ato legal notes

Chapter I: The “Composer” Mainframe Defect & Preemptive Strike

In early 1997, upon being assigned to the “Single Sign-On” project with Computer Security, Colin Dunstan immediately drafted a technical discussion paper to outline systemic security exposures [57]. By analyzing database configurations, he identified a catastrophic, pre-existing “open door” in the ATO mainframe environment [57].

Dunstan immediately reported this critical vulnerability to the Director of Computer Security so it could be remedied [57]. The ATO’s response, however, was highly anomalous:

1. Preemptive Security Suspension & Prepared Notice (4 June 1997): Assistant Commissioner John Growder suspended Dunstan on 4 June 1997 on “computer security” grounds, citing “paranoid fears” that Dunstan might disrupt operations [21, 57]. The suspension was engineered at a meeting with Robyn Orr and John Molyneux (note-taker). Although the notice of suspension was signed at the end of the interview, the document had been prepared in advance [17, 35]. Orr verbally stated that an independent investigation would get to the bottom of the allegations and that Dunstan’s input would help. While Orr’s hand-written notes recorded Dunstan’s home phone number so he could be contacted to assist, the subsequently typed notes Growder instructed Dunstan to collect on 16 June completely omitted the phone number—representing a structural shift to lock Dunstan out of the database environment [21, 28].
2. The David Pasch Investigation Subterfuge: While Dunstan was suspended and locked out, John Growder engaged David Pasch (an external MVS/RACF consultant) who completed his systems audit in Dunstan’s absence [23, 62]. Growder then used Dunstan’s home phone number to instruct him to return on 16 June solely to collect 19 “trap” questions suggested by Pasch’s completed investigation [21, 23]. This audit featured two extraordinary anomalies:
   • Selective Blindness (Anomaly A): Pasch supposedly audited Dunstan’s personal datasets but completely failed to report or “see” the clear systems proof of the database parameter backdoor—including the copy of the DB2 database parameters, the IBM reference manual extracts, and Dunstan’s two reports to Geoff Best explaining the defect [24, 57].
   • The Suppressed 18-Staff Backdoor (Anomaly B): Pasch did discover a massive, separate security defect: 18 technical support staff had untraceable clearance to add or delete security violation records without leaving any system audit trace. Geoff Best (Director of Computer Security) requested Pasch to remove this finding from the report subsequently given to John Higham [23, 62]. The AGS suppressed this second report in the 1997 “Bundle of Documents”; it was only unearthed in early 2007 when Clayton Utz was forced to provide a list of documents they obtained from the ATO that year.
3. The Security Baseline Fallacy: Dunstan forensically demonstrated that on a typical day (6 June 1997), 2,400 ATO staff generated 9,500 access violations (an average of 4 per person) [29, 30]. Over five months, this equated to nearly one million system violations [30]. Dunstan’s user ID had recorded only 11 minor violations over that same five-month period (just 2.5% of the average employee rate) [30]. Targeting 11 minor incidents out of one million proved the audit was not a routine security measure, but a highly targeted campaign [30].
4. The 2007 Morning-of-Trial Subversion: To escape this glaring contradiction, the ATO waited until the literal morning of the Federal Court trial in July 2007 to file an amended defence, in which they flatly denied that Dunstan had ever discovered or reported the mainframe security backdoor.

Chapter II: Sworn Omissions & Sworn Statements

Following Dunstan’s suspension, John Higham (the independent Authorised Officer) issued his formal 29 July 1997 minute clearing Dunstan of misconduct and stating that he must be immediately recalled to duty [59, 60]. Geoff Seymour wrote to the Second Commissioner the very next day, agreeing that under AGS advice Dunstan “must return to work,” but stating that he refused to allow it because he “no longer trusted” him [87, 88, 101].

On 19 August 1997, Justice Finn of the Federal Court issued a strict order requiring John Growder and Geoff Seymour to provide sworn lists of discoverable documents [273, 361]. The subsequent execution of this order revealed a profound act of litigation dishonesty:

5. The Total Omission of Exculpatory Evidence: In September 1997, the AGS delivered John Growder’s sworn list of discoverable documents [273]. The July 29 Higham Minute clearing Dunstan of misconduct was completely omitted [274, 362], despite Growder swearing under oath that he “never had in his possession, custody, or power any document other than the documents enumerated” [274].
6. The Omitted Court Footer: Growder’s sworn list of documents uniquely lacked the standard court footer on the first page, which is strictly required for formal filing in the Federal Court registry [275, 364]. This formatting anomaly indicates a deliberate “bureaucratic flinch”—the legal team was hesitant to formally file a provably false sworn statement with the Court registry, even while using it to satisfy their active discovery obligations to Dunstan’s legal team [275, 365].
7. The Unearthing of Dr John Molyneux’s “Day Books” (ACT Supreme Court, 2013): During cross-examination on 5 September 2013, HR officer Dr John Molyneux unwittingly revealed under oath that he kept detailed, handwritten “Day Books” throughout 1997 to record the internal planning and efforts to terminate Dunstan’s employment [146, 150]. Molyneux admitted that he had gone through his archives and supplied complete copies of these books to the ATO legal representatives in 2007 [150]—confirming that the ATO and the AGS possessed this highly exculpatory material for years. Yet, the existence of these records was systematically denied, hidden, and omitted from all sworn discovery lists for over a decade, including the 2008 AAT summons and the 2011 Supreme Court Order for Discovery [330].
8. The Double-Subpoena Checkmate & Clayton Utz’s Silence: Following Molyneux’s slip, Dunstan requested the Supreme Court to issue subpoenas during a two-week adjournment: one to the Tax Commissioner (for the 2007 copies) and another to Molyneux’s home (for the physical originals). While Molyneux’s home originals were produced, Clayton Utz and the Tax Commissioner completely ignored and refused to respond to the subpoena for the Commissioner’s copies. This evasive non-compliance was a deliberate tactical maneuver to avoid producing concrete evidence that the ATO had illegally suppressed these discoverable documents since 2007, and to hide how Robyn Orr reported in late September 1997 that Higham was at “sixes and sevens” and still preferred to counseling Dunstan rather than charging him.
9. Selective Application of the Public Service Act (Salary Cancellation): The Public Service Act 1922 mandated that Dunstan be paid his salary during his suspension from 4 June 1997, and this entitlement could legally only end once a formal charging instrument was signed [19, 117]. On 13 October 1997, the absolute instant John Higham was co-opted to sign the formal charging instrument, the ATO applied the Act with perfect, clinical precision to cancel Dunstan’s salary [117]. This represents a highly selective, bad-faith application of the law: the ATO completely ignored and violated the mandatory statutory section requiring them to recall Dunstan to duty from suspension on 29 July 1997 when Higham cleared him [60], but applied the Act immediately when it served to cut off his livelihood [117, 330].
10. The “October Mystery” Solved: Higham’s Overseas Trip & GST Career Promotion: The handwritten Day Books reveal a lingering question: what occurred in early October 1997 to break Higham’s resistance, leading him to sign Whyte’s draft charges on 13 October after standing firm on counseling Dunstan in July [59, 60] and remaining at “sixes and sevens” in late September? The answer lies in a calculated sequence of career inducements orchestrated by Second Commissioner Richard Highfield. Concurrently with receiving Geoff Seymour’s 30 July minute [87] and Robyn Orr’s 15 August memo [103] recommending continuing suspension while lobbying Higham to change his mind, Highfield approached Higham. In mid-August, Highfield invited Higham on an overseas technology research trip to Europe and North America (from 25 August to 22 September 1997) [509, 514], while simultaneously offering him the highly coveted role of heading up the computer systems for the proposed Goods and Services Tax (GST) [512, 513]. Higham formally became the Assistant Commissioner for the GST Tax Reform Project in October 1997—the exact same month his resistance dissolved and he signed the misconduct charges [125, 508].

Chapter III: The “Sick Leave” Alibi Debunked by Billing Records

When the AGS failed to deliver Growder’s discovery list by the Court’s strict September 19, 1997 deadline [276], they sought to buy time by writing a formal letter to Dunstan’s team on September 24, claiming the delay was because Growder was incapacitated on “sick leave for some time” [276, 367].

This alibi was completely demolished years later when the AGS filed their itemised Bills of Costs, which record legal activities in precise six-minute increments [277, 368]:

11. 23 September 1997: The AGS billed the taxpayer for actively drafting and reviewing the list of documents with Growder [277].
12. 24 September 1997 (The day of the “sick leave” letter): The AGS billed for finalising the list and, crucially, for attending Growder in person to go over the discovery list [277, 370].
13. 25 September 1997: The AGS billed for making late amendments to the document list following direct, active discussions and collaboration with Growder [278].

The financial ledgers prove that while the government was formally asserting that Growder was too sick to work, their lawyers were actively collaborating with him in person to redact the very discovery list that suppressed the Higham Minute [278, 371].

Chapter IV: Phantom Meetings & Shielding Behind Privilege

The unvarnished financial billing files revealed a broader systemic disregard for ethical litigation standards:

14. Billing for the Physically Impossible: The AGS Bill of Costs claimed an expense for a formal meeting held between their in-house counsel and Colin Dunstan on 29 May 1997 [280, 373]. Dunstan’s personal work diary proved he was on approved leave and offsite that entire day [280, 374]. When caught, the AGS initially threatened to put their barrister on the stand to swear the meeting occurred, before backing down and quietly withdrawing the cost item when Dunstan refused to yield [280, 376, 377].
15. The Broken Written Undertaking: On 19 September 2001, Kim Bennett of the AGS gave a clear, written undertaking to “of course substantiate the respondents’ bills of costs on the basis of their files” [281, 380]. Just over a year later, on 5 November 2002, the AGS completely reversed this promise, submitting a 10-page filing to the Federal Court arguing that producing those files would violate legal professional privilege, thereby permanently blindfolding the auditor [282, 381, 383].