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Garnishee notices: FCT v Park


Where certain types of tax debts and related amounts are owed by a taxpayer, the Commissioner is empowered, under Div 260 of Sch 1 to the Taxation Administration Act 1953, to send a written notice to a third party who owes money to the taxpayer requiring that third party to pay the Commissioner the lesser of the tax debt and the available money. The recent decision of the Full Court of the Federal Court in FCT v Park highlights just how powerful this “garnishee” notice procedure is, with the potential to disrupt commercial transactions. The case highlights the need for even secured creditors to be wary when the Commissioner employs the garnishee notice procedure.

This article examines the reasoning in the case and the implications for mortgagees and taxpayers when the Commissioner issues a garnishee notice to the purchaser of a property.

Author profile

Dr Philip Bender
Philip is a Barrister and member of the Institute of Chartered Accountants practising in State and Federal taxation, superannuation and commercial law. He is also a sessional member of the Victorian Civil and Administrative Tribunal (although he still appears as a barrister in the tax list of that Tribunal). Philip advises and appears for taxpayers and revenue authorities in State and Federal courts and tribunals and has appeared on a number of occasions in the High Court. He has also been briefed by other government agencies including ASIC, the Official Trustee in Bankruptcy and the Victorian Government Solicitor's Office. - Current at 01 October 2014
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