Federal Court of Australia

Zhang v Commissioner of Taxation [2026] FCAFC 137

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs of the appeal on the standard basis, as assessed or agreed.

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

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    Since 12 May 2016, the appellant, Mr Li Zhang, has owed the Commonwealth a taxation liability of $1,189,655.51 for the 2003 income year, pursuant to an amended assessment of that date. For some time after issuing that assessment, the Australian Taxation Office (ATO) considered that recovery action against Mr Zhang was uneconomical and had determined not to expend time and money pursuing the debt. That decision was recorded in Mr Zhang’s statement of account with the ATO. However, in March 2024, after issuing a notice under s 353-10 of Schedule 1 of the Taxation Administration Act 1953 (Cth) (TAA53) to the Hong Kong and Shanghai Banking Corporation (HSBC) (the “353-10 Notice”), the ATO identified that Mr Zhang held a term deposit with that bank in the amount of $391,735.78. Subsequently, on 23 April 2024, the Commissioner issued a garnishee notice to HSBC, requiring payment of that sum. By then, Mr Zhang’s total indebtedness to the Commonwealth in respect of the 2003 income year amounted to $2,076,506.81, comprising the outstanding taxation debt and general interest charges.

2    On 4 June 2024, Mr Zhang applied under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) for review of the Commissioner’s decision to “re-raise” his taxation liability by: (1) changing the balance of his account with the ATO to reflect that the tax liability was owing, and then (2) issuing the garnishee notice to HSBC under s 260-5 of the TAA53. He also sought an order that the Commissioner repay the funds received from HSBC. The application was dismissed, and he now appeals from that decision: Zhang v Commissioner of Taxation [2025] FCA 1230 (PJ).

3    In broad terms, this appeal faces the insurmountable hurdle that the allegations of fraud and misconduct by the ATO which he sought to advance before the primary judge, and which he now seeks to agitate on appeal, were not raised by his application for review. For that reason alone, the appeal cannot succeed.

4    However, even if those new allegations were considered, the appeal remains unsustainable. Firstly, there is no arguable case of misconduct on the part of the Commissioner or the ATO. None of the documents produced by the ATO on which Mr Zhang relies is suggestive of any wrongdoing. Though he believes them to be suspicious or unreliable, there is no evidence to that effect. Rather, his perception of impropriety appears to arise from his lack of understanding of the operations of the ATO and, consequently, of the documents’ contents.

5    Second, Mr Zhang has not demonstrated any error in the Commissioner’s decision to issue the garnishee notice in respect of his taxation liability of $1,189,655.51 for the 2003 income year. He does not challenge the primary judge’s finding that he was issued an assessment for that amount. He also does not contend that he has discharged any of that indebtedness, an amount which vastly exceeds that for which the Commissioner issued the garnishee notice. In those circumstances, the ATO’s internal treatment of his liability is irrelevant. It is also not relevant that Mr Zhang was previously informed that the Commissioner had decided not to pursue the outstanding debt, because no estoppel could run against the taxation legislation. Rather, the Commissioner simply exercised his powers to recover assessed taxation – in furtherance of his statutory obligation to do so – upon realising that Mr Zhang held assets capable of recovery. Mr Zhang has not established any unlawfulness in that action.

6    This appeal constitutes yet another step in the long and protracted dispute between Mr Zhang and the Commissioner. That the appeal concerns a taxation liability for the 2003 income year is illustrative of the length of the dispute. However, it is not limited to that income year; at the time the Commissioner issued the garnishee notice to HSBC, Mr Zhang had a total liability of approximately $7.5 million. Mr Zhang is also presently incarcerated for criminal offences relating to the conduct of his tax affairs. Nevertheless, this appeal is concerned only with matters arising out of his taxation liability for the 2003 income year.

Background

7    The background to this matter is largely not in contest. The essence of the dispute is concerned with certain inferences which Mr Zhang seeks to draw from the available documentary evidence.

Notices of Assessment

8    The initial assessment of Mr Zhang’s taxation liability for the 2003 income year was issued on 5 March 2004. It showed that his taxable income was $19,104 and that the tax on this income was $2,227.68.

9    However, from 9 February 2006, Mr Zhang became the subject of an audit investigation in relation to his returns made since 2003.

10    By an audit decision of 22 June 2009, the Commissioner determined that Mr Zhang owed additional income tax of $3,306,762.89. He also imposed an administrative penalty of $1,653,381.60. On that same day, amended assessments were issued for the 2003 to 2007 income years inclusive.

11    Mr Zhang lodged an objection against the amended assessments. On 24 March 2011, the Commissioner allowed the objection in part.

12    However, Mr Zhang was dissatisfied with the objection decision. On 29 April 2011, he applied for review of the decision pursuant to s 29(1) of the Administrative Appeals Tribunal Act 1975 (Cth).

13    On 2 March 2016, the Administrative Appeals Tribunal (as it then was) (AAT) set aside the Commissioner’s objection decision and remitted the matter for reconsideration, with a direction that account be taken of the AAT’s reasons and certain concessions made by the Commissioner.

14    Consequently, on 12 May 2016, the Commissioner relevantly issued a notice of amended assessment in relation to the 2003 income year, giving effect to the AAT’s decision. It identified an amended taxable income of $2,558,033.00 and tax payable of $1,189,655.51.

15    It is not suggested by Mr Zhang that he has discharged any of this taxation liability or any of the interest which has accrued on it since.

16    In parallel to the foregoing events, in March 2013, the Commissioner had determined that it was uneconomic to pursue Mr Zhang in relation to his taxation liabilities. Entries were made in his statement of account to reflect this decision on 12 March 2013. Subsequently, on 14 July 2016, further entries were made to record that, whilst his total indebtedness was $2,513,693.24, comprising the outstanding income tax and general interest charges, the debt was “uneconomical to pursue”.

17    Mr Zhang relied upon several documents before the primary judge which had been produced by the ATO. Among those was a letter to him dated 22 July 2016, which read in part:

We are writing to let you know we have decided not to pursue your Income Tax Account Debt of $2,513,693.24 at this time.

You still owe this amount and interest will continue to be charged. Any income tax refund or activity statement credit you claim in the future may be used to reduce your debt.

You can make payments toward this debt at any time by contacting us. If we receive information that your circumstances have changed we may contact you to arrange payment.

18    Six years later, on 17 August 2022, Mr Zhang’s statement of account was updated to record a “Re-raise of non-pursuit amount – Income Tax” in the amount of $1,819,671.46. That entry indicated that the taxation liability, which had continued to exist, was once again being treated internally as available for recovery action. It is this activity with which these proceedings are largely concerned, together with the garnishee notice, which is discussed further below.

19    By an email of 23 September 2022, Mr Zhang was notified that he owed a debt of $1,152,002.06. Mr Zhang claims that the information on his tax portal indicated that he had no such liability prior to this notification.

The garnishee notice

20    On 6 March 2024, the Commissioner issued the 353-10 Notice to HSBC, seeking information regarding assets, liabilities and accounts held by Mr Zhang.

21    HSBC responded on 13 March 2024, advising by letter that it held a term deposit in Mr Zhang’s name, which had a balance of $391,735.78.

22    On 23 April 2024, the Commissioner issued a garnishee notice to HSBC under s 260-5 of Schedule 1 to the TAA53, requiring it to pay to the Commissioner the full amount in the term deposit identified in its response to the 353-10 Notice. It appears that HSBC complied with the garnishee notice and the requested amount was paid.

The application for review

23    On 4 June 2024, Mr Zhang filed an originating application seeking review of the re-raising of his taxation liability and the issuing of the garnishee notice.

24    It appears that the substance of Mr Zhang’s claims was mentioned at several case management hearings, prior to the substantive hearing of the application. The content of those discussions has some relevance to the determination of this appeal and is considered below.

The primary judge’s decision

25    The primary judge dismissed Mr Zhang’s application for review of the decision to re-raise his taxation liability on the basis that it was not a decision made under an enactment for the purposes of s 3(1)(a) or (b) of the ADJR Act: PJ [54]. Her Honour noted that Mr Zhang, who was self-represented, “did not refer to any provision of the taxation legislation (or other legislation) that expressly or impliedly required or authorised a decision to be made as to whether or not to pursue a debt”: PJ [54]. That being so, the first criterion identified by Gummow, Callinan and Heydon JJ in Griffith University v Tang (2005) 221 CLR 99 at 130 – 131 [89] (Tang) was not met. Whilst that was sufficient to refuse this aspect of the application, her Honour went on to determine that the decision also: (a) did not itself confer, alter or otherwise affect legal rights or obligations, and in that sense, derive from an enactment: PJ [55]; (b) did not form part of the process of making a relevant decision: PJ [56]; and (c) was not conduct engaged in for the purpose of making a relevant decision: PJ [57]. Separately, her Honour also held that there was no error of law in re-raising the taxation liability by reason of the operation of s 14 of the Limitation Act 1969 (NSW) (Limitation Act), which has no application to the recovery of taxation liabilities under federal law: PJ [62].

26    As to the issuing of the garnishee notice, the primary judge rejected Mr Zhang’s somewhat diffuse allegation of bad faith, given the absence of any necessary particulars: PJ [66]. It had been alleged that the timing of the notice was “suspicious” because it was issued at a time when he was attempting to defend both the Commissioner’s claims against him and a criminal prosecution. However, her Honour found that there was nothing in the relevant circumstances which suggested that there was any improper intention in the issuing of the notice: PJ [69]. Her Honour also noted that it was not alleged that the Commissioner had not considered Mr Zhang’s personal circumstances when issuing the notice, as required by the decision in Edelsten v Wilcox (1988) 83 ALR 99 at 111 – 112. In that respect, her Honour noted:

[70]    … The Application does not claim that the Commissioner failed to consider his personal circumstances in issuing the notice: see Edelsten at 111-112. In any event, the evidence suggests that consideration was given to those circumstances in an (undated) internal submission that recommended issuance of a garnishee notice against the applicant’s term deposit, which made reference to the context in which the taxation debt arose; the applicant’s incarceration for tax fraud; debt action to date; the applicant’s awareness of the debt; and that the applicant had no known dependents and there was no indication of financial hardship.

27    The primary judge refused to consider the other grounds advanced by Mr Zhang, being fraud by those in the Commissioner’s office and breaches of the rules of natural justice, on the basis that such matters had not been sufficiently raised by the application and were not supported by any evidence: PJ [71] – [74].

28    Her Honour observed that the effect of Mr Zhang’s submissions was to challenge the notice of amended assessment issued in 2016, such a challenge being illegitimate and beyond the scope of the application for review: PJ [75].

29    Finally, her Honour addressed the allegations of misfeasance in public office, which had been raised by Mr Zhang in his written submissions, and those allegations, too, were found to be beyond the scope of the application. Leave to advance them was refused because, like the others, they were futile, unsupported by any evidence, and not articulated with any precision: PJ [76] – [80]. In this regard, it is relevant to note that Mr Zhang was invited on a number of occasions during the hearing before the primary judge to explain the nature of the claims which, although not articulated in his application, he nonetheless wished to advance. He was also asked whether he wished to seek leave to amend his application. The transcript reveals that Mr Zhang offered little in response to those invitations, which supports her Honour’s conclusion that it would have been futile to grant leave to amend.

30    In the result, both aspects of the application were dismissed.

The appeal to this Court

31    The crux of this appeal is Mr Zhang’s contention that the primary judge wrongly limited the scope of his application. He submits that her Honour wrongly excluded his claims of fraudulent conduct or maladministration and misfeasance in public office. From what can be discerned from his submissions, the underlying basis of those claims appears to be an allegation that the Commissioner relied upon false or fabricated documents when making the decisions to re-raise his taxation liability and issue the garnishee notice to HSBC. Otherwise, there does not appear to be any challenge to the primary judge’s finding that the decision to re-raise the debt was not a decision to which the ADJR Act applies. There is also no attempt to establish any error in the manner in which the primary judge dismissed the contentions which arose on the face of the application for review. Rather, the central contention is that her Honour erred by failing to address claims that did not appear in it.

The scope of the application before the primary judge

32    The first ground of appeal contends that the primary judge “erred by treating the originating application as the fixed boundary of the case, rather than determining the … proceeding as it had developed before judgment”.

33    The orders sought in the originating application were as follows:

1.    An order declaring that the “re-raise the non-pursuit amount-Income Tax” on 17 August 2023 [sic] occurred outside the statute-barred period.

2.    An order setting aside garnishee notice issued to HSBC bank.

34    The grounds on which those orders were sought were identified in the following terms:

Details of claim

The Applicant is aggrieved by the conducts because:

1.    The “re-raise the non-pursuit amount-Income Tax” has significantly surpasses the six-year statute-barred period in New South Wales

2.    The suspicious timing of the new tax bill and garnishee notice, and potential manipulation of events effectively undermine the applicant’s access to justice.

3.    The applicant was unable to access relevant to materials to dispute this alleged debt while held in custody.

Grounds of application

1.    Breach of the statute-barred debts in New South Wales.

2.    Breach of the rules of natural justice and raising humanitarian concerns.

35    On appeal, Mr Zhang appears to accept that the grounds raised in his application were vague and unparticularised. However, he submits that their nature and scope were clarified and expanded upon during case management hearings which occurred prior to the substantive hearing. This, he says, was a consequence of the fact that he did not obtain the relevant documents from the Commissioner until after he had filed his application and thus could not use them to formulate the grounds of review.

36    There are, in substance, two allegations which Mr Zhang says should have been addressed by the primary judge. The first is the allegation of fraud on the part of officers of the ATO, based on their reliance upon “false documents”, and the second is an allegation of misfeasance in public office.

The 15 April 2025 case management hearing

37    Mr Zhang claims that he clarified the nature and scope of his application at a case management hearing on 15 April 2025. The transcript of that hearing was included in the Appeal Book, and the Court was taken to parts of it throughout Mr Zhang’s submissions. However, considered in total or in part, it does not support the conclusion that Mr Zhang effectively broadened the scope of his application in the way that he now claims.

38    Relevantly, the transcript reveals that the Commissioner’s Counsel raised concerns with the primary judge as to the lack of particularity in the application. In response, Mr Zhang indicated that his concern was that some “false document” was used by the Commissioner to re-raise his taxation liability. He seemed to suggest that, because the Commissioner had previously determined not to pursue him in relation to any taxation debt, the debt no longer existed. On that basis, he appeared to allege that any document identifying any indebtedness was somehow fabricated. So much appears from the following exchange:

HER HONOUR: - - - it was not clear to me. It is not clear to me on the basis of your originating application, and so I wanted you to clarify what you say the decision or conduct is that you challenge.

MR ZHANG: Yes, your Honour. There has never have any amount exists in the past and the Commissioner was unable to raise that. The reason they could raise that debt because they use the false document to do so.

HER HONOUR: I’m not sure I understood you, Mr Zhang. Could you repeat what you said? I’m not sure I understood your response.

MR ZHANG: Yes, your Honours. The debt not existed, so the Commissioner was not in a position to re-raise any debt because there’s no debt there. That’s the first thing. Secondly, the reason why they couldn’t re-raise the debt is because they used a false document. The document is not real. It’s made up.

39    On that basis, the primary judge indicated that she would not require Mr Zhang to file any amended originating application. Counsel for the Commissioner agreed but indicated that he remained uncertain about the “false document allegation”. One might surmise that the primary judge and Counsel were prepared to accept Mr Zhang’s vague assertion without requiring him to amend the application because they considered it unlikely to amount to anything of substance, in circumstances where it appeared that he did not appreciate the Commissioner’s entitlement to rely upon the pre-existing indebtedness.

40    On the other hand, it can be accepted that the “false document” allegation did not sit comfortably with the grounds set out in the application. At best, it might have constituted part of the allegation in ground 2, which referred to a “potential manipulation of events”. However, of itself, that reference did not clearly indicate the case that was ultimately advanced.

41    Nevertheless, orders were made for the filing of submissions in advance of the hearing, which was set down for 11 June 2025.

Written submissions

42    Mr Zhang filed his written submissions on 9 May 2025, in which he asserted that the documents with which he had been provided after he filed the application revealed the existence of “false debts and false documents”. He added that the import of such documents was raised at case management hearings on 14 February 2025 and 15 April 2025. The essence of what occurred at the latter hearing has been outlined at supra [38]. Otherwise, nothing in the transcript of that hearing appears to show any further discussion by Mr Zhang of the additional evidence and its relevance to his case. The Court was not provided with the transcript of the 14 February 2025 case management hearing.

43    Mr Zhang’s written submissions also referred to what were said to be “suspicious” or “highly suspicious” entries in the ATO’s customer relationship software, Siebel. It appears that Mr Zhang’s interpretation of these entries formed the basis of several allegations by him in relation to the issuing of the garnishee notice, under the heading “Tort of Misfeasance in Public Office”. Thereafter, he made several conclusory allegations of conscious maladministration, bad faith, tort of misfeasance in public office, targeted malice, dishonest abuse of power, and actual intent to cause harm/injury, though the precise basis for each was not identified.

44    It is apparent that, upon receiving Mr Zhang’s submissions, Counsel for the Commissioner became concerned that the scope of the application had been expanded. In the introduction of his written submissions, filed on 23 May 2025, he relevantly stated that:

To the extent that Mr Zhang seeks to advance vague and unparticularised allegations of fraud and misfeasance, those allegations are beyond the scope of the Application. Leave could not be granted to amend the Application to introduce those allegations in circumstances where they are not properly pleaded or particularised, the respondent does not have adequate notice of the Mr Zhang’s case on those allegations and they are likely to be out of time.

45    Later in the submissions, Counsel contended that the Court was confined to considering the relief sought in the originating application, and the grounds identified therein, in an application for judicial review under the ADJR Act. He also relied upon r 31.01(2) of the Federal Court Rules 2011 (Cth) (Rules), which provides that if the grounds of an application include “an allegation of fraud or bad faith, the originating application must include details of the alleged fraud or bad faith.” Thereafter, he submitted that Mr Zhang’s allegations of fraud and misfeasance in public office did not arise on the face of the application and, in any event, were not sufficiently particularised by the contentions advanced in the written submissions. For that reason, Counsel submitted that any application by Mr Zhang to amend his originating application would be opposed.

46    It follows that the Commissioner’s position on the matter was clear: the allegations of fraud and misfeasance in public office were not within the scope of the application, Mr Zhang needed to amend his application to advance them, and any application for leave to do so would be opposed. There is no suggestion that Mr Zhang did not appreciate or understand this position.

The primary judge’s refusal to grant leave to amend

47    Mr Zhang did not make any formal application to amend his originating application, nor did he suggest to the Commissioner that he intended to do so. However, at the final hearing, he submitted his case comprised “more than the originating application” because he had expanded his case during the case management hearings to a “different stage”.

48    Notwithstanding the absence of a formal application for leave to amend, the primary judge proceeded on the basis that Mr Zhang had notionally made such an application in his submissions. Her Honour refused that notional application because the relevant amendments in relation to the fraud claim were not precisely identified and, in any event, both of the new allegations were futile: PJ [71] – [72], [77] – [79]. Her Honour also observed that the Commissioner had not been informed in a timely manner as to the proposed amendment, and the allegations sought to be advanced were not comprehensible.

49    It is unclear whether Mr Zhang seeks to appeal the primary judge’s refusal to grant leave to amend. To the extent that he does, he must establish an error of the kind identified in House v The King (1936) 55 CLR 499, since the decision concerns a matter of practice and procedure. However, there is nothing on the material which gives rise to any such error. Ultimately, despite being asked by the primary judge to do so on several occasions, Mr Zhang was unable to formulate, with any precision, the nature of the case which he sought to advance. Further, as her Honour observed, there was an absence of any evidence from which he could have raised even a prima facie case of fraud or misfeasance in public office. That being so, any amendment would have been futile.

50    Moreover, and in any event, her Honour also found that the allegation of fraud was contrary to r 31.01(2) of the Rules (see supra [45]), because no details of the alleged fraud or bad faith had been included in the originating application or in Mr Zhang’s submissions. The obvious purpose of that rule is to afford appropriate notice of the foundation of any allegations of dishonesty, and to prevent the making or continuance of unfounded allegations of a serious nature. Consistently with that purpose, the absence of any sufficient particularisation of the assertions sought to be made by Mr Zhang constituted a further justification for her Honour’s refusal of leave.

51    In those circumstances, the primary judge was correct to conclude that Mr Zhang had not raised in his application any grounds of review which alleged fraud or misfeasance in public office in relation to the issue of the garnishee notice. Self-evidently, no such claims appeared in the originating application, and Mr Zhang did not appear to suggest that they did. Rather, they were only raised in a substantial way in his written submissions, in response to which the Commissioner made it patently clear that Mr Zhang needed to amend his application to raise those serious allegations, and that any application for leave to do so would be opposed.

52    Accordingly, the primary judge did not err by failing to address the substance of Mr Zhang’s claims of fraud and misfeasance. Mr Zhang had been placed on notice of the procedural steps necessary for such matters to be properly advanced, yet he made no attempt to take them. That being so, those matters were not before the primary judge for determination, and her Honour rightly declined to consider them.

53    Though it can be accepted that Mr Zhang may have attempted to raise the “false documents” allegation at the case management hearing on 15 April 2025, he ultimately failed to do so coherently. Anything said by him on that occasion was far too oblique to sustain the argument that he had raised in a proper way the issues he now seeks to advance.

The alleged use of fraudulent documents

54    In any event, even if the primary judge had granted leave to Mr Zhang to raise the “fraudulent documents” and misfeasance in public office allegations, his case could not have succeeded. Before this Court, he was permitted to advance his case in relation to those issues, though it transpired that they were bereft of any substance.

55    Mr Zhang took the Court to several internal ATO records in which he sought to identify what he perceived to be discrepancies which, in his view, evidenced improper behaviour. In substance, his submission was that, because he was unable to reconcile the manner in which the ATO records were maintained, they were necessarily false. The difficulty with this submission is that it is inherently speculative and draws inferences from the records based upon Mr Zhang’s misguided understanding as to the events underpinning them.

56    In this respect, it is unfortunate that he had not sought a statement from the Commissioner as to the reasons for issuing the garnishee notice. There was, therefore, no direct explanation from the ATO as to how any of the amounts which appear in the ATO records were calculated. Against that background, it is, with respect, quite inappropriate to rely upon the Commissioner’s internal accounting and other records, without any information as to the manner in which they are kept or the reasons why certain entries are made, to make allegations of deliberate falsification simply because they cannot be understood by someone without that information.

57    One way of interpreting these somewhat diffuse submissions is as a contention that the Commissioner was not entitled to re-raise the debt because Mr Zhang himself was unable to reconcile the accounting records upon which the Commissioner relied. Indeed, part of his argument appeared to be that, if the ATO’s internal records were unreliable, no indebtedness would exist and the garnishee notice should not have been issued. He also seemed to submit that, since the Commissioner had previously written off the debt internally, he should not be required to repay it unless he could ascertain precisely how the Commissioner accounted for its re-raising. With respect, that reasoning is untenable in circumstances where the amended assessment for the 2003 income year, issued on 12 May 2016, was not in contest, the primary judge had found that it had occurred, that finding was not challenged, and Mr Zhang had not paid any of the assessed amount of $1,189,655.51 before the garnishee notice was executed.

58    Another way in which Mr Zhang sought to undermine the re-raising of his taxation liability was by reference to alleged inconsistencies in his ATO statement of account. In particular, he claimed that one statement, dated 3 May 2016, recorded a reduction in his liability from $3,314,277.26 to $2,465,335.61, without any explanation. Whilst it is true that the document in question is not self-explanatory of the apparent difference, that does not suggest fraud or maladministration. Rather, all that might be inferred is that the document does not fully explain the circumstances in which the relevant entries were made. In any event, that potential discrepancy says nothing about the fact that, on 12 May 2016, a notice of amended assessment was issued to Mr Zhang which recorded him as having a taxation liability of $1,189,655.51 for the 2003 income year. That amount is well in excess of the amount the subject of the garnishee notice, being $391,735.78.

59    Mr Zhang also took the Court to what he considered to be anomalies in other statements which were, in his submission, incapable of explanation. Again, however, there is no evidence as to the circumstances in which those entries were made or the reasons why they were recorded by the relevant ATO officer. Whilst various explanations might be posited, it is not possible to determine with any certainty why the entries were made. In some instances, they appear to relate to the AAT decision concerning Mr Zhang’s taxation liability and steps subsequently taken by the Commissioner to reduce his recorded indebtedness. Whilst that may be the most likely explanation, in the absence of any satisfactory evidence, it is merely speculation.

60    Mr Zhang also sought to rely upon allegedly unreliable entries in Siebel, a software used by the ATO to, inter alia, record notes about individuals in relation to their taxation affairs. The entries came to Mr Zhang’s attention when the Commissioner delivered documents to the Court after his application for review was filed. Despite there being no explanation of how the records were maintained, or of how entries were made, Mr Zhang nevertheless alleged that they were unreliable.

61    The first allegedly unreliable entry occurred on 29 February 2024 at 3:16:13 pm. Mr Zhang made no submissions as to its contents; rather, he referred to the fact that the subsequent entry appears to have been made at 3:17:28 pm on that same day. He submitted that an ATO officer could not possibly have typed the entry, which comprised more than 200 words, in the one minute and fifteen seconds before the subsequent entry. There is much speculation in this assertion. In the first instance, it assumes that the timestamp of an entry is generated upon its commencement, as opposed to its completion. Second, it assumes that the entries are typed into the system as opposed to being copied from elsewhere. Third, it further assumes that it was the same person who posted the entries, as opposed to them being posted by different officers. In the absence of any context or guidance as to how entries are made into Siebel, it is not possible to draw any conclusions as to whether the entries in question give rise to any grounds for suspicion. It should also be noted that Mr Zhang did not suggest that any of the information recorded in Siebel was incorrect in any relevant manner.

62    The second Siebel entry to which Mr Zhang referred was a note made at 9:00 am on 23 April 2024, which stated that the garnishee notice had been issued. He submitted that this note is inconsistent with another notation which indicated that the notice was not issued until 3:00 pm on that day. Again, however, the circumstances of the notations are not known, and it is not possible to draw any inference from them. Moreover, it is not self-evident that an incorrect notation about the precise time at which a garnishee notice is issued renders it invalid.

63    Mr Zhang made numerous criticisms of other Siebel entries, but they amount to little more than expressions of his disagreement with them, or indications that he was unable to understand the events and decisions they describe. Taken at their highest, his assertions do not establish, or even suggest, the existence of any inappropriate conduct by any ATO officers.

64    Ultimately, whilst the Court was taken to an array of documents, nothing relied upon by Mr Zhang lent any support to a suggestion of wrongdoing by any officer in the ATO. To the contrary, all that can be discerned is that the relevant ATO officers recognised that Mr Zhang had an asset which the Commissioner might pursue to discharge part of his taxation liability. Upon that realisation, they adjusted the internal accounts so that the outstanding indebtedness, which had previously been treated as uneconomical to pursue, was again recorded for recovery purposes. Far from suggesting any misconduct, the documents reveal that those responsible for the recovery of taxation liabilities undertook the steps necessary to fulfil their functions.

65    It follows that, even if some allegation of fraud or misfeasance in public office had been properly raised by Mr Zhang, the material on which he relied did not support it in any way.

Other matters

66    The foregoing is sufficient to dispose of the primary submissions advanced by Mr Zhang on this appeal. Nevertheless, other matters were also raised in his Notice of Appeal and written submissions. They are considered in the following paragraphs.

The missing ADJR references

67    The third ground of appeal purports to identify an error in the primary judge treating as fatal the absence of references to particular subsections of the ADJR Act, and the absence of particulars of fraud. The allegations made in that respect are unsustainable and are not consistent with the manner in which the primary judge approached the issue. Her Honour, at PJ [52] – [57], appropriately addressed the claims set out in the originating application at their highest, and considered the relevant sections of the ADJR Act. There is nothing in the reasons which suggests that she proceeded on the basis that the absence of a reference to any relevant subsection prevented consideration of the amenability to judicial review of the decision to re-raise the relevant debt. To the contrary, her Honour adopted the orthodox approach and considered whether the decision was within the scope of ss 3(1), 5 and 6 of the ADJR Act.

The primary judge’s treatment of the alleged tort of misfeasance in public office

68    By the fourth ground of appeal, Mr Zhang alleges that the primary judge erred by treating his allegation of misfeasance in public office as a standalone claim, rather than as underpinning his other allegations. There was, however, no error in the way in which the primary judge dealt with that issue.

69    Critically, Mr Zhang indicated to the primary judge that he was advancing a claim for the tort of misfeasance in public office. Indeed, his written submissions contained a heading which read, “Tort of Misfeasance in Public Office”, and his submissions alleged that such a tort had been committed. It was appropriate for the primary judge to treat the allegation in the manner in which it was advanced – namely, as a separate contention – and Mr Zhang did not explain how the alleged tort was relevant to the question of whether the impugned decisions were voidable for a reason identified in the ADJR Act. In any event, the tort allegation was merely a different characterisation of Mr Zhang’s underlying claims of misconduct which, as has been demonstrated, were not sustainable.

Dealing with the separate decisions individually

70    Contrary to the sixth ground of appeal, the primary judge did not err by dealing separately with the two decisions of which Mr Zhang complained. It was apparent, on the face of his application, that he sought relief in relation to each decision separately and advanced separate grounds in relation to each. In respect of the decision to re-raise his taxation liability, his principal concern appeared to be that the Commissioner was prevented from recovering the debt by reason of the operation of the Limitation Act. That was misguided for the reasons given by the primary judge.

71    Mr Zhang also suggested that the primary judge should have dealt with the decision to re-raise his indebtedness as conduct preparatory to the making of the decision to issue the garnishee notice. However, that is precisely what the primary judge did. Her Honour specifically addressed s 3(5) of the ADJR Act and noted (at PJ [41]) that conduct engaged in for the purpose of making a decision included the doing of any act or thing preparatory to the decision. Subsequently, she concluded that the decision to re-raise Mr Zhang’s taxation liability was only for the purposes of accounting, and therefore not conduct which could be described as being preparatory to the making of a decision to issue the garnishee notice: PJ [57]. So much can be accepted and there were no substantial submissions made against that conclusion. The re-raising of the debt was not required for the purpose of issuing the garnishee notice, nor was it a prerequisite. It also did not advance the making of the decision and was not a procedural or administrative step undertaken in a way connected with the issuing of the notice. Accordingly, it is sufficiently clear that it was done merely for internal accounting purposes and, as such, was not within the scope of s 3(5) of the ADJR Act.

The Commissioner’s entitlement to make a reassessment for the 2003 income year

72    In submissions before this Court, Mr Zhang returned to his initial disputations with the Commissioner and the reassessments of his taxation liabilities following the audit in 2009. The core of his concern was the allegation that the Commissioner had relied upon false documents to establish fraud or evasion, with the effect that he had an additional period in which to undertake a reassessment. However, the difficulty with this submission is that Mr Zhang did not attempt to identify how the Commissioner relied upon fraud or evasion in this respect or why he was not entitled to do so.

73    Further, and in any event, Mr Zhang does not appear to challenge the primary judge’s finding that, on 12 May 2016, the Commissioner had issued a third assessment in relation to the 2003 income year, which assessed his taxation liability at $1,189,655.51. That finding appears at PJ [15]:

[15]    On 12 May 2016, the respondent issued a notice of amended assessment for the period ending 30 June 2003, which gave effect to the AAT’s decision, and reduced the applicant’s taxable income to $2,558,033 and the tax on taxable income to $1,189,655.51.

74    In his submissions on appeal, Mr Zhang claimed that it was part of his case below that the third assessment was “never issued”. This is a somewhat unusual submission, particularly since the Appeal Book included a document entitled “Notice of amended assessment – year ended 30 June 2003” and dated 12 May 2016, which identified Mr Zhang’s taxation liability for the 2003 income year as $1,189,655.51.

75    Later in his submissions, it appeared that Mr Zhang accepted that the notice was issued but instead contended that it was wrong. In this regard, he submitted that:

MR ZHANG: And then they issued a second notice. Those two notice represent in the total all appellant ..... account provided by the respondent. There’s no argument on that time. The argument is that were wrong, but rather than the paperwork itself. And then the Commissioner removed like that under 12 – 2012 – 2013, sorry. Respondent said, “Look, it’s not pursued like that”. They just removed ..... total, make a – the account balance become zero after that. And then later time, when they remove the debt, the first question come out, they said, “Uneconomic - - -”…

76    As best as can be ascertained, it would seem that Mr Zhang contends that the amount in the third assessment was incorrect because, prior to that time, the Commissioner had reduced his account to zero on the basis that it was uneconomic to seek recovery from him. In other words, his concern appears to be that, because the Commissioner had determined not to pursue recovery, he was unable to later assert the existence of a debt. There is no foundation for that argument. Indeed, by a letter from the ATO dated 22 July 2016, Mr Zhang was explicitly informed that his tax liability remained despite the Commissioner’s decision to not pursue recovery at the time, and that recovery action may be recommenced in the future.

77    Another submission advanced by Mr Zhang was that the third assessment was not issued on 12 May 2016, but was created sometime in 2022, after the Commissioner determined to pursue recovery action against him. That is another baseless allegation.

78    Ultimately, the insurmountable difficulty for Mr Zhang is that his taxation liability for the 2003 income year has been assessed at $1,189,655.51, and he has not sought to challenge that assessment by way of Part IVC proceedings. Further, the existence of that assessment and consequent taxation liability were factual findings made by the primary judge, in respect of which no challenge appears to be advanced on appeal. Accordingly, he is unable to advance arguments before this Court that the third assessment was never made.

79    Though Mr Zhang claimed from time-to-time throughout the hearing that he was not now challenging the third assessment, he effectively submitted that the Court should go behind it and consider the Commissioner’s internal records. That is also something that the Court cannot do. Section 350-10 of Sch 1 of the TAA53 provides that a notice of assessment is conclusive evidence that the assessment was properly made and, other than in proceedings under Part IVC of the TAA53, that the amounts and particulars of the assessment are correct.

80    In Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at 157 [24] (Futuris), Gummow, Hayne, Heydon and Crennan JJ said of s 175 of the Income Tax Assessment Act 1936 (Cth) (ITAA36), being the progenitor of s 350-10 of the TAA53:

24    Section 175 must be read with ss 175A and 177(1). If that be done, the result is that the validity of an assessment is not affected by failure to comply with any provision of the Act, but a dissatisfied taxpayer may object to the assessment in the manner set out in Pt IVC of the Administration Act; in review or appeal proceedings under Pt IVC the amount and all the particulars of the assessment may be challenged by the taxpayer but with the burden of proof provided in ss 14ZZK and 14ZZO of the Administration Act. Where s 175 applies, errors in the process of assessment do not go to jurisdiction and so do not attract the remedy of a constitutional writ under s 75(v) of the Constitution or under s 39B of the Judiciary Act.

81    It is not doubted that there are no relevant Part IVC proceedings on foot by Mr Zhang in relation to the third assessment of his taxation liability in the 2003 income year, and that the time for commencing them in a regular fashion has well passed.

82    Granted, as was contemplated in Futuris at 166 – 167 [66], there may be proceedings which can be brought pursuant to s 39B of the Judiciary Act 1903 (Cth), in which the setting aside of an assessment can be ordered consequent upon corruption or deliberate maladministration, and which are unaffected by the operation of s 175 of the ITAA36 (or s 350-10 of the TAA53). However, the difficulty here is that no such application has been expressly made by Mr Zhang, and no legitimate case of corruption or maladministration can be understood as arising from the application.

83    It follows that there can be no doubt as to Mr Zhang’s indebtedness in respect of the 2003 income year, in an amount vastly in excess of the amount recovered via the garnishee notice. In those circumstances, nothing in his submissions provided any basis on which to conclude that the Commissioner was not entitled to seek to recover the outstanding taxation liability.

Conclusion and costs

84    It follows that no error was shown in the primary judge’s dismissal of Mr Zhang’s application. His application did not raise any allegations of fraud or maladministration of the nature which he seeks to agitate, and her Honour rightly refused to deal with those extraneous matters. In any event, Mr Zhang was unable to demonstrate that the allegations bore any substance.

85    In the result, the appeal must be dismissed. It is appropriate that Mr Zhang pay the Commissioner’s costs of the appeal, to be taxed or as agreed.

86    For the avoidance of doubt, the Court has not taken into account the “supplementary written submissions” which the appellant attempted to file by email after the hearing, on 28 August 2026. The appellant was not given leave to file any such submissions.

Associate:

Dated:    22 October 2026