FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Williams [2022] FCA 263

ORDERS

THE COURT ORDERS THAT:

1.    The application for interlocutory relief be returnable instanter.

FREEZING AND ANCILLARY ORDERS:

2.    Upon the Applicant giving the undertakings set out in Schedule A to each of the following annexures, freezing and ancillary orders be made:

(a)    against the First Respondent in the form of Annexure A to these orders; and

(b)    against the Second Respondent in the form of Annexure B to these orders.

3.    Until 6.00pm on the date fixed for the next case management hearing of this matter or further order of the Court, the Third Respondent must not register any dealings which affect the property known as 44 Brittanic Crescent, Paradise Point, Queensland 4216, being Lot 70 on Registered Plan 222332 in the State of Queensland (Title Reference 17320088).

SERVICE:

4.    Pursuant to rule 10.24 of the Federal Court Rules 2011 (Cth):

(i)    personal service of the Application on the First and Second Respondents be dispensed with; and

(ii)    the Applicant have leave to serve the Documents on the First and Second Respondents as follows:

A.    by leaving a copy of the Documents at 44 Brittanic Crescent, Paradise Point, Queensland 4216;

B.    by leaving a copy of the Documents at MKP Consulting & Co, Level 5, 219-223 Castlereagh St, Sydney NSW 2000;

C.    by emailing the Documents to spencerpibworth@aol.com;

D.    by emailing the Documents to spencerwilliams7@me.com.

5.    In this order, "Documents" means:

(i)    the originating application;

(ii)    the interlocutory application;

(iii)    the affidavit of Thomas Joseph Paino filed with the originating application and exhibit TJP-1;

(iv)    the Applicant's outline of submissions in support of the interlocutory application;

(v)    a transcript of the ex parte hearing, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court; and

(vi)    a copy of these orders.

6.    The time for service of the Documents is abridged and service is to be effected by 4.00pm on the third business day after the making of these orders.

7.    A direction that, upon the undertaking of the Applicant to provide a paper copy of the exhibit to any supporting affidavit within three business days of a request by a Respondent to do so, service of any exhibit may be effected by:

(i)    providing a copy on a USB drive; or

(ii)    making it available for download by web link.

Other matters

8.    The proceeding be listed for a case management hearing on a date to be fixed.

9.    The costs of this application be reserved.

10.    Liberty to apply on 24 hours’ notice.

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

ORDERS

THE COURT ORDERS THAT:

1.    The application for interlocutory relief be returnable instanter.

FREEZING AND ANCILLARY ORDERS:

2.    Upon the Applicant giving the undertakings set out in Schedule A to each of the following annexures, freezing and ancillary orders be made:

(a)    against the First Respondent in form of Annexure A to these orders.

(b)    against the Second Respondent in the form of Annexure B to these orders.

3.    Until 6.00pm on the date fixed for the next case management hearing of this matter, or further order of the Court, the Third Respondent must not register any dealings which affect the following properties:

(a)    the property known as 5 Chessington Court, Sandy Bay, Tasmania 7005 being Lot 5 on Sealed Plan 62800 in the State of Tasmania (Volume 62800 Folio 5); and

(b)    the property known as 3/479 Churchill Avenue, Sandy Bay, Tasmania 7005, being Lot 3 on Strata Plan 178426 in the State of Tasmania (Volume 178426 Folio 3).

4.    Until 6.00pm on the date fixed for the next case management hearing of this matter or further order of the Court, the Fourth Respondent must not register any dealings which affect the property known as 1521/1 Lakeview Rise Noosa Heads, Queensland 4567, being Lot 3 on Strata Plan 178426 in the State of Queensland (Title Reference 51219278).

SERVICE:

5.    Pursuant to rule 10.24 of the Federal Court Rules 2011 (Cth):

(a)    Personal service of the Application on the First and Second Respondents be dispensed with; and

(b)    The Applicant be granted leave to serve the Documents on the First and Second Respondent as follows:

(i)    by leaving a copy of the Documents at 5 Chessington Court, Sandy Bay, Tasmania 7005;

(ii)    by leaving a copy of the Documents at MKP Consulting & Co, Level 5, 219-223 Castlereagh St, Sydney NSW 2000;

(iii)    by emailing the documents to yuliana.halim@mkpassociates.com.au;

(iv)    by emailing the documents to simon@chessington.com.au.

6.    In this order, "Documents" means:

(i)    the originating application;

(ii)    the interlocutory application;

(iii)    the affidavit of Thomas Joseph Paino filed with the originating application and exhibit TJP-1;

(iv)    the Applicant's outline of submissions in support of the interlocutory application;

(v)    a transcript of the ex parte hearing, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court; and

(vi)    a copy of these orders.

7.    The time for service of the Documents is abridged and service is to be effected by 4.00pm on the third business day after the date of these orders.

8.    A direction that, upon the undertaking of the Applicant to provide a paper copy of the exhibit to any supporting affidavit within three business days of a request by a Respondent to do so, service of any exhibit may be effected by:

(i)    providing a copy on a USB drive; or

(ii)    making it available for download by web link.

Other matters

9.    The proceeding be listed for a case management hearing on a date to be fixed.

10.    The costs of this application be reserved.

11.    Liberty to apply on 24 hours’ notice.

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

Annexure A

Freezing Order

No.    QUD 79 of 2022

Federal Court of Australia

District Registry: Queensland

Division: General

Deputy Commissioner of Taxation

Applicant

Simon Farid and others named in the schedule

Respondents

PENAL NOTICE

TO: Simon Farid

This is a 'freezing order' made against you on 22 March 2022 by Justice Collier at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

1.    

2.    Subject to the next paragraph, this order has effect up to and including a date to be fixed by order of the Court ("the Return Date"), at which time and date there will be a further hearing in respect of this order before a judge of this Court.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

5.    

FREEZING OF ASSETS

6.    

7.    For the purposes of this order,

PROVISION OF INFORMATION

8.    Subject to paragraph 9, you must:

9.    

EXCEPTIONS TO THIS ORDER

10.    This order does not prohibit you from:

11.    You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.

12.    

COSTS

13.    The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENT

14.    Set off by banks

This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

15.    Bank withdrawals by the respondent

No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

16.    Persons outside Australia

17.    Assets located outside Australia

Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant.

18.    Notices under s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth)

Nothing in this order shall prevent any third party complying with the terms of a notice issued by the Commissioner of Taxation to the third party pursuant to section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in respect of any money which the third party may owe or may later owe to you.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

(1)    The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

(2)    As soon as practicable, the applicant will file and serve upon the respondent copies of:

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.

SCHEDULE B

AFFIDAVITS RELIED ON

NAME AND ADDRESS OF APPLICANT'S LAWYERS

The applicant's lawyers are:                     K&L Gates

Annexure B

Freezing Order

No.    QUD 79 of 2022

Federal Court of Australia

District Registry: Queensland

Division: General

Deputy Commissioner of Taxation

Applicant

Simon Farid and others named in the schedule

Respondents

PENAL NOTICE

TO: Penelope Jane Farid

This is a 'freezing order' made against you on 22 March 2022 by Justice Collier at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

1.    

2.    Subject to the next paragraph, this order has effect up to and including a date to be fixed by order of the Court ("the Return Date"), at which time and date there will be a further hearing in respect of this order before a judge of this Court.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

5.    

FREEZING OF ASSETS

6.    You must not in any way dispose of, deal with or diminish the value of the Property (or if the Property has already been sold when these orders are made, you must not in any way dispose of, deal with, diminish the value of, or remove from Australia, the net proceeds of sale of the Property).

7.    

COSTS

8.    The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENT

9.    Set off by banks

This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

10.    Bank withdrawals by the respondent

No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

11.    Notices under s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth)

Nothing in this order shall prevent any third party complying with the terms of a notice issued by the Commissioner of Taxation to the third party pursuant to section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in respect of any money which the third party may owe or may later owe to you.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

(1)    The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

(2)    As soon as practicable, the applicant will file and serve upon the respondent copies of:

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.

SCHEDULE B

AFFIDAVITS RELIED ON

NAME AND ADDRESS OF APPLICANT'S LAWYERS

The applicant's lawyers are:                     K&L Gates

Annexure A

Freezing Order

No.    QUD 78 of 2022

Federal Court of Australia

District Registry: Queensland

Division: General

Deputy Commissioner of Taxation

Applicant

Spencer Williams and others named in the schedule

Respondents

PENAL NOTICE

TO: Spencer Williams

This is a 'freezing order' made against you on 22 March 2022 by Justice Collier at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

1.    

2.    Subject to the next paragraph, this order has effect up to and including a date to be fixed by order of the Court ("the Return Date"), at which time and date there will be a further hearing in respect of this order before a judge of this Court.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

5.    

FREEZING OF ASSETS

6.    

7.    For the purposes of this order,

(1)    your assets include:

(2)     the value of your assets is the value of the interest you have individually in your assets.

PROVISION OF INFORMATION

8.    Subject to paragraph 9, you must:

9.    

EXCEPTIONS TO THIS ORDER

10.    This order does not prohibit you from:

11.    You and the applicant may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the applicant or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the applicant and you, and the Court may order that the exceptions are varied accordingly.

12.    

COSTS

13.    The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENT

14.    Set off by banks

This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

15.    Bank withdrawals by the respondent

No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

16.    Persons outside Australia

17.    Assets located outside Australia

Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party's application, reasonable written notice of the making of the application is given to the applicant.

18.    Notices under s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth)

Nothing in this order shall prevent any third party complying with the terms of a notice issued by the Commissioner of Taxation to the third party pursuant to section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in respect of any money which the third party may owe or may later owe to you.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

(1)    The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

(2)    As soon as practicable, the applicant will file and serve upon the respondent copies of:

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.

SCHEDULE B

AFFIDAVITS RELIED ON

NAME AND ADDRESS OF APPLICANT'S LAWYERS

The applicant's lawyers are:                     K&L Gates

Annexure B

Freezing Order

No.    QUD 78 of 2022

Federal Court of Australia

District Registry: Queensland

Division: General

Deputy Commissioner of Taxation

Applicant

Spencer Williams and others named in the schedule

Respondents

PENAL NOTICE

TO: Bronwyn Williams

This is a 'freezing order' made against you on 22 March 2022 by Justice Collier at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.

THE COURT ORDERS:

INTRODUCTION

1.    

 (b)    The time for service of the Documents is abridged and service is to be effected by 4.00pm on the third business day after the making of these orders.

2.    Subject to the next paragraph, this order has effect up to and including a date to be fixed by order of the Court ("the Return Date"), at which time and date there will be a further hearing in respect of this order before a judge of this Court.

3.    Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.

4.    In this order:

5.    

FREEZING OF ASSETS

6.    You must not in any way dispose of, deal with or diminish the value of the Property (or if the Property has already been sold when these orders are made, you must not in any way dispose of, deal with, diminish the value of, or remove from Australia, the net proceeds of sale of the Property).

7.    

COSTS

8.    The costs of this application are reserved to the Court hearing the application on the Return Date.

PERSONS OTHER THAN THE APPLICANT AND RESPONDENT

9.    Set off by banks

This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.

10.    Bank withdrawals by the respondent

No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.

11.    Notices under s 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth)

Nothing in this order shall prevent any third party complying with the terms of a notice issued by the Commissioner of Taxation to the third party pursuant to section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) in respect of any money which the third party may owe or may later owe to you.

SCHEDULE A

UNDERTAKINGS GIVEN TO THE COURT BY THE APPLICANT

(1)    The applicant undertakes to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.

(2)    As soon as practicable, the applicant will file and serve upon the respondent copies of:

(3)    As soon as practicable, the applicant will cause anyone notified of this order to be given a copy of it.

(4)    The applicant will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.

(5)    If this order ceases to have effect the applicant will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.

(6)    The applicant will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.

(7)    The applicant will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.

SCHEDULE B

AFFIDAVITS RELIED ON

NAME AND ADDRESS OF APPLICANT'S LAWYERS

The applicant's lawyers are:                     K&L Gates

REASONS FOR JUDGMENT

COLLIER J

1    These reasons for decision and orders concern two ex parte interlocutory applications brought by the Deputy Commissioner of Taxation (DCT) against different respondents. However the interlocutory applications raise similar legal issues, and involve certain common facts, suggesting that there is a business or other relationship between a number of the respondents. The interlocutory applications were heard together.

2    The relief sought by the DCT in each matter was as follows.

3    First, in QUD 79 of 2022 the DCT yesterday filed an originating application seeking relief against Mr Simon Farid, Ms Penelope Farid, the Recorder of Titles (Tasmania) and the Registrar of Titles (Queensland). In that originating application the DCT claimed as follows:

On the grounds stated in the statement of claim, accompanying affidavit or other document prescribed by the Rules, the Applicant claims:

1.    Upon the following tax-related liabilities becoming due and payable, Judgment for the Applicant against the First Respondent in the sum of $7,753,168 plus any general interest charges thereon in respect of his liability for:

(a)    income tax and shortfall interest charges for the year ended:

(i)     30 June 2017 as per notice of amended assessment issued 21 March 2022;

(ii)     30 June 2018 as per notice of amended assessment issued 21 March 2022;

(iii)     30 June 2019 as per notice of amended assessment issued 21 March 2022;

(iv)     30 June 2020 as per notice of amended assessment issued 21 March 2022;

(v)     30 June 2021 as per notice of amended assessment issued 21 March 2022;

(b)    administrative penalties for the periods ended:

(i)    30 June 2017 as per notice of assessment issued 21 March 2022;

(ii)    30 June 2018 as per notice of assessment issued 21 March 2022;

(iii)    30 June 2019 as per notice of assessment issued 21 March 2022;

(iv)    30 June 2020 as per notice of assessment issued 21 March 2022;

(v)    30 June 2021 as per notice of assessment issued 21 March 2022; and

(c) any accrued general interest charges.

2.    Costs.

3.    Such further or other orders as the Court deems appropriate

Claim for interlocutory relief

The Applicant also claims interlocutory relief.

1.    As set out in the Applicant's interlocutory process filed with this originating application.

4    By an interlocutory application also filed, ex parte, yesterday in QUD 79 of 2022, the DCT sought freezing and ancillary orders against the same respondents pursuant to Division 7.4 of the Federal Court Rules 2011 (Cth)(FCR) in the following terms:

1.    An order that the application for interlocutory relief be returnable instanter.

Freezing and ancillary orders

2.     Freezing and ancillary orders pursuant to Division 7.4 of the Federal Court Rules 2011 (Cth) (FCR) against the First Respondent in the terms specified in Annexure A to this application.

3.    Freezing and ancillary orders against the Second Respondent pursuant to Division 7.4 of the FCR in the terms specified in Annexure B to this application.

4.    An order that until the return date of the Applicant's application for freezing orders or further order of the Court:

(a)    the Third Respondent must not register any dealings which affect the following properties:

(i)    the property known as 5 Chessington Court, Sandy Bay, Tasmania 7005 being Lot 5 on Sealed Plan 62800 in the State of Tasmania (Volume 62800 Folio 5);

(ii)    the property known as 3/479 Churchill Avenue, Sandy Bay, Tasmania 7005, being Lot 3 on Strata Plan 178426 in the State of Tasmania (Volume 178426 Folio 3);

(b)    the Fourth Respondent must not register any dealings which affect the property known as 1521/1 Lakeview Rise Noosa Heads, Queensland 4567, being Lot 3 on Strata Plan 178426 in the State of Queensland (Title Reference 51219278).

Service

5.    Pursuant to rule 10.24 of the FCR, orders that personal service of the Application on the First and Second Respondents be dispensed with and that the Applicant have leave to serve the Documents on the First and Second Respondents as follows:

(a)    by leaving a copy of the Documents at 5 Chessington Court, Sandy Bay, TAS 7005;

(b)    by leaving a copy of the Documents at MKP Consulting & Co, Level 5, 219-223 Castlereagh St, Sydney NSW 2000;

(c)    by emailing the Documents to yuliana.halim@mkpassociates.com.au;

(d)    by emailing the Documents to simon@chessington.com.au.

6.     In this order, "Documents" means:

(a)     the originating application;

(b)     this interlocutory application;

(c)     the affidavit of Thomas Joseph Paino filed with the originating application and exhibit TJP-1;

(d)     the Applicant's outline of submissions in support of the interlocutory application;

(e)     a transcript of the ex parte hearing, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;

(f)     orders made by the Court.

7.    The time for service of the Documents is abridged and service is to be effected by 4.00pm on the third business day after the making of these orders.

8.    A direction that, upon the undertaking of the Applicant to provide a paper copy of the exhibit to any supporting affidavit within three business days of a request by a Respondent to do so, service of any exhibit may be effected by:

(a)    providing a copy on a USB drive; or

(b)    making it available for download by web link.

Other

9.    Costs of the interlocutory application be reserved.

10.     Liberty to apply on 24 hours' notice.

11.     Such further or other orders as the Court deems appropriate

5    Currently, in QUD 79 of 2022, it is only the ex parte interlocutory application which is before the Court.

6    Second, in QUD 78 of 2022 the DCT yesterday filed an originating application seeking relief against Mr Spencer Williams, Ms Bronwyn Williams, and the Registrar of Titles (Queensland). In that originating application the DCT claimed as follows:

1.    Upon the following tax-related liabilities becoming due and payable, Judgment for the    Applicant against the First Respondent in the sum of $3,907,935 plus any general interest charges thereon in respect of his liability for:

(a)    income tax and shortfall interest charges for the year ended:

(i)     30 June 2017 as per notice of amended assessment issued 21 March 2022;

(ii)     30 June 2018 as per notice of amended assessment issued 21 March 2022;

(iii)     30 June 2019 as per notice of amended assessment issued 21 March 2022;

(iv)     30 June 2020 as per notice of amended assessment issued 21 March 2022;

(b)    income tax for the year ended 30 June 2021 as per notice of assessment issued 21 March 2022;

(c)     administrative penalties for the periods ended:

(i)     30 June 2017 as per notice of assessment issued 21 March 2022;

(ii)     30 June 2018 as per notice of assessment issued 21 March 2022;

(iii)     30 June 2019 as per notice of assessment issued 21 March 2022;

(iv)     30 June 2020 as per notice of assessment issued 21 March 2022; and

(d)     any accrued general interest charges.

2.     Costs.

3.     Such further or other orders as the Court deems appropriate.

Claim for interlocutory relief

The Applicant also claims interlocutory relief.

1.     As set out in the Applicant's interlocutory process filed with this originating application.

7    By an interlocutory application also filed, ex parte, yesterday in QUD 78 of 2022, the DCT sought freezing and ancillary orders against the same respondents pursuant to Division 7.4 of the FCRin the following terms:

Interlocutory orders sought

1.    An order that the application for interlocutory relief be returnable instanter.

Freezing and ancillary orders

2.    Freezing and ancillary orders pursuant to Division 7.4 of the Federal Court Rules 2011 (Cth) (FCR) against the First Respondent in the terms specified in Annexure A to this application.

3.    Freezing and ancillary orders against the Second Respondent pursuant to Division 7.4 of the FCR in the terms specified in Annexure B to this application.

4.     An order that until the return date of the Applicant's application for freezing orders or further order of the Court, the Third Respondent must not register any dealings which affect the property known as 44 Brittanic Crescent, Paradise Point, Queensland 4216, being Lot 70 on Registered Plan 222332 in the State of Queensland (Title Reference 17320088).

Service

5.     Pursuant to rule 10.24 of the FCR, orders that personal service of the Application on the First and Second Respondents be dispensed with and that the Applicant have leave to serve the Documents on the First and Second Respondents as follows:

(a)     by leaving a copy of the Documents at 44 Brittanic Crescent, Paradise Point, Queensland 4216;

(b)     by leaving a copy of the Documents at MKP Consulting & Co, Level 5, 219-223 Castlereagh St, Sydney NSW 2000;

(c)     by emailing the Documents to spencerpibworth@aol.com:

(d)     by emailing the Documents to spencerwilliams7@me.com.

6.     In this order, "Documents" means:

(a)    the originating application;

(b)    this interlocutory application;

(c)     the affidavit of Thomas Joseph Paino filed with the originating application and exhibit TJP-1;

(d)     the Applicant's outline of submissions in support of the interlocutory application;

(e)     a transcript of the ex parte hearing, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court; and

(f)     orders made by the Court.

7.    The time for service of the Documents is abridged and service is to be effected by 4.00pm on the third business day after the making of these orders.

8.    A direction that, upon the undertaking of the Applicant to provide a paper copy of the exhibit to any supporting affidavit within three business days of a request by a Respondent to do so, service of any exhibit may be effected by:

(a)     providing a copy on a USB drive; or

(b)     making it available for download by web link.

Other

9.     Costs of the interlocutory application be reserved.

10.    Liberty to apply on 24 hours' notice.

11.     Such further or other orders as the Court deems appropriate

8    Currently, in QUD 78 of 2022 it is only the ex parte interlocutory application which is before the Court.

MATERIAL FACTUAL ALLEGATIONS BEFORE THE COURT

QUD 79 of 2022 Farid

9    Relevant factual material concerning Mr Farid was summarised in the affidavit of Mr Thomas Paino (the Technical Leader in the Lodge and Pay-Management-Resolutions, Service Delivery group at the Australian Taxation Office in Melbourne, sworn 21 March 2022 and filed in QUD 79 of 2022) and the submissions of the DCT.

10    Mr Farid migrated to Australia from the United Kingdom in 1995 and is an Australian resident for tax purposes. Mr Farid is not an Australian citizen. Ms Penelope Farid is Mr Farid’s spouse.

11    On the DCT’s case, Mr Farid has a history of poor compliance with income tax lodgement obligations. Mr Farid’s lodgement history for the income years 2017-21 is as follows:

12    The amounts declared by Mr Farid related to interest income, trust distributions over the 2020-2021 income years, and a large net capital gain in 2019. No salary or wages were declared.

13    On or about 13 May 2021, the DCT commenced a review of Mr Farid’s tax affairs. The review was conducted covertly given the DCT’s determination that there was a risk of Mr Farid dissipating assets were he put on notice of the review.

14    The DCT’s investigations revealed, in summary, that:

    Significant unexplained deposits, which had not been disclosed in the assessable income of Mr Farid, had been made into Mr Farid’s bank accounts as follows:

    The unexplained deposits include large regular deposits from:

•    Mr Spencer Williams;

•    Brizo Group Pty Ltd; and

•    Brizo Group Nominees Pty Ltd.

    Mr Farid regularly used the unexplained deposits to support his and his family’s lifestyle;

    Mr Farid has a history of receiving and transferring funds to bank accounts in foreign jurisdictions;

    Mr Farid applied for an American Express Credit Card on 18 July 2017 in which application he stated that:

•    Mr Farid was a Director of Chessington Nominees Pty Ltd;

•     Mr Farid earned $900,000 per year before tax; and

•    Mr Spencer Williams was a “business partner”.

    There are four supplementary accounts attached to Mr Farid’s American Express account, namely:

•    Mr Spencer Williams;

•    Ms Bronwyn Williams;

•    Ms Penelope Farid; and

•    Mr Farid himself.

    Mr Farid is the sole director, secretary and shareholder of Chessington Nominees Pty Ltd and Chessington Investments Pty Ltd;

    Chessington Nominees Pty Ltd:

•    was incorporated on 19 March 2015;

•    has not lodged a tax return; and

•    was likely the trustee of Chessington Trust ABN 35 523 653 955 (Chessington Trust).

    Chessington Trust:

•    was registered for income tax on 23 May 2015;

•    had lodged tax returns for “consulting services” for the years 2015-16 and 2018-21.

    Mr Farid was a Director of Heritage Fine Wines Pty Ltd between 26 March 2002 and 1 August 2004. Heritage Fine Wines Pty Ltd was placed into liquidation in May 2005.

    Mr Farid was prohibited from performing any function in relation to regulated activities which correspond to investment businesses by the United Kingdom Financial Conduct Authority in 1996.

15    As a result of the review, the DCT determined that Mr Farid had significant undisclosed income and had engaged in tax evasion. On 21 March 2022, the DCT issued amended Notices of Assessment of taxable income and Notices of Assessment of shortfall penalty, for the income years 2017-21.

16    Mr Farid’s amended taxable income, administrative penalties and shortfall interest charge can be summarised as follows:

17    Assets allegedly owned by Mr Farid and Ms Farid, both individually and jointly, were identified by the DCT as follows:

18    The DCT identified that Mr Farid held the following directorships and shareholdings:

QUD 78 of 2022 Williams

19    Relevant factual material concerning Mr Williams was summarised in the affidavit of Mr Thomas Paino sworn 21 March 2022 and filed in QUD 78 of 2022, and the submissions of the DCT.

20    Mr Williams is a citizen of the United Kingdom having migrated to Australia in November 1997. The second respondent, Ms Bronwyn Williams, is his spouse. Mr and Ms Williams declared their taxable incomes in the 2017 to 2020 income years to be as follows:

21    On the case of the DCT, Mr Williams did not declare any salary or wages income during the 2017 income year, rather only income resulting from partnership and trust distributions: $52,953 and $14,345 respectively.

22    Mr Williams was yet to lodge an income tax return for the 2021 income year. Nevertheless, the DCT submitted that, during the 2018, 2019 and 2020 income years, Mr Williams declared that he was employed as a sales consultant by the Trustee of the Australian Diamond Portfolio Trust. Mr Williams reported his income from this role in the amounts of $60,000, $120,000 and $120,000 in the 2018, 2019 and 2020 income years respectively.

23    On 24 May 2021 the DCT commenced a covert audit of Mr Williams’ tax affairs for the 2017 to 2020 income years. On 19 July 2021 the scope of the audit was widened to include the 2021 income year. This audit identified a number of large, unexplained deposits being made into three bank accounts belonging to Mr Williams that were not reflected in his income tax returns for the same period. These were as follows:

24    In the context of this table, deposits occurring in the 2021 income year were included. Mr Williams is yet to file an income tax return for the current income year.

25    The audit also found that a number of these unexplained deposits were made with the description of a ‘Direct Credit’ from ‘Brizo Group Nomi’ (which appears to have been placed in voluntary liquidation), and uncovered large amounts of lifestyle expenditure. As a result of the audit, the DCT concluded that the deposits described in the table represented assessable income referable to Mr Williams in the 2017 to 2020 income years, that administrative penalties should be imposed, and that an increase of the base penalties of 20 per cent was appropriate in the circumstances.

26    Following the audit, the DCT yesterday issued the following assessments and amended assessments to Mr Williams:

RELEVANT LEGAL PRINCIPLES

27    Many of the legal principles arising in the present proceedings were recently summarised by me in Deputy Commissioner of Taxation v Raptis [2021] FCA 1192. It is convenient to repeat them:

46    The Court is empowered to make freezing orders by r 7.32 of the Federal Court Rules, which provides as follows:

7.32 Freezing order

(1)    The Court may make an order (a freezing order), with or without notice to a respondent, for the purpose of preventing the frustration or inhibition of the Court’s process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied.

(2)    A freezing order may be an order restraining a respondent from removing any assets located in or outside Australia or from disposing of, dealing with, or diminishing the value of, those assets.

Note: Without notice is defined in the Dictionary.

47     Orders ancillary to freezing orders are the subject of r 7.33, which provides:

7.33 Ancillary order

(1)    The Court may make an order (an ancillary order) ancillary to a freezing order or prospective freezing order as the Court considers appropriate.

(2)    Without limiting the generality of subrule (1), an ancillary order may be made for either or both of the following purposes:

(a)    eliciting information relating to assets relevant to the freezing order or prospective freezing order;

(b)     determining whether the freezing order should be made.

48     Rule 7.34 extends the powers of the Court in rules 7.32 and 7.33 to persons who are not otherwise parties to the substantive proceedings, namely third parties. For completeness I note that r 7.34 provides:

7.34 Order may be against person not a party to proceeding

The Court may make a freezing order or an ancillary order against a person even if the person is not a party in a proceeding in which substantive relief is sought against the respondent.

49     Rule 7.35 anticipates reezing orders against a judgment debtor, or prospective judgment debtor, or a third party. In particular r 7.35 (1)(b) states that:

(1) This rule applies if:

(a)     ...

(b)     an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in:

(i) the Court; or

(ii) ...

50     Further factors guiding the exercise of the Court’s discretion are set out in r 7.35 (4)-(6) as follows:

(4)    The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur:

(a)     the judgment debtor, prospective judgment debtor or another person absconds;

(b)     the assets of the judgment debtor, prospective judgment debtor or another person are:

(i)    removed from Australia or from a place inside or outside Australia; or

(ii)     disposed of, dealt with or diminished in value.

(5)    The Court may make a freezing order or an ancillary order or both against a person other than a judgment debtor or prospective judgment debtor (a third party) if the Court is satisfied, having regard to all the circumstances, that:

(a)    there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because:

(i)    the third party holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(ii)    the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or

(b)    a process in the Court is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, under which process the third party may be obliged to disgorge assets or contribute toward satisfying the judgment or prospective judgment.

(6)    Nothing in this rule affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so.

51    Having regard to these rules I note the following.

52     First, Freezing Orders Practice Note (GPN-FRZG) issued by the Chief Justice on 25 October 2016 applies to any proceeding involving an application in this Court for a freezing order, and to that extent supplements the provisions of the Federal Court Rules relating to the making of such orders.

53    Second, the DCT seeks interim orders ex parte. I note however that r 7.32 (1) empowers the Court to make a freezing order with or without notice to a respondent.

54    In relation to the making of orders ex parte, I note the following observation of Gageler J in Aristocrat Technologies Australia Pty Ltd v Allam [2016] HCA 3:

15.    It is an elementary principle of our ordinarily adversarial system of justice that full and fair disclosure must be made by any person who seeks an order from a court ex parte, with the result that failure to make such disclosure is ordinarily sufficient to warrant discharge of such order as might be made. The principle is not confined to particular types of interlocutory orders. Its rationale lies in the importance to the administration of justice of the courts and the public being able to have confidence that an order will not be made in the absence of a person whose rights are immediately to be affected by that order unless the court making the order has first been informed by the applicant of all facts known to the applicant which that absent person could be expected to have sought to place before the court had the application for the order been contested.

        (footnotes omitted)

55     (See also Rumsley v Vegas Enterprises Pty Ltd [2016] FCAFC 84 at [20].)

56     Third, as the Practice Note states at 2.6, a freezing order should be viewed as an extraordinary interim remedy because it can restrict the right to deal with assets even before judgment, and is commonly granted without notice. In this respect I further note the following observation of Gaudron, McHugh, Gummow and Callinan JJ in Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380 at 403-404:

We agree with the tenor of what was said with particular respect to Mareva relief before judgment by the Court of Appeal of New South Wales (Mason P, Sheller JA, Sheppard A-JA) in Frigo v Culhaci:

"[A Mareva order] is a drastic remedy which should not be granted lightly....

A [Mareva order] is an interlocutory order which, if granted, imposes a severe restriction upon a defendant's right to deal with his or her assets. It is granted at the suit of a plaintiff whose status as a creditor is in dispute and who need not be a secured creditor. Its purpose is to preserve the status quo, not to change it in favour of the plaintiff. The function of the order is not to 'provide a plaintiff with security in advance for a judgment that he hopes to obtain and that he fears might not be satisfied; nor is it to improve the position of the plaintiff in the event of the defendant's insolvency' ... Many authorities attest to the care with which courts are required to scrutinise applications for [Mareva orders]...”

        (footnotes omitted, emphasis added)

57     In view of the extreme seriousness of a freezing order it is also appropriate for the Court to take into account the balance of convenience of making an order in these terms: Deputy Commissioner of Taxation v Shi [2018] FCA 1915 at [20].

58     Fourth, the Court must be satisfied that a freezing order is necessary to prevent the frustration or inhibition of the Court’s process by seeking to meet a danger that a – in this case – prospective judgment of the Court will be wholly or partly unsatisfied. In respect of prospective judgment debtors, the Court must be satisfied that there is a danger of a prospective judgment being wholly or partly unsatisfied because the debtor (or another person) might abscond, or relevant assets will be removed, disposed of, dealt with or diminished in value (r 7.35 (4)).

59     Fifth, r 7.32 (2) contemplates orders restraining a respondent in respect of assets located in or outside Australia.

60     Sixth, the purposes for which ancillary orders may be made are limited by r 7.33 (2), namely for eliciting information relating to assets relating to the freezing order or determining whether the freezing order should be made.

61    Seventh, plainly either freezing orders or ancillary orders may be made against a person even if not a party to the substantive application. However the circumstances in which the Court may make such orders against third parties are subject to r 7.35 (5). Rule 7.35 (5)(a) requires that there must be a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because:

•    the third party holds or is using, or has exercised or is exercising, a power of disposition over relevant assets; or

•    the third party is in possession of, or in a position of control or influence concerning, relevant assets.

62    Alternatively, r 7.35 (5)(b) enlivens the Court’s power to make freezing or ancillary orders against third parties where, having regard to all the circumstances, a process is or may ultimately be available to the applicant as a result of a judgment or prospective judgment, wherein the third party may be obliged to disgorge assets or contribute towards satisfying the judgment or prospective judgment.

63     Eighth, an applicant for a freezing order bears the onus of satisfying the Court that the order should be made, and in satisfying the Court as to the amount which is to be the subject of the order: Zhen v Mo [2008] VSC 300 at [24].

64     Ninth, an order can only be made on the basis of admissible evidence which supports the contentions made by the party seeking the order: Zhen at [25].

65     Finally, and critically, an applicant for a freezing order must demonstrate that it has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court.

28    Turning now to the facts before me, it is plain in both proceedings that the first respondent to each originating application - being the taxpayers identified in each application – is a “prospective judgment debtor” within the meaning of r 7.35 of the FCR in respect of tax-related liabilities claimed by the DCT. The other respondents to each originating application do not appear to be “prospective judgment debtors” – rather they are “third parties” within the meaning of r 7.35 (5).

QUD 79 OF 2022

29    In respect of QUD 79 of 2022 I am satisfied that freezing and ancillary orders should be made against Mr Farid, Ms Farid, the Recorder of Titles (Tasmania) and the Registrar of Titles (Queensland). I have formed this view for the following reasons.

Mr Simon Farid

30    First, I am satisfied that the DCT’s prospective claims for judgment against Mr Farid pursuant to the originating application filed yesterday are justiciable in this Court. Section 39B (1A)(c) of the Judiciary Act 1903 (Cth)(Judiciary Act) provides that the original jurisdiction of the Federal Court of Australia includes jurisdiction in any matter arising under any laws made by the Parliament, other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter. It is well-settled that recovery of a tax debt under s 255-5 of Sch 1 to the Taxation Administration Act 1953 (Cth)(TAA53) is a matter arising in respect of a Commonwealth law: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; (1945) 70 CLR 141 at 154; Deputy Commissioner of Taxation v Vasiliades [2014] FCA 1250 at [41]; Deputy Commissioner of Taxation v Shi [2018] FCA 1915; Raptis at [68].

31    Second, the substantive claims of the DCT against Mr Farid relate to tax debts owing by him in respect of assessments and amended assessments. By s 350-10 of Sch 1 to the TAA53 the production of a notice of assessment or a copy of it is conclusive evidence that the assessment was properly made and (except in proceedings under Part IVC of the TAA53) that the amount and all the particulars of the assessment are correct: FJ Bloemen Pty Ltd v Commissioner of Taxation [1981] HCA 27; (1981) 147 CLR 360 at 376; Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 at 157 and 166-7; Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 at [15].

32    In his affidavit sworn 21 March 2022 Mr Paino gave the following evidence:

4.5    I am informed by ATO officer Nicholas Gunaratnam and believe that the Assessments were served on the Taxpayer in accordance with the provisions of the TAA and the Taxation Administration Regulations 2017 (Cth) (TAR) at approximately 10.00am on 21 March 2022, by delivering them to the registered office of the Taxpayer's authorised contact and tax agent, MKR Consulting & Co, at Level 5, 219 Castlereagh Street, Sydney 2000.

4.6     The total amount payable by the Taxpayer to the Commonwealth of Australia, including in respect of amounts not yet due and payable, is $7,753,168 (as at 21 March 2022).

33    At this interlocutory stage of the proceedings I am satisfied that notices of assessment in respect of claimed taxation liabilities of Mr Farid have been issued. Although the date by which Mr Farid’s assessments must be paid has not elapsed, the amounts assessed are nevertheless due to the Commonwealth: Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 at 16-17. It necessarily follows that a prospective cause of action exists in the context of these assessments against Mr Farid: Commissioner of Taxation v Edgewater Estates Limited [2009] FCA 611.

34    The notices of assessment issued to Mr Farid are conclusive evidence of the existence and accuracy of the relevant tax liabilities of Mr Farid.

35    Third, I consider that there is a danger or real risk that any judgment in favour of the DCT against Mr Farid will go unsatisfied if the freezing orders sought by the DCT are not made. The evidence discloses that Mr Farid has interests in three bank accounts with the Commonwealth Bank of Australia, two luxury motor vehicles, and shares in Chessington Nominees Pty Ltd and Chessington Investments Pty Ltd. However, on the DCT’s case, the following factors support a finding that these assets may be disposed of, dealt with or diminished in value in the absence of freezing orders:

    Mr Farid evidently stated in his credit card application to American Express dated 18 July 2017 that his annual income was $900,000, whereas in his income tax return for the 2017-2018 income year he claimed a total income for the year of $115. The following year Mr Farid claimed a total income for the year of $1,613. An inference of deliberate failure on Mr Farid’s part to honestly declare his taxable income can be drawn (cf Deputy Commissioner of Taxation v Shi [2018] FCA 1915 at [20]);

    Mr Farid is a citizen of the United Kingdom, with a history of engaging in international fund transfers between Australia and overseas, and (it appears) has the ability to move funds offshore (cf Deputy Commissioner of Taxation v Vasiliades (2014) 323 ALR 59 at [49], [50]);

    There are no registered mortgages on the titles to the Tasmanian or Noosa Properties, such that Mr Farid has the capacity to raise borrowings against the equity in those properties (and redirect any funds so borrowed);

    Mr Farid’s luxury Range Rover vehicle appeared to be unencumbered by security interests, and could be sold to generate cash (which again could be redirected by Mr Farid). In any event, both vehicles could be sold to generate cash;

    Any cash held by Mr Farid could be transferred to third parties (including, for example, Ms Farid); and

    Mr Farid has a history of significant lifestyle expenditure.

36    In determining whether there is a danger that a prospective debtor might remove, diminish, deal with or reduce the value of their assets, the Court may take into account the prior conduct of the taxpayer, the value of the actual or prospective judgment and the assets or income available to the taxpayer to satisfy it: Deputy Commissioner of Taxation v Gashi [2010] VSC 120 at [33]. As Gordon J further observed in Deputy Commissioner of Taxation v Vasiliades (2014) 323 ALR 59 at [36] in this context:

Although the Court must be cautious before making freezing orders, it must be borne in mind that their very purpose is “to ensure that assets are not alienated to as to avoid or frustrate the [C]ourt process”.

37    In my view the apparent prior conduct of Mr Farid, and the relatively liquid nature of his assets, are such that the risk of dissipation is real.

38    Fourth, insofar as concerns the balance of convenience, a factor militating against the grant of freezing orders is that on 21 March 2022 the DCT issued a notice to the CBA pursuant to s 260-5 of Sch 1 to the TAA53 requiring compliance no earlier than 14 April 2022 (s 260-5 notice). The s 260-5 notice required the CBA to “deduct money you may hold on behalf of or owe to Simon Farid up to the value of $7,753,173.68 or 85% of the available money, whichever is the lesser amount.” This form of notice is arguably an effective alternative remedy available to the DCT.

39    I am nonetheless satisfied that, notwithstanding the s 260-5 notice, the balance of convenience favours the freezing orders sought. This is because:

    the s 260-5 notice does not apply to other assets of Mr Farid, including his real property, motor vehicles, and corporate interests;

    the s 260-5 notice does not require all money held by the CBA to be paid to the DCT;

    the evidence supports a finding that Mr Farid has extensive tax liabilities;

    there appears to be a real risk of asset dissipation; and

    the DCT is prepared to give the usual undertakings as to damages;

40    The DCT has also proposed that sums be made available to Mr Farid in respect of living expenses ($1,500 per week) and legal costs ($50,000). On the evidence before me such sums appear to be reasonable.

Ms Penelope Farid

41    The evidence before the Court is that Ms Farid is a joint tenant of the Churchill Tasmanian Property with Mr Farid.

42    While there is no specific evidence before the Court concerning the likelihood of dissipation of assets by Ms Farid or pointing to a risk that any judgment against Mr Farid would be frustrated by conduct of Ms Farid, I am satisfied that such a risk exists in respect of the Churchill Tasmanian Property. I note that:

    given that Ms Farid is a joint tenant of the Churchill Tasmanian Property with Mr Farid, she satisfies the description of a third party in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor within the meaning of r 7.35(5)(a)(ii) of the FCR; and

    given that, on the evidence before the Court, Ms Farid is the spouse of Mr Farid, at this interlocutory stage the Court can draw the inference that Ms Farid might be prepared to assist Mr Farid should he choose to deal with his assets.

43    I note that the DCT seeks freezing orders against Ms Penelope Farid limited to her interest in the Churchill Tasmanian Property.

44    In my view it is appropriate to make the freezing orders sought against Ms Farid, so limited.

The Recorder of Titles (Tasmania) and the Registrar of Titles (Queensland)

45    The DCT submitted that ancillary orders were sought against the Recorder of Titles (Tasmania) and the Registrar of Titles (Queensland) to prevent dealings in respect of the Tasmanian and Noosa Properties, in circumstances where both entities may be under a statutory duty to process dealings lodged in respect of those properties.

46    That the Court has power to make such orders, and that it may be appropriate to make such orders, was confirmed in such cases as Commissioner of Taxation v Zou [2021] FCA 433.

47    In the absence of such orders there is a risk that the Tasmanian and Noosa Properties could be disposed of, or subjected to encumbrances, potentially diminishing them as assets available to satisfy any judgment in favour of the DCT. Orders in the form sought by the DCT so restraining the Recorder and the Registrar are appropriate.

Substituted Service of Material

48    I understand that service of relevant material on the Recorder of Titles (Tasmania) and the Registrar of Titles (Queensland) is not an issue of concern to the DCT.

49    However, the DCT submitted that, as matters presently stand, the originating application, the interlocutory application, the affidavit material in support of these applications, the proposed interlocutory orders, and written submissions have not been served on either Mr Farid or Ms Farid. The DCT has sought substituted service of this material in terms of r 10.24 of the FCR.

50    Rule 10.24 of the FCR allows substituted service in instances where it is not practicable to serve a document on a person in a way required by the Rules. It need not be shown that service in the ordinary way is impossible; it is sufficient to show that ordinary service is not realistic or sensible. The urgency of a freezing order, in addition to the risk of dissipation of assets, have been sufficient to meet the threshold for orders allowing substituted service to be granted: see Deputy Commissioner of Taxation v Seabrooke [2012] FCA 1158 at [24]; Commissioner of Taxation v Regent Pacific Group Limited [2013] FCA 36 at [26]; Unilever Australia Ltd v PB Foods Ltd [2000] FCA 798 at [14]; NPP Australia Ltd v Ripple Labs, Inc [2020] FCA 1237 at [36].

51    In my view it is appropriate to order substituted service in light of the risk of dissipation of property, the accompanying urgency of a freezing order in the present case, and the ex parte nature of the orders sought. However the method of substituted service must be one through which there is a reasonable probability that the relevant documents will be brought to the attention of the person to be served: Commissioner of Taxation v Oswal [2012] FCA 1507 at [37], referring to Porter v Freudenberg [1915] 1 KB 857 at 889. In this case the methods of substituted service suggested are:

    by leaving a copy of the relevant materials at 5 Chessington Court, Sandy Bay TAS 7005. In my view this is an appropriate method, being that this address is (on the DCT’s case) the home address of Mr and Ms Farid;

    by leaving a copy of the relevant materials at MKP Consulting & Co, Level 5, 219-223 Castlereagh Street, Sydney NSW 2000. In my view this is an appropriate method, being (on the DCT’s case) the address of the registered tax agent of Mr and Ms Farid;

    by emailing the relevant materials to yuliana.halim@mkpassociates.com.au. In my view this is an appropriate method, given that (on the DCT’s case) Yuliana Halim is recorded on the system of the Australian Taxation Office as the authorised contact for Mr Farid as his tax agent;

    by emailing the relevant materials to simon@chessington.com.au . In my view this is an appropriate method, given that (on the DCT’s case) this was Mr Farid’s recorded address in his application to American Express.

52    I am satisfied that service by these methods is likely to bring the freezing orders to the prompt attention of Mr Farid and Ms Farid.

QUD 78 OF 2022

53    In respect of QUD 78 of 2022 I am satisfied that freezing and ancillary orders should be made against Mr Williams, Ms Williams and the Registrar of Titles (Queensland). I have formed this view for the following reasons.

Mr Spencer Williams

54    First, for reasons I have explained referable to s 39B (1A)(c) of the Judiciary Act and s 255-5 of Sch 1 to the TAA53, I am satisfied that the DCT’s prospective claims for judgment against Mr Williams, pursuant to the originating application filed yesterday, are justiciable in this Court.

55    Second, I am similarly satisfied that notices of assessment as claimed by the DCT have been issued to Mr Williams. I note evidence of Mr Paino in his affidavit as follows:

4.5    I am informed by ATO officer Nicholas Gunaratnam and believe that the Assessments were served on the Taxpayer in accordance with the provisions of the TAA and the Taxation Administration Regulations 2017 (Cth) (TAR) at approximately 10.00am on 21 March 2022, by delivering them to the registered office of the Taxpayer's authorised contact and tax agent, MKP Consulting & Co, at Level 5, 219 Castlereagh Street, Sydney 2000.

4.6     A copy of an ICR screenshot showing the Taxpayer's service address is at page 485.

4.7     The total amount payable by the Taxpayer to the Commonwealth of Australia, including in respect of amounts not yet due and payable, is $3,907,935 (as at 21 March 2022).

56    In accordance with such authorities as Futuris, the accuracy and existence of the tax liabilities of Mr Williams as claimed by the DCT is conclusive.

57    Third, I consider that there is a danger or real risk that any judgment in favour of the DCT against Mr Williams will go unsatisfied if the freezing orders sought by the DCT are not made. On the case of the DCT there is a significant level of funds in Mr Williams’ Bendigo Bank Account (noting that there was $3,280,000.00 worth of unexplained deposits made into that account in 2021), as well as his ownership of a number of luxury motor vehicles. Additionally, the applicant submits that a number of factors give rise to a ready inference that the Mr Williams’ assets may be disposed of, dealt with or diminished in value:

    on the case of the DCT, Mr Williams has grossly understated his income over a number of years thus showing an intention to not pay tax, culminating in an extremely large tax shortfall;

    Mr Williams’ tax liabilities exceed his known assets;

    there are no registered mortgages over the title to the property located at 44 Britannic Crescent, Paradise Point QLD 4216(Paradise Point Property), such that he has the capacity to raise borrowings against the equity in that property (and redirect any funds so borrowed);

    none of Mr Williams’ luxury vehicles appear to be encumbered by security interests, and could be sold to generate cash (which again could be redirected by Mr Williams);

    any cash held by Mr Williams could be transferred to third parties (including, for example, Ms Williams);

    Mr Williams has a history of significant lifestyle expenditure; and

    Mr Williams is not an Australian citizen, and there is the prospect that he might seek to move cash offshore.

58    In my view the apparent prior conduct of Mr Williams, and the relatively liquid nature of his assets, are such that the risk of dissipation of assets is real.

59    Fourth, insofar as concerns the balance of convenience, a factor militating against the grant of freezing orders is that on 21 March 2022 the DCT issued a notice to the Bendigo Bank pursuant to s 260-5 of Sch 1 to the TAA53 requiring compliance no earlier than 14 April 2022 (s 260-5 notice (2)). The s 260-5 notice (2) required the Bendigo Bank to “deduct money you may hold on behalf of or owe to Spencer Williams up to the value of $3,907,943.04 or 75% of the available money, whichever is the lesser amount.” This form of notice is arguably an effective alternative remedy available to the DCT.

60    I am nonetheless satisfied that, notwithstanding the s 260-5 notice (2), the balance of convenience favours the freezing orders sought. This is because:

    the s 260-5 notice (2) does not apply to other assets of Mr Williams, including his real property and motor vehicles;

    the s 260-5 notice (2) does not require all money held by the Bendigo Bank to be paid to the DCT;

    the evidence supports a finding that Mr Williams has extensive tax liabilities;

    there appears to be a real risk of asset dissipation by Mr Williams;

    the DCT is prepared to give the usual undertakings as to damages.

61    The DCT has also proposed that sums be made available to Mr Williams in respect of living expenses ($1,500 per week) and legal costs ($50,000). On the evidence before me such sums appear to be reasonable.

Ms Bronwyn Williams

62    The evidence before the Court is that Ms Williams is a joint tenant of the Paradise Point Property with Mr Williams.

63    While there is no specific evidence before the Court concerning the likelihood of dissipation of assets by Ms Williams, or pointing to a risk that any judgment against Mr Williams would be frustrated by conduct of Ms Williams, I am satisfied that such a risk exists in respect of the Paradise Point Property. In particular:

    the purchase of the Paradise Point Property was, on the DCT’s case, funded by a loan or mortgage issued by ANZ Bank, which in turn was paid off with funds deposited into Mr Williams’ accounts by way of unexplained deposits;

    given that Ms Williams is a joint tenant of the Paradise Point Property with Mr Williams, she satisfies the description of a third party in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor within the meaning of r 7.35 (5)(a)(ii) of the FCR; and

    given that, on the evidence before the Court, Ms Williams is the spouse of Mr Williams, at this interlocutory stage the Court can draw the inference that Ms Williams might be prepared to assist Mr Williams should he choose to deal with his assets.

64    I note that the DCT seeks freezing orders against Ms Williams limited to her interest in the Paradise Point Property.

Registrar of Titles

65    The DCT submitted that ancillary orders were sought against the Registrar of Titles (Queensland) to prevent dealings in respect of the Paradise Point Property, in circumstances where the Registrar may be under a statutory duty to process dealings lodged in respect of that property.

66    That the Court has power to make such orders, and that it may be appropriate to make such an orders, was confirmed in such cases as Commissioner of Taxation v Zou [2021] FCA 433.

67    In the absence of such orders there is a risk that the Paradise Point Property could be disposed of, or subjected to encumbrances, potentially diminishing it as an asset available to satisfy any judgment in favour of the DCT. Orders in the form sought by the DCT so restraining the Registrar are appropriate.

Substituted Service of Material

68    I understand that service of relevant material on the Registrar of Titles is not an issue of concern to the DCT.

69    However, the DCT submitted that, as matters presently stand, the originating application, the interlocutory application, the affidavit material in support of these applications, the proposed interlocutory orders, and written submissions have not been served on either Mr Williams or Ms Williams. The DCT has sought substituted service of this material in terms of r 10.24 of the FCR.

70    As I explained earlier in this judgment, r 10.24 of the FCR allows substituted service in instances where it is not practicable to serve a document on a person in a way required by the Rules. The method of service however must be such that there is a reasonable probability that the relevant documents will be brought to the attention of the person to be served

71    To that end, the applicant seeks the following methods of substituted service by:

    leaving a copy of the documents at the Paradise Point Property. In my view this is an appropriate method, being that this address is (on the DCT’s case) the home address of Mr and Ms Williams;

    leaving a copy of the Documents at MKP Consulting & Co, Level 5, 219-223 Castlereagh St, Sydney NSW 2000. In my view this is an appropriate method, being (on the DCT’s case) the address of the registered tax agent of Mr and Ms Williams;

    emailing the documents to spencerpibworth@aol.com. In my view this is an appropriate method, being (on the DCT’s case) Mr Williams’ email address; and

    emailing the documents to spencerwilliams7@me.com. In my view this is an appropriate method, being (on the DCT’s case) an email address used by Mr Williams in correspondence with Bendigo Bank.

72    Given the nature of the relief sought, the potential of the risk of dissipation of assets, and the suitability of the methods of substituted suggested by the applicant, I am prepared to grant the orders sought in this context.

CONCLUSION

73    It follows that I am prepared to make orders substantially in the terms sought. It is appropriate that costs be reserved.

Associate:

Dated:    22 March 2022

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