the registration "Y...Z". It is clear from the sister's statement that her father paid for it.[280] The Applicant points out he was not asked any questions about this transaction. There was also no reference to these matters in the Respondent's statement of facts, issues and contentions or any other documents.
14. The Respondent called the evidence of the Applicant in relation to the vehicles doubtful. Again, the basis for any doubt was not put to the Applicant.
15. In relation to the Cabo Boat the Respondent submits the Applicant's assertion at that the Cabo Boat was purchased by LS must be treated with caution in circumstances where LS was not called to independently verify. The Respondent does not explain why independent verification was required in circumstances where the Applicant gave an adequate explanation for the purchase.
16. The Respondent submitted that there is a reference in the Applicant's accounts to the purchase of a body kit for a Lamborghini Aventador and a jet ski. The Applicant was not asked any questions about these transactions.
17. The Respondent submitted that the Applicant's assertion that none of the monies he lent to friends and family members were for a good or service must be treated with caution when on his own evidence some of the loans were purportedly used by YLX to purchase a house; by KBL to purchase a car (in relation to which the Applicant purportedly shared ownership); to PLN to purchase a camera; by FT to purchase a watch; and by Mr T and LLBH to set up companies (in circumstances where the Applicant became a director of the companies and was paid rental income for the lease of commercial premises by the companies). The Tribunal considers that the Respondent misunderstood the Applicant's evidence on this issue. The Tribunal understood the Applicant's evidence to mean that he was not lending the money to his friends in return for services/good to be acquired/purchased by him.
18. Again, with respect to not calling all witnesses, the Respondent does not explain why independent verification was required in circumstances where the Applicant has provided an adequate explanation for the purchase. It was not put to the Applicant that his evidence in relation to those witnesses was a fabrication or that he had purposely not called certain people to give evidence.
19. The Respondent submitted that what the Applicant claims generally in relation to his loans to friends ought to be treated with caution in circumstances where:

(a) his stated income from his work in PNG is modest; > > (b) he still has a mortgage in Australia; and > > (c) his children attend school in Australia.

20. The Respondent contends it was inherently implausible that the Applicant would be making private, undocumented, non-interest-bearing loans without repayment plans. The Tribunal considers that this misunderstands the access the Applicant had to money from his father. The fact that the Applicant's family's financial circumstances may be different to that of an average person, does not make those circumstances implausible.
21. The Respondent goes on to submit that the evidence of individuals who all profess to be good friends of the Applicant's must also be treated with a degree of scepticism because where repayments have been identified, they are often made some years after the alleged loan and where the Applicant and borrowers often cannot remember specific details.
22. The Tribunal does not find it inherently implausible that the Applicant lent money in this way to his long-term friends and associates.
23. The Respondent states the witnesses appeared to be relaying what they could reconstruct from the Applicant's bank records with little or no independent recollection. The witnesses all acknowledged when they could not record exact details and dates, but they also recalled that they did loan/repay money. The transactions under question were from 7 to 10 years ago.
24. The Respondent states the information included in the LowDoc and NoDoc loans paint a different picture of the Applicant's financial position. Why was not explained. The Applicant accepted in cross-examination that his reference to income was in relation to all funds/assets he could get his hands on in order to service the loan. The whole purpose of these loans is that substantiating documentation is not required. Higher interest rates are usually charged as a result.
25. It is not the case here that the Respondent did not cross-examine the witnesses, but that the majority of the cross-examination resulted in the witnesses confirming what was in their written statement. The assertions that the Respondent makes seeking a favourable outcome, were not put to the witnesses. Such questioning of the witnesses may or may not have elicited information of relevance to this decision, but it is not for the Tribunal to guess what those responses would have been. The Tribunal was not given the opportunity of hearing from the witnesses on these points of contention and therefore the opportunity to evaluate their evidence in relation to those points was not available.[281]
26. If a witness' evidence has not been contradicted, it is open to the Tribunal to accept it. Submissions that purport to undermine the credibility or substance of the Applicant's and other witnesses' evidence, should have been put to the relevant witnesses. To have not done so was procedurally unfair. At no stage did the Respondent put to the Applicant (or any of the witnesses) that he/she was lying, that he/she fabricated documents or transactions, or that his/her evidence was implausible in any way. The failure to do this means that the evidence before the Tribunal is uncontradicted and therefore may be accepted.[282]
27. The Applicant referred the Tribunal to the High Court decision in Precision Plastics Pty Ltd v Demir [1975] HCA 27; 132 CLR 362[283] where Gibbs J found that the jury, acting reasonably, were bound to accept a witness' evidence, which was uncontradicted and unchallenged in cross-examination.[284]
28. As pointed out by Basten JA in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; 261 ALR 382 at [105], there should be a reason for a judge/decision maker to not accept unchallenged evidence, such as where the evidence relied upon was inconsistent with other evidence already accept or if the evidence was "inherently incredible".[285]
29. The Applicant's evidence is not "inherently incredible".
30. Unlike in Anglo American, the evidence of the witnesses was not significantly inconsistent. Corroborating documents that were available were put before the Tribunal. It is understandable with the passage of time that people do not recall or do not recall accurately every detail.
31. The High Court has also recently addressed the application of the rule in Browne v Dunn (1893) 6 R 67 (Browne v Dunn) in Hofer v The Queen [2021] HCA 36; 95 ALJR 937. In that case the appellant was convicted of eight counts of having sexual intercourse with another person knowing that the other person does not consent, contrary to section 61I of the Crimes Act 1900 (NSW). Credibility of the witnesses was important. Some of the appellant's evidence contradicted the alleged victims' evidence. This evidence was not put to the victims. The High Court had to consider whether this resulted, among other things, in a miscarriage of justice. Although this case was concerned with the substantive issue of miscarriage of justice, it provides a useful reminder of the relevance and importance of the rule of Browne v Dunn.
32. The majority in Hofer (Kiefel CJ, Keane and Gleeson JJ) explained that the rule in Browne v Dunn as it is known is a:

[26]...general rule of practice regarding the cross‑examination of witnesses of an opposing party". The rule requires that where it is intended that the evidence of the witness on a particular matter should not be accepted, that which is to be relied upon to impugn the witness's testimony should be put to the witness by the cross‑examiner for his or her comment or explanation. > > (emphasis added)

33. The High Court went on to explain that this rule is not one of professional practice but has been described as "essential to fairness".[286] The High Court added:

[27]... adherence to the rule may also be necessary to permit an assessment on the part of the tribunal of fact of differences or inconsistencies in the accounts given and of the credit of witnesses where that is an issue.

34. Finally, the High Court confirmed that the rule is "both appropriate to and an important aspect of the adversarial system of justice".[287]
35. The Respondent contended that the Applicant had been put on notice of the Respondent's case and has been given the opportunity to put his "best case". Counsel for the Respondent told the Tribunal that "things were not necessarily put to the applicant but he was tested on his evidence in that regard". But it was not put to the Applicant, or the other witnesses, that their evidence was implausible or indeed untrue, or that the authenticity of some of their documents were in issue.[288]
36. The Tribunal agrees with the Applicant that, particularly in a case where fraud is alleged, the basis for that allegation should be put to the witness in the witness box.[289]
37. The Applicant submitted that he has provided evidence as to what his position is in life, how he spends his time, the way he spends money. The Applicant identified and explained all of transaction he could recall. The Applicant submitted:[290]

To the extent that there are still some unexplained transactions his evidence about all of his other lifestyle, the way he gets his money, the way he spends his money, all of that is relevant to satisfying that aspect of the onus in relation to unexplained sources.

38. The Tribunal agrees with the Applicant's submission and repeats paragraph ‎47‎47. Mathematical precision is not required, estimates may be made, particularly given the passage of time.
39. In terms of categorised and uncategorised inflows and outflows, Ms Skennar KC for the Applicant said this:[291]

Perfection can never be achieved and the cases allow for it in the sense of being able to give evidence of how you spend your time, how you get your money, what you do, all of those things. The applicant has done that. There is no basis and no justification for a finding that it is anything other than those. Interestingly, the respondent didn't challenge the applicant during his evidence about that. So again, there's no challenge to what he said in his statement. There's no challenge to how he spends his time. There's no challenge to most of what his case was.

40. The Tribunal agrees with Ms Skennar's submission.

1. Consistent across all witnesses was the lack of any real challenge by the Respondent. A lot has been made by the Respondent of the evidence in submissions, but issues such as authenticity of documents, whether transactions were genuine, whether the Applicant has engaged in fraud, and whether additional documents or witnesses should have been or could reasonably be expected to have been provided to the Tribunal, were not put to the Applicant or other witnesses while they were under oath.
2. It is trite to say that the Respondent does not bear the onus of proving or disproving the Applicant's contentions. However, the evidence must be tested and challenged in order to assist the Tribunal to either accept or reject it, or to determine what weight should be given to it. This issue was put to the Respondent's counsel during closing submissions. The Respondent contends that it challenged the evidence to the extent that that enabled the commissioner to make submissions about deficiencies.:[292]
3. The Respondent relied on cases which confirm that the rule in Browne v Dunn does not apply. For example, in Le v Commissioner of Taxation [2021] FCA 303; 390 ALR 132 (Le) Logan J said at [90]:

The applicants were astute to concede, as they had to in light of Sullivan v Civil Aviation Safety Authority (2014) 226 FCR 555 (Sullivan), that it was no part of their submission that Browne v Dunn (1893) 6 R 67 had any direct application to the proceeding such that the Commissioner was under a formal obligation to put his case.

4. However, Logan J went on in Le to note that "notwithstanding Sullivan and s 33 of the AAT Act,[293] like consequences can nonetheless follow from the Tribunal's obligation to conduct proceedings, including making its decision, in a procedurally fair way."
5. The Respondent also referred to the decision of Deputy President McCabe in MJPV and Commissioner of Taxation [2020] AATA 1527 (MJPV) who said:

[13] The evidence of a witness who tells an unlikely story or a story that is at odds with other evidence or contrary to human experience might be rejected, notwithstanding the absence of answers during cross examination which could have provided a positive reason for rejecting the witness' evidence. > > Evidence that is not expressly contradicted may yet be unpersuasive. Section 14ZZKB does not speak of a rebuttal, presumption, that evidence is to be accepted in the absence of authoritative contradiction.

6. DP McCabe went on in MJPV to acknowledge that the Tribunal must act reasonably and approach the evidence with an "open mind".[294]
7. Even though the rule in Browne v Dunn may not apply, that does not mean the evidence does not need to be tested. If the evidence given is untested, it leaves it open to be accepted, subject to findings of credibility, and it makes it difficult for the arbiter of fact to disregard it.
8. In the Full Federal Court decision of Commissioner of Taxation v Cassaniti [2018] FCAFC 212; 266 FCR 385 (Cassaniti), the Court considered the issue of burden of proof and how a court or tribunal should determine whether that burden of proof has been discharged. One of the submissions made by the Commissioner in Cassaniti was that the taxpayer's evidence "was insufficient" because she had failed to call any witnesses to corroborate her claims. Steward J found (at [88]) that:

"Contending that evidence was "insufficient" in the face of three sworn affidavits of the respondent, together with the exhibits attached thereto, and her answers in cross examination, may suggest that a taxpayer bears a special burden of proof. However, other than the necessity to scrutinise evidence given by the taxpayer him or herself with care, no such special burden exists."

9. The taxpayer is not under some special burden. It is the standard civil burden of proof.
10. Similarly here, the Applicant has given evidence, by way of written statement and orally, and numerous witnesses have been called who corroborate his evidence. The Respondent submitted there was insufficient supporting documentation. It is clear from the authorities that the absence of documents is not necessarily fatal to a case. The Respondent's main criticism with respect to a purported lack of documentation was with respect to documents produced by witness other than the Applicant. None of those witnesses were on "trial" so to speak.
11. In Cassaniti, Steward J set out five propositions in relation to standard of proof in tax matters, which he derived from Allied Pastoral Holdings:

[88] ...

(1) first, where the onus is on the taxpayer (whether pursuant to s 14ZZO of the TAA or otherwise) the degree or standard of proof required is that which ordinarily applies in civil proceedings. The direction given to a jury in civil cases aptly describes that onus by reference to a pair of scales and to the arguments of each party being placed at each end. As Hunt J said in Allied Pastoral:

...if the plaintiff succeeds... in weighing down those scales ever so slightly in his favour then he has discharged the burden he carries...

(2) secondly, for that purpose it is not obligatory for a taxpayer, in order to discharge his burden of proof, to call all material witnesses and to produce all material documents which support her or his or its position;

(3) fourthly, there is no requirement that evidence can only be accepted as admissible and probative if it is corroborated;

(4) fifthly, the tribunal of fact is free to accept the evidence of the taxpayer alone if it finds the taxpayer to be truthful;

(5) finally, it would usually be prudent to corroborate the evidence of a taxpayer. It is also prudent to adduce contemporaneous objective evidence. But prudence should not be confused with the requirements of the law.

1. The issue of substantiation and proof in relation to purported loans, arose in the recent decision of Logan J in Anglo American. Anglo American was concerned, among other things, with whether a taxpayer failed to establish on the balance of probabilities that purported loans were made. It was the responsibility of the taxpayer to demonstrate on the balance of probabilities that there was a loan.[295]
2. The evidence before Logan J was oral and affidavit evidence of the taxpayer. In some instances, there were no substantiating loan documents. There were also inconsistencies in the evidence given and the taxpayer's recollection. Although Logan J noted (at [123]) that the "absence of a document", such as a loan agreement, "evidencing, in this instance a legal relationship occasioning the indebtedness claimed ... is not fatal", it does become problematic in circumstances where there are inconsistencies in the evidence which does exist.
3. There is no requirement in law that evidence must be independently corroborated before it can be accepted by the Tribunal. In matters such as these, where witnesses are being asked to consider individual transactions from up to 10 years ago, it is important to remember that people may forget dates, locations, distances, events and personal experiences due to that lapse of time or for other reasons. In other words, people's recollections may vary.
4. This matter concerns transactions and events that occurred 7 to 10 years ago. Some of those events one would expect a person to remember, such as the purchase of a house, or the birth of a child. The particulars of other, not so important, or commonplace matters may not be recalled. Several of the witnesses for example, could recall loaning money from the Applicant but not the exact amount or date/s. It is not unreasonable for someone to recall that they regularly lent money to friends and yet not be able to recall exact amounts and dates of repayment (particularly in circumstances where the "lender" has significant access to funds). Recalling these types of transactions in detail from such a long time ago would be a challenge for anyone. A failure to recall these details should not automatically result in a finding of evasion or fraud.
5. The Applicant appeared calm and confident when giving evidence. He was prepared to answer questions and did not ramble or appear evasive. He was not hesitant. He was prepared to acknowledge when he could not recall the precise details of a transaction. The Applicant's version of events was not contradicted by the other witnesses.
6. The evidence given was consistent with the available documentary evidence. Again, it is not surprising that all documents that may have existed were not available after such a long period of time.
7. The evidence relating to individual transactions given by the witnesses accorded with transaction descriptions in the Applicant's accounts. The description in the entries themselves, are not automatically inputted, they must be populated by someone, presumably either the Applicant or person depositing the funds. Although, on its own, these descriptions are not conclusive proof of the contents described therein, when considered in light of the witnesses' evidence, and how long ago those entries were made (i.e., in some cases 5 years before becoming aware of the ATO audit), those descriptions are accepted. That evidence was not challenged.
8. The Applicant's father could not recall some details but the evidence he did give concerning his approach to distributing money to his family, and the roles the Applicant performed for him was clear. The Applicant's father was also able to demonstrate that he had the funds to make the transfers to the Applicant. There was no challenge to the documents produced by the Applicant's father in relation to their authenticity. There is no requirement for the other witnesses to have provided their personal bank accounts. To expect all documents, even those from third parties, to be made available, is contrary to the principles in the authorities referred to above.
9. Any assertion to the validity of a document should have been put to the appropriate witness. There is no basis for the Tribunal to conclude that these documents are not genuine.
10. Mr Libby's evidence was honest and credible. He explained that based on the information he knew about the Applicant, he was satisfied that the Applicant was not a resident for tax purposes. In relation to the Trust Deed and when it was prepared, he could not recall the exact date but confirmed that he would have arranged for its creation. This is understandable. There is no reason to doubt Mr Libby's evidence.
11. The Applicant's sister also gave clear credible evidence.
12. Similarly, the Tribunal finds that the evidence of other lay witnesses was credible. The witnesses were not defensive or argumentative, they explained their relationships with the Applicant, and were honest when they could not recall a transaction or the exact details of a transaction. Again, the fact they could not recall some details was understandable with the passage of time. The Tribunal agrees with the Applicant's submission that the lack of formality and documentary evidence for the loans to friends, was understandable. These were not commercial transactions.
13. It is understandable given how the Applicant was described by his friends, as generous with money, that he did not enter into formal arrangements with these people. They were people he had known for years. They were his friends.
14. Mr T confirmed that the Applicant did not receive any income from Company B. Mr T came across as an honest witness. The Tribunal accepts his evidence.
15. In relation to Mr Thynne, he is an expert in his field of forensic accounting. There was no challenge to his expertise and no opposing expert witness was called by the Respondent.
16. Mr Thynne sets out in his reports the particulars of the instructions provided, the answers given, the records provided, how the answers were tested against the business records, and how the accounts were analysed was all set out in his statement.
17. There was no challenge made to Mr Thynne's approach or conclusions save that he was reliant on the Applicant's instructions. On the basis of his instructions Mr Thynne was able to conclude to that the Amended NOAs were excessive and calculated the Applicant's assessable income, for the Relevant Years. The Tribunal accepts Mr Thynne's opinion.

1. The Applicant contends that he was not an Australian resident during the Relevant Years. The Applicant says his usual and permanent place of abode in the Relevant Years was in PNG. The Applicant acknowledges that he had assets, including a home and cars, in Australia and also that he had some interests in businesses. The Applicant says he was not involved in the day-to-day operations of those businesses.
2. The Applicant says he primarily resides in PNG where he has an apartment and significant connections. The Applicant's father says that the apartment the Applicant lives in is owned by PNG Company 2.[296] The Applicant is a director and 10% shareholder of PNG Company 2.
3. The Applicant is not employed in Australia, and he does not earn income from any business interests or companies incorporated in Australia.

(a) In the 2013 financial year: > > > (i) He was not domiciled in Australia; > > > > (ii) spent 206 days in Australia in non-continuous block periods of time as he set about identifying a suitable property for his family to live in because they could not return to PNG given the safety considerations; > > (b) In the 2014 financial year: > > > (i) He was not domiciled in Australia; > > > > (ii) He spent 189 days in Australia in non-continuous block periods of time predominantly to deal with the purchase of Residential Property 2 and the sale of Residential Property 1 and the necessary relocation of the family's possessions. > > (c) In the 2015 financial year: > > > (i) He was not domiciled in Australia; > > > > (ii) He spent less than 183 days in Australia; > > > > (iii) the Applicant spent only 161 days in Australia in non-continuous block periods of time despite having a son born in Australia during this time and relocating his family from Singapore. > > (d) In the 2016 financial year: > > > (i) He was not domiciled in Australia; > > > > (ii) He spent less than 183 days in Australia; > > > > (iii) the Applicant spent only 126 days in Australia in non-continuous block periods of time. > > (e) It was never his intent to reside in Australia and that his only "purpose" in coming to Australia was to visit family, attend to business affairs; > > (f) His permanent and usual place of abode since 2009 is in PNG; > > (g) He intends for his family to permanently relocate to PNG when it is safe to do so; > > (h) He does not exhibit a routine or pattern of habitual behaviour whilst in Australia and his purpose and pattern of living are consistent with that of a visitor and not a person who intends to settle in Australia; > > (i) His family and business and employment ties are predominantly in PNG as: > > > (i) He is employed as a managing director by PNG Company 1, a company incorporated in PNG. The Applicant provided a copy of his contract of employment dated 1 September 2006; > > > > (ii) He sometimes travels to Australia on PNG Company 1's behalf; > > > > (iii) his family maintains their personal effects in the Applicant's home in PNG, including clothing, bags, shoes, toys, gaming equipment and other personal effects; > > > > (iv) he always returns to PNG after visiting Australia; > > > > (v) he is managing the family's business interests in PNG which includes PNG Company 1 and PNG Company 2; > > > > (vi) the only reason his family does not reside with him in PNG is because of concerns for their safety; > > > > (vii) he maintains assets in PNG; > > > > (viii) he maintains a bank account in PMG; > > > > (ix) he has a superannuation account in PNG; > > > > (x) he will inherit the shares in PNG Company 1 and PNG Company 2 on the death of his father; > > > > (xi) he has social memberships at various clubs in PNG; > > > > (xii) he has a friendship network in PNG; > > > > (xiii) he undertakes charity work in PNG; > > > > (xiv) he is not a member of any sporting or community organization in Australia; > > > > (xv) he is not engaged in charity work in Australia; > > > > (xvi) he does not have an Australian drivers' licence.

1. The Respondent contends the Applicant was resident in Australia during the Relevant Years:[298]

(a) under the "ordinary concepts test" as a person who resides in Australia; > > (b) under the "domicile test" as a person domiciled in Australia whose permanent place of abode is not outside Australia; and > > (c) in the years ended 30 June 2015 and 2016 under the "183-day test" as a person who was actually in Australia for more than half of each of the years, had an intention to take up residence here and whose usual place of abode was not outside Australia.

(a) the Applicant is an Australian resident for tax purposes pursuant to Article 4 of the PNG Agreement which came into force on 29 December 1989; > > (b) the residency argument put forward by the Applicant may be academic as the asset betterment calculation only included Australian sourced income. As such, even where the Applicant satisfies the Tribunal that he is not an Australian resident for tax purposes, this may not affect the calculations used to determine his assessable income in the Relevant Years.

1. Deputy President O'Loughlin summarised the relevant principles from the authorities to be applied in determining a person's place of residence in Handsley and Commissioner of Taxation (Taxation) [2019] AATA 917:

1. A number of relevant principles to be applied in determining a person's place of residence emerge from the authorities. They include:

(a) an individual resides where she or he lives and the process of determining that location was described by Williams J in Koitaki Para Rubber Estates Limited v The Federal Commissioner of Taxation in the following terms:

The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where habitually lives even if this is in hotels or on a yacht or some other abode[299]

and these concepts have been endorsed recently;[300]

(b) a person can continue to reside at, and therefore continue to be resident in, a place notwithstanding current absence from that place[301] if he or she has maintained a sufficient continuity of association or connection with that place;[302]

(c) for a person who spends significant time out of Australia, one such connection is the characterisation of that person's visits to Australia and whether they are to be regarded as return visits to the place regarded as or which was the person's home.[303] If a person's return visits to Australia are not properly regarded as return visits to the place regarded as or which was the person's home, then those return visits are squarely inconsistent with the propositions that the person was returning to her or his place of residence in Australia or that he or she was residing in Australia;[304]

(d) a person may retain some financial connections with Australia but still have abandoned residency in Australia, particularly where those financial connections are the remnants of prior residency in Australia or connected with ongoing financial responsibilities in Australia;[305]

(e) internationalisation of banking facilities and investment activities and markets causes less significance to be placed on retention of investments in stable Australian financial markets and a continued connection with Australia;[306]

(f) a person's presence in a place (and presumably absence of presence in a place) and their intentions concerning that presence or absence, are both to be considered in addressing that person's place of residence;[307]

(g) a person can have two residences, and therefore two places of residence, concurrently, and thereby attain the character of a resident of both places;[308]

(h) events occurring both before and after the period under examination may be considered as throwing light on and disclosing the significance of habits and conduct within the period under examination;[309] and

(i) whether a person is a resident is a question of degree, and therefore one of fact.[310]

(emphasis added)

1. The Applicant was physically present in Australia in the Relevant Years as follows:

Applicant's purpose for visiting or leaving Australia

1. During the Relevant Years the evidence indicates that the Applicant:

(a) Invested and was involved in several businesses (Company G and Company E);[311] > > (b) was the sole director of several Australian companies;[312] > > (c) completed a Company Directors Course with the Australian Institute of Company Directors;[313] > > (d) in loan documentation for the purchase of Residential Property 2 stated:[314] > > > (i) he was an Australian resident; > > > > (ii) an employee of Australian companies (Company P, Company G and Company E); > > > > (iii) he earned $650,000 as an employee of Australian companies; > > (e) lived with his family at the family residence at Residential Property 1, and later Residential Property 2; > > (f) was the joint owner of Residential Property 1 in February 2014; > > (g) owned and operated a number of bank accounts in Australia; > > (h) was responsible for the mortgage over Residential Property 1 to which a concessional rate of stamp duty was applied as the property was purchased as the Applicant's principal place of residence;[315] > > (i) recording Residential Property 2 as his address for the purpose of government records with the ATO, ASIC, banks, Department of Home Affairs, Queensland Transport; > > (j) recorded himself as an Australian resident returning home on incoming passenger cards completed when entering Australia; > > (k) from 2013 to 2016 the Applicant spent more time in Australia after the birth of his third child here. > > (l) the Applicant's children attend school in Australia;[316] and > > (m) his family were covered by Medicare over the period 2013 to 2016.

2. The Tribunal accepts that the authorities provide that statements on immigration forms are relevant but not "definitive of their truth and these facts must be placed in the context of the rest of the evidence".[317] The Applicant submits that he has explained the reason for his answers on the passenger cards, and they were not in relation to declaring his actual residency, and therefore no weight should be placed on this evidence.

1. The Respondent states the has held private health insurance with Medibank Private since 2015.[318] The Tribunal notes the Applicant appears to have held insurance with Medibank since 2010. A copy of his Medibank private card issued in January 2010 was submitted with his Low Doc Loan Application.[319]
2. The Applicant is the registered owner of several motor vehicles registered in Australia.[320]
3. The Applicant had a valid driver's licence.[321]

The remaining family and business ties with Australia in comparison to any other foreign country

1. The Applicant has no family in PNG. The majority of his family reside in Australia. His wife and children reside in Australia. His sisters reside in Australia.[322] The Applicant's father resides in Singapore.
2. Limited evidence was provided by the Applicant to indicate that he had any connection with PNG other than for business reasons during the Relevant Years. No particulars, photos, or other evidence of his life in PNG was proffered.
3. In addition to the family ties with Australia the Applicant also has significant business ties and relationships.
4. Primarily the Applicant repeatedly returned to Australia visit and resided with his family.

1. As referred to in paragraphs ‎104-‎126 above, the Applicant has maintained a family residence in Australia since 2004. The residential properties were never rented out.

1. The Applicant said the intention was his family to come to PNG when it was safe.
2. The Applicant has been working in PNG since 2003. In all that time there has been no move to PNG. There was no evidence given by his wife. No evidence from any other witness to support the contention that his family would move to PNG. His father gave evidence at the hearing but did not address this issue. The Applicant's wife was not called to give evidence. There was no evidence from any associate in PNG.
3. The Respondent points to the fact that throughout the objection process the Applicant has maintained that he is entitled to CGT exemption on the sale of Residential Property 1 on the basis that it was his main residence. The Applicant's children have been enrolled in school here. These factors also point to the Applicant's state of mind. The Applicant provided the Respondent copies of rates notices, utility bills, a home insurance policy and a Brisbane City Council animal registration notice for the family dog, to support his residence claim.[323]

1. Based on the above, the Tribunal finds that the Applicant was a resident of Australia under ordinary concepts during the Relevant Years.
2. Given this finding it is unnecessary to consider whether the Applicant satisfies the other residency tests.

1. The Applicant contends that pursuant to Article 4 of the PNG Agreement he ought to be deemed resident solely of PNG because:[324]

(a) his permanent home and habitual abode is in PNG; > > (b) he had a permanent dwelling in PNG at all continuous times; > > (c) although his family does not reside with him, this is because of safety concerns; > > (d) he has strong social relations and friendships in PNG and is actively involved in the community; > > (e) he has clear business and employment ties with PNG; > > (f) he resides in PNG and has no intention of moving elsewhere.

2. The Respondent contends that the Applicant was an Australian resident for tax purposes.
3. The Tribunal has found that the Applicant is an Australian resident for tax purposes. The Respondent has not assessed any income the Applicant may have earned in PNG as part of its Amended NOAs. Only Australian sourced "income" has been targeted by the Respondent.
4. There is no risk of any double taxation. The Treaty is not relevant for the purpose of this decision.

ARE THE AMENDED NOA EXCESSIVE/HAS THE APPLICANT DEMONSTRATED HIS ACTUAL INCOME?

1. The Applicant submits he has discharged his onus on the basis that:[325]

(a) He is able to prove his actual taxable income; > > (b) He is able to prove that he did not have any other sources of assessable income; > > (c) He is able to prove a reasonable explanation for any appearance of the possession of assets; > > (d) He is able to explain the unexplained deposits and withdrawals which are nonassessable income; and > > (e) He is able to prove that the capital receipts and non-assessable income he received during the Relevant Years exceeded the increase in wealth across the relevant years.

2. The Applicant says the assessment carried out by Vincents Accountants represents the correct position in relation to his asset position.
3. As outlined above, Mr Thynne has opined that the Respondent's Amended NOAs are excessive. The Tribunal accepts this evidence.
4. Based on the findings regarding the evidence the Tribunal is satisfied on the balance of probabilities that the Applicant's actual taxable income for the Relevant Years is set out in Schedule B of Mr Thynne's reports. The Tribunal accepts the Applicant's and other witnesses' explanations, and that the Applicant had the assets, outflows and inflows, as set out in the Applicant's Written Submissions dated 14 October 2022 at paragraphs [40]-[184].
5. As was stated by Burchett J in Ma at 230, in seeking to establish that an assessment under s 167 of the ITAA 1936 was excessive, that burden may be discharged:

... [I]f a taxpayer denies any undisclosed source of income, provides acceptable evidence of how he spends his time, and demonstrates a reasonable explanation for any appearance of the possession of assets, he will generally discharge his burden of proof unless some positive reason is shown why he is to be disbelieved.

1. There is no hard and fast rule dictating how a taxpayer must discharge their burden of proof.
2. In Condon, Derrington J referred to the decision in Haritos v Commissioner of Taxation [2015] FCAFC 92; 233 FCR 315, at 392 ([234]) where it was accepted that "in performing its review function, the Tribunal may be required to make an estimate upon inexact evidence, and it cannot avoid its responsibility to make findings by relying on the burden of proof section". Derrington J held that (at [62]):

If the appellant can, by any means, demonstrate his actual taxable income and show the assessments are excessive, he is entitled to seek relief: Ma at 232.

3. The Tribunal finds that the Applicant has shown, on the balance of probabilities, his accumulated wealth was from non-income sources.[326]
4. On the balance of probabilities, the Tribunal finds that the Applicant has provided a "reasonable explanation for any appearance of the possession of assets". The Tribunal accepts that this was largely due to the gifts of money and assets from his father. No "positive reason" has been demonstrated for why his explanation should not be accepted or why he should be disbelieved.[327]
5. The Applicant has provided sufficient evidence to explain his possession of assets and the inflows and outflows from his various accounts. These transactions have been scrutinized and analysed by Mr Thynne.
6. The Tribunal finds that the Applicant has established what his actual taxable income was for each of the Relevant Years, and that the Commissioner's Amended NOAs were excessive.

1. Administrative penalties can be imposed pursuant to section 284-75(3) of Schedule 1 to the TAA in the following circumstances:

(3) You are liable to an administrative penalty if:

(a) you fail to give a return, notice or other document to the Commissioner by the day it is required to be given; and

(b) that document is necessary for the Commissioner to determine a * tax-related liability (other than one arising under the * Excise Acts) of yours accurately; and

(c) the Commissioner determines the tax-related liability without the assistance of that document.

Note: You are also liable to an administrative penalty for failing to give the document on time: see Subdivision 286-C.

1. The base administrative penalty is 75% of the relevant tax related liability.[328] The base penalty is increased by 20% if the taxpayer "took steps to prevent or obstruct the Commissioner from finding out about a shortfall amount, or the false or misleading nature of a statement, in relation to which the base penalty amount was calculated".[329]
2. Pursuant to section 298-20 of Schedule 1 of the TAA the Commissioner has the power to remit all, or part of the penalty amount calculated.
3. The ATO issues practice statements pursuant to authority of the Commissioner. These practice statements are used by the ATO to provide instructions on the way in which the tax law should be administered. Practice Statement Law Administration PSLA 2014/4 (PS 2014/4) explains the circumstances in which an entity will become liable to a penalty pursuant to section 284-75(3) of the TAA and how that penalty is assessed including any remission.
4. Pursuant to paragraph 27 of PS 2014/4 a relevant matter for the remission of a penalty includes "a major objective of the penalty regime is to promote a consistent treatment by reference to specified rates of penalty" and that this objective could be compromised if penalties are omitted without just cause or as a matter of course.
5. Paragraph 28 of PS 2014/14 goes on to provide that the discretion to remit penalties should be approached in a fair and reasonable way and sets out that a remission, either in full or in part will generally occur, as follows:
   • an entity has a genuine, yet mistaken, belief that lodgment was not required as opposed to an indifference to, or a rejection of, their obligation
   • an entity understood their obligation to lodge but circumstances beyond their control affected their ability to lodge
   • the amount of penalty imposed by law causes an unjust result
   • there were credits available to offset the amount of the tax-related liability payable, or
   • there was extraordinary cooperation during an examination.
6. The Commissioner has also issued a ruling, Taxation Ruling TR 94/7 Income tax: tax shortfall penalties: guidelines for the exercise of the Commissioner's discretion to remit penalty otherwise attracted (TR 94/7). TR94/7 provides relevantly:

The discretion to remit penalty otherwise attracted under a shortfall section should be exercised in only those exceptional cases where, having regard to all of the circumstances, the application of a particular shortfall section and/or the rate of penalty prescribed under that section would provide a clearly unreasonable or unjust result.

1. The Applicant submits that he should not be liable for administrative penalties pursuant to section 284-75(1) of Schedule 1 to the TAA for the Relevant Years or that the discretion to remit the administrative penalty under section 298-20(1) of Schedule 1 to the TAA ought to be exercised in his favour.[330]
2. The Tribunal has found that the Amended NOAs are excessive, and that the Applicant has demonstrated his actual income. As a result, the Amended NOAs will be set aside. As a result, there has been no finding of fraud or evasion.
3. The Applicant submitted: [331]

26. The imposition of the decision maker to impose administrative penalties should be set aside and replaced with a decision to remit the amount given that: > > 26.1. The Respondent's decision does not accord with the facts, law and rights in existence. > > 26.2. The Applicant has always complied with lodgement obligations concerning income derived in Australia. > > 26.3. An additional factor in relation to the remission of penalties is the reasonable care exercised by the Applicant, which included seeking professional advice, before the lodgement of the returns. > > 26.4 The Respondent did not conduct an audit or any enquiry raising issues of concern with the affairs reported by the Applicant through its ordinary lodgement regime before issuing the amended assessments for the Relevant Years to the Applicant. > > 26.5 The Applicant co-operated with the Respondent in providing information and complying with requests for more information, in particular responding to the following: > > > a) Letter from the ATO dated 17 April 2019 (see T Doc 47 and 48); and > > > > b) Letter from the ATO dated 14 June 2019 (see T Doc 49, 54 and 55). > > 26.6 The allegation that the funds deposited into the bank accounts of the Applicant constitute income is unfounded, without substance including evidence or particulars of the allegations, has been made on incorrect assumptions and has been rebutted on the evidence and explanation of the Applicant. > > 26.7 The Applicant did not engage in any act, or make a statement to the Respondent, that was: > > > a) False or Misleading; > > > > b) Lacking in reasonable care; > > > > c) Deliberate with the intent of evading income tax; > > > > d) Reckless; > > > > e) An intentional disregard of the law; > > > > f) Made on the basis of an unarguable position; or > > > > g) Had a dominant purpose of avoiding tax. > > 26.8. There has been no evasion in the Applicant reporting his affairs and the Respondent should, in the circumstances, remit any administrative penalty as well as the SIC pursuant to section 298-20 of Schedule 1 to the Taxation Administration Act 1953.

4. The Respondent submitted penalties and interest imposed should remain. As the Tribunal has found in favour of the Applicant the basis for the Respondent's submissions are no longer relevant. In these circumstances the penalties and interest decisions are set aside and remitted and recalculated to reflect the decision.

1. The decisions under review with respect to penalties are set aside and remitted to be determined in accordance with the findings above.

1. The decision under review should be set aside and the Amended NOAs be reassessed in accordance with the law.
2. The decisions under review with respect to penalties are set aside and remitted to be determined in accordance with the findings above.

I certify that the preceding 503 (five hundred and three) paragraphs are a true copy of the reasons for the decision herein of Senior Member D K Grigg

..............................[Sgd].......................................

ANNEXURE A: CHRONOLOGY (PREPARED BY THE RESPONDENT)[332] WITH THE APPLICANT'S COMMENTS

A1. In 1997, the Applicant contends he arrived in Australia to study a foundation course at Queensland University of Technology to improve his English skills. The Commissioner understands that the Applicant actually arrived in July 1997. The Applicant contends he then

enrolled in a Bachelor of Business Management degree at Central Queensland University.[333]

A2. In the income years ending 30 June 1998, 30 June 1999 and 30 June 2000, the Applicant spent a large majority of his time in Australia. An average of 81 per cent of his days in these

A3. In 2000, the Applicant contends he met his wife while studying.[334]

A4. In the income years ending 30 June 2001, 30 June 2002 and 30 June 2003, the Applicant spent almost all his time in Australia. An average of 97 per cent of his days in a year were spent in Australia.[335]

I spent most of my time in Australia in the 2001, 2002 and 2003 income years, which are not the Relevant Tax Years, because I was residing in Australia as a student

A5. On 11 November 2002, the Applicant was appointed as a director of an Australian proprietary company, Company P.[336]

A6. In 2002, the Applicant contends he forgot to renew his student visa and was requested by Border Force to depart Australia.[337]

A7. In 2003, as a result of his visa situation, the Applicant contends he returned to PNG to work in his father's business. The Applicant contends he continued a long-distance relationship with his wife.[338]

A8. In the income year ending 30 June 2004, the Applicant spent 65 days in Australia.[339]

A9. On 4 November 2004, Residential Property 1 was purchased for $715,000 in the name of the Applicant and the Applicant's wife. The Applicant and his family resided at the home whenever they were in Australia[340]

A10. On or around 21 November 2004, the Applicant and the Applicant's wife married.[341]

A11. On 5 May 2005, the couple's first child was born in Australia, PQBZ's son. The Applicant was in Australia for the birth.[342]

A12. In 2005, the Applicant applied for a spouse visa.[343]

I applied for a spouse visa as it is difficult for Papua New Guinea citizens to obtain travel visas to Australia. Obtaining a spouse visa made it easier to visit Australia

A13. In the income year ending 30 June 2005, the Applicant spent 253 days in Australia. His wife spent 294 days.[344]

A14. In the income year ending 30 June 2006, the Applicant spent 135 days in Australia. His wife spent 135 days.[345]

A15. In the income year ending 30 June 2007, the Applicant spent 22 days in Australia. His wife spent 41 days.[346]

A16. In April 2008, the Applicant and his wife purchased Property 3 for $770,000. The Applicant declared rental income in relation to the property for all the Years of Income.[347]

A17. On or about 15 May 2008, the Applicant was issued a Marine Licence by the Queensland Government.[348]

I obtained the marine licence in Australia after undertaking a course on marine rules and safety. No such courses were available in PNG at the time

A18. On 21 May 2008, the couple's second child was born in Australia. The Applicant was in Australia for the birth.[349]

A19. In the income year ending 30 June 2008, the Applicant spent 102 days in Australia. His wife spent 204 days.[350]

A20. On 28 August 2008, the Applicant's application for permanent residence in Australia was approved. He was granted a Partner (Residence) Visa (Class BS) (Subclass 801).[351]

A21. In the income year ending 30 June 2009, the Applicant spent 57 days in Australia. His wife spent 87 days.[352]

A22. On 2 January 2010, the Applicant contends that his father was the victim of an assassination attempt due to an escalating family dispute. The Applicant contends he was flown for urgent treatment in Australia. The Applicant contends that his parents, wife and children fled PNG for

A23. On 28 April 2010, the Applicant purchased an Audi Q7 for approximately $93,275. The vehicle was registered in Queensland.[354]

A24. In the income year ending 30 June 2010, the Applicant spent 85 days in Australia. His wife spent 179 days.[355]

A25. On 4 August 2010, the Applicant purchased a Porsche Cayenne for approximately $155,600. The vehicle was registered in Queensland.[356]

I note that my wife was in a car accident at this time and her car was written off. We received an insurance payout which was used to purchase the Porsche Cayenne

A26. In the income year ending 30 June 2011, the Applicant spent 109 days in Australia. His wife spent 210 days.[357]

, I note that in the 2010/11 income year, while my father was in Australia recovering from his gunshot wound, I was required to travel more often to visit him to obtain advice on business operations in PNG and to have him sign documents to enable his PNG company to conduct its affairs

A27. On 6 February 2012, the Applicant purchased a Lamborghini Gallardo for approximately $180,000. The vehicle was registered in Queensland.[358]

A28. On 20 June 2012, Unit 12 was purchased by the Applicant for $222,750. The property is a commercial property.[359]

A29. Also on 20 June 2012, the Applicant purchased a Mercedes-Benz C63 AMG for approximately $149,200. The vehicle was registered in Queensland.[360]

A30. On 24 June 2012, an animal registration reminder noticed was issued to the Applicant by the Brisbane City Council. The notice states that PQBZ's dog is usually kept at Residential Property 1. The registration was seemingly paid on 9 October 2012.[361]

A31. On 26 June 2012 and 9 July 2012, the Applicant signed loan documents with Sandhurst Trustees and Merchant Mortgages for $108,000 in relation to Unit 12. Subsequently, on 1 August 2012, the Applicant's wife signed the loan documents.[362]

A32. In the income year ending 30 June 2012, the Applicant spent 110 days in Australia. His wife spent 200.[363]

A33. On 4 July 2012, it appears from the Applicant's diary that he watched the State of Origin at 'PQBZ's Cousin's Place'. The Applicant was in Australia at the time.[364]

I was in Australia at the time and my cousin invited all family members to watch the State of Origin game at his house. State of Origin is a big event in PNG which I follow wherever I am at the time

A34. In July and August 2012, it appears from the Applicant's diary that he sought medical treatment in Australia for a knee injury, including surgery at Brisbane Private Hospital on 1 August 2012.[365]

I tore my anterior cruciate ligament in my knee while on a skiing holiday at Mt Bulla. I had the operation to fix my knee in Australia and I attended physiotherapy in Australia. This was a consequence of where the accident which caused the injury occurred

A35. In August 2012, it appears from the Applicant's diary that he travelled to Singapore to be with his family while their children started school.[366]

A36. Between August and November 2012, utility bills were sent to the Applicant and his wife at Residential Property 1.[367]

A37. On 6 November 2012, it appears from the Applicant's diary that he attended a Melbourne Cup lunch at Jellyfish restaurant on Brisbane's riverside. His wife was in Australia for the same period of time on this trip.[368]

I often attend networking events when I am in Australia on behalf of my PNG employer in order to foster and maintain business relationships with clients, suppliers and other stakeholders

A38. On 21 November 2012, it appears from the Applicant's diary that the Applicant and his wife celebrated their eight-year wedding anniversary. They both arrived in Australia on that day and

A39. On 22 November 2012, the Applicant purchased a Cabo Speedboat for approximately $195,000. The vehicle was registered in Queensland.[370]

The Cabo boat was purchased by a friend of mine. It was registered in my name because I have an Old CRN which allowed the vessel to travel through Australian waters to PNG where it was handed over to the new owner

A40. On 28 February 2013, Unit 11 was purchased by the Applicant for $221,650. The property is a commercial property and is next door to Unit 12 purchased by the Applicant in June 2012.[371]

A41. On 17 March 2013, it appears from the Applicant's diary that he attended the Brisbane Super Car Club Open Day at Sirromet Wines in Queensland. The Applicant and his wife were in Australia at the time.[372]

I have an interest in cars and I attended the event because it coincided with my holiday in Australia

A42. On 5 April 2013, it appears from the Applicant's diary that he attended to a number of tasks including picking up business cards, RSVPing for an Aventador drive day, and paying speeding fines. The Applicant and his wife were in Australia at the time. [373]

A43. On 6 April 2013, it appears from the Applicants diary that he attended an open house at Musgrave Road. Witness Statement of PQBZ, Annexure L

A44. On 22 April 2013, the Applicant signed a loan application with Bendigo and Adelaide Bank seeking a loan about of $1,800,000 to purchase a property.[374]

A45. On 27 April 2013, the Applicant purchased Residential Property 2. The purchase price for the property was $2,880,000. The Applicant took out a mortgage to purchase the property with Bendigo and Adelaide Bank.[375]

A46. On 9 May 2013, it appears from the Applicant's diary that he attended the Lamborghini Aventador Track Day. The Applicant was in Australia at the time.[376]

A47. On 5 June 2013, there is a note in the Applicant's diary about State of Origin, Game 1. The Applicant was not in Australia at the time.[377]

I note that the State of Origin is an event widely followed in PNG. I otherwise repeat my response to paragraph A33

A48. On 12 and 13 June 2013, there is a note in the Applicant's diary about the last day of school for his children PQBZ's son and daughter. Between then and mid-August, a period coinciding with northern hemisphere school holidays, the Applicant and his family spent a significant amount of time in Australia.[378]

my wife and children spend much of the children's school holidays traveling and visiting family. I join them in order to spend time with my children whenever it is possible to do so between my work commitments in PNG

A49. On 26 June 2013, there is a note in the Applicant's diary about State of Origin, Game 2. The Applicant arrived back in Australia the day of the game[379]

A50. In the income year ending 30 June 2013, the Applicant spent 126 days in Australia. His wife spent 138 days.[380]

A51. On 16 and 17 July 2013, there is a note in the Applicant's diary about State of Origin, Game 3. The Applicant arrived back in Australia the day before the game, and it appears from the Applicant's diary that he visited Sydney for the game.[381]

Company O, a major supplier of goods to PNG Company 1, invites all their major distributors (approximately 15 people) to fly to Australia to attend the final State of Origin game in the series. They pay for all flights and accommodation. This was an industry networking event associated with my employment in PNG

A52. On 7 October 2013, Comminsure sent the Applicant and his wife a renewal notice and certificate of insurance in respect of Residential Property 1.[382]

A53. In October 2013, the Applicant was appointed as the sole director of the newly registered Australian proprietary companies Company A and Company B. In the applications for registration, the Applicant's address was recorded as Residential Property 1.[383]

the companies were registered on behalf of my father who wanted to invest in Australia. They were registered in my name as I had a spouse visa and we thought this would be easier. If any income was derived from these companies, it would be declared in Australia. I otherwise receive no undeclared benefit from these business interests

A54. On 5 November 2013, there is a note in the Applicant's diary about Melbourne Cup. The Applicant was not in Australia on this day.[384]

as with State of Origin, the Melbourne Cup is a usual corporate event in PNG, and I diarise the event for my records

A55. On 18 November 2013, a reminder notice sent to the Applicant and his wife from Brisbane City Council showed there was $850.53 of rates due in respect of Residential Property 1.[385]

A56. In late November 2013, it appears from the Applicant's diary that he participated in the M Rally, a car rally that runs from Sydney to Brisbane. The Applicant and his wife were in Australia over this period.[386]

, I took annual leave to attend this event in Australia as my holiday because I have a keen interest in cars

A57. On 14 December 2013, there is a note in the Applicant's diary that 'Wife/kids arrive Brissy. Wife Birthday'. The Applicant's wife and children did arrive in Australia on that day. The Applicant arrived the day before on 13 December 2013.[387]

A58. On 6 January 2014, there is a note in the Applicant's diary that school starts. The Applicant's wife and children leave Australia on 5 January 2014.[388]

A59. On 3 February there is a note in the Applicant's diary that school starts again after 'CNY', presumably Chinese New Year. The Applicant and his wife are in Australia for a very short period before departing on what appears to be a holiday in New Zealand, returning to Australia

on 10 February. Upon returning to Australia, the Applicant appears to have attended the wedding of J and C on 15 February, had 'dinner with in-laws' on 16 February and attended the preview the Lamborghini Huracan that has landed in Brisbane.[389]

the trip to New Zealand was a business trip funded by BB as PNG Company 1 is a major customer in PNG. There are no direct flights from PNG to NZ and therefore I used Australia as a transit hub

A60. On 28 February 2014, the Applicant and his wife sold their home at Residential Property 1 which they had held for almost 10 years. The sale price was $960,000.[390]

A61. On 28 February 2014, the Applicant was appointed as the sole director of the newly registered Australian proprietary company, Company C. In the application for registration, the Applicant's address was recorded as Residential Property 2.[391]

A62. On 17 March 2014, the Applicant sold his Cabo Speedboat[392]

this is incorrect as I did not sell the Cabo boat. I did not own the Cabo Boat. The Australian registration on the boat had expired and did not require renewal as the boat was already in PNG. The actual owner had no intention of returning the boat to Australia and he therefore allowed the registration to expire

A63. In March 2014, the Applicant was appointed as a director of the newly registered Australian proprietary companies Company F and Company H. In the applications for registration, the Applicant's address was recorded as Residential Property 2.[393]

A64. From 1 to 7 May, it appears from notes in the Applicant's diary that he completed an Australian Institute of Company Directors course.[394]

, I note that I completed the director's course at the request of my father and to further my knowledge in the area. It was completed in Australia because no such course exists in PNG

A65. On 22 May 2014, it appears from the Applicant's diary that he arrived in Australia to attend the Sanctuary Cove Boat Show on the Gold Coast.[395]

I did not attend the boat show. It was merely noted in my diary that the show was on in case I got an opportunity to attend, which I did not.

A66. On 11 June 2014, it appears from the Applicant's diary that school holidays started. Between then and mid-August, a period coinciding with northern hemisphere school holidays, the Applicant and his family spent a significant amount of time in Australia.[396]

my wife and children spend much of the children's school holidays traveling and visiting family. I join them in order to spend time with my children whenever it is possible to do so between my work commitments in PNG

A67. In the income year ending 30 June 2014, the Applicant spent 161 days in Australia. His wife spent 159 days.[397]

A68. In July 2014, the Applicant and his family obtained private health insurance through Medibank[398]

due to frequent visits to Australia, and because my wife is a citizen, we maintain an appropriate level of health cover in Australia as our PNG medical insurance does not provide sufficient cover in Australia

A69. On 19 August 2014, the Applicant was appointed as a director of the newly registered Australian proprietary Company J. In the application for registration, the Applicant's address was recorded as Residential Property 2.[399]

A70. On 18 September 2014, the Applicant purchased a Lamborghini Huracan for approximately $444,000. The vehicle registered in Queensland[400]

A71. On 20 October 2014, the Applicant purchased a ForTwo Smart Car for approximately $8,600. The vehicle was registered in Queensland.[401]

A72. The Applicant arrived in Brisbane at the end of January 2015 ahead of the birth of his third child in order to set up Residential Property 2.[402]

A73. During this time, the Applicant contends he undertook an Australian Institute of Company Directors course.[403]

A74. On 14 February 2015, it appears from the Applicant's diary that he attended a wedding in Hobart.[404]

, I attended the wedding of a friend from PNG which took place in Hobart

A75. On or about 3 March 2015, the couple's third child was born in Australia, PQBZ's son. The Applicant was in Australia for the birth.[405]

A76. On 24 March 2015, it appears from the Applicant's diary that he attended an awards presentation hosted by the Australian Institute of Company Directions.[406]

A77. In April 2015, the Applicant contends that he, his wife and newborn flew to Singapore to be with their older children while they completed the school term in Singapore.[407]

A78. On 27 May 2015, it appears from the Applicant's diary that he recorded a note to watch State of Origin, Game 1, at his home. The Applicant was in Australian at this time.[408]

A79. On 31 May 2015, the Applicant was appointed as a director of the newly registered Australian proprietary company, Company L. In the application for registration, the Applicant's address was recorded as Residential Property 2.[409]

A80. On 15 June 2015, the Applicant was appointed as the sole director of the newly registered Australian proprietary company, Company D. In the application for registration, the Applicant's address was recorded as Residential Property 2.[410]

A81. In June 2015, the Applicant returned to Singapore to assist with his family's relocation to Australia.[411]

A82. In the income year ending 30 June 2015, the Applicant spent 189 days in Australia.[412]

A83. On 21 June 2015, the Applicant, his wife and children arrived in Australia. The Applicant's wife and children had a consistent presence in Australia throughout the 2016 income year with limited travel outside Australia.[413]

A84. The Applicant contends the children attended .............. School[414]

A85. On 31 July 2015, the Applicant was appointed as a director of the newly registered Australian proprietary company, Company I. In the application for registration, the Applicant's address was recorded as Residential Property 2.[415]

A86. In 2015, the Applicant was charged for driving without a Queensland driver's licence.[416] On 7 August 2015, the Applicant obtained his first Queensland driver's licence.[417]

The charges were dismissed because I was not required to have an Qld driver's licence because I do not reside in Queensland and had not been in Australia for a period longer than 2 months. Nevertheless, in order not to have to go through such proceedings again, I subsequently obtained an Qld driver's licence

A87. On 7 September 2015, the Applicant purchased a Mini Cooper for approximately $18,000. The vehicle was registered in Queensland[418]

A88. On 14 October 2015, the Applicant purchased a Landrover Range Rover for approximately $177,000. The vehicle was registered in Queensland.[419]

A89. On 3 November 2015, it appears from the Applicant's diary that he attended a Melbourne Cup event in Melbourne.[420]

I was invited to the Melbourne Cup event by SP Brewery which is a part of the Heineken Group. SP Brewery invited their main PNG wholesalers to the event and all costs were covered by them. This was a networking event I attended in my capacity as Managing Director of PNG Company 1. Attached hereto and marked JT1 is an email invitation from SP for the event

A90. On 27 November 2015, the Applicant sold his Mercedes-Benz C63 AMG.[421]

A91. On 15 March 2016, the Applicant sold his Audi Q7.[422]

A92. On 20 June 2016, the Applicant and his wife sold their investment Property 3 for $655,000.[423]

A93. In the income year ending 30 June 2016, the Applicant spent 206 days in Australia. His wife spent 336 days in Australia.[424]

I spent longer in Australia during this income year due to my wife and children returning to reside in Australia. My wife also suffered from post-natal depression after the birth of our 3rd child and I travelled to Australia more frequently to support her and our children during this time, particularly as they transitioned from residing in Singapore where they had access to more help from my parents

[1] Exhibit 1, Agreed Bundle 1825-3382, No. 20, Applicant's PNG passports, Agreed Bundle 1879-1924.

[2] Exhibit 1, Agreed Bundle 279-579, No. 6, T11-T27, Correspondence relating to Bank Account Statements from 22 March 2017 to 3 May 2018, Correspondence relating to Property Searches from 27 April 2017 to 16 January 2018.

[3] Exhibit 1, Agreed Bundle 163-262, No. 6, T3-T6, Income Tax Returns lodged for the 2013-2016 income years.

[4] Exhibit 1, Agreed Bundle 163-183, No. 6, T3, Income Tax Return lodged for the 2013 income year.

[5] Exhibit 1, Agreed Bundle 184-205, No. 6, T4, Income Tax Return lodged for the 2014 income year.

[6] Exhibit 1, Agreed Bundle 206-233, No. 6, T5, Income Tax Return lodged for the 2015 income year.

[7] Exhibit 1, Agreed Bundle 234-262, No. 6, T6, Income Tax Return lodged for the 2016 income year.

[8] Exhibit 1, Agreed Bundle 263-278, No. 6, T7-T10, Notices of Assessment lodged for the 2013-2016 income years.

[9] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018.

[10] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 35.

[11] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 36.

[12] Exhibit 1, Agreed Bundle 30-57, No. 2, Audit of income tax affairs dated 29 August 2018, Agreed Bundle 39.

[13] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 43.

[14] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 51.

[15] Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 52, paragraphs [118]-[122].

[16] Exhibit 1, Agreed Bundle 732-747, No. 6, T42-T45, Notices of Assessment of Shortfall Plenty for the 2013-2016 income years. Table found at Exhibit 1, Agreed Bundle 30-57, No. 2, ATO Audit Decision dated 29 August 2018, Agreed Bundle 55, paragraph [146].

[17] Exhibit 1, Agreed Bundle 724-731, No. 6, T38-T41, Notices of penalty for failure to lodge documents on time for the 2013-2016 income years.

[18] Exhibit 1, Agreed Bundle 708-723, No. 6, T34-T37, Notices of Amended Assessment for the 2013-2016 income years.