FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Donoghue [2015] FCA 337

THE COURT ORDERS THAT:

1.    Orders 1 to 4 inclusive and 6 made 24 March 2015 in QUD 353 of 2012 be stayed pending the hearing and determination of this appeal, or until the appeal is discontinued.

2.    Costs of the application be costs in the cause.

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

THE COURT ORDERS THAT:

1.    Orders 1 to 3 made 17 March 2015 and orders 1 to 3 inclusive made 24 March 2015 in QUD 360 of 2013 be stayed pending the hearing and determination of this appeal, or until the appeal is discontinued.

2.    Costs of the application be costs in the cause.

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

THE COURT ORDERS THAT:

1.    Order 1 made 17 March 2015 and order 1 made 24 March 2015 in QUD 727 of 2013 be stayed pending the hearing and determination of this appeal, or until the appeal is discontinued.

2.    Costs of the application be costs in the cause.

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

REASONS FOR JUDGMENT

Introduction

1    These are applications for a stay of certain orders made by a judge of this Court in each of three proceedings (QUD 353 of 2012; QUD 360 of 2013 and QUD 727 of 2013) pending the hearing and determination of appeals (QUD 110 of 2015; QUD 128 of 2015 and QUD 129 of 2015) filed by the appellant (“Commissioner’) on 1 April 2015, or until the relevant appeal is discontinued.

2    The relevant orders were made at the time his Honour published his reasons for judgment in two of those proceedings (QUD 353 of 2012 and QUD 360 of 2013) on 17 March 2015, and subsequently on 24 March 2015 to correct what his Honour described as “a mismatch which has inadvertently occurred in the orders made in proceedings QUD 353 of 2012 and 360 of 2013”.

3    I heard these applications on Thursday, 2 April 2015 and at the conclusion of the hearing granted a stay of the relevant orders until 5:00 pm on Monday, 20 April 2015 on which day I indicated I would either hand down final judgment on the application or extend the stay pending further consideration of the issues raised on the hearing.

4    As I have concluded my consideration of these issues, I am now in a position to hand down final judgment on the application and these are my reasons for judgment.

Background

5    In his reasons for judgment of 17 March 2015, the primary judge found that the Commissioner’s process of assessment of the respondent to income tax for the years ended 30 June 2005 to 2007 inclusive was “affected by conscious maladministration” and, based on what was said by Gummow, Hayne, Heydon and Crennan JJ in Commissioner of Taxation of the Commonwealth of Australia v Futuris Corporation Limited (2008) 237 CLR 146 at [25], concluded that such infection “in the process of assessment does not produce an assessment to which s 175 of the [Income Tax Assessment Act 1936 (Cth )] applies” (at [145]). His Honour continued at [145]–[146]:

[145]    … The assessments concerned must therefore be quashed. It necessarily follows that separate penalty assessment dependent upon the primary tax assessments must also be quashed …

[146]    …

[147]    A number of consequences flow both from the invalidity of the assessments in respect of the 2005, 2006 and 2007 income years and the related penalty assessment and the other conclusions reached. In the absence of these assessments, there is nothing to support either the recovery proceedings or the departure prohibition order based on the taxation liability grounded in these assessments. Further, the privileged material must either be returned to Mr Donoghue or destroyed with the occurrence of one or the other being verified by affidavit …

6    In proceeding QUD 353 of 2012, his Honour made the following orders on 24 March 2015:

1.    By 4.00 pm on 7 April 2015, the respondent deliver up to the applicant’s solicitors all hard copy documents (including any and all hard copies thereof), relating to the applicant, any individual, corporation or trust referred to in the ATO Reasons for Decision dated 21 December 2011, or any entity in relation to which the applicant is a related entity within the meaning of section 9 of the Corporations Act 2001 (Cth) provided to the respondent or any employee, agent or delegate of the respondent by Mr Simeon Moore.

2.    By 4.00 pm on 7 April 2015, the respondent cause to be destroyed:

a)    by permanent deletion of all electronic copies of the documents referred to in order 1; and

b)    by physical destruction of all hard drives, flash drives or other form of storage of electronic media,

provided by Mr Simeon Moore to the respondent or any employee, agent or delegate of the respondent.

3.    By 4.00 pm on 7 April 2015, the respondent cause to be destroyed by physical destruction of hard copies and permanent deletion of electronic files containing all documents recording or evidencing consideration by the respondent or any employee, agent or delegate of the respondent of any of documents (or information contained in the documents) referred to in order 1 or 2.

4.    By 4.00 pm on 14 April 2015, the respondent file and serve on the applicant’s solicitors an affidavit sworn by a delegate of the respondent who is charged with overseeing the compliance with orders 2 and 3 above, confirming that the destruction of hard copy and electronic documents in accordance with orders 2 and 3 above has been carried out and is complete.

5.    The respondent is hereby permanently restrained, by himself or through any employee, agent or delegate of the respondent, from making any future use, or taking any future action on the basis of any documents (including copies and electronic versions thereof) relating to the applicant, or any entity in relation to which the applicant is a related entity within the meaning of s 9 of the Corporations Act 2001 (Cth), provided by Simeon Moore to the respondent or any employee, agent or delegate of the respondent, including (without limitation) for the purpose of:

A.    making, amending or enforcing an assessment of the taxable income of any taxpayer; or

B.    exercising any power under s 263 or s 264 of the Income Tax Assessment Act 1936 (Cth) or s 353-10 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in respect of any person.

6.    The respondent pay the applicant’s costs of and incidental to the proceedings, including reserved costs and those relating to the hearing on 24 March 2015 for the purpose of considering issues as to consequential orders and costs.

7    The Commissioner seeks a stay in respect of orders 1 to 4 inclusive and order 6. The respondent does not oppose the grant of a stay in respect of orders 1 to 4 inclusive, but does oppose the grant of a stay in respect of the costs order in order 6.

8    In proceeding QUD 360 of 2013, his Honour made the following declarations and orders on 17 March 2015:

THE COURT DECLARES THAT:

1.    Each of the following purported income tax assessments made by the respondent (the purported income tax assessments) is invalid and of no force and effect:

(a)    income tax assessment in respect of the applicant for the 2005 income year, notified to the applicant by notice of assessment dated 21 December 2011;

(b)    income tax assessment in respect of the applicant for the 2006 income year, notified to the applicant by notice of assessment dated 21 December 2011;

(c)    income tax assessment in respect of the applicant for the 2007 income year, notified to the applicant by notice of assessment dated 21 December 2011.

2.    The purported penalty tax assessment made by the respondent in respect of penalty amounts for the income years 30 June 2005, 30 June 2006 and 30 June 2007 and notified to the applicant by notice dated 21 December 2011 (the purported penalty tax assessment) is invalid and of no force and effect.

THE COURT ORDERS THAT:

1.    Each of the purported income tax assessments is quashed.

2.    The purported penalty tax assessment is quashed.

3.    Consequentially, the Departure Prohibition Order made by the respondent on 21 December 2011 in respect of the applicant is quashed.

and the following orders on 24 March 2015:

1.    By 4.00 pm on 7 April 2015, the respondent deliver up to the applicant’s solicitors an executed Form 14 General Request for removal of caveat number 714443185 together with original bill of mortgage dated 18 April, 2012.

2.    By 4.00 pm on 7 April 2015, the respondent:

(a)    withdraw any and all garnishee notices issued by the respondent to third parties in respect of the income tax assessments; and

(b)    provide the applicant’s solicitors with written confirmation of the respondent having withdrawn all such garnishee notices.

3.    The respondent pay the applicant’s costs of and incidental to the proceedings, including reserved costs and those relating to the hearing on 24 March 2015 for the purpose of considering issues as to consequential orders and costs.

9    By his application, the Commissioner seeks a stay in respect of orders 1 to 3 inclusive made on 17 March 2015 and in respect of orders 1 to 3 inclusive made on 24 March 2015. The respondent opposes the grant of a stay in respect of all such orders.

10    In proceeding QUD 727 of 2013, his Honour made an order (order 1) dismissing the proceeding on 17 March 2015 and a costs order (order 1) in favour of the respondent on 24 March 2015.

11    By his application, the Commissioner seeks a stay in respect of both orders and the respondent opposes the grant of such a stay.

Evidence on the Hearing of the Applications

12    In support of his application for a stay the Commissioner relied on two affidavits sworn by Mr Martin Edward Hanson of the Australian Government Solicitor’s office in Brisbane, the first sworn 24 March 2015 (Ex 1) and the second sworn 1 April 2015 (Ex 2).

13    In Ex 1 Mr Hanson set out a table of the amounts of tax assessed to the respondent for the years ended 30 June 2005 to 2007 inclusive, aggregating $9,417,090.12. Mr Hanson subsequently deposed:

8.    I have been advised by Yi Deng an officer of the Commissioner of Taxation, who has access to the records of the Commissioner of Taxation concerning Mr Donoghue’s taxation debts, and believe that no sum has been received by the Commissioner in payment of the tax liability created by the Assessments.

9.    Mr Deng has also advised me and I believe that the current Statement of Account shows an outstanding liability by Mr Donoghue in the amount of $36,699,659.03.

10.    …

Departure Prohibition Order

11.    The investigations made by the Commissioner demonstrated that the Respondent was a beneficiary of the Donoghue Family Trust, the Trustee being his wife Sandra Lynne Donoghue. The principal asset of that Trust were residential properties at 56 Langside Road, Hamilton.

12.    The Respondent had no assets otherwise within the jurisdiction.

13.    Accordingly, the Commissioner of Taxation issued a DPO pursuant to subsection 14S(1) of the Taxation Administration Act 1953 (TAA) prohibiting the Respondent’s departure from Australia for a foreign country without discharging his tax liability or making satisfactory arrangements for its discharge.

14.    The Commissioner has on various occasions issued Departure Authorisation Certificates (DACs) pursuant to subsection 14U(1) of the TAA authorising the temporary departure of Mr Donoghue from Australia.

15.    Currently, Mr Donoghue is absent from Australia pursuant to the DAC which requires his return on 6 September 2015 or such other date as stipulated.

16.    In order to facilitate the issue of the DAC, Sandra Donoghue in her capacity as Trustee of the Donoghue Family Trust granted a Mortgage over the Hamilton residential property to secure payment of the outstanding income tax liability. Mrs Donoghue further gave an undertaking not to draw down further monies from the Commonwealth Bank which is the registered first mortgagee of the property and that no default would occur under the Commonwealth Bank mortgage.

17.    The mortgage granted by Mrs Donoghue was unregistered and the Commonwealth subsequently lodged a Caveat to protect its interest as mortgagee.

14    With respect to those orders he opposed a stay being granted, the respondent relied on three affidavits, the first sworn by Mr Ashley John Tiplady on 1 April 2015 (Ex A), the second affirmed by Ms Sandra Lynne Donoghue, the respondent’s estranged wife, on the same date (Ex B) and a third affirmed by Ms Donoghue on the same date (Ex C).

15    By Ex B, Ms Donoghue deposed:

1.    I am the estranged wife of Mr Garry Donoghue, the Respondent in these appeal proceedings. I make this affidavit in support of his opposition to the interlocutory application filed by the Appellant to stay the orders of His Honour Justice Logan dated 17 March, 2015 and 24 March, 2015.

2.    I married Mr Donoghue in 1985, and we had a daughter, Ms Alexandria Donoghue, in 1988. Mr Donoghue and I remain legally married, although we separated in or about 1997.

3.    I reside at 52-54 Langside Road, Hamilton, in the State of Queensland (“Langside Road”) and have done so since my return to Australia in or about late 1996 or early 1997. My daughter, Alex, lives with me at Langside Road.

4.    I am the trustee of The Donoghue Family Trust (“the Trust”), a trust settled in Australia in 1996. A true copy of the trust deed for the Trust is annexed to this affidavit and marked “SLD1”.

5.    Mr Donoghue was formerly a beneficiary of the Trust, however in 1999 he was removed as a beneficiary of the Trust. A true copy of the resolution removing Mr Donoghue as a beneficiary of the Trust is annexed to this affidavit and marked “SLD2”.

6.    Langside Road was purchased on behalf of the Trust in approximately 1997. A true copy of the current title searches for Langside Road, as provided to me by Russells at my request, is annexed to this affidavit and marked “SLD3”.

7.    The current title search for Langside Road shows that the registered owner of the property is me, as trustee under instrument 701778643 which is, I understand, a copy of the trust deed for Trust. A true copy of dealing number 701778643, obtained by Russells from the Queensland Land Registry at my request, is annexed to this affidavit and marked “SLD1”.

8.    In approximately January, 2012, Mr Donoghue asked me in my capacity as trustee of the Trust to provide security to the Australian Taxation Office (ATO) to permit him to leave Australia.

9.    At this time, the property market was poor and I was not intending to sell Langside Road in the immediate future. Therefore, as trustee for the Trust, I agreed to provide that security and did so by way of an unregistered bill of mortgage over Langside Road (“the Mortgage”). A true copy of the Mortgage is annexed to this affidavit and marked “SLD4”. I was aware that instead of registering the Mortgage the ATO would lodge a caveat over Langside Road.

10.    It was my understanding that the Mortgage would be used in some way to allow Mr Donoghue to leave the country to return to his home in London, and continue his business affairs.

11.    The ATO registered a caveat on the Langside Road title recording the interest of the unregistered Mortgage (“the Caveat”). A true copy of the registered caveat, obtained by Russells from the Queensland Land Registry at my request, is annexed to this affidavit and marked “SLD5”.

12.    Langside Road is a large prestige property with 5 bedrooms located on a double block of land on the top of Hamilton Hill. It has uninterrupted city views. Prior to the Global Financial Crisis it had been valued in the vicinity of $10 million to $12 million. I do not have the need for such a large house. Providing I was able to obtain an acceptable price it is my intention to market and sell the property so that I could downsize to a smaller and more manageable sized home.

13.    The Brisbane property market has improved across the last 18 months and I am considering placing Langside Road on the market to test what sale price might be achieved. I have been delayed in taking such a step given the Caveat and the Mortgage. I was concerned that should I market Langside Road whilst the Caveat was in place potential purchasers may form the view that it was a forced sale (which it would not be) and price their offers accordingly. This concern and the then depressed nature of the Brisbane property market meant that I was not minded to sell Langside Road.

14.    Those circumstances have now changed give the improvement to the Brisbane property market and changes to my lifestyle and family situation as the years pass.

15.    With these factors in mind, I would like to be free to deal with Langside Road, free from the ATO caveat and the Mortgage, as and when I see fit.

16.    There is a first registered mortgage registered on the title for Langside Road which secures a debt to the Commonwealth Bank of Australia in the sum of approximately $5 million. In my capacity as trustee of the Trust I am currently making interest only payments toward that loan. The interest only payments that are made to Commonwealth Bank of Australia are approximately $24,000.00 per month.

17.    All the facts and circumstances deposed to are within my own knowledge save such as are deposed to from information only and my means of knowledge and sources of information appear on the face of this my Affidavit.

16    By Ex C, Ms Donoghue deposed:

I.    I make this affidavit in support of Mr Donoghue’s opposition to the interlocutory application filed by the Commissioner of Taxation to stay the orders of His Honour Justice Logan dated 17 March, 2015 and 24 March, 2015. In making this affidavit I also refer to, and rely upon, the affidavit that I affirmed earlier today and that has already been filed in this proceeding (“my first affidavit”).

2.    In or about January, 2012, I was informed as the trustee of The Donoghue Family Trust (“the Trust”) that the Australian Taxation Office (“the ATO”) had selected the Trust for audit. On or about 13 November, 2012, the ATO sent me a letter, via my accountants, stating that the audit of the Trust had been finalised with no further income tax assessments having been made and issued to the Trust. A true and correct copy of the audit finalisation letter dated November, 2012, is annexed to this affidavit at “SLD6”.

3.    In my first affidavit I set out the amount of the monthly loan repayments due to the Commonwealth Bank of Australia in respect of the debt secured by the first registered mortgage on Langside Road. In addition to the monthly loan repayments the Trust is also required to meet additional outgoings and expenses relating to Langside Road, including:

(a)    home and contents insurance payments in the sum of $875.00 per month ($10,500 per year);

(b)    Electricity bills in the sum of approximately $2,500.00 per quarter ($10,000 per year);

(c)    Brisbane City Council rates in the sum of approximately $2,500.00 per quarter ($10,000 per year); and

(d)    Water and utilities bills in the sum of $1,000.00 per quarter ($4,000.00 per year).

4.    I am currently struggling to meet all of these payments and have recently sold my cars to ensure that I can pay my bills.

5.    Langside Road is a large property and requires regular maintenance and upkeep. I can not afford to employ anyone to assist me with this maintenance and as a result the house is falling into disrepair. Where possible I am carrying out maintenance tasks on my own.

6.    However, there are some maintenance tasks which I cannot carry out on my own and which I need to fund. Currently. the ceiling in my living room is leaking when it rains. I have been told by my insurance company that they will repair the internal leak but only after I repair the problem the [sic] external roofing structure which has apparently caused the leak. I have obtained a quote to fix the problem with the roof at an amount of $4,500.00. I am currently attempting to source funds to pay this repair cost.

7.    The reasons above are further explanation of why I would like to downsize from Langside Road to a much smaller home which is cheaper and easier to maintain.

Principles Guiding the Exercise of the Court’s Discretion

17    Rule 36.08 of the Federal Court Rules 2011 relevantly provides:

(1)    An appeal does not:

(a)    operate as a stay of execution or a stay of any proceedings under the judgment subject to the appeal; or

(b)    invalidate any proceedings already taken.

(2)    However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined.

(3)    …

18    The equivalent rule to r 36.08 was O 52 r 17 of the former Rules, the language of which was described by a Full Court of this Court as suggesting “no limitation upon a broad discretion inhering in the Court”: Powerflex Services Pty Ltd & Ors v Data Access Corporation (1996) 67 FCR 65 at 66C.

19    The starting point is that prima facie a successful party is entitled to the benefit or fruits of the judgment obtained and is entitled to commence with the presumption that the judgment is correct. On the other hand, as Mahoney JA said in Re Middle Harbour Investments Ltd (In Liq) (unreported, Court of Appeal, NSW, 15 December 1976) with the concurrences of Moffitt P and Glass JA:

These are not matters of rigid principle and a court asked to grant a stay will consider each case upon its merits, but where an applicant for a stay has not demonstrated an appropriate case but has left the situation in a state of speculation or of mere argument, weight must be given to the fact that the judgment below has been in favour of the other party.

This particular passage was referred to with apparent approval in Powerflex Services at 66E.

20    The threshold in this Court would not seem to require some “exceptional” or “special” reason for the stay, merely a requirement on the part of the applicant for a stay pending the determination of an appeal to demonstrate “a reason or an appropriate case to warrant the exercise of discretion in his favour”: Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 694; Powerflex Services at 66C–D.

21    While the prospect that execution of a judgment appealed from would render any appeal nugatory is usually regarded as a substantial factor in favour of a stay (Maher v Commonwealth Bank of Australia [2008] VSCA 122 at [24]–[26] per Dodds-Streeton JA with Redlich JA agreeing, it is not a necessary condition of the exercise of the jurisdiction to grant a stay: Federal Commissioner of Taxation v Multiflex Pty Ltd (2011) 82 ATR 724 at [10].

The Respective Submissions

22    For the Commissioner it was contended that there were at least three reasons why a stay should be granted.

23    First, if the Commissioner were to be successful on appeal, the appeal would be rendered largely nugatory. The current Departure Prohibition Order (“DPO”) would be lost; the Departure Authorisation Certificate (“DAC”) and the security held by the Commissioner under the DAC would be lost; no further DPO could be made unless the respondent returned to Australia, but there would be nothing to compel him to return; and the Commissioner might have assessments that he could not enforce in any practical way.

24    Secondly, the respondent would suffer no corresponding prejudice from a stay. The respondent is overseas and under the current DAC can remain overseas until 6 September 2015. His liberty would not be affected.

25    Thirdly, the grounds of appeal are arguable. It is said that the reasoning of the primary judge is attended with doubt in at least two respects.

(1)    It attributes to the words “conscious maladministration”, a meaning far wider than anything hitherto held in case law, reference being made to Denlay v Federal Commissioner of Taxation (2011) 193 FCR 412 at [78].

(2)    The primary judge’s reasoning is inconsistent with authorities that establish that one cannot demonstrate misfeasance by aggregating the action and states of mind of different persons at different times, referring to Moder & Anor v Commonwealth of Australia (2012) 261 FLR 396 at [73].

26    The respondent’s submissions opposing the Commissioner’s application for a stay can be summarised as follows:

(1)    Should a stay not be granted and the Commissioner succeeds in his appeal, he could simply issue fresh assessments.

(2)    It is common ground that the respondent owns no assets in the jurisdiction; there is little difference to the Commissioner whether he has the benefits of assessments issued on 21 December 2011 or a date in 2015 upon the conclusion of a successful appeal.

(3)    The bill of mortgage over the Hamilton property in which Ms Sandra Donoghue resides does not secure in any way payment of the respondent’s “outstanding income tax Liability”. In these circumstances, the absence of a stay will not render any appeal nugatory.

(4)    There is evidence that the existence of the caveat over the Hamilton property is casting a severe burden on the respondent’s estranged wife, in that she cannot deal with the property without the caveat being removed. She wishes to deal with it, as it is no longer an appropriate property for her to reside in and she wishes to downsize. In the meantime, she has been restricted from doing so and has been required to maintain a monthly mortgage repayment in the vicinity of $25,000, quite apart from the other significant holding expenses for the property.

Consideration

27    My review of the terms of the bill of mortgage given by Ms Sandra Donoghue, as trustee of The Donoghue Family Trust, over the Hamilton property, to the Commonwealth as represented by the Commissioner of Taxation, as put in evidence through Mr Hanson as part of “MEH4” to Ex 1, leads me to the firm conclusion that it does not secure payment of any money obligation of the respondent, either to the Commissioner or anyone else. Moreover, nothing in the letter sent by the Deputy Commissioner of Taxation to NYST lawyers dated 12 April 2012 (also part of “MEH4” to Ex 1) called for the bill of mortgage to secure any such liability of the respondent to the Commissioner. On the other hand, it may be inferred from all relevant circumstances at the time the mortgage was given, that that was the Deputy Commissioner’s expectation as the quid pro quo for issuing the DAC. The bill of mortgage was obviously never closely scrutinised by anyone with sufficient expertise to ensure that this expectation was satisfied.

28    During the course of argument, I put to counsel for the respondent that the fact that the Commissioner could issue fresh assessments if he succeeds in his appeals was no answer in support of his opposition to a stay, because the interest accrued on the existing assessments would be lost. His response was, and this must be correct, if the Commissioner was successful in his appeals, the setting aside of the order quashing the assessments (order 1 made on 17 March 2015 in proceeding QUD 360 of 2013) would leave the existing assessments on foot; in other words, it would not be necessary for the Commissioner to issue fresh assessments.

29    I am satisfied that the issues which the Commissioner wishes to raise as grounds of appeal (see [25] above) have a substantive foundation sufficient to enable arguments to be articulated which are reasonably arguable in the sense of being as likely to be accepted by an appellate court as not being accepted. This is an area, as demonstrated by the different decisions of the Full Court of this Court and the High Court of Australia in Futuris where: “Different minds may come to different conclusions with equal propriety”: Heather v P E Consulting Group Ltd [1973] Ch 189 at 216 per Lord Denning.

30    If the appeals are upheld and the order to quash the assessments is set aside, the respondent will be indebted to the Commonwealth in excess of $37 million. This is of course, subject to the respondent’s Pt IVC appeal (QUD 326 of 2013), which has been adjourned to a date to be fixed.

31    The respondent has no assets in the jurisdiction against which recourse might be had to satisfy the relevant assessments, if the Commissioner’s appeals succeed.

32    Having regard to the matters referred to in [27] to [31] above, I have come to the firm conclusion that, subject to one particular order, the Court should grant a stay in respect of all orders for which the Commissioner seeks a stay. The one order I have had some doubt about is order 1 made on 24 March 2015 in proceeding QUD 360 of 2013, namely:

By 4.00 pm on 7 April 2015, the respondent deliver up to the applicant’s solicitors an executed Form 14 General Request for removal of caveat number 714443185 together with original bill of mortgage dated 18 April, 2012.

33    As indicated earlier, I am of the view that the bill of mortgage does not secure any money obligation of the respondent to the Commissioner and the caveat lodged in reliance on it does nothing more than frustrate Ms Sandra Donoghue’s desire to sell the Hamilton property and rid herself of the ongoing obligations of mortgage repayments and expenses of upkeep of the property. Arguably, the Commissioner’s position will not be prejudiced if this particular order is not stayed, but the orders to quash the assessments and the DPO are stayed.

34    Upon reflection, I have also come to the view, not without some doubt, that this order should also be stayed. If Ms Sandra Donoghue wishes to sell the Hamilton property and downsize between now and the contemplated dates of the hearing of the appeals in early August this year, then it is open to her to approach the Commissioner or his delegate and seek delivery up of the existing unregistered mortgage and a withdrawal of the caveat. The terms upon which the Commissioner might be prepared to do this are matters for the Commissioner. They may include Ms Donoghue paying to the Commissioner some part of the proceeds of sale of the Hamilton property not required for her new home, but these are matters which can be better dealt with by direct negotiation between the parties than by the intervention of orders of the Court.

35    I therefore propose to make orders staying the orders sought by the Commissioner pending the hearing and determination of the appeals, or until the relevant appeal is discontinued.

Associate:    

Dated:    14 April 2015