Background
The Deputy Commissioner of Taxation sought ex parte freezing orders against Vijayakumar Kuppan and his wife, Jasmine Ravi, while pursuing prospective judgment debts for tax-related liabilities. The Commissioner alleged liabilities of about $5.44 million against Mr Kuppan for the 2019–2025 income years and about $3.497 million against Ms Ravi for 2024–2025.
The Commissioner’s review identified deposits substantially exceeding the income Mr Kuppan reported, while Ms Ravi had not lodged returns for the relevant years despite significant deposits and property acquisitions. The couple’s principal known Australian assets included unencumbered real property estimated at about $7.09 million. The Commissioner also relied on evidence that they had opened and closed multiple bank accounts, which held relatively small balances by July 2026.
The Court’s Holding
Hill J made freezing and ancillary disclosure orders substantially in the form sought. The orders restrained Mr Kuppan from dealing with assets up to $5,444,132.63 and Ms Ravi from dealing with assets up to $3,496,689, with specified properties subject to an absolute interim prohibition on dealing. The respondents were also required to disclose their worldwide assets.
The Court held that the Deputy Commissioner had a good arguable case to recover statutory tax debts, relying on the assessments and statutory certificates. It also found a sufficient danger that a prospective judgment could be unsatisfied, given the alleged substantial unreported or unexplained income, the size of the asserted liabilities, the unencumbered properties, prior transfers between the spouses, and the pattern of bank accounts. The Court gave little weight to Mr Kuppan’s overseas travel.
Hill J declined to consider the Commissioner’s confidential affidavit, stating that the Commissioner could not rely on evidence unavailable to the respondents or their lawyers. The affidavit was not filed. The Court required prompt substituted service and set a short return date for an inter partes hearing.
Key Takeaways
- Tax assessments and statutory certificates supported a good arguable case for recovery, notwithstanding any potential challenge to the underlying assessments.
- A real risk of dissipation may be inferred from the surrounding circumstances; proof of an intention to defeat recovery is unnecessary.
- Ex parte freezing relief must be tightly managed: service and the return date should be prompt, and the Court will not rely on undisclosed evidence that denies procedural fairness.
Why It Matters
The decision illustrates the Federal Court’s willingness to preserve assets pending tax-recovery proceedings where assessments concern large alleged liabilities and the taxpayer’s financial dealings create a practical risk that assets could be transferred, encumbered, or dissipated.
It also underscores a limit on ex parte practice. Even where urgent protective relief is justified, the applicant cannot obtain it on the basis of confidential material that the affected parties cannot meaningfully answer.