PCQT and Commissioner of Taxation (Taxation) - [2025] ARTA 1873

PCQT and Commissioner of Taxation (Taxation) [2025] ARTA 1873 (19 September 2025)
Applicant/s:  PCQT
Respondent:  Commissioner of Taxation
Tribunal Number:                2023/6362

Tribunal:General Member J Dunne
Place:Melbourne
Date:19 September 2025
Decision:The Tribunal affirms the decision under review.

.................................[SGD].................................
General Member J Dunne
Catchwords
TAXATION – superannuation guarantee charge – whether salary or wages were paid – nature of the Applicant’s burden of proof – weight to be given to sworn evidence in other proceedings when witness is not before the Tribunal – assessment of overall evidence – finding that the Applicant did not meet his burden of proof
TAXATION – superannuation guarantee charge penalty amounts – remission – finding that the Applicant did not meet his burden of proof
Legislation
Administrative Review Tribunal Act 2024 (Cth) s 9, 52
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth)
Evidence Act 1995 (Cth) ss 63, 64, Schedule 1, Part 2
Fair Work Act 2009 (Cth) ss 323, 544, 545
A New Tax System (Goods and Services Tax) Act 1999 (Cth) s 17-5
Income Tax Assessment Act 1936 (Cth) ss 159ZR, 166A, 169A
Income Tax Assessment Act 1997 (Cth) Subdivision 82-C, ss 290-60, 995-1
Superannuation Guarantee (Administration) Act 1992 (Cth) ss 11, 12, 16, 19, 26, 27, 28, 29, 31, 32, 33, 35, 36, 42, 43, 59, 62, 74
Superannuation Guarantee (Administration) Regulations 2018 (Cth) regulations 12, 12A
Superannuation Guarantee Charge Act 1992 (Cth) s 6
Taxation Administration Act 1953 (Cth) ss 3AA, 14ZZK, Schedule 1 ss 16-155, 155-15, 350-5, 350-10(1), 350-10(3A), 388-60, 388-65, 388-75
Cases
Bosanac v Commissioner of Taxation [2019] HCA 1
Burswood Care Pty Ltd ATF Roshana Family Trust v Federal Commissioner of Taxation [2023] AATA 1468
Commissioner of Taxation v Ross [2021] FCA 766
Danmark Pty Ltd v Federal Commissioner of Taxation; Forestwood Pty Ltd v Federal Commissioner of Taxation (1944) 7 ATD 333
Delbake and Commissioner of Taxation [2024] AATA 449
Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41
Deputy Federal Commissioner of Taxation v Lawson 2017 ATC 20,644
Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404
Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614
Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227
Gashi v Federal Commissioner of Taxation [2013] FCAFC 30
Geelong Turf Company Pty Ltd and Commissioner of Taxation [2023] AATA 1718
George v Federal Commissioner of Taxation (1952) 86 CLR 183
Healy v Federal Commissioner of Taxation [2013] AATA 281
Jones v Dunkel [1959] HCA 8
McPartland v Federal Commissioner of Taxation [2025] FCAFC 23
Payne v Federal Commissioner of Taxation [2016] AATA 104
Penrowse Pty Ltd v Federal Commissioner of Taxation [2013] AATA 10
Pye and Commissioner of Taxation [2004] AATA 143
RFZD and Commissioner of Taxation [2022] AATA 988
Rinaldo v Federal Commissioner of Taxation [2011] AATA 839
SBXB and Commissioner of Taxation [2025] ARTA 999
S&H Investments Pty Ltd v Federal Commissioner of Taxation [2024] AATA 893
Stone v Federal Commissioner of Taxation (1918) 25 CLR 389
Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63
Watson v Federal Commissioner of Taxation [1999] AATA 883
Secondary Materials
Australian Bureau of Statistics Jobs quadrant: Labour Statistics (2022)
Australian Taxation Office Practice Statement Law Administration PS LA 2007/10 Making default assessments: section 36 of the Superannuation Guarantee (Administration) Act 1992
Australian Taxation Office Practice Statement Law Administration PS LA 2021/3 Remission of additional superannuation charge
Australian Taxation Office Superannuation Guarantee Ruling SGR 2009/2 Superannuation Guarantee: Meaning of the Terms “ordinary time earnings” and “salary or wages”
Australian Taxation Office website Self-assessment and the taxpayer Taxation Office website Tax time lodgment statistics (28 August 2025) Memorandum to the Indirect Tax Laws Amendment (Assessment) Bill 2012 (Cth)
Fair Work Ombudsman website: ”Frequency of pay” Australian Government, The Treasury ReThink: Tax Discussion Paper (2015)
Statement of Reasons
ISSUES AND SUMMARY OF CONCLUSIONS

This case is about the superannuation guarantee charge (“SGC”). Under the Superannuation Guarantee (Administration) Act 1992 (Cth) (“SGAA”) if an employer does not make prescribed superannuation guarantee contributions for employees, the employer has a superannuation guarantee shortfall.[1] Under the Superannuation Guarantee Charge Act 1992 (Cth) a charge is imposed on the employer equal to the amount of the shortfall, and this is payable by the employer under section 16 of the SGAA.[2]
[1] Section 19 of the SGAA.
[2] Section 6 of the Superannuation Guarantee Charge Act 1992 (Cth).
If there is a shortfall, the SGAA requires the employer to lodge a statement for the relevant quarter by a specified date.[3] If that statement is not filed, the Commissioner may issue a default assessment under section 36 of the SGAA if the Commissioner is of the opinion that the employer is liable to pay SGC for that quarter. The assessment is of the amount that in the Commissioner’s opinion might reasonably be expected to be the shortfall.[4]
[3] Section 33 of the SGAA.
[4] The Commissioner has issued guidance on section 36 in Practice Statement Law Administration PS LA 2007/10 Making default assessments: section 36 of the Superannuation Guarantee (Administration) Act 1992.
On 26 August 2021, 27 August 2021 and 1 September 2021, the Commissioner issued default assessments (the “SGC Assessments”) to the Applicant for SGC as well as penalty assessments (“SGC penalties”) under Part 7 of the SGAA.[5] The SGC Assessments and SGC penalties related to each of the 32 quarters ending 30 September 2009 to 30 June 2017 inclusive (“Relevant Period”). The Applicant works in the professional services industry. The SGC Assessments and SGC penalties relate to his former personal assistant (“Ms M”), who is also his former spouse.
[5] T64 to T127.
On 25 October 2021 the Applicant objected to the SGC Assessments in accordance with section 42 of the SGAA, and the Applicant filed additional objection submissions on 13 April 2022 and 10 November 2022.[6] On 31 July 2023 the Commissioner disallowed the Applicant’s objection,[7] and on 29 August 2023 the Applicant filed proceedings in this Tribunal.[8]
[6] T128, T129, T133, T134.
[7] T2, T136.
[8] T1. On 14 October 2024, the Administrative Appeals Tribunal became the Administrative Review Tribunal. Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 proceedings that were not finalised before 14 October 2024 are continued and finalised by the Administrative Review Tribunal. Anything done in relation to any such proceeding before 14 October 2024 is taken to have been done by the Administrative Review Tribunal.
The issue between the parties is whether wages and salary were paid to Ms M in the Relevant Periods.[9] There is no dispute that if salary or wages were not paid to Ms M then the SGC Assessments must fall away, as would the SGC penalties.[10]
[9] Sections 11, 19 and 36 of the SGAA.
[10] Commissioner’s Outline of Submissions dated 15 July 2025 (“Commissioner’s Outline”) [69], [73].
The first issue is whether the Applicant has met his burden of proof under section 14ZZK of the Taxation Administration Act 1953 (Cth) (“TAA”) to demonstrate that:
(a)the SGC Assessments are incorrect and should be zero because salary or wages were not paid to Ms M, taking into account all of the evidence; or
(b)in the alternative, the SGC Assessments are incorrect and should total $3,287.38, as salary or wages were only paid for a very short period and the SGC Assessments should be reduced to reflect that short period.[11]
[11] Applicant’s Outline of Submissions dated 2 July 2025 (“Applicant’s Outline”) [77]. Applicant’s Revised Assessment (as detailed in Outline of Submissions [74]).
The second issue is whether the SGC penalties applied were correctly applied, and/or should be remitted.
For the detailed reasons outlined in this decision, I have concluded that:
(a)The Applicant has not met his burden of proof to demonstrate that the SGC Assessments were excessive, either on the basis that Ms M was not paid salary or wages or was only paid salary or wages for a short period.
(b)In terms of SGC penalties, they were appropriately applied, and the Applicant has demonstrated no exceptional circumstances at law to justify a remission below a 100% penalty. In any event, the Applicant has not demonstrated any circumstances that justify reduced culpability on his part and a further remission of the penalties.
The Commissioner’s decision is affirmed.
REASONS FOR DECISION – THE SGC ASSESSMENTS
Evidence before the Tribunal and findings on the evidence
The employment of Ms M
Ms M commenced employment with the Applicant on 1 July 2009.[12] An employment letter of offer dated 30 June 2009 was sent to Ms M by the Applicant.[13] Ms M’s employment was also confirmed by the Applicant by letter dated 17 September 2009.[14]
[12] ST1-2584.
[13] ST1-2581 to ST1-2583.
[14] ST1-2584.
While issues relating to Ms M’s employment status, and other issues such as whether she repudiated her contract were all initially disputed by the Applicant for various technical reasons in his objection,[15] those arguments were withdrawn and not pursued before the Tribunal.[16] It is accepted that Ms M was an employee of the Applicant (although there is apparent dispute as to whether that was the position in all of the Relevant Periods).[17]
[15] T128. These issues were also raised in the Applicant’s Statement of Facts, Issues and Contentions dated 13 September 2024 (“Applicant’s SFIC”).
[16] Applicant’s Outline [5].
[17] Applicant’s Outline [68]. The issue of whether Ms M was an employee of Reflex Corporation Pty Ltd in the September 2009 quarter was not raised or pressed before the Tribunal, so it has not been considered.
In terms of Ms M’s duties, these were set out in the employment letter of offer and included establishing and maintaining MYOB bookkeeping systems to record appropriate records for GST, BAS and income tax, and liaising with the Applicant’s accountant to prepare the necessary tax documents.[18]
[18] ST1-2584; Applicant’s Outline [8].
The Applicant also says that Ms M was provided full access to his bank accounts, and was required to liaise with the accountant to ensure tax compliance obligations (such as lodgment and payment of tax) were satisfied.[19] The Applicant says that at all relevant times he relied upon Ms M to manage his tax and financial affairs, and to ensure his obligations as an employer were met, including tax obligations.[20]
[19] Witness Statement of the Applicant dated 4 October 2024 (Applicant’s Witness Statement”) [6], [7], [8], [11], [12], [14]. Applicant’s Outline [15] to [19].
[20] Applicant’s Outline [24]; Applicant’s Witness Statement [7], [10]; T171-1467 [8] to [9].
There is some evidence of the Applicant having made superannuation contributions in relation to Ms M’s employment for a short period.[21] The Applicant’s evidence was that he had no knowledge of that.[22]
[21] ST3 is comprised of Ms M’s MLC statements showing minimal superannuation contributions in the 2009, 2010 and 2011 income years, and thereafter only 34 cents contributed – a total of just over $7100. The Commissioner’s Outline summarises the superannuation contributions at Table 3 [30].
[22] Transcript 24 [19]-[44].
The Applicant says that from around 2011 Ms M worked less for the Applicant, and focussed on her studies in counselling.[23] The Applicant says in some of his filings that her employment ended in 2011[24] and in others that she “worked less” for the Applicant from 2011.[25] Ms M’s evidence was that she left the Applicant’s employment on 30 June 2017[26] or 1 July 2017.[27]
[23] Applicant’s Outline [13] and [68] submit this was when the employment relationship ended.
[24] Applicant’s Witness Statement [3]. Applicant’s Outline [68].
[25] Applicant’s Outline [13].
[26] T177-1529 [122]; T178-1537 [19]; T196-2267 [6].
[27] T139-954 [13].
During Mr Molesworth’s cross-examination of the Applicant, the Applicant suggested that Ms M was only entitled “at times” to salary or wages but that all “tacitly broke down” in about 2012/13 when Ms M started her counselling business, that she was always “underemployed” in her role with him, and that it did not require full time attendance from Ms M.[28] The Applicant also said that the arrangement with Ms M ceased “around about 2015”.[29] Ms M’s evidence is that she assisted, but the Applicant agreed in 2016 to take over the management of the financial affairs of his business.[30] The Applicant said in evidence before the Tribunal that Ms M “continued to perform functions … up until it became clear that we were separating.”[31] The Applicant’s evidence before the Tribunal[32] was that the Applicant and Ms M separated in 2019. There is also evidence from the Applicant on the T Documents from other proceedings that suggests Ms M ceased to be employed by him from around December 2018, was a “casual employee” and operated her counselling business concurrently from 2012.[33] The Applicant’s Supplementary Outline of Submissions dated 30 July 2025 (“Applicant’s Closing Submissions”)[34] confirm that the date the employment relationship terminated is disputed.[35]
[28] Transcript 6 [40]-[47], 7 [20].
[29] Transcript 7, [38]-[40].
[30] T172-1483 [32].
[31] Transcript 8, [11]-[12].
[32] Transcript 8, [24].
[33] T197-2355 [15]-[16].
[34] The Commissioner did not provide written closing submissions but provides oral submissions before the Tribunal (“Commissioner’s Closing Submissions”).
[35] Applicant’s Closing Submissions, footnote 2.
As is further explained below, the Applicant relies upon sworn evidence from Ms M provided in other proceedings and submits it is of significant weight.[36] He says that Ms M is the person in a position to know whether she was paid salary or wages.[37]
[36] Applicant’s Closing Submissions [4].
[37] Applicant’s Closing Submissions [62].
However, when considering the date when the employment relationship between the Applicant and Ms M ended, Ms M’s prior sworn evidence is that the employment relationship ended at the end of the 2017 income year – either 30 June 2017 or 1 July 2017. As is clear from the above, the Applicant does not rely upon that aspect, as his evidence and submissions are that the employment relationship with Ms M ended around 2011, in 2012/13, around about 2015, or “up until it became clear that we were separating” which is in 2019 or potentially around December 2018. The Applicant also says Ms M was in charge of his financial affairs as a general matter, and does not appear to accept her evidence that she stepped back from some tasks in 2016. It is clear from all of this that the Applicant relies upon only some of Ms M’s prior evidence in other proceedings.[38]
[38] The Tribunal specifically notes that it could point to numerous examples in Ms M’s prior sworn evidence that the Applicant does not accept, but has provided an example that is relevant to the current tax proceedings. There are serious allegations made by Ms M in sworn evidence which the Applicant does not accept.
The issues between the Applicant and Ms M
The personal life of parties before the Tribunal is rarely relevant to the determination of taxation matters. In this case these matters impact the Tribunal’s assessment of the evidence, and this means that unfortunately some of these matters need to be briefly noted.
The relevant matters are as follows:
(a)The Applicant and Ms M were married on 2 January 2010.[39]
(b)Around May 2019 the Applicant and Ms M separated,[40] although there is also a suggestion there was a separation at the end of 2018.[41] On 21 October 2020 a divorce order was issued, and the divorce was effective on 22 November 2020.[42]
(c)Following the breakdown of the Applicant and Ms M’s personal relationship, the situation between them became extremely contentious. Various allegations have been made, Ms M and the Applicant have engaged in litigation in various Courts, and various complaints have been investigated by and/or referred to various regulators in respect of Ms M, the Applicant and, on occasion, the Applicant’s family members have also been impacted. The regulators included the Commissioner as Ms M sought unpaid superannuation.[43] The present proceedings are linked to actions taken by Ms M with the Commissioner.
(d)The T Documents are littered with many hundreds of pages of material from unrelated litigation and other allegations between the Applicant and Ms M. The relevance of that material is that it confirms that unfortunately there is a significant level of acrimony between the Applicant and Ms M. This is acknowledged by the Applicant both at the hearing and in the Applicant’s filings.[44]
(e)The litigation between the Applicant and Ms M included proceedings in the Federal Circuit and Family Court and claims by Ms M in the Federal Court under the Fair Work Act 2009 (Cth) (“the FWA proceedings”) which included claims for unpaid leave entitlements, unpaid superannuation and unpaid wages.[45]
(f)In the FWA proceedings, periods prior to 11 November 2015 in which Ms M made claims were found by the Federal Court in 2023 to be time-barred from pursuit pursuant to subsection 545(5) of the Fair Work Act 2009 (Cth). The Tribunal notes that a submission was previously made by the Applicant that this, of itself, means that no salary or wages were paid.[46] That submission was not made at the hearing, but for the record, it is misguided, as a holding by the Federal Court that a claim is time-barred is not a finding that salary or wages were unpaid. It is a finding that no decision needs to be made on that point.[47]
(g)It is not disputed that Ms M accessed and withdrew funds from the Applicant’s bank account, and that on occasion these withdrawals were for considerable amounts.[48] It is noted, for example, that on bank statements that are on the T Documents some (but not all) lump sum withdrawals are referenced to as “Payment [Ms M], backpay”[49] and the Applicant’s evidence was he did not know what those payments were for and did not provide the reference which appears in the bank statements.[50]
[39] Applicant’s Outline [12]; T128-828 [2.5]; Commissioner’s Outline [12].
[40] T128-829 [2.14]; T177-1513 [2]; T164-1419 [A]; Applicant’s Outline [24].
[41] T197-2355 [15].
[42] T175. Commissioner’s Outline [32].
[43] Applicant’s Objection dated 25 October 2021 (“Objection”) [2.16] T128-829. ST3-2637 to ST3-2688 sets out the MLC superannuation statements for Ms M, demonstrating minimal superannuation payments were made into Ms M’s account.
[44] For example, Applicant’s Outline [61].; Applicant’s Addition of a Party Submissions dated 26 February 2025 (“Applicant’s Addition of a Party Submissions”) [11]-[12]. Applicant’s Witness Statement [17] to [22], particularly the table at [19]. Also, T133-853 [55] and following.
[45] T133-844 [5], [8] and following, [55] and following; T135; Applicant’s Outline [25]; Commissioner’s Outline [31] and following.
[46] Applicant’s letter to the Commissioner dated 26 June 2023 T135-884 [6b], [8]. Applicant’s SFIC [11], [14].
[47] The Tribunal agrees with the Commissioner’s SFIC [71].
[48] Applicant’s Witness Statement [19]. ST2-2628 to 2629 [30.5]-[30.7]; ST2-2631 [31]. Commissioner’s Outline [52]; [82].
[49] T196-2320.
[50] Transcript 26 [15], [30].
The lump sum withdrawals

Mr Rubenstein submitted that it was “disingenuous” and “with greatest respect, intellectually dishonest” [51] for the Commissioner to suggest that the lump sum withdrawals by Ms M may include remuneration for Ms M (as Mr Molesworth suggested in his cross-examination of the Applicant). Mr Rubenstein suggested that this had been raised late by the Commissioner, only at the hearing.[52]
[51] Transcript 35 [15], [22].
[52] Transcript 35 [15]-[29], 36 [35]-[44].
The Commissioner raised this issue in the Commissioner’s Outline and in cross-examination[53] but it is true, as Mr Rubenstein says, that this is not apparent in earlier filings, including, particularly, the objection decision. The payments from the Applicant’s account seem to the Tribunal to be a glaringly obvious issue.
[53] Commissioner’s Outline [82].
The Commissioner said in its oral closing submissions before the Tribunal that its case is not that the lump sum payments are salary or wages, rather that the Tribunal cannot be satisfied they are not, and this is entirely consistent with the Commissioner’s case all along which was focussed upon the Applicant’s burden of proof.[54] The Commissioner says that the delay in raising the issue was caused by the Applicant’s failure to meet the Tribunal’s directions which, by domino effect, led to the Commissioner’s Outline being filed the day before the hearing.[55] It is true that the Applicant was remiss in meeting timeframes in the later part of the period immediately prior to the hearing.
[54] Transcript 44 [38]-[40].
[55] Transcript 45 [10]-[15].
The debate as to when the Commissioner raised the lump sum withdrawals specifically is of little real importance. The Tribunal provides an independent mechanism of review, it can inform itself on any matter, and it is not constrained in its task by what the Commissioner puts in its objection decision or any other filing.[56] Further, the Applicant has been given the opportunity to make submissions on this and any other issue, including subsequent to the hearing. The Applicant took that opportunity and provided both oral and written closing submissions on this point, including after the hearing.
[56] Section 9 and section 52 of the Administrative Review Tribunal Act 2024 (Cth). Cases, such as, for example Healy v Federal Commissioner of Taxation [2013] AATA 281 [45].
Mr Rubenstein submitted that the lump sum withdrawals are not relevant as salary or wages comprise a regular payment at set intervals and this is ‘characteristic of a wage or remuneration’.[57] Mr Rubenstein’s point is valid at employment law as wages or salary are paid at set intervals, and the Tribunal understands at employment law this must be at least monthly.[58] Mr Rubenstein points out that the employment arrangement between Ms M and the Applicant said wages would be paid weekly.[59] While not conceding that any payments made to Ms M were salary or wages, Mr Rubenstein also pointed to the payments made to Ms M between 24 October 2016 and 26 May 2017 as showing that regularity while the lump sum payments do not, and these cannot logically work together.[60]
[57] Transcript 35-36.
[58] Section 323 of the Fair Work Act 2009 (Cth). Fair Work Ombudsman website: Transcript 37 [18]-[19].
[60] Transcript 36 [25]-[33]. See paragraph ‎49 of these reasons below.

Taxation case law is to broad effect; salary or wages are amounts paid by an employer for the employee’s services and there is no focus on the regularity or interval of payments.[61] At taxation law, lump sum payments to employees may be assessable income[62] and payments of salary or wages in arrears (such as in a lump sum) are still salary or wages recognised for tax purposes in order to determine if a rebate can be applied for example.[63] Those provisions do not engage with the SGAA however which is what this case is about.

[61] Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227.

[62] For instance, employment termination payments under Subdivision 82-C of the Income Tax Assessment Act 1997 (Cth). They are not called “salary or wages”.

[63] Section 159ZR and following of the Income Tax Assessment Act 1936 (Cth).

Mr Rubenstein submitted that maintaining that the lump sum payments might be salary or wages “doesn’t engage the legislative provisions.”[64] Salary and wages is defined in section 11 of the SGAA as including payments such as commission (which is a lump sum concept) or other ‘remuneration’ or ‘payments’ to employees as defined under section 12 of the SGAA.[65] Contrary to Mr Rubenstein’s submissions, section 11 does not specify that a payment or remuneration can only be salary or wages for the purposes of the SGAA if paid at regular intervals.[66] Under the Superannuation Guarantee (Administration) Regulations 2018 (Cth) (“SGA Regulations”) regulations 11, 12 and 12A provide that certain employees and payments are excluded from the concept of salary or wages. Other provisions in the SGAA also exclude certain employment arrangements and payments from being salary or wages.[67] None of the specified payments or employment arrangements in the SGA Regulations or SGAA apply to the present case. The SGA Regulations and the SGAA do not state that lump sum payments are excluded from the concept of salary or wages in the SGAA. The Commissioner’s Closing Submissions said that Mr Rubenstein’s submissions otherwise have “no foundation in the legislation.”[68] I agree with the Commissioner.

[64] Transcript 35 [43].

[65] Section 12 of the SGAA provides a definition of employee that takes into account the ordinary meaning of the concept, and expands that definition in some respects.

[66] A similar submission was dismissed in Penrowse Pty Ltd v Federal Commissioner of Taxation [2013] AATA 10, where the taxpayer sought to maintain a payment was a reimbursement of expenses as opposed to salary or wages which was a regular payment. At [23] it was held that all payments were a reward for the services of the relevant employees. While not law, the Commissioner’s Superannuation Guarantee Ruling SGR 2009/2 Superannuation Guarantee: Meaning of the Terms “ordinary time earnings” and “salary or wages” provides guidance to ATO staff that lump sum payments such as bonus payments can be salary or wages for SGAA purposes. That is consistent with the SGAA.

[67] Sections 27, 28, and 29 of the SGAA.

[68] Transcript 45, [3].

In oral closing submissions, Mr Rubenstein doubled down on his submissions that the lump sum payments cannot be salary or wages because they were not systematically made, and he focused on bank statement evidence:[69] The bank statement evidence is considered further below.

[69] Transcript 35 [40]-[46], 36.

Mr Rubenstein’s oral closing submissions also made a more nuanced point. That is, to be relevant remuneration for SGAA purposes the Tribunal cannot be satisfied that the lump sum payments were related to Ms M’s employment and were payments for services.[70] He submitted the Tribunal could not be so satisfied as the employment effectively came to an end in about 2011. I reject this submission. What is required is for the Applicant to meet his burden of proof in these taxation proceedings is to show that the lump sum payments could not be relevant remuneration under the SGAA and hence the Commissioner’s SGA Assessments were excessive, and should have been nil (on this argument) or a lesser amount on the alternative argument. Mere assertions that payments were not payments for services accompanied by the Applicant’s evidence that he does not know either way is insufficient to persuade the Tribunal.

[70] Transcript 37 [36]-[45].

The Applicant said in evidence before the Tribunal on cross-examination by Mr Molesworth that he could not characterise what the lump sum payments Ms M withdrew were, but said he did not believe they were salary or wages.[71] In his evidence before the Tribunal, the Applicant said:[72]

I can’t really say to you, with any accuracy, that the money she took out of my accounts – as and when it came in – were for wages, or for other things. I can tell you this. I thought – when I went through the documentation, year after year – I thought that she was paying herself a weekly wage. I thought that she was sequestering money from my bank account, to pay her PAYG tax. I thought that she was sequestering money from my bank account to pay superannuation guarantee charge money [….] I thought she was doing all of those things. It turns out, that many of those things, she now alleges she didn’t do. And there is no record of her having done so. So I’m left in a situation where I just can’t accurately say why it was that she took the monies that she did.
[71] Transcript 5 [47], 6 [1]-[2], [9], [30].
[72] Transcript 6 [27]-[31].

The Applicant confirmed this position in the Applicant’s Witness Statement and on re-examination by Mr Rubenstein.[73] The Applicant’s evidence before the Tribunal was consistent with the above evidence.[74] The obvious problem for the Applicant is that evidence that he does not know whether the payments are salary or wages is not evidence that the lump sum payments are not salary or wages. It is evidence that payments could comprise salary or wages in whole or in part. This does not assist him to meet his burden of proof in these proceedings.

[73] Applicant’s Witness Statement [9], [10], [11], [18], [19]. Transcript 25-29.

[74] Transcript 25-29.

Further, the Tribunal is presented with an array of dates that the Applicant says are when Ms M’s employment terminated and witness evidence from the Applicant that he does not know whether the lump sum payments were salary or wages or not. This Tribunal is presented with Ms M’s prior evidence which the Applicant wishes to rely upon (as set out below) selectively; not for instance for the evidence from Ms M as to when the employment relationship ended. This does not persuade the Tribunal on the balance of probabilities that the SGC Assessments are excessive because the lump sum payments are not remuneration for Ms M’s services, or because her employment had ended.

FWA proceedings and Ms M’s evidence

In the FWA proceedings, Ms M gave affidavit evidence that she was not paid wages or salary, [75] other than (potentially) in a very narrow time period.[76] Ms M said she made the same claim to the Commissioner when claiming unpaid superannuation.[77] She made consistent claims in other filings, including in sworn evidence before the Federal Circuit and Family Court.[78] This sworn evidence from Ms M comprises the major evidence relied upon by the Applicant in this case.[79] It is noted that the Applicant challenged Ms M’s claims in the FWA proceedings for (amongst other matters) unpaid wages. The Tribunal understands this was on a basis other than that she was in fact paid wages (such as the application of the time bar in the Fair Work Act 2009 (Cth)).[80]

[75] T196-2267 [4c], [5a], [14].

[76] T196-2268 [14]; T196-2272 [35]. Applicant’s Outline [20], [22]. Commissioner’s Outline [27] to [30]. Applicant’s SFIC [16] suggests that some of this narrow period is inconsistent with Ms M’s other assertions that she was not paid wages or salary. The Applicant’s Outline suggests at [68] and [69] that some of the payments (those designed to obtain finance for a property purchase) were not “genuine” payments for salary or wages. This is another area where Ms M’s sworn evidence is disputed by the Applicant.

[77] Applicant’s Outline [25]; T184-1645 [H1]. T196-2269 [17].

[78] For example, Ms M’s filings where both parties sought a release from their Harman undertakings: T184-1637 [8]-[12]. Ms M’s claim to the Applicant for more than $335,000 stated to be for unpaid wages (alongside other matters) T194-2259 Letter from Ms M to the Applicant dated 21 October 2021. Ms M’s filings in the Federal Court T196-2267 [4],[12]-[16], [39].

[79] From the material on the T Documents, the Applicant sought and was granted relief from his Harman undertakings in relation to the material from the Federal Circuit and Family Court: T183-1623, T187-1660 [2]; T188. A similar release from Harman undertakings was granted by the Federal Court by a judgment in August 2022 in relation to material filed in proceedings under the Fair Work Act 2009 (Cth) (which are further described below as the FWA proceedings). The citation for those proceedings are not referenced due to the confidentiality orders attached to these proceedings.

[80] Applicant’s SFIC [15].

The Applicant also relies upon an email directed by Ms M to a mortgage broker prior to the Applicant and Ms M’s marriage separation.[81] In that email Ms M was seeking finance for a property purchase and said that she was unable to provide evidence of wages and salary being paid to her. Payments were made from the Applicant’s bank account between 24 October 2016 and 26 May 2017 and Ms M provided that evidence. Ms M gave sworn evidence or made contentions as to that matter that are consistent; this was all to obtain financing.[82] The Applicant’s position is that this private email should be given greater weight by the Tribunal because it was dated prior to his separation from Ms M, when there were no potential credibility concerns about Ms M’s evidence arising from the high level of acrimony that existed between himself and Ms M after their separation.[83]

[81] T196-2313. Applicant’s Outline [32], [61]. Applicant’s Closing Submissions [2], [4], [9].

[82] For example, T196-2271 [35], T184-1637 [8].

[83] Applicant’s Closing Submissions [9]. Applicant’s Outline [61].

It is true that the date of this email is a factor to take into account when considering an issue of the weight to be given to Ms M’s prior evidence which was raised by the Tribunal with the parties at the hearing. In the course of the hearing the Tribunal signalled to the parties that after reviewing all of the material on the T Documents it was considering whether Ms M’s prior evidence should be given lesser weight. This was not merely due to hearsay, but also because the evidence might be considered self-serving to suit the particular proceedings she was engaged in at the time.[84] The Applicant’s focus on the email to the mortgage broker is to counter that concern.

[84] Transcript 29, [17]-[21]; [45]-[47]; 30, [1]-[6].

When considering the contents of the email from Ms M to the mortgage broker, it reveals that payslips were provided to the mortgage broker,[85] the best Ms M says is “I can’t show salary credits, so I’m stuck”[86] and it reveals that the Applicant’s income was going to be relied upon with lenders. It can be maintained, as the Applicant says, that this supports the Applicant’s case that no salary or wages were paid, but it is also fair to say it is not a compelling document to that effect. The Applicant’s point is that this evidence supports Ms M’s sworn evidence that there were no salary or wages paid as she ought have been able to show a mortgage broker salary or wages if they had been paid, and the email is without the taint of the animosity that unfortunately seems to now exist between the Applicant and Ms M. This submission has been taken into account.

[85] T196-2315. The Applicant could say this demonstrates that at least some of the payslips were designed for this financing purpose as well. However, the payslips provided to the mortgage broker must have been dated prior to this email so they differ from those relied upon by the Applicant for this argument.

[86] T196-2314.

The Applicant also submits that the payments made by Ms M to herself between 24 October 2016 to 26 May 2017 (i.e., after the email with the mortgage broker) could not be salary or wages, as they were overtly designed to create an appearance for financing purposes[87] and also because Ms M was no longer working for the Applicant by October 2016.[88] But, contrary to this submission, the Applicant’s evidence was he did not know. His evidence to the Tribunal was:[89]

You recall, in your submission, as you talk about weekly wages, which were paid, from October 16 to May 2017 – amounts of $1,019. Is it correct that you dispute that they were, actually, wages paid to her?--- I have no idea whether those monies were actually paid to her, or whether they were by way of wages, or otherwise… I just can’t say, Mr Molesworth, whether that money was wages or not. I just don’t know.
[87] Ms M said as much T196-2271 and T196-2272 [35]-[37] although she said wages were paid to her.
[88] Applicant’s Outline [68], [69].
[89] Transcript 22 [13]-[14], [23]-[24].

The Applicant then went on to dispute that payments made between 24 October 2016 to 26 May 2017, and which were recorded on bank statements[90] were payments of wages, again on the basis that he had no idea whether that was the case or not:[91]

And you agree that it does appear, for that period, where we have bank statements, that those amounts were withdrawn from your account?---I agree, the amounts were withdrawn from the account. What I cavil with, is whether they were wages, or not. These are transactions, conducted by [Ms M] for her own purposes. She was the one who did the narration of the – of the withdrawal. I have no idea, whether that was correct, or not.[….]
Again, just for your comment – the Commissioner’s position is that those 36 payments were amounts of wage paid to [Ms M], which are reflected in bank statements. Would you disagree with that?---I do disagree with that.
[90] T196-2318 to T196-2350.
[91] Transcript 23 [12]-[17], [31]-[35]. A challenge to these payments being salary or wages was also raised in the Applicant’s SFIC [16] on the basis that Ms M was inconsistent in her prior evidence.

The Applicant also says other people, including Ms C provided services from 2015-2017 instead of Ms M so the payments between October 2016 and May 2017 could not be wages.[92] This is also part of the controversy of when Ms M’s employment with the Applicant ceased, which is referred to earlier and for which the Tribunal has an array of potential dates. Ms C was a witness for the Applicant and did not appear without explanation.[93] The Commissioner submits there is no evidence of payments to Ms C and the tax filings did not show an additional amount payable to Ms C.[94] This might be considered evidence in favour of the Applicant; that is, he has a pattern of not paying wages or salary to employees. The alternate position is that the Applicant did pay salary or wages to Ms C and has inaccurately filed his tax filings or perhaps that Ms C was not engaged at the relevant time. The Applicant’s evidence is that he left everything administrative to Ms M, but Ms C may have been paid as a contractor.[95] There is no substantive evidence before the Tribunal to clarify the situation and which might support the view it was Ms C performing services, and not Ms M.

[92] Applicant’s Outline [68].

[93] The inference that Ms C would not have assisted the Applicant per Jones v Dunkel [1959] HCA 8 is only very weakly taken, as although this was not explained, it seems likely to the Tribunal that she was not called due to the narrowing of the Applicant’s case from his position at objection.

[94] Commissioner’s SFIC [93].

[95] Applicant’s Witness Statement [15].

Ms M did not appear as a witness before the Tribunal, and did not provide a witness statement. Ms M attempted to be joined as a party to these proceedings in January 2025, the Applicant objected to that,[96] while the Commissioner did not oppose the application from Ms M.[97] The Tribunal refused Ms M’s application on 27 February 2025 issuing reasons to Ms M that were broadly consistent with the concerns outlined in the Applicant’s Addition of a Party Submissions, including (particularly) because at the time Ms M was an undischarged bankrupt and it was unclear that she could be a party to the proceedings in any event. Mr Rubenstein’s comments at the hearing confirmed that, in the Applicant’s view, the unfortunate conflict between Ms M and the Applicant could impact the nature of Ms M’s engagement were she before the Tribunal. The Tribunal’s assessment is that the Applicant was concerned Ms M’s evidence would not assist him.

[96] Applicant’s Addition of a Party Submissions.

[97] Commissioner’s email dated 26 February 2026.

Mr Rubenstein made a number of submissions to the Tribunal that were to the broad effect that the sworn evidence from Ms M in the FWA proceedings and Federal Circuit and Family Court proceedings was “direct evidence” carried greater weight than other evidence before the Tribunal, such as tax returns and the like. Mr Rubenstein submitted that any other evidence, particularly tax filings, was “an inference case” or “conjecture” or “circumstantial evidence” or comprised “documentary hearsay”.[98] Mr Rubenstein submitted that it was relevant that all filings were made by Ms M, and the Applicant put his innocent trust in her. For the reasons noted below at paragraph ‎54 and paragraph ‎56 of this decision, I do not accept those submissions. They do not engage with taxation legislation, and they do not assist the Applicant to meet his burden of proof of demonstrating the SGC Assessments are incorrect and what those assessments should be.
[98] Applicant’s Outline [61], [62]. [66]. Transcript 36 [41]-[42]; 39 [23]-[45]. Even ignoring the impact that taxation law has on these submissions, the Tribunal notes that the ‘documentary hearsay’ submission does not engage with exemptions such as the business records exemption from the hearsay rule in any event.
The Applicant referred to Directed Electronics OE Pty Ltd v OE Solutions Pty Ltd (No 8) [2022] FCA 1404 [296]-[298] to consider concepts such as ‘direct evidence” and “circumstantial evidence”.[99] For clarity, the cases on the burden of proof in the TAA that are relevant to the issue in these proceedings must be considered by the Applicant.[100] In any event, the Tribunal has undertaken the task described by Justice Beach at [299]:
Generally, the proper inference to be drawn on the balance of probabilities depends upon a practical and reasonable assessment of the evidence as a whole.
[99] Applicant’s Outline [67].
[100] For instance, see footnote 116 below.
The Tribunal has concluded that Ms M’s sworn evidence is hearsay.[101] The evidence is hearsay as Ms M was the maker of the prior statements and the Applicant seeks to rely upon for the truth of their contents. Ms M was not called as a witness at the Tribunal, there is no suggestion she was not available to give evidence, [102] and there was no argument before the Tribunal that calling Ms M would not be reasonably practicable or would cause undue expense or delay.[103] As Ms M wanted to be joined as a party, it seems to the Tribunal to be very unlikely she would not have made herself available. The Applicant made the decision not to call Ms M as a witness. The Applicant has explained why, including in the Applicant’s Closing Submissions.[104] The evident acrimony between Ms M and the Applicant could have caused issues and the Tribunal acknowledges this. Mr Rubenstein’s submissions were to the effect that the Applicant could not be confident what Ms M would say or do given the acrimony between Ms M and the Applicant. However, none of those issues make the parts of Ms M’s prior evidence relied upon by the Applicant to be anything but hearsay.
[101] The Tribunal agrees with the Commissioner’s Outline [83].
[102] As defined in Schedule 1, Part 2 clause 4 of the Dictionary to the Evidence Act 1995 (Cth).
[103] Section 63 and section 64 of the Evidence Act 1995 (Cth).
[104] Transcript 38 [34]-[40].
The Tribunal does not accept Mr Rubenstein’s submissions that the parts of Ms M’s evidence in the FWA proceedings and other proceedings the Applicant seeks to rely upon should be given ‘significant weight.’[105] While it is true that Ms M’s earlier evidence “directly” states whether or not she was paid salary or wages, Ms M’s evidence was not given at the Tribunal, the Tribunal could not assess the credibility of Ms M as a witness, and her evidence was not subject to cross-examination by the Commissioner. Further, the Tribunal notes that the Applicant accepts only some of Ms M’s sworn evidence in any event.[106] The Applicant is relying upon aspects of Ms M’s prior statements and ignoring other aspects; he is selective.[107] This of itself undermines the Applicant’s submissions about the weight of her sworn evidence. The Tribunal also comments that it is not relevant to the current proceedings whether Ms M’s evidence in other unrelated proceedings was subject to cross-examination or not in those other proceedings.[108]
[105] Applicant’s Closing Submissions [4].
[106] Applicant’s SFIC [16]. Also see the reference in paragraph and ‎17 of these Reasons in relation to when Ms M’s employment ended where it is clear the Applicant takes a different position to Ms M’s sworn evidence.
[107] The Tribunal again notes that it could point to numerous examples in Ms M’s prior sworn evidence that the Applicant does not accept, but has provided an example that is relevant to the current tax proceedings.
[108] Applicant’s Closing Submissions [4].
It may perhaps go without saying that the Tribunal is not restricted by rules of evidence[109] and it has taken Ms M’s evidence into account. Ms M’s evidence has been weighed up alongside the other evidence before the Tribunal. However, Ms M’s evidence is not of “significant weight” as submitted by the Applicant.[110] The existence of the email to the mortgage broker from Ms M has not changed that conclusion. It too is hearsay.
[109] Section 52 of the Administrative Review Tribunal Act 2024 (Cth).
[110] For the avoidance of doubt, the Tribunal’s decision not to have Ms M as a party and having her participate in the proceedings as a whole, is completely different to the Applicant’s choice of not calling her as a witness and her having a role as a witness.
The Tribunal notes that the Applicant’s Outline includes a submission that as the Commissioner did not specifically challenge her evidence as untruthful, the Tribunal should accept it, and that is a factor in the Applicant’s favour.[111] There are also suggestions that the Commissioner did not investigate matters properly.[112] These submissions reflect a lack of appreciation of the burden of proof in taxation proceedings, including where there are default assessments such as the SGC Assessments. The Applicant must meet its burden of positively demonstrating to the Tribunal that the relevant SGC Assessments and SGC penalties are incorrect and what they should be.[113] The Commissioner does not have to prove anything nor to call witnesses, and, as was submitted by Mr Molesworth in the Commissioner’s Closing Submissions, the Commissioner may rely upon deficiencies in the Applicant’s case.[114] The Commissioner not calling Ms M as a witness is not a factor in the Applicant’s favour; it is irrelevant. In addition, the Applicant’s view of the Commissioner’s investigation[115] does not assist him to meet his burden of proof either; it is also irrelevant. When considering a default assessment, there is a long line of case law establishing that the burden of proof is not satisfied by showing the Commissioner made an error.[116]
[111] Applicant’s Closing Submissions [4].
[112] Applicant’s Closing Submissions [9].
[113] Section 14ZZK of the TAA.
[114] Transcript 33 [11]-[13].
[115] For example, Applicant’s Closing Submissions [10].
[116] Bosanac v Federal Commissioner of Taxation [2019] HCA 1, [30]; Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63, 87; Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614, 624-626, 634; George v Federal Commissioner of Taxation (1952) 86 CLR 183, 201, 204, 206, 207; Commissioner of Taxation v Ross [2021] FCA 766 [66]; Gashi v Commissioner of Taxation [2013] FCAFC 30, [63].
In any event, the Commissioner did challenge Ms M’s evidence at the hearing. A dramatic submission is not required to challenge Ms M’s evidence. Mr Molesworth pointed to contradictory evidence to Ms M’s evidence in his submissions before the Tribunal[117] and he put that material to the Applicant in cross-examination.[118] This is a challenge to Ms M’s evidence. The Commissioner’s Closing Submissions were to the effect that the Tribunal should prefer the other evidence to Ms M’s prior statements.[119] As a result, the Tribunal was puzzled by the Applicant’s submission.
[117] Transcript 30 to 34.
[118] Transcript 8 to 24.
[119] Transcript 31 [5] and following.
Ms M as a “business expense” or her salary/wages used as living expenses
Ms M said in her sworn evidence in other proceedings that:
When I agreed to work full-time with [the Applicant], it was on the basis that the wages he would supposedly pay me, would be what we lived on, with a balance being put away for tax, and other obligations.[120]
[120] T172-1483 [33]. Also see T196-2268 [15].
Ms M’s evidence that her salary or wages would be used as living expenses may be said to explain the email to the mortgage broker. She could not demonstrate pay slips or salary payments because she was paid when she withdrew lump sums to meet living expenses. As Ms M could not demonstrate a specific amount of income, she adjusted the manner of payment to enable her to obtain financing. That would explain the combination of the payments made for financing purposes and the lump sum payments.[121] The Applicant does not accept that to be correct.
[121] This could answer the point made by Mr Rubenstein which is referred to above in paragraph ‎25.
Ms M’s above evidence was put to the Applicant in cross-examination, and this was an aspect of Ms M’s prior evidence that he did not rely upon:[122]
Do you agree, with that statement?---No, I don’t. No, I don’t. I – it’s not an accurate reflection of what our arrangement was. Our arrangement was, really, that my income would drive the ship, as it were. [Ms M] would get an independent wage, and I’d get a side benefit, of claiming a tax deduction. And I would also get the direct benefit, of her managing my practice, in the way that she’d said she was going to, which was going to be for our mutual benefit. I don’t agree that we had agreed to sequester her wage, for our day-to-day living expenses, because that never happened. That was never what we did.
M'mm. The Commissioner would suggest that that sentence supports that when she withdraws money for living expenses, both you and her are treating that as her wage, which she is entitled to. Would you agree with that?---No. I disagree. I completely disagree with that. It’s not what happened. What happened, was that – as it turns out – when the money hit my bank account, [Ms M] would appropriate it, and I have no idea what she did with it, and how she allocated it, none whatsoever. I thought she was doing one thing, but in fact, she was doing another.
[122] Transcript 20 [44] – 21 [1]-[15].
Despite Ms M’s evidence in this regard being rejected by the Applicant in his evidence before the Tribunal, the Applicant’s Closing Submissions appear, in some respects, to rely on Ms M’s evidence to explain the tax filings. It is said that she was an “expense” in the tax returns but that did not mean she paid herself a salary.[123] It is not explained how she could be an expense without an expense being incurred, but the Applicant’s case seems to be to explain that his earlier claims for deductions were made in his tax filings, but were not correct. This is obviously unsatisfactory. Added to that, the Applicant’s witness evidence has not demonstrated that the payments he accepts Ms M derived were not salary or wages under the SGAA. His evidence was that he does not know.
[123] Applicant’s Closing Submissions [7]. Applicant’s Outline [20].
The Applicant’s tax filings
As is foreshadowed above, a number of tax filings were made by the Applicant in the Relevant Period.[124] They appear on the T Documents.
[124] Summarised in the Commissioner’s Outline at [25], [26] and [81].
Relevant tax filings are:
(a)The income tax returns from the Applicant for each of the years ended 30 June 2010 to 30 June 2017 (“Relevant Years”).[125] In each of those years the Applicant claimed a deduction for salary or wages paid to his employees including Ms M.[126] In the 2010, 2013 and 2015 years the Applicant claimed a deduction for superannuation expenses.[127] In all but the 2010 year, the Applicant reported Ms M’s income as spousal income.
(b)The Applicant’s business activity statements (“BAS”) for the Relevant Periods.[128] The BAS record salary or wages paid to employees.
(c)The Applicant issued PAYG payment summaries to Ms M for the Relevant Years.[129] These disclose salary or wages paid to Ms M during the Relevant Years.
[125] T7, T8, T18. T19, T23, T24, T30, T31, T35, T36, T40, T41, T49, T54, T56, T58.
[126] The Commissioner’s Closing Submissions noted these deductions were not small amounts in total: Transcript 32 [30]-[47]. Commissioner’s Outline [25].
[127] Deductions were claimed under section 290-60 of the Income Tax Assessment Act 1997 (Cth).
[128] ST4 to ST15, T21, T22, T25, T26, T27, T28, T29, T32, T33, T34, T37, T38, T39, T44, T45, T46, T47, T48, T50, T51, T52, T53, T55, T57.
[129] T196-2279 to T196-2285.
In his evidence before the Tribunal the Applicant did not dispute that the above facts about his tax filings are correct.[130] There was also no dispute that the Applicant has not sought to amend any of the above tax filings and has not objected to any related assessments.[131] Instead, The Applicant made an array of submissions about those tax filings which were to the effect that Ms M had prepared these documents not the Applicant, sometimes she had signed them not the Applicant (although the Applicant signed sometimes), the Applicant had no awareness of them or trusted they were correct when signing them, and that for that reason they could not be relied upon as evidence.[132]
[130] Transcript 18, [4]-[9]. In oral closing submissions a suggestion was made that expenses were claimed, but no payment was made: Transcript 40 [13].
[131] Applicant’s Opening Statements. Commissioner’s Closing Submissions - Transcript 31 [12]-[14].
[132] For instance, Applicant’s Supplementary Witness Statement dated 2 July 2025 (“Applicant’s Supplementary Witness Statement”) [1]-[4], Applicant’s Closing Submissions [11]-[15], Transcript 40 [23] and following.
Subsection 350-10(3A) of Schedule 1 of the TAA[133] states that a document provided to the Commissioner by the Applicant and signed on his behalf is prima facie evidence that the document was made by the Applicant and with his authority. It does not matter who prepared the relevant filings nor who signed them. He said he authorised her in any event.[134] The Applicant also said Ms M was responsible for his tax filings, including for superannuation purposes.[135] At taxation law, as the employer, the Applicant bears the responsibility for meeting his tax requirements under the SGAA. Saying Ms M is responsible does not assist the Applicant.[136] The Applicant’s oral closing submissions contained a statement that he accepts that “the buck stops with him” and describes his other submissions as “extenuating circumstances.”[137] This submission is considered below when considering the remission of the SGC penalties as that was the context of its submission. Those submissions do not affect the status of his tax filings at law.
[133] This provision applies to all “taxation laws” per section 350-5 of Schedule 1 to the TAA. The superannuation guarantee charge is a taxation law per section 3AA(2) of the TAA and as defined in section 995-1 of the Income Tax Assessment Act 1997 (Cth) because, in accordance with section 43 of the SGAA, the Commissioner has the general administration of the SGAA.
[134] Applicant’s Outline [24]; Applicant’s Witness Statement [7], [10]; T171-1467 [8] to [9]. Transcript 42 [11]–[31], and see paragraph ‎‎89 below for a quote of that passage.
[135] Applicant’s Outline [4(c)].
[136] A similar argument was dismissed in Payne v Federal Commissioner of Taxation [2016] AATA 104 at [28] and [30] and in RFZD and Commissioner of Taxation [2022] AATA 988 at [81]. An employer’s obligations under the SGAA cannot be contracted out of: S&H Investments Pty Ltd v Federal Commissioner of Taxation [2024] AATA 893 at [55].
[137] Transcript 42, [26]-[28].
The Applicant is responsible for his tax filings, and he cannot seek to say they are unreliable because someone else prepared them.[138] Taxation law is clear in this respect and includes (for instance) provisions confirming that the penalty regime can apply to a taxpayer even where a tax agent filed a taxpayer’s return.[139] The Applicant’s evidence was to the effect that he simply did not know the detail about his tax filings and did not seek to verify his filings were correct.[140] This does not assist him as he has declared those filings to be true and correct.[141] While he now says he either did not verify that all the tax filings were actually correct, or thought when he signed what he signed that they were correct,[142] none of that evidence assists him at taxation law. They are his tax filings, and he is legally responsible. I reject the Applicant’s submissions.
[138] Case law confirms this as does the declaration at the base of the return (ss 388-60, 388-65 and 388-75 of Schedule 1 to the TAA). See for example, Watson v Federal Commissioner of Taxation [1999] AATA 883; Rinaldo v Federal Commissioner of Taxation [2011] AATA 839.
[139] Division 284 of Schedule 1 to the TAA.
[140] Transcript 15 [37] and following, and 16-17.
[141] Sections 388-60, 388-65 and 388-75 of Schedule 1 to the TAA provide that declarations are made in returns that they are true and correct. The Applicant made these declarations and/or Subsection 350-10(3A) of Schedule 1 of the TAA applies.
[142] For instance, see Transcript 17 [21] “And I accept that when I signed those statements, and they were lodged I thought they were correct” and [27]-[35] “And did you – independently, at any point – verify that those disclosures were correct?---No, I didn’t. Did you know them to not be correct?---I thought they were correct. I thought they were correct, because my wife was presenting me, with material that she had liaised with her accountant – our accountant – to prepare, and which I thought, was accurate. I thought it was all above board, and that’s why I signed it, and allowed it to be lodged.”
The Applicant’s Closing Submissions submit at [8] as follows:
During the course of the hearing, counsel for the applicant was asked by the Tribunal whether lodgement of the income tax returns and BAS and PAYG statements might be treated as conclusive proof that salary was in fact paid. In other words, the fact of lodgement meant that content of the documents were, by some legislative means, deemed to be true. The lawyers for the applicant have not been able to identify any legislative provision in either the taxation legislation or regulation that deems the content of an income tax return, BAS or PAYG statement, group certificate or payroll record to be true and correct (unless proven otherwise). Further, the Commissioner of Taxation has not identified such a provision in either his decision for review of the objection or in his written submissions made in this proceeding. It is the applicant’s contention that there is no such provision.
This submission is misguided. To be clear, the Tribunal does not raise non-existent issues with parties that appear before it. This issue was raised with the Applicant and his representatives for submissions to be made. The Applicant’s submission that there is no statutory basis for the Tribunal’s comment to him shows admirable confidence but is incorrect for the reasons which follow.
To explain the issue, the self-assessment regime is a relevant factor.[143] The tax filings from the Applicant that are being considered in evidence comprise income tax returns, BAS and PAYG filings. Under the self-assessment regime, tax filings themselves may be deemed to be notices of assessment.[144] This may be the case for GST and income tax returns. [145]
[143] For completeness, the self-assessment regime is applicable to the SGAA as well. Section 35 of the SGAA applies the self-assessment regime, providing that statements lodged by the employer are taken to be an assessment. Here we have no such statements, hence the SGC Assessments which are default assessments.
[144] Sections 166A and 169A of the Income Tax Assessment Act 1936 (Cth), section 155-15 of Schedule 1 to the TAA. Self-assessment applies to GST filings from 2012. The ATO website provides more information “Self-assessment and the taxpayer” In this case, notices of assessment have been issued to the Applicant for income tax taking into account those filings, including deductions for wages and salary from the filings.T24, T311, T36, T41, T54, T58.

Subsection 350-10(1) of Schedule 1 to the TAA provides that notices of assessment are conclusive evidence that those notices were properly made. Subsection 350-10(1) also provides that notices of assessment are conclusive evidence that the amount and particulars of the assessment are correct, other than in proceedings on a review or appeal under Part IVC of the TAA relating to the assessment.[146] While the current proceedings are proceedings under Part IVC, the proceedings relate to the SGC Assessments and the SCG penalties and not assessments arising from the Applicant’s tax filings. This means that subsection 350-10(1) of Schedule 1 to the TAA is relevant to the Applicant when considering the Applicant’s tax filings. There is case law in relation to section 350-10 of Schedule 1 to the TAA and its predecessors which could be engaged with.[147] All of this is why this issue was raised by the Tribunal with the Applicant.
[146] There is case law that could be considered as well: for example, Deputy Federal Commissioner of Taxation v Lawson 2017 ATC 20,644.
[147] For example, Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd [2008] HCA 41, [33], [40], [49].
The Applicant not provided submissions about the effect of these provisions on his arguments about the weight to be given to the tax filings. The Applicant’s other submissions about conclusions being drawn by the Commissioner from the tax filings being mere “inference”[148] or circumstantial evidence or unreliable[149] or were “misguided” or “conjecture”[150] or documentary hearsay are countered by the statutory provisions which provide that the filings as deemed assessments comprise conclusive evidence at taxation law.
[148] Applicant’s Closing Submissions [7].
[149] Applicant’s Outline [67].
[150] Applicant’s Outline [66].
This is so, for instance, in relation to the BAS for the 2014 year which record salary payments.[151] Subsection 155-15(1) of Schedule 1 of the TAA (at item 1) provides that the GST return comprises a notice of assessment. It might be maintained by the Applicant that this is only the assessment of the net amount[152] and not every aspect which in aggregate results in that net amount. The background to the relevant provision suggests that is not the legislative intent, and the reference to the particulars of the assessment (per item 2 of subsection 350-10(1)) might also be said to be contrary to that putative argument from the Applicant.[153] Where the entire return is a deemed assessment, its contents comprise that assessment. If the Applicant wanted to challenge the assessments that were based on his tax filings, he needed to object to them. He has not.
[151] T28, T29, T32, T33, T34.
[152] For example, as defined in section 17-5 of A New Tax System (Goods and Services Tax) Act 1999 (Cth).
[153] Explanatory Memorandum to the Indirect Tax Laws Amendment (Assessment) Bill 2012 (Cth) at [1.51] “The amount assessed is either stated on the return, or worked out in accordance with the information stated in the document (as is the case for GST returns).”
The income tax return for 2014 is consistent with the BAS and records $71,386 as salary payments made by the Applicant and records the payment being made to an associated person.[154] It also records Ms M’s “spousal income” as $71,272.[155] Taking the 2014 year example, the PAYG summary for the 2014 year[156] records gross payments to Ms M of $71,386, consistent with the BAS and the income tax return.
[154] T35-396.
[155] T35-381.
[156] T196-2283.
In relation to the PAYG payment summaries, these are provided to employees in accordance with section 16-155 of Schedule 1 of the TAA. Of themselves PAYG payment summaries do not comprise self-assessments. They can be considered supporting evidence to other returns, as they are consistent with the other returns which may comprise conclusive evidence.
In terms of the Applicant’s reference to the Commissioner not raising the issue raised by the Tribunal at the hearing, the Commissioner decided not to provide written closing submissions after the hearing although time was given by the Tribunal post-hearing for that to occur, and this issue was raised during the hearing. This issue is not dealt with by the Commissioner for that reason. But, in any event, it does not matter whether the Commissioner has raised this previously or not; for the reasons noted above, the Tribunal is not constrained by what the Commissioner does, and the Tribunal identified this as an issue and the parties were given an opportunity to respond to it.
The Commissioner refers to the Applicant’s Outline at [73] where the Applicant submitted that “it is not open to the Commissioner of Taxation to make findings (and base the SGC Assessments) on an assertion that it is more likely than not that Ms M was paid wages.” The Commissioner’s Outline[157] submits that it has met the obligation under section 36 of the SGAA to issue default assessments for the amount that in the Commissioner’s opinion might reasonably be expected to be the shortfall. The Commissioner says the Applicant’s submissions “fundamentally misunderstand the operation of the law”. The Commissioner’s submission is accepted by the Tribunal. A default assessment by its nature is an estimate. The Commissioner is not required to demonstrate it is correct. It is deemed correct by the TAA provisions noted earlier. The burden of proof on the Applicant in Part IVC proceedings is a positive obligation to demonstrate that the default assessments were excessive, and by how much.
[157] Commissioner’s Outline [86], [87].
For completeness, on the topic of tax filings, the Tribunal notes that the Commissioner rather vaguely submitted that Ms M also may have returned income from the Applicant in her income tax returns, including as wages.[158] The Tribunal must misunderstand these vague references as there is obviously no evidence before the Tribunal of that (noting that Ms M’s tax returns purported to be annexed to T158-1399 are not accessible), Ms M is not before it, and her returns are confidential. The Tribunal records this only for the purpose of specifically noting these comments have not been taken into account in its decision.
[158] Commissioner’s Outline [28], [68].
Background documents to the Applicant’s tax filings
There are background documents to the tax filings on the T Documents. When considering this material, it is incomplete. It could be said for the Applicant that this supports the view that salary or wages were not paid. Of course, the alternate position is that the records were simply not maintained properly. There is case law which supports the view that such tax background material can form the basis for a default assessment under section 36 of the SGAA.[159]
[159] Pye and Commissioner of Taxation [2004] AATA 143.
The background documents record the following:

Type of filing	Period covered	T document reference	Relevance	Missing period(s)
Payroll Activity Statements	1 June[160] 2012 to 30 June 2013	ST1-2586, 2588-2591	Records salary or wages paid to Ms M, taxes, net pay and expenses	All periods prior to 1 June 2012 1 July 2013 to 30 June 2014 1 July 2014 to April 2015
1 April 2015 to 30 June 2015	ST1-2606	As above
1 July 2015 to 30 June 2016	ST1-2608; ST1-2609	As above
1 July 2016 to 30 September 2016	ST1-2610	As above	1 October 2016 - 30 June 2017
Liabilities payment register	1 July 2013 to 30 June 2014	ST1-2592	Records PAYG withholding liabilities in relation to Ms M's salary or wages	All Relevant Periods prior to 1 July 2013 and after 30 June 2014
Payroll Journal	1 July 2013 to 30 June 2014	ST1-2593-2600	Records hourly rates, salary/wages, PAYG withholding, SGC and other details relating to Ms M	All Relevant Periods prior to 1 July 2013 and after 30 June 2014
Pay slips	28 November 2011 to 4 December 2011 5 December 2011 to 12 December 2011 13 October 2014 to 17 October 2014 20 October 2014 to 24 October 2014 27 October 2014 to 31 October 2014	ST1-2601-2605	Records wages, year to date wages, PAYG, leave and SGC relating to Ms M	Relevant Periods: - prior to 28 November 2011; - between 13 December 2011 and 13 October 2014; - after 31 October 2014.

[160] Material is scattered in the T Documents, not necessarily grouped in income years.

The Applicant has challenged this background material on a number of bases, saying they contain “significant irregularities”.[161] This includes the following submissions:
(a)The payslips are not regular weekly payslips, and one was for three months.[162] The Tribunal has been unable to locate a payslip on the T Documents that is for three months. That may be a reference to the payroll activity summary that is at ST1-2606 which is not a pay slip. The payslips on the T Documents are for weekly periods as is noted above. They are incomplete and do not cover all of the Relevant Periods, which might be said to suggest that no payments for salary or wages were made for periods where there are no payslips. It might alternatively be said that this suggests that the Applicant did not maintain or complete appropriate records.[163]
(b)The payroll records show that payments were made to Ms M by cheque, when the Applicant did not use a cheque book, and had not for some time.[164] This submission is countered by the Applicant’s evidence before the Tribunal that the payroll records could actually be correct. When cross-examined by Mr Molesworth, the Applicant said: [165]
Are you able to say that the debits, and credits to Ms [M], and against a cheque account – are incorrect? Or do you not know?---I don’t know.
[161] Applicant’s Closing Submissions [11].
[162] Transcript 41, [10]-[11].
[163] If insufficient evidence is maintained by a taxpayer that can be telling as to the consequences: Stone v Federal Commissioner of Taxation (1918) 25 CLR 389, 393.
[164] Transcript 11 [9]-[23]. Applicant’s Closing Submissions [13]-[14].
[165] Transcript 11 [21]-[23].
The Tribunal concludes that the background material is limited in nature and incomplete. However, the Applicant’s challenges to this material are not substantive, and do not materially assist him to satisfy his positive burden of proof that the SGC Assessments are excessive and should be nil or his alternative position.
Bank statements
As is noted above, Mr Rubenstein submitted that to be salary or wages payments needed to be made at regular intervals. As is also noted above, that submission is not supported by the SGAA. Those submissions included the following from the Applicant’s Outline at [63]:
Further, for the period August 2009 through to October 2016, there is no evidence of regular or systematic payments of amounts that reflect weekly or fortnightly salary by the application to Ms M. There are no bank statements that disclose regular and systematic payments of salary. This is telling. The absence of such evidence supports Ms M’s contention that she did not receive payment of a wage or salary from the applicant.
And at [65] – [66]:
The contention of the Commissioner of Taxation that payments were made to Ms M is not based on any direct evidence. It is not based on analysis of the applicant’s bank statements disclosing systematic payments in the nature of salary to Ms M. It is not based on admissions from the applicant or Ms M. It is based solely on inferences drawn from BAS, PAYG summaries, income tax returns and group certificates prepared by the applicant’s external accountants on instructions from Ms M. …. The reliance on these documents to establish that payments of wages were in fact made is misguided. …. It is rebutted by the fact that no systematic payment of wages have been identified in the bank statements.
The Commissioner emphasised in its oral closing submissions the absence of bank statements in evidence before the Tribunal.[166] In cross-examination of the Applicant, the Commissioner asked about the bank statements while taking the Applicant through payroll records for the period from 1 July 2013 to 3 June 2014:[167]
Right. This particular one, which we have on the screen, at the moment, is for the period 1 July 13 to 30 June 2014?‑‑‑Yes.
Would you agree – being familiar with the evidence in this matter – that there are no bank statements – in evidence, or before the tribunal – for that period, in this matter?‑‑‑Yes, I do agree.
Right. So?‑‑‑But that’s over 10 years ago. And I – there’s a – there’s a long tale of woe, behind my lack of documentation, in this case. I don’t necessarily want to go into that, unless you want to hear about it. But I can tell you, that this document that I’m looking at now – knowing what I know now, I doubt very much that there’s any accuracy in it, whatsoever.
Right. But you would agree with me, that there isn’t any bank records, for the tribunal – or indeed, for the Commissioner – to have formed the view, that those payments were not made?‑‑‑I agree.
[166] Transcript 31 [24]-[25].
[167] Transcript 10 [19]-[35].
Similar points were put to the Applicant in relation to other periods in the Relevant Periods – for example, reference was made to a Payroll Journal for the 2014 income year. In response to questions from the Commissioner, the Applicant confirmed:[168]
And again, this is a period, where we don’t have any bank records, for the tribunal, or the Commissioner, to have regard to. That’s correct, isn’t it?‑‑‑No. That’s right.
[168] Transcript 11 [25]-[27].
The evidence on the T Documents comprises Westpac bank statements for periods between 1 September 2016 and 31 May 2017.[169] Those bank statements record payments were made to Ms M. There are also some ING bank statements from outside of the Relevant Periods for periods from 22 December 2018 to 5 August 2019 accompanied by transfer records from a Commonwealth Bank account.[170] These latter statements are obviously not relevant to the Relevant Periods. There are some limited Westpac bank statements from August 2009 on the T Documents.[171] There is some unsworn evidence from the Applicant in earlier unrelated proceedings on the T Documents listing the bank accounts and credit cards he says he had including during the Relevant Periods.[172] That lists nine accounts although the Applicant goes on to say that there were three that he utilised after March 2016, including a new account with Bank Australia.[173] It is also noted that it appears there were some copies of Ms M’s account statements provided in other proceedings, but those statements were also not provided by the Applicant to the Tribunal.[174]
[169] T196-2318-2350.
[170] T146-1105-1125, 1126-1129, 1136-1141, 1143, 1145-1147.
[171] T203-2536 to 2541.
[172] ST2-2622 [18.1] – [18.2].
[173] ST2-2624 [22].
[174] T158-1376, T158-1383 to T158-1398
In taxation proceedings under Part IVC of the TAA[175] it is for the Applicant to establish the facts upon which he seeks to rely.[176] The Applicant has presented no bank account evidence that covers the entirety of the Relevant Period,[177] yet he has made submissions that the bank statements do not show payments made to Ms M. Some of the bank statements that are before the Tribunal show payments were made to Ms M. The Applicant’s witness evidence before the Tribunal was to the effect that he does not know whether the evidenced payments made to Ms M were wages or salary, nor whether she made payments to herself or not. In the light of this, in the absence of this bank material for the entire period which demonstrates anything else, the Tribunal cannot be satisfied that payments were not made to Ms M in other periods in the Relevant Period.[178]
[175] Refer to section 42 of the SGAA.
[176] Danmark Pty Ltd v Federal Commissioner of Taxation; Forestwood Pty Ltd v Federal Commissioner of Taxation (1944) 7 ATD 333.
[177] Supra, footnote 163.
[178] A lack of bank statements or the inability to establish material facts upon which the taxpayer relied was fatal in cases on default assessments such as McPartland v Federal Commissioner of Taxation [2025] FCAFC 23 [31]-[37]; Bosanac v Federal Commissioner of Taxation [2019] HCA 1 [30], and SBXB and Commissioner of Taxation [2025] ARTA 999 [160]-[161].
Further, the Applicant’s Outline presents the absence of bank records in a manner that suggests it was for the Commissioner to present such evidence. That is not the position. It is for the Applicant to meet a positive burden of proof.
CONCLUSIONS – SGC ASSESSMENTS
The Tribunal is not persuaded by the Applicant’s case. The Applicant has not met his burden of proof under section 14ZZK of the TAA to demonstrate on the balance of probabilities that the SGC Assessments were excessive and what they should be. He has not demonstrated on the balance of probabilities that no salary or wages were paid to Ms M in the Relevant Periods, nor that salary or wages payments were made only in a very limited period.
This is for the following reasons:
(a)Ms M’s evidence has been considered carefully by the Tribunal. While Ms M’s evidence from other proceedings (including the email to the mortgage broker) is that she was not paid salary or wages, Ms M’s evidence is not of significant weight. It is hearsay evidence. Her evidence that she was not paid salary or wages is countered by bank statements showing she did receive payments. It is also explained also by her own evidence that is to the effect that her wages were to be used as “living expenses” explaining the manner of payment, and also explaining the email to the mortgage broker. It is also countered by other material before the Tribunal, including the tax filings from the Applicant.
(b)The Applicant does not seek to reply upon all aspects of Ms M’s evidence. Her evidence is selectively presented by the Applicant. Ms M makes scandalous allegations in her evidence in other proceedings,[179] which might undermine her credibility. Ms M was not called as a witness at the hearing and her credibility could not be properly assessed by the Tribunal.
(c)The Applicant’s witness evidence before the Tribunal was to the substantive effect that he did not know whether salary or wages were paid to Ms M. That is not evidence they were not.
(d)The Applicant has not presented clear evidence to demonstrate on the balance of probabilities that Ms M’s employment terminated earlier than 2017. He has raised an array of dates. He has suggested others were engaged instead of Ms M (such as Ms C), but he was not certain when or how they were engaged. The Applicant accepts Ms M was an employee and appears to accept that she provided services until they separated.
(e)There is limited bank account evidence showing payments were made to Ms M including in the period between October 2016 and May 2017, and the Applicant was unable to say what those payments were for. That is not evidence that they were not salary or wages.
(f)The Applicant submits there was nothing regular leaving his bank accounts which could comprise salary or wages to Ms M. The Applicant has not provided evidence to support that, as the evidence before the Tribunal does not comprise all or even close to all of the bank statements from the Applicant’s bank accounts for the Relevant Periods. In addition, the bank statements before the Tribunal do show payments made to Ms M. In any event, the SGAA does not require payments to be at any particular intervals for payments to comprise salary or wages. Salary or wages in arrears are captured by the SGAA.
(g)The Applicant’s tax filings support the view that payments of salary or wages were made. The tax filings are evidence deemed by law to be properly made and may comprise conclusive evidence at law. The Applicant has not engaged with the taxation law in his submissions.
(h)The Applicant is responsible for his tax filings at law. His efforts to suggest he is not responsible for those filings, to say the tax filings cannot be relied upon, and to describe them as hearsay (and the like), did not engage properly with taxation law. They also are inconsistent with his other evidence about the authorisation he gave Ms M. Those submissions do not assist him to meet his burden of proof.
(i)The incompleteness of the tax background material to his tax filings does not assist the Applicant in any substantive way meet the Applicant’s burden of proof. It can be explained by a failure to meet administrative requirements. The Applicant’s challenges of the available tax background material were of an insubstantial nature. They were countered by his witness evidence before the Tribunal.
(j)The Commissioner does not have to prove the SGC Assessments are correct. The SGC Assessments are default assessments. It is for the Applicant to prove they are excessive and what they should be. The Applicant’s efforts to challenge the Commissioner’s processes did little to assist his case overall, and did not assist him to meet his burden of proof.
REASONS FOR DECISION – SGC PENALTIES
[179] For instance, T154-1242 [3], [6], [8], [9].
Challenge to the imposition of SGC penalties

The SGC penalties were imposed in accordance with Part 7 of the SGAA. The relevant provisions to consider in this case are section 59 and section 62.
Subsection 59(1) of the SGAA provides:
(1) If an employer other than a government body refuses or fails to provide, when and as required under this Act, a superannuation guarantee statement or information relevant to assessing the employer’s liability to pay superannuation guarantee charge for a quarter, the employer is liable to pay, by way of penalty, additional superannuation guarantee charge equal to double the amount of superannuation guarantee charge payable by the employer for the quarter.
The Applicant’s case for the SGC penalties being inappropriately imposed relies upon subsection 59(1) not being enlivened as there were no wages or salary paid to Ms M, or alternatively only limited payments of wages or salary.[180] As is set out above, I am not persuaded that the Applicant has met his burden of proof to demonstrate that aspect of his case. This means those challenges to the SGC penalties are also not successful before the Tribunal.
[180] Applicant’s Outline [75a], [75b], [76], [77]. Applicant’s Closing Submissions [15]-[16].
There was no other challenge to subsection 59(1) and it applies on its terms.
Remission of SGC penalties
Relevant statutory provisions
When issuing the assessments for SGC penalties, the Commissioner remitted the SGC penalties from 200% to 150%.[181] The reasons for this were explained in the Audit Reasons for Decision at [32].[182] The Applicant has challenged the SGC penalties on the basis that they should be further remitted in whole or in part.
[181] T65, T67, T69, T71, T73, T75, T77, T79, T81, T83, T85, T87, T89, T91, T93, T95, T97, T99, T101, T103, T105, T107, T109, T111, T113, T115, T117, T119, T121, T123, T125, T127.
[182] T63.
The relevant parts of section 62 provide:
(3) The Commissioner may remit all or part of the additional superannuation guarantee charge payable by an employer under this Part, but, for the purposes of applying subsection 33(1) of the Acts Interpretation Act 1901 to the power of remission conferred by this subsection, nothing in this Act is taken to prevent the exercise of the power at a time before an assessment is made of the additional superannuation guarantee charge.
(4) If:
(a) an employer is liable under section 59 to additional superannuation guarantee charge for a quarter that started on or before 1 January 2018; and
(b) there is particular information that is relevant to the amount of the employer’s superannuation guarantee shortfall for the quarter; and
(c) since the start of the amnesty period, either:
(i) the employer has not disclosed that information to the Commissioner; or
(ii) the employer has disclosed that information to the Commissioner, but only after the Commissioner informed the employer that the Commissioner was examining, or intended to examine, the employer’s compliance with an obligation to pay the superannuation guarantee charge for the quarter; and
(d) by taking that information into account, the employer’s superannuation guarantee shortfall for the quarter exceeds what it would be if that information were not taken into account;
to the extent that the additional superannuation guarantee charge relates to that excess, the Commissioner’s power under subsection (3) of this section to remit the additional superannuation guarantee charge is limited to remitting no more than half of the charge.
(5) However, subsection (4) does not apply if the Commissioner is satisfied that there were exceptional circumstances that prevented the employer from:
(a) disclosing that information to the Commissioner; or
(b) disclosing that information to the Commissioner before the Commissioner informed the employer as mentioned in subparagraph (4)(c)(ii);
as the case requires.
Section 74 of the SGAA sets out an amnesty period[183] for historic amounts of superannuation guarantee shortfall. The Applicant did not disclose anything during the amnesty period, so, unless subsection 62(5) applies, there is a question as to whether subsection 62(4) restricts the ability to remit any penalties to less than 100% in any event.
[183] Per subsection 74(3) of the SGAA, the amnesty period started 24 May 2018 and ended 6 September 2020 (6 months after the day that the Treasury Laws Amendment (Recovering Unpaid Superannuation) Act 2020 (Cth) received Royal Assent).
Issues
This means there are two issues to consider:
(a)If subsection 62(4) is relevant, whether there are “exceptional circumstances” pursuant to section 62(5) of the SGAA which prevented the Applicant from disclosing information to the Commissioner, such that the restriction in subsection 62(4) of the SGAA should not apply;
(b)Whether the SGC penalties should be further remitted in accordance with subsection 62(3).
Applicant’s submissions
The Applicant’s submissions on remission of the SGC Penalty follow.
(a)From the Applicant’s Outline: [184]
Based on the fact that Ms M had total control of the bank accounts and financial affairs and had responsibility under her contract of employment for paying her salary and superannuation and the fact that the applicant trusted Ms M to do so (and thought that she was doing so), the correct and proper view is that Part 7 penalties should be remitted in whole or in part.
(b)From the Transcript,[185] in oral closing submissions Mr Rubenstein said:
What the applicant says about that, is that this is the case – and he’s given forthright evidence that he relied upon [Ms M]. She was his wife. She was his PA. He relied upon her control of the financial documents. He relied upon her preparation of the BAS, her preparation of income tax returns, in accordance with the instructions to the external accountant, and so she was giving instructions to the external accountant. The accountant was preparing the returns. They were then being signed by [the Applicant]. He thought that all of those payments were being made appropriately, and that salary was being paid, superannuation guarantee charge was being remitted, and that tax was being paid, in respect of the salary.
He – to his surprise – discovered that that was not the case, when the tax office conducted its audit. When the family law and Federal Court proceedings occurred, he discovered that the trust that he reposed in [Ms M] was misplaced, and that she was not filing all the documentation, in accordance with her obligation that she is to do so. There should be, and the applicant accepts, that at the end of the day, the buck stops with him. But that said, there is extenuating circumstances, for the failure to provide the SG statements, and lodge the SG statements, and there ought to be a remitting of the penalties, over and above the 150 per cent that the Commissioner of Taxation has accepted, and has reduced it to.
[184] Applicant’s Outline [75c].
[185] Transcript 42 [11]–[31].
The only other submission on remission is in the Applicant’s SFIC at [18] which states “any additional superannuation guarantee charge should be reduced to nil or alternatively no more than 12.5% upon the proper exercise of the discretion of the Commissioner in accordance with s62(5) of the Superannuation Guarantee (Administration) Act 1992.” No reasoning is given.
At the hearing, the Tribunal asked a question of the Applicant about the SGC penalties and the remission discretion. The exchange with the Applicant suggested that the Applicant is also relying on his personal relationship with Ms M as a reason for remission:[186]
GENERAL MEMBER: And Mr Molesworth has put to me, ‘Well, look [the Applicant’s] position relied on [Ms M], is no different than another taxpayer relying on a tax agent, so why is this exceptional in any way? Why should I exercise my discretion. And I’m happy to hear from you, now, about that. Or you can think about that.
MR RUBENSTEIN: I’ll think about that, and deal with that, in written submissions, if we need to.
GENERAL MEMBER: Okay.
MR RUBENSTEIN: But I mean, the broad sense is, we have highlighted – the answer to that comes from – one would hope that ordinarily a taxpayer’s never a magic relationship with their tax agent, but it’s the relationship, here. The relationship of trust, and confidence, and vulnerability between [the Applicant] and [Ms M]. So he’s really relied upon her. He has focussed entirely on his practice, his earning his income, and left all of the paperwork to her. And it really arises from that relationship of trust and confidence that he has in – not just a professional relationship. Not just the PA, but his former wife.
[186] Transcript 44 [13]-[31].
Time was given by the Tribunal until the end of July 2025 for any final written closing submissions. While the Applicant’s Closing Submissions were filed, no further submissions were filed by the Applicant on this point.
Subsections 62(4) and 62(5) of the SGAA and exceptional circumstances
The first issue is whether paragraph 62(4)(d) of the SGAA is applicable. This seemed to be a potential issue on the facts. There is no analysis of this point in either of the parties’ submissions. Each of the paragraphs in subsection 62(4) must be satisfied for that provision to apply. There is no evidence before the Tribunal that enables it to determine this point.
Assuming that paragraph 62(4) is applicable (which may be likely), the next issue is whether the circumstances described by the Applicant comprise “exceptional circumstances” preventing the Applicant from providing information to the Commissioner such that the restriction on remission in subsection 62(4) does not apply to the Tribunal when making a remission decision. The Applicant’s submissions before the Tribunal focus on the trust and relationship between Ms M and the Applicant as (presumably) comprising those exceptional circumstances. The Applicant’s submissions do not engage with the legislative tests nor any case law.
In Delbake Pty Ltd and Commissioner of Taxation [2024] AATA 449 (“Delbake”) at [13] the Tribunal said that “exceptional circumstances” in this context:
Sub-section 64(5) of the Act means that that for the limit on remission to be removed the Commissioner, and in this case the Tribunal, must be satisfied that there were exceptional circumstances that prevented the employer from providing information about the extent of its superannuation guarantee shortfall that was not previously disclosed to the Commissioner. ‘Exceptional circumstances’ has a close sibling in the often used legislative phrase ‘special circumstances’. Both involve circumstances that are genuinely unusual or uncommon or out of the ordinary. Further, it is not simply satisfaction about the existence of ‘exceptional circumstances’ that is required but those circumstances must be productive of a particular result, namely preventing the employer from providing the relevant information to the Commissioner. It is unnecessary to dwell on it but the existence of exceptional circumstances that have such a consequence is itself unlikely to be frequently occurring, but naturally enough will depend upon the circumstances of a particular case (emphasis added).
The Tribunal in Delbake also held at [15] that concepts of justice, fairness and the like are not relevant to determining whether exceptional circumstances prevented the employer from disclosing relevant SGC material. The Tribunal held at [37] that circumstances where the tax agent was suffering from a serious illness did not explain the Applicant’s failure to lodge its superannuation guarantee statements nor to inform the Commissioner of matters it raised after the end of the amnesty period.
A similar approach was taken in Geelong Turf Company Pty Ltd and Commissioner of Taxation [2023] AATA 1718, at [35]-[42], where the Tribunal referred to exceptional circumstances as circumstances that were “uncommon” or “unprecedented”. In that case, the Tribunal found that limited knowledge of taxation responsibilities by the taxpayer and financial difficulty were not exceptional circumstances [at 44], nor was the competence of the taxpayer’s tax agent [at 43].
In the present case, I do not find that employing a spouse or other relative, and/or engaging someone to assist with tax filings is genuinely unusual, uncommon, unprecedented or out of the ordinary.[187]
[187] The statistics indicate that more than 70% of Australian taxpayers utilise agents to assist with tax filings: The Australian Government, the Treasury ReThink-Tax Discussion Paper 2015 at 28. More recent tax time lodgment statistics (as at 28 August 2025) also support that view: employment statistics reflect that the employment of family members is reasonably common, particularly in small businesses, with “contributing family workers” a separate integer in Australian statistics comprising between 25,000 to 30,000 workers in Australia (Jobs quadrant: Labour Statistics (2022) Australian Bureau of Statistics).
The Tribunal has no substantive submissions on the statutory provisions from the Applicant. It might be maintained for the Applicant that the exceptional circumstances in this case comprise his inability to access information due to the breakdown of his personal relationship with Ms M and the unfortunate acrimony which ensued and this was the matter that prevented him from providing information to the Commissioner.[188] The T Documents include allegations that Ms M did not provide him certain business and other materials.[189] Ms M disputes that, and there may be evidence to the contrary.[190] The issue was not raised, and the Tribunal has no evidence to how any of the circumstances that were raised prevented the Applicant from providing information to the Commissioner, despite the Applicant’s SFIC specifically referring to subsection 62(5) on this point.[191] No evidence was given at the Tribunal that might clarify the position.
[188] For example, the Applicant suggested in oral closing submissions that his failure to engage with the Commissioner in the audit process was due to him not having access to mail as a result of the acrimony with Ms M and her giving the wrong address to the Commissioner: Transcript 42 [33]-[40] “And there is also – I think the Commissioner in submissions said that there wasn’t assistance, or cooperation given, with the audit. And [the Applicant’s] given evidence in his statement – I think – about that, where he talks about the information for the audit was being sent to an old address, and he wasn’t aware of those communications. [K] Road address, in [X], which he wasn’t residing at – and he’s given evidence about that, in his – yes, and he says that that was the address that she gave to the tax office, as part of the complaint made, about his non-payment of wages and superannuation.”
[189] T148-1158, [8], [19]; T151-1186 [6], [8]; T171-1468 [13].
[190] T161-1407 [8]-[9]; T167-1444 [7]; T198-2389, 2391, 2392, 2393, 2394, 2399-2401, 2409-2452; T203-2542 to T203-2545.
[191] Applicant’s SFIC [18].
For those reasons, I am not persuaded that the Applicant has demonstrated on the balance of probabilities that subsection 62(5) is applicable to the Applicant. That means that if subsection 62(4) is applicable, the power to remit is restricted, and the SGC penalties can be no less than 100%.
Remission under subsection 62(3)
The last question is whether further remission should be granted to the Applicant in any event. The Applicant bears the burden of proof and must persuade the Tribunal on the balance of probabilities that the discretion to remit should be further exercised.
In Burswood Care Pty Ltd as Trustee for the Roshana Family Trust and Commissioner of Taxation [2023] AATA 1468 (“Burswood Care”) at [28] the Tribunal found that mitigating circumstances involving poor record keeping, inadequate resources being applied to compliance, and shortcomings in internal processes were not of substantial weight in mitigation. In addition, the Tribunal held that the discretion in subsection 62(3) of the SGAA was of a narrow nature. By that it is meant that the power of remission is directed at considering the culpability of the taxpayer as opposed to wider considerations such as hardship. At [16]:
The narrower interpretation of the remittal power which was adopted in Ross[192] should also apply to s 62(3). The narrower view is appropriate because the scheme of the SGAA clearly establishes an incentive structure that is intended to promote compliance. The power to impose a penalty in s 59 focuses on the employer’s refusal or failure to provide a superannuation guarantee statement or provide information that is required to assess the employer’s liability. Section 62(3) needs to be interpreted in light of that objective. The subsection makes it possible to remit where it would be harsh to hold the employer responsible because of the circumstances which prevented the employer from complying with its obligations in the first place. To that extent the sub-section focuses on culpability, not hardship per se.
[192] Referring to Commissioner of Taxation v Ross [2021] FCA 766.
The Commissioner’s Practice Statement Law Administration PS LA 2021/3 remission of additional superannuation guarantee charge (“PS LA 2021/3”) was also referred to in Burswood Care. At [9]:
While that practice statement is not binding on the Tribunal, it should be consulted and followed unless the Tribunal is satisfied it is not appropriate to do so: see, generally, Re Drake and Minister of Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 644 per Brennan J; see also BSRJ and Commissioner of Taxation [2021] AATA 333 at [80] per SM Olding. The reasons for that approach towards a non-binding policy are obvious enough: as Brennan J pointed out in Drake, a lawful, generally-applied policy that was developed according to a careful deliberative process - and which takes account of various public interest considerations - has the advantage of promoting consistency amongst decision-makers. Consistency is a feature of good government. Treating like cases alike is also one of the hallmarks of justice.
PS LA 2021/3 at [5] sets out a four-step process which requires consideration of an employer’s compliance with the SGC requirements, the employer’s attempt to comply by lodging the required statement under the SGAA, the employer’s tax compliance history, and any mitigating facts or circumstances that warrant further remission. That is, in my view, an appropriate approach, and I have applied that approach when reaching conclusions on this aspect of the Applicant’s case.
In this case, the first two steps are not relevant. The Applicant has not complied with his SGC requirements, although he claims he was unaware he had not done so. The law is clear that they are his obligations, and he cannot seek to contract them out to others, such as employees. There are 32 quarters where default assessments have been issued by the Commissioner. It is a process of continuing disinterest by the Applicant in his own obligations. It is a pattern of non-compliance over many years. The Applicant has also not lodged the required statements under section 33 of the SGAA.
The last two steps in PS LA 2021/3 are relevant. Unfortunately, and without dwelling on all of the details, the Applicant does not have a stellar tax compliance history. He has had multiple issues with the Commissioner in the past. He appears not to have learned from this and his compliance remains problematic. One of the features of this case that demonstrates that is the Applicant’s failure to pay personal attention to his tax obligations as his entire case is based on it being Ms M’s responsibility, and the lack of documentary evidence and financial records produced by the Applicant. This counts against him. He shows disinterest in giving personal time to ensure he meets his tax obligations despite his history with the Commissioner. This was demonstrable from the Applicant’s witness evidence that he did not check that the tax returns he signed were correct.

We turn to factors in mitigation, the final factor in PS LA 2021/3. The Applicant’s case comes down to excusing his lack of awareness of whether he has met his tax obligations on the basis of his trust in Ms M, due to their personal relationship. The Applicant’s culpability is not mitigated by his engagement of Ms M or anyone else to assist him in meeting his tax obligations. I have concluded that these factors are similar to those raised in Burswood Care – that is, they focus (in substance) on the Applicant not applying appropriate resources, focussing on other matters, and not taking care to meet his own obligations. The fact the Applicant trusted and relied on his wife, does not in my assessment mitigate his responsibility for his own tax compliance. I have sympathy for the Applicant because of the evident and unfortunate acrimony between Ms M and himself and all of the matters that has caused for them both over recent years. However, the Applicant’s submissions do not persuade me that he has reduced culpability for his tax obligations under the SGAA, nor that this is an appropriate case for any further mitigation of the SGC penalties.
I have concluded that the Applicant has not met his burden of proof to persuade the Tribunal that the SGC penalties are excessive and should be further remitted under subsection 62(3) of the SGAA.
CONCLUSION
For those reasons, the Commissioner’s decision is affirmed.

Date of hearing: 16 July 2025

Counsel for the Applicant:

Solicitors for the Applicant:

Mr S Rubenstein

Scammell Black Mileo

Counsel for the Respondent: Mr L Molesworth

Solicitors for the Respondent: ATO Litigation and Legal Services

Date of hearing:	16 July 2025
Counsel for the Applicant: Solicitors for the Applicant:	Mr S Rubenstein Scammell Black Mileo
Counsel for the Respondent:	Mr L Molesworth
Solicitors for the Respondent:	ATO Litigation and Legal Services