iscover Late appeal against $18m tax settlement judgment quashed
BusinessA taxpayer has lost his attempt to bring an appeal against a judgment enforcing a $18 million tax settlement after he filed it around 18.5 months late.
In the case of El Youssef v Deputy Commissioner of Taxation [2026] NSWCA 225, the Court of Appeal in the NSW Supreme Court refused to grant an extension of time to appeal, arguing that if a taxpayer wants to delay legal proceedings to investigate a contract, they must establish some factual basis rather than speculation.
The dispute began in December 2020 when the Deputy Commissioner began court proceedings alleging that various companies and trusts connected to Bassem El Youssef had avoided GST by submitting false or misleading claims for GST refunds made by various companies and trusts.
Youssef was one of 14 defendants in the proceedings. In September 2023, he and a number of other parties entered into a settlement deed with the deputy commissioner.
El Youssef agreed to be jointly and severally liable to pay a settlement sum of $18 million to the deputy commissioner by a certain date. If they failed to do so, each person consented to judgment being entered against them for the unpaid portion of the settlement sum.
The bulk of that sum was not paid. The deputy commissioner then filed a notice of motion seeking that judgment be entered in the terms of the deed.
At that hearing in May 2024, the applicant sought an adjournment arguing that his newly engaged solicitors needed time to investigate whether the deed was enforceable against him.
The primary judge refused the application for an adjournment and entered judgment jointly and severally against the applicant and the other relevant defendants in relation to the outstanding part of the settlement sum of $17,357,593.94 and identified costs of $782,029.89.
While El Youssef could lodge an appeal by 3 June 2024 challenging that part of the primary judge’s orders refusing the adjournment application and giving judgment against the applicant for the two identified sums, he filed on 18 December 2025, which was around 18.5 months late.
In March 2026, the deputy commissioner and the Commonwealth filed a motion to dismiss the notice of appeal as incompetent because the applicant required leave to appeal and had declined to seek such leave.
This motion was filed outside the 28-day period as specified in the rules for such applications. The applicant then agreed to file a summons seeking leave to appeal in case leave was required (which he did not concede).
The hearing of the motion was stood over to be heard together with the application for leave to appeal, and the appeal.
Therefore, the hearing before the court in the current case involved overlapping issues of whether leave of appeal was required, whether an extension of time should be granted for the application for leave to appeal and/or the notice of appeal, and whether the applicant’s grounds of appeal had merit.
No factual basis for appeal
In his appeal, El Youssef argued that the primary judge had set the bar too high by requiring proof of the case before allowing time to investigate it.
The applicant argued that the primary judge “misdirected himself as to the applicable test by requiring the appellant to establish a substantive factual foundation for proposed claims before an adjournment could be granted”.
However, the Court of Appeal rejected these arguments, stating that the primary judge had not set some high barrier of requiring “near proof of the possible claims”.
“On the contrary, his Honour indicated that ‘had I been persuaded that some factual basis had been established’ for the proposed investigations then he ‘would readily have taken steps to adjourn this application’,” the judgment read.
His Honour emphasised that the onus was on El Youssef as the applicant to show some factual basis for the investigation that he wanted his new solicitors to undertake to support the adjournment he sought.
“The problem for the applicant was that he had provided no material evidence to establish some basis for investigation beyond assertion and speculation,” the Court of Appeal judgment said.
El Youssef also argued that there was a conflict of interest as he was represented by the same solicitor as the one who acted for the other defendants.
However, the court also rejected this argument, stating that just because a solicitor acted for more than one party who may have conflicting interests does not automatically mean there was an improper conflict of interest.
The court refused the application for an extension of time to file the application for leave to appeal and the notice of appeal, and dismissed the summons seeking leave to appeal and notice of appeal. It also dismissed the competency motion filed by the first and second respondents in March 2026.
The applicant was ordered to pay the costs of the Deputy Commissioner of Tax and the Commonwealth of Australia.
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