The recent case of Fastbet Investments & Anor v Deputy Commissioner of Taxation (No 5) [2019] FCA 2073 concerns a challenge by Fastbet to the validity of a security bond demand (“SBD”). The SBD issued by the Commissioner required Fastbet to provide security to the Commissioner in the form of a mortgage over land in respect of a “future tax liability” of $6.5M.
In analysing the legislative requirements for the making of such a decision to issue an SBD His Honour Justice Derrington ruled that the Commissioner is not required to re-consider “all relevant circumstances” in exercising his power to issue an SBD, having already done so in reaching the reasonable belief that it was appropriate to ask for such security.
Understanding the mechanics of decision making is critical given Fastbet’s application was considered flawed and therefore doomed to fail because it incorrectly focussed the challenge on the action of issuing of the SBD and not on the antecedent step of the Commissioner first forming a reasonable belief that the SBD needed to be issued.
His Honour also found that it was also appropriate for the Commissioner to require Fastbet to pay money to the Commissioner in exchange for the Commissioner agreeing to release/partially release his mortgage over land.
List Member, Dr Richard Schulte, appeared for the successful Commissioner of Taxation.
