The ATO trumps a mortgagee – or does it..?

Many of you will be familiar with the decision in Tang & Anor v. Bassili & Ors [2011] FMCA 544, in which the Federal Magistrate’s Court said that the ATO could not use a garnishee notice to hijack the proceeds of sale of a mortgaged property.

Last Friday, that decision was overturned on appeal, and the proceeds of sale of the property concerned were ordered to be paid to the ATO, instead of the mortgagee. However, for the reasons set out below, this development is not as alarming as it might initially seem. Continue reading