Deputy Commissioner of Taxation v Bonaccorso

1. [1]

   The Deputy Commissioner claims that under s 8AAZH of the Taxation Administration Act 1953 (Cth) Mr Bonaccorso owes some $1,467,626.47 in respect of an “RBA deficit debt” for the 2013 income year and now seeks to recover that sum, together with further interest. The amended statement of claim addresses how this debt was quantified. It includes amounts claimed to be due under the BAS provisions of the Income Tax Assessment Act 1997 (Cth), as well as interest.

2. [2]

   By his December 2014 amended defence Mr Bonaccorso denies that he has such a tax debt, or that the Deputy Commissioner is entitled to recover what is claimed. There are certain difficulties with that pleading, in respect of which he seeks leave to amend.

3. [3]

   From the case which Mr Bonaccorso, who appears in these proceedings unrepresented, advanced in support of the motions which he now presses, it is apparent that he believes that he is wrongly being pursued for a tax debt which was the subject of earlier proceedings brought against him in the Federal Court. In those proceedings orders requiring payment of $3,552,577.81 were made against him in respect of tax assessments issued in 2009 (see Commissioner of Taxation v Grimaldi (No. 5) [2009] FCA 765; (2009) 76 ATR 352). Mr Bonaccorso was legally represented in those proceedings. Other orders were made against other defendants to those proceedings, including for the sum of $36,341,461.73 in the case of Mr Grimaldi and $3,664,366.20 in the case of IFTC Broking Services Ltd.

4. [4]

   It is Mr Bonaccorso’s case that the income tax he was ordered to pay in those proceedings, has since been paid by others and that accordingly, the Deputy Commissioner cannot now pursue him for the tax the subject of these proceedings.

5. [5]

   What lies in issue between the parties in these proceedings includes various matters of fact, as well as questions of law, including as to the proper operation of the tax legislation on which the Deputy Commissioner’s case depends.

6. [6]

   Despite Mr Bonaccorso’s submissions, what of course cannot be done in these proceedings is for the correctness of judgments given in the Federal Court as to Mr Bonaccorso's then tax liability, to be challenged. Unless set aside by order of the Federal Court, those judgments bind the parties to those proceedings, including the Commissioner and Mr Bonaccorso.

7. [7]

   Nor can final orders be made in favour of Mr Bonaccorso on these interlocutory applications, for example as to damages, as he sought by his motions.

The parties’ motions

1. [8]

   The parties have filed various motions. Those filed by the Deputy Commissioner are motions of:

   1. (1)

      1 July 2014 as to service and 5 May as to amendment of the statement of claim.

   2. (2)

      2 February 2015 amended by a motion filed on 5 March - seeking orders:

   3. (3)

      1 June 2015 – seeking orders to set aside a notice to produce documents to the Court issued by Mr Bonaccorso on 11 May, amended over his objection at the hearing, to include an order to set aside a second notice to produce documents issued by Mr Bonaccorso on 23 May 2016.

   4. (4)

      19 April 2016 – seeking orders to set aside a subpoena to produce documents issued by Mr Bonaccorso on 18 April 2016.

2. [9]

   It is the June 2015 motion and the April 2016 motions that the Commissioner now presses.

3. [10]

   The motions filed by Mr Bonaccorso are:

   1. (1)

      11 September 2015 - seeking orders:

   2. (2)

      14 September - seeking orders:

   3. (3)

      4 December 2015 – seeking leave:

   4. (4)

      23 March 2016 - seeking orders:

4. [11]

   Some of the orders sought in these motions are repetitive, but they were all pressed.

The requirements of s 56 of the Civil Procedure Act

1. [12]

   These proceedings already have a considerable history. There is also a considerable history of prior litigation between the parties, disclosed in the affidavits sworn by Mr Bonaccorso in support of his motions, the affidavits sworn by Mr Zafiriou, a Director in the Australian Public Service employed in the debt section of the ATO, and the documents annexed to those affidavits, or otherwise tendered by the parties.

2. [13]

   What the parties have joined issue over must be resolved, bearing in mind the requirements of s 56 of the Civil Procedure Act 2005 (NSW), which requires the Court to give effect to the overriding purpose there specified, namely, to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The section also imposes duties on the parties to assist the Court in furthering that purpose. The Court must also exercise its powers having regard to the objects specified in s 57, namely:

3. [14]

   The Court must also act in accordance with the dictates of justice, having regard to relevant matters specified in s 58(2), namely:

4. [15]

   The object of the elimination of delay (see s 59) and the proportionality of costs, (s 60), must also be borne in mind.

Issues

1. [16]

   The matters in issue pursued by the parties include:

   1. (1)

      The Deputy Commissioner’s standing to bring the proceedings.

   2. (2)

      Whether the proceedings should be struck out.

   3. (3)

      Whether the notices to produce and subpoena should be set aside.

   4. (4)

      Whether Mr Bonaccorso should have leave to further amend his defence and to file a cross-claim.

   5. (5)

      Whether other relief claimed by Mr Bonaccorso should now be dealt with.

Evidence

1. [17]

   From what he submitted and deposed to in his affidavits, it seems that Mr Bonaccorso not only considers that these proceedings are an abuse of process and challenges the Deputy Commissioner’s standing, he also purportedly seeks to challenge the existence of the legislative scheme under which the proceedings are pursued; the Court’s jurisdiction and indeed, its existence; the very existence of Australia as a nation; the existence of the Constitution as a law under which the Federal Parliament enacts statutes, and whether certain statutes have been enacted in accordance with the requirements of the Constitution. He also claims that s 78B notices should be issued.

2. [18]

   The Commissioner’s case is advanced on the basis of an affidavit sworn by Mr Zafiriou.

3. [19]

   I received that affidavit despite he not being available for cross-examination, given the nature of what he there deposed to and the late notice given that he was required for cross-examination. There was a dispute as to whether that notice had been given by way of confirmation of earlier advice that he was required for cross-examination.

4. [20]

   Given that on an interlocutory application such as this, the evidence as to the basis on which the Deputy Commissioner will seek to make out the case against Mr Bonaccorso must be taken at its highest and that it is not an opportunity for a mini trial or rehearsal of the foreshadowed testing of Mr Zafiriou’s evidence, I concluded that he should not be required for cross-examination and that the hearing of the motions should not adjourn so that he could be brought to court for cross-examination.

The case does not raise Constitutional issues

1. [21]

   That many of the matters by which Mr Bonaccorso seeks to advance his case are not, in truth, in issue and do not necessitate the giving of s 78B Notices, as Mr Bonaccorso contended, became apparent from the submissions which he finally himself advanced. Those submissions, it should be noted, included the submission that “I stand on the land and I am only bound by the laws and the jurisdiction under the federal legislation”.

2. [22]

   Mr Bonaccorso claimed that but for the “interference” of the Australian Taxation Office he would have been able to sell a share portfolio in 2009 for some $8,767,224, in which event he would have paid tax on that amount, honestly assessed. Instead, the shares were sequestered and sold for a sum totalling $1,800,000. A question thus arose, Mr Bonaccorso contended, as to whether the ATO had the power to acquire his property without providing ‘just terms’ and using powers not authorised by s l51(xxxi) of the Constitution.

3. [23]

   It was in those circumstances, Mr Bonaccorso contended, that a s 78B Judiciary Act 1903 (Cth) notice should be issued.

4. [24]

   Section 78B(1) of the Judiciary Act provides:

5. [25]

   While Mr Bonaccorso relies on s 51(xxxi) to resist the Deputy Commissioner’s case, it is settled that “[a] law which is in truth a law imposing taxation escapes the requirement of s 51(xxxi) of the Constitution that an "acquisition of property ... for any purpose in respect of which the Parliament has power to make laws" be "on just terms"” (see Australian Tape Manufacturers Association Ltd v Commonwealth [1993] HCA 10; (1993) 176 CLR 480 at [30]).

6. [26]

   In the result, I am satisfied that s 78B notices are not required, these proceedings not in truth involving either a matter arising under the Constitution, or its interpretation.

7. [27]

   In Australian Competition & Consumer Commission v C G Berbatis Holdings Pty Ltd [1999] FCA 1151; (1999) 95 FCR 292, French J (as he then was) agreed with observations of Burchett J in Amrit Lal Narain v Parnell [1986] FCA 89; (1986) 9 FCR 479 at 486-489:

8. [28]

   French J also said:

9. [29]

   Mr Bonaccorso himself relied on the Constitution to advance various of his own submissions. He also relied on various statutes enacted by State and Federal Parliaments, for example the Crimes Act 1914 (Cth), the Bills of Exchange Act and the Crimes Act 1958 (Vic). The case which he finally advanced confirmed that in reality, the existence of the nation, its Constitution, Parliaments and courts and the proper enactment of various laws, including the Taxation Administration Act 1953 (Cth), are not in reality, in issue in these proceedings.

10. [30]

    In the result, in so far as the motions, notices to produce and subpoena seek the production of documents going to these matters, the orders sought cannot be granted and the notices and subpoena must be set aside.

Applicable principles on strike out

1. [31]

   There is no question as to the Court’s power to strike out the proceedings under Rule 14.28 of the Uniform Civil Procedure Rules 2005 (NSW), but the discretion can only be exercised in the limited circumstances discussed in Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [59], considered in O’Brien v Bank of Western Australia Ltd [2013] NSWCA 71; (2013) 16 BPR 31,705 where it was observed at [3]:

2. [32]

   Mr Bonaccorso did not address these principles, but by the arguments which he advanced, it was apparent that he contended that, in truth, the Deputy Commissioner has no cause of action against him. Mr Bonaccorso’s submissions are not all easy to understand, but amongst his concerns, which must be accepted are genuinely held, is that as the result of the Commissioner’s past actions, he is now in danger of losing his family home, if these proceedings are also pursued, given his mortgage liabilities, which exceed $800,000.

3. [33]

   That provides a good explanation as to what has motivated his various applications, but it does not provide a basis for the conclusion that he has met the high onus which falls upon him to establish that the Deputy Commissioner’s case is so certain to fail, that it should be struck out.

4. [34]

   For reasons which I will explain, while some basis for arguments which Mr Bonaccorso wishes to pursue can be seen, that the Deputy Commissioner’s case will necessarily fail, given the strength of the arguments which he seeks to advance, is not apparent.

The Deputy Commissioner’s standing

1. [35]

   The Deputy Commissioner’s standing derives from the Taxation Administration Act. Section s 7 provides for the office of Deputy Commissioner and s 4 for the offices of Commissioner of Taxation and Second Commissioners of Taxation and for the engagement of staff necessary to assist the Commissioner, under the Public Service Act 1999 (Cth). For the purposes of that Act, the Commissioner and that staff together constitute a Statutory Agency of which the Commissioner is the Head. The Public Service Act also gives the Commissioner the powers of an employer (s 20), including determination of employees’ duties (s 25). This permits the allocation of the duties of the office of Deputy Commissioner to a particular employee.

2. [36]

   Section 8 gives the Commissioner powers of delegation to Deputy Commissioners and provides for how they may be exercised. I note the definition of the principle “delegatus non potest delgare” in Black’s Law Dictionary, but that principle does not establish any lack of standing on the Deputy Commissioner’s part, as Mr Bonaccorso contended.

3. [37]

   Section 255-5 of the Taxation Administration Act provides that:

4. [38]

   Tax related liability is defined in s 255-1 in terms which includes a “pecuniary liability” defined in s 250(10) to include an RBA deficit debt arising under s 8AAZH(1).

5. [39]

   Section 15 provides that in proceedings brought by or on behalf of a Deputy Commissioner under, or arising out of, a taxation law the Deputy Commissioner may be legally represented. Section 15(2) provides that:

6. [40]

   In response to a notice to produce, documents relating to the Deputy Commissioner’s appointment have been produced to Mr Bonaccorso. They are in evidence. He did not rely on any of those documents to show that the Deputy Commissioner has not been appointed to his office; that he does not have power to bring these proceedings; or that those who appear for him in the proceedings, do not have the necessary authority to do so.

7. [41]

   That there is any real question as to the Deputy Commissioner’s standing is not apparent. That the Australian Tax Office is not a legal personality, as Mr Bonaccorso also contended, is not to the point. It is not a party to the proceedings. What was said in the High Court during submissions in 2000 in proceedings between parties to other proceedings, in which no judgment was given, simply takes the matter no further.

8. [42]

   In the result, it must be concluded that what Mr Bonaccorso raised as to the Deputy Commissioner’s standing, provided no basis for a strike out order.

Leave to amend the defence and to file a cross-claim

1. [43]

   Mr Bonaccorso’s amended defence certainly needs to be further amended, so that it complies with the requirements of the Uniform Civil Procedure Rules, which apply to all litigants.

2. [44]

   Those requirements include that a summary of the material facts on which Mr Bonaccorso relies be pleaded (Rule 14.7); that the effect of identified documents or spoken words must, so far as material, be stated, but that the precise terms of the document or spoken words must not be stated, except so far as those terms are themselves material (Rule 14.9). Further, that in accordance with Rule 14.14(2) there must be express pleading as to any matter:

3. [45]

   Given the requirements of the Rules, leave to amend in terms of the further amended defence filed on 4 December 2015 cannot be granted. That document is, in parts, difficult to follow and it certainly does not comply with the requirements of the Rules, in various respects. Nor can a defence make an application for strike out, as this proposed defence seeks to do at [12], for example, or require the production of documents, as it purports to do at [19], [20] and [21], for example. It also purports to put in issue matters which by the case which Mr Bonaccorso himself advanced on his motion, are clearly not, in truth, in issue, as I have explained.

4. [46]

   In the result, while Mr Bonaccorso must have an opportunity to re-plead, leave cannot be given to file the proposed pleading. He was earlier, properly, refused such leave by the Registrar. No basis on which the leave which he pressed in respect of that proposed pleading can be given.

5. [47]

   There was also an incomplete draft cross-claim filed with Mr Bonaccorso’s 11 September motion. That document also fails to comply with the requirements of the Rules, in various ways, which it is unnecessary to outline in detail. It is in large part difficult to understand; it poses questions; it fails to specify the relief which is claimed; and it also fails to particularise the damages which are sought. In the result the leave sought in respect of that pleading cannot be granted.

The claim that the tax the subject of these proceedings has already been recovered

1. [48]

   There is no issue between the parties that in Grimaldi (No. 5), Graham J gave judgment against Mr Bonaccorso for $3,552,577.81 unpaid income tax in respect of notices of assessment issued in 2009 for the 2006, 2007 and 2008 tax years. The proceedings and the assessment were concerned with income generated by the sale of shares in Murchison Metals Pty Ltd, sold through IFTC Broking.

2. [49]

   It is Mr Bonaccorso's case in these proceedings that he was a principal investor in that company; that Mr Grimaldi was a director, who defrauded him and other investors in the company; that he was deemed to have received profits from the sale of the shares, which he had never received, being the victim of that fraud; and that the Commissioner’s assessments rested on that fraud, aspects of which had only become known to him in 2013 or 2014, when he obtained access to certain documents under a Freedom of Information application.

3. [50]

   In an affidavit sworn by Mr Zafiriou in the 2009 proceedings, it appears that the respondents to the 2009 proceedings came to the attention of authorities as the result of the Project Wickenby investigation into international tax avoidance. Mr Bonaccorso contends that this affidavit supports his contention that he never received the profits on which the Commissioner’s 2009 assessment rested.

4. [51]

   It is common ground that Mr Bonaccorso had not filed a tax return in 2008, nor has he since filed any tax returns. Indeed, in April 2016 he served on the Commissioner notices of “non lodgement advice” for tax years going back to 2008, in which he says that he did not lodge returns in each of those years for "religious and spiritual reasons". Attached to those notices is an “affidavit of truth” in terms which it is not here necessary to explain, but by which he contends, amongst other things, that he is not liable to pay taxes.

5. [52]

   Mr Bonaccorso also contends that payment of income tax is voluntary. To establish this he relies on what was said in a document issued by the Australian Taxation Office, entitled “Taxpayer’s Charter - What you need to know”, in which it is said at p 23:

6. [53]

   The statement that “[w]e prefer to work with you cooperatively, providing you with help to meet your tax obligations voluntarily” he submits, establishes that while he may pay taxes voluntarily, he has no obligation to do so.

7. [54]

   Mr Bonaccorso may have such a belief, but that his obligations are as he claims them to be, cannot be established by this document.

8. [55]

   It was a default assessment, it is common ground, issued in relation to the 2008 tax year by the Commissioner as the result of a May 2009 audit decision, which explained the basis of that assessment, which became the subject of the Federal Court proceedings. That assessment, on the Deputy Commissioner’s case, also later became the base assessment for the tax which is pursued in these proceedings, Mr Bonaccorso having himself not lodged any tax returns since that assessment; not having appealed the 2009 judgment given in Grimaldi (No. 5), not having pursued proceedings which he commenced in the AAT, to challenge the Commissioner’s 2009 assessment; or succeeded in the objection to that assessment, which he did pursue.

9. [56]

   It was in June 2009 that Mr Bonaccorso pursued an objection to the assessment, which failed. Reasons for that decision were given in June 2010. There was also no challenge to that decision.

10. [57]

    Mr Bonaccorso also referred in his submissions to a mediation which, it is common ground, followed proceedings in the High Court in relation to other proceedings involving the Crime Commission and other defendants to the 2009 Federal Court proceedings, which it is not necessary here to outline. On his case the result of that mediation was that the Commissioner had settled with all parties to those proceedings, other than him.

11. [58]

    Mr Bonaccorso also contends that the Commissioner later twice brought bankruptcy proceedings against him, but they were not finally pursued. His defence in those proceedings was that his tax debt, the subject of the order made in in Grimaldi (No. 5), had been extinguished by payments made by other respondents to the 2009 proceedings to the Tax Commissioner. A subpoena was issued in the bankruptcy proceedings, which required the production of documents sought in relation to IFTC Broking, Raphael J having concluded that they were relevant to what was in issue on the bankruptcy application (matter no 2136 of 2013). The documents were produced, but the proceedings were later withdrawn by the Commissioner.

12. [59]

    In these proceedings the Deputy Commissioner contends that Mr Bonaccorso cannot challenge the calculation of the $3,552,577.81 he was ordered to pay in Grimaldi (No. 5). The Deputy Commissioner’s case is that it is not the same tax which is now sought to be recovered from Mr Bonaccorso; that while the 2009 assessment was relevant to the calculation of the RBA deficit debt which is pursued in these proceedings, the tax now sought to be recovered relates to the 2013 tax year. The Deputy Commissioner also contends that payments made in respect of the income the subject of the 2009 assessment are irrelevant to the tax debt now pursued. That is in issue.

13. [60]

    In Grimaldi (No. 5) it was observed by Graham J at [22] that “[i]t is immaterial to the validity of the power to assess one taxpayer to tax that the Commissioner believes it possible that another taxpayer is liable to tax in respect of the same particular income.” Further at [23] his Honour said “The fact that a tax liability remains outstanding against two taxpayers pending the ascertainment of the taxpayer truly liable is no bar to the exercise of the power to assess both to tax in respect of the same income.” At [48] his Honour concluded that the amount claimed as the result of the 2009 assessment was due and payable by Mr Bonaccorso. There was finally no objection in those proceedings by Mr Bonaccorso to summary judgment being entered against him.

14. [61]

    In Commissioner of Taxation v Grimaldi (No. 9) [2009] FCA 1404; (2009) 181 FCR 275 orders were also sought against the fourth respondent, MGG Capital Pty Limited As Trustee For Webtel Management Super Fund for $25,909,612.54. They were resisted on the basis of the orders earlier made against another respondent. Graham J observed at [6] – [9]:

15. [62]

    At [28] his Honour reiterated that “[p]lainly, alternative or concurrent assessments are permissible and judgments founded upon such assessments are also permissible. As Davies J observed one might expect the courts to intervene to ensure that alternative assessments and judgments based thereon would not lead to double recovery by the Commissioner.” Nevertheless, his Honour concluded that the existence of the judgment against Mr Grimaldi did not estop the Commissioner from securing a judgment against MGG Capital.

16. [63]

    In these proceedings Mr Bonaccorso relies on Graham J’s observations, contending that, in fact, the Commissioner has recovered the tax payable on the income the subject of the 2009 litigation, which was the subject of the 2009 assessment as to his tax liability, from other taxpayers. Accordingly, on his case, he no longer has any liability in respect of that income and it would involve double recovery to permit the Deputy Commissioner now to pursue him for the RBA deficit debt sought to be pursued in these proceedings, given that it has been calculated by reference to the order made against him in the 2009 proceedings in respect of the income the subject of the 2009 assessment. He also contends that the orders there made against him were obtained as the result of a fraud, which only came to his attention long after judgment in Grimaldi (No. 5) was given. In the result, even though the judgment has not been challenged, the Commissioner is not entitled to rely on the orders there made.

17. [64]

    Attached to Mr Bonaccorso’s December 2015 affidavit is a deed of settlement between the Commissioner and other respondents to the 2009 proceedings, who were also parties to other proceedings in New Zealand, in which certain freezing orders had been made. One of the matters there agreed was for payment by Mr Grimaldi of amounts which Mr Bonaccorso contends the Commissioner accepted as settling the tax assessed against he and IFTC Broking, dealt with in Grimaldi (No. 5). It is on these payments and their alleged consequences, that Mr Bonaccorso’s case depends.

18. [65]

    In his February 2015 affidavit, Mr Bonaccorso also deposed that in excess of half of the 2009 judgment debt has been recovered from him and that execution of a writ against his property at Terrigal is being pursued. That is being pursued despite what transpired in the bankruptcy proceedings which were not finally pursued and the views there expressed during the course of hearing by Raphael J (matter no 2136 of 2013).

19. [66]

    On his evidence, in those proceedings Raphael J had given him leave to issue a subpoena for production of documents which he contended were also relevant in these proceedings, namely a “May 2009 Audit Report – Reasons for decision in respect of IFTC Broking Services Limited.” That document, he contends, establishes that the tax the subject of the orders made against him in 2009 has been recovered from other respondents to those proceedings.

20. [67]

    The Deputy Commissioner relied on the affidavit evidence of Mr Zafiriou, who has day-to-day conduct of these proceedings, which went to the ATO’s computerised accounting system. That system records that Mr Bonaccorso had various liabilities, from time to time, for income tax instalments and pay as you go tax, as well as BAS liabilities, under the Income Tax Assessment Act. The total of his liabilities the subject of these proceedings, including interest, there recorded is $1,593,255.86. Copies of PAYG instalment advices issued to Mr Bonaccorso, including those issued for the October to December 2012 quarter, the January 2013 to March 2013 quarter, the April 2013 to June 2013, as well as advice as to how interest on outstanding PAYG was calculated, were annexed to his affidavit.

21. [68]

    The Deputy Commissioner’s case is that these proceedings are concerned with those tax liabilities, not the liabilities which were the subject of the 2009 proceedings, relying on s 8AAZH(1) of the Taxation Administration Act which provides:

22. [69]

    Mr Zafiriou’s evidence explains how Mr Bonaccorso’s alleged RBA debt was calculated. On the submissions advanced for the Deputy Commissioner it is apparent that because Mr Bonaccorso has not filed a tax return since the orders made against him in Grimaldi (No 5), that those calculations depend at least, in part, on the assessment which was the subject of that order. That is said to follow from the provisions made in s 45-405, s 45-325 and s 45-330, which defines a taxpayer’s “base assessment” to be the latest assessment for the most recent year in which an assessment had been made, in his case for the 2008 tax year.

23. [70]

    The Deputy Commissioner’s case is that the alleged tax debt pursued in these proceedings is thus not the same tax which was the subject of the order made in Grimaldi (No 5). It is the effects of s 8AAZC(3) and s 8AAZD(1) which were relied on to establish an RBA for Mr Bonaccorso and to allocate a primary tax debt, as defined in s 8AAZA. Sections 8AAZI and 8AAZJ are also relied on. They provide:

24. [71]

    It is in that way that the 2009 assessment is said to be relevant to the tax debt which the Commissioner pursues. Section 45-15 permits the Commissioner to give a tax payer an instalment rate of the kind served on Mr Bonaccorso. It is s 45-112 which imposes a liability on tax payers to pay instalment amounts of the kind served on Mr Bonaccorso.

25. [72]

    Section 45-50 imposes liability on such a tax payer to pay quarterly instalments, at the time specified, in Mr Bonaccorso's case, in s 45-61(b). Section 45-130(a), which the Commissioner contends applies to Mr Bonaccorso, defines “quarterly”. It provides:

26. [73]

    It is s 45-80 which makes provisions as to general interest. In the result, the Deputy Commissioner contends, prima facie effect must be given to the RBA statements and evidentiary certificates served on Mr Bonaccorso. The Deputy Commissioner accepted, however, that these provisions left open the possibility that Mr Bonaccorso could lead evidence at the hearing to establish that they were not accurate, for example.

27. [74]

    What is evident from the case which the Deputy Commissioner so advances is that what is now pursued against Mr Bonaccorso has been calculated by reference to the amount specified in the assessment which became the subject of the order made against him in Grimaldi (No. 5). That was the Commissioner’s last issued tax assessment for Mr Bonaccorso. Ordinarily such assessments cannot be challenged in a court such as this. Such a challenge must be pursued in the AAT, a course which Mr Bonaccorso in fact took, but abandoned (see s 177 of the Income Tax assessment Act).

28. [75]

    Mr Bonaccorso’s case is, however, that the Commissioner accepted in those proceedings that the same tax could not be twice recovered from different tax payers and such payment is evidenced by the deed of settlement between the Commissioner other respondents to the 2009 proceedings. The tax the subject of his 2009 assessment was, as events later unfolded, not recoverable from him, that it having been recovered by the Commissioner from other taxpayers respondent to those proceedings, who were also assessed to have been responsible for tax on the income the subject of those assessments.

29. [76]

    That, it seems to me, cannot simply be dismissed as an unarguable basis for Mr Bonaccorso’s challenge to the Commissioner’s calculation of the debt he is claimed to have for the 2013 tax year. If he were able to establish that the 2013 assessment, in reality, involves double recovery of tax on the income the subject of the 2009 proceedings, because firstly, that some, or all of that tax has already been recovered from another taxpayer and secondly, that any later assessment cannot, as a result, be based on tax that was not payable by him, as Graham J discussed in Grimaldi (No 9), it might be expected that the Court would intervene.

30. [77]

    Furthermore, were that to be shown, as a model litigant it might be expected that the Deputy Commissioner would not press its case further against Mr Bonaccorso.

31. [78]

    Mr Bonaccorso also seeks to rely on a tax return which showed that he purportedly owed $1,616,651.35 tax, which he alleges was fraudulently lodged, without his consent or authority. Mr Bonaccorso also contends that the Deputy Commissioner has unclean hands and must be refused equitable relief. Mere silent acquiescence and partaking the benefits of such fraud, on his case was sufficient. It is more difficult to see the basis of these submissions.

32. [79]

    Despite, however, what does appear to be arguable by Mr Bonaccorso, none of his submissions established a basis for the conclusion that Mr Bonaccorso has met the heavy onus which falls upon him on his strike out application, to show that the Deputy Commissioner’s case has a "fanciful" prospect of success, or that the outcome of these proceedings is so certain, that it would be an abuse of the process of the Court to allow the proceedings to go forward. In the result, no strike out order can be made.

The notices to produce and subpoena

1. [80]

   The Commissioner contends that relevant documents have been served and that Mr Bonaccorso’s notices and subpoena otherwise seeks the production of documents which are irrelevant to what is in issue in these proceedings and hence should be set aside.

2. [81]

   Mr Bonaccorso pressed his case, submitting that advice he had received from the Deputy Commissioner’s solicitors, as to how his tax had been calculated under statutory provisions on which those calculations were based and the documents he had been served were “absurd”. He also submitted:

3. [82]

   The documents which he pursues, which go to the matters the subject of the assessment the subject of the 2009 proceedings, do not appear to be relevant to what is in issue in these proceedings.

4. [83]

   As I have explained Mr Bonaccorso’s case does rest, in large part, on the conclusions reached in the 2009 proceedings and what later eventuated as to the payment of the income tax the subject of those proceedings and the consequences of those payments, for the calculation of tax which he might owe, under the statutory scheme, in later years. That is why Mr Bonaccorso relied on the Deputy Commissioner’s pursuit, on two occasions, of bankruptcy proceedings, which were withdrawn after his pursuit of a subpoena which he had issued in those proceedings, which he claimed evidenced that the tax the subject of the 2009 order had been paid by others.

5. [84]

   Mr Bonaccorso also contends that such documents are thus also relevant to his defence to the Deputy Commissioner’s claim that he has an obligation to pay further tax for the 2013 year.

6. [85]

   In the May 2015 notice to produce he thus seeks production of:

7. [86]

   The apparent relevance of the other documents which Mr Bonaccorso seeks to pursue, so far as these proceedings are concerned, is that thereby, as I have explained, he seeks to challenge the existence not only of the legislative scheme pursuant to which the Deputy Commissioner claims Mr Bonaccorso’s tax liability for the 2013 tax year rests, but the very existence of the Commonwealth of Australia and its Constitution, the laws enacted by the Commonwealth Parliament under that Constitution and the appointment of the Deputy Commissioner and other ATO officers, to their respective offices under those laws.

8. [87]

   Nothing advanced by Mr Bonaccorso established a conceivably arguable basis for all of those challenges. Nothing which he has submitted suggests that what is sought to be produced is pursued for a legitimate forensic purpose, or that its production is pursued bona fide. To permit the pursuit of such documents would be oppressive and an obvious abuse of the Court’s processes. They do not have any apparent relevance to what is in truth in issue in these proceedings.

Other relief

1. [88]

   Final relief, such as an order for damages in Mr Bonaccorso’s favour, or removal of a writ and orders under the Crimes Act, which were not in truth pressed on the case which Mr Bonaccorso finally advanced, also cannot be entertained.

Notices Quo Warranto

1. [89]

   I should finally observe that Mr Bonaccorso variously sought the issue of such notices and, in his final submissions, claimed that such a notice had already been issued.

2. [90]

   Section 12 of the Supreme Court Act 1970 (NSW) provides that:

3. [91]

   It follows that the leave sought may not be granted and that Mr Bonaccorso is not entitled to pursue information by way of such a notice.

Costs

1. [92]

   The usual order under the Rules is that costs, as agreed or assessed, follow the event. The parties should consider the question of costs and provide short written submissions as to any costs order which they seek, within 14 days.

2. [93]

   Otherwise, for the reasons given, I make the following orders:

   1. (1)

      Mr Bonaccorso's notices to produce and subpoena are set aside, other than as to the document described at [85].

   2. (2)

      Mr Bonaccorso has leave to file a further defence, within 21 days.

   3. (3)

      Otherwise Mr Bonaccorso’s motions are dismissed.

   4. (4)

      The proceedings are otherwise adjourned to the Registrar’s list on 3 June 2016.