Deputy Commissioner of Taxation v Freudenstein

The Deputy Commissioner of Taxation (the Commissioner) sought leave to appeal from a decision of a single judge of the Supreme Court of New South Wales. The dispute concerned the Commissioner's claim to recover from Mr Freudenstein, a director of a corporate taxpayer, an amount of $66,000 owed by the company. Mr Freudenstein sought to rely on a defence under section 222AQD of the *Taxation Administration Act 1953* (Cth), which requires the Commissioner to show that the director had reasonable grounds to expect the company would comply with an agreement to pay its tax liabilities by instalments. The single judge had found that Mr Freudenstein did have such reasonable grounds.

The primary legal issue before the Court of Appeal was whether the single judge erred in finding that Mr Freudenstein had reasonable grounds to expect the company would comply with the instalment agreement, thereby establishing a defence under section 222AQD. The Commissioner argued that this finding was not open to the judge on the evidence.

The Court of Appeal, comprising Spigelman CJ, Mason P, and Giles JA, considered whether there was an arguable case for error in the single judge's findings of fact. The Court noted that the amount in dispute was $66,000 and that the appeal did not raise any significant question of principle. After reviewing the material, the Court concluded that while an arguable case for error might exist, it was not a strong case. Consequently, the Court determined that leave to appeal should not be granted.

The summons for leave to appeal was dismissed with costs.