Express law No. 294

16 February 2021

CUB Australia Holding v COT

Federal Court finds that notice issued for the purpose of obtaining particulars of a legal professional privilege claim was not issued for an improper purpose or is otherwise beyond power.

The Federal Court on 2 February 2021 found that a notice issued by the Commissioner of Taxation to give information to the Commissioner pursuant to s 353-10 of Schedule 1 to the Taxation Administration Act 1953 (Cth) was issued for a proper purpose. Justice Moshinsky found that the notice was issued to obtain information to enable the Commissioner to determine whether to accept or challenge the Applicant’s claim for legal professional privilege, a purpose concerning the administration or operation of a taxation law.


The Respondent, the Commissioner of Taxation (the Commissioner), has since about April 2013 been undertaking an examination of the tax affairs of the SAB Australia Pty Ltd multiple entry consolidated group, which includes the Applicant, CUB Australia Holding Pty Ltd, formerly known as ABI Australia Holding Pty Ltd (CUB). That examination involved the issue of 2 notices by the Commissioner to CUB pursuant to s 353-10 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (the TAA) and s 264A of the Income Taxation Assessment Act 1936 (Cth) for the production of specific documents and information (the earlier notices).

In response to the earlier notices, CUB made in excess of 20,000 claims for legal professional privilege (privilege) over documents. In making the privilege claim, CUB provided to the Commissioner schedules which identified details of the documents upon which CUB asserted privilege and a limited pro forma explanation as to the subject matter of the privileged communication (for example ‘Legal Advice from an External Legal Advisor’). The schedules did not include information that would have assisted the Commissioner in identifying whether he should accept or challenge the privilege claim, including the title of each document, the name of the author and person to whom the document was communicated.

A dispute arose between the Commissioner and CUB in respect to the privilege claims. The Commissioner maintained that he could not undertake a meaningful consideration of CUB’s privilege claims with the detail provided in the schedules and argued that he was entitled to further particulars. CUB maintained that he was not entitled to particulars.

In that context, the Commissioner issued a notice pursuant to s 353-10 of Schedule 1 to the TAA requiring CUB to furnish, for each privilege claim, the title of each document, the name of the author of each document, the name of the person to whom the document was communicated, and in respect to emails any detail as to whether the email was sent directly to the recipient or copied to the recipient (the notice).   

CUB subsequently filed a judicial review application on the grounds that:

  • the notice was not authorised by s 353-10 of the TAA
  • the Commissioner’s primary or substantial purpose was an improper purpose
  • the Commissioner took into account an irrelevant consideration
  • the title of the documents was subject to legal professional privilege.

Given the volume of privilege claims the Court heard the first 3 grounds of the originating application as a separate question.

Federal Courts Reasoning

At hearing, CUB argued that the Commissioner’s purpose or substantial purpose in the issue of the notice was to determine the validity of CUB’s privilege claims and that this was not a proper purpose, as the role of determining privilege claims was limited to a court of competent jurisdiction exercising judicial power.

In considering CUB’s argument, the Court had careful regard to the statement of reasons of the Commissioner’s delegate and the correspondence exchanged between the parties during the course of the privilege dispute.

By reference to the evidence, his Honour was satisfied that the Commissioner’s purpose (or motivation) in issuing the notice was to obtain information necessary to consider whether to accept or challenge CUB’s claim for legal professional privilege. His Honour considered that while certain parts of the reasons and the correspondence when, taken in isolation, might have suggested collateral motivation, considered as a whole and in context, the evidence established that the Commissioner’s purpose in issuing the notice was to obtain information required so that he could consider whether to accept or challenge CUB’s claim for privilege.

His Honour then went on to consider whether that purpose was one which was authorised by s 353-10 of the TAA. His Honour accepted the evidence that the documents from the earlier notices remained relevant to the statutory functions still being carried out by the Commissioner. His Honour held at paragraph [98] that the fact that the information sought in the notice related to a claim of legal professional privilege did not preclude the notice being authorised by the provision as the authorities establish that the power for the Commissioner to seek information under s 353-10 is broad and wide ranging (Federal Commissioner of Taxation v Australian and New Zealand Banking Group Ltd (1979) 143 CLR 499).   


For those regulators who have broad information gathering powers similar to that in s 353-10 of the TAA, this case may provide an example of a preliminary step that may be considered by a regulator to obtain the information needed to make an informed decision on whether to accept or challenge a privilege claim. 

Text of the decision is available at:
Federal Court of Australia, CUB Australia Holding Pty Ltd v Commissioner of Taxation [2021] FCA 43.


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