The Full Federal Court has unanimously upheld the decision in Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196 and confirmed that notices issued by the ATO under s 264 of the ITAA 1936 to the Bank were valid. The notices sought information about customers of an affiliate of ANZ with accounts in Vanuatu.

At first instance, the ANZ argued, among other things, that it would be in breach of certain common law confidentiality obligations it owed to the relevant customers of ANZ Vanuatu, as well as certain secrecy provisions enacted in Vanuatu if it were required to comply with the notice. However, the Federal Court dismissed this argument primarily on the basis that as the relevant information was stored in ANZ’s electronic records located in Australia, there would be no such breaches and that s 264 overrides any obligation of confidence ANZ may have owed to ANZ Vanuatu, or to ANZ Vanuatu’s customers.

On appeal, the Full Federal Court unanimously held that the onus of establishing that disclosure would cause a breach of the non-statutory obligation that ANZ’s affiliate owed to its customers had not been discharged.

Likewise, the Full Court found that the validity of the notice was not inhibited by any foreign law that purported to prohibit the disclosure of information in Australia to the Commissioner.

Finally, the Full Court confirmed that no improper purpose had been made out and that the first notice issued had not been invalidated by reason of any uncertainty of terms used in the notice – albeit, a second notice had.

(Australia and New Zealand Banking Group Limited v Konza [2012] FCAFC 127, Full Federal Court, Kenny, Edmonds and Robertson JJ, 12 September 2012.)

[LTN 179, 14/9]