The Full Federal Court has unanimously dismissed the taxpayer’s application for leave to appeal from the decision in Hua Wang Bank Berhad & Ors v FCT (No 2) [2012] FCA 938. The taxpayer sought to leave to appeal from that part of the decision in which the Court at first instance refused to set aside portions of a notice to produce in respect of activities the taxpayer carried out in Samoa which the taxpayer claimed would require its employees to breach the criminal law of Samoa and, in particular, the secrecy provisions of the International Banking Act 2005 (Samoa).
However, in dismissing the taxpayer’s application, the Full Court found that the Court at first instance had exercised the appropriate “caution” required in a matter involving an intrusion upon the sovereignty of a foreign state and that, contrary to the taxpayer’s claim, it was not a case where the Court at first instance should have exercised its discretion to set aside those parts of the notice to produce on the basis of “exceptional circumstances”. In short, the Full Court held that the manner in which the Court at first instance exercised its discretion was one which was reasonably open to it, was not attended with any real doubt and that the refusal to grant leave to appeal would not result in any substantial injustice.
Finally, the Full Court dismissed the application of the Independent State of Samoa to be made a party to the proceedings on the grounds that it had no direct legal interest in the substantive taxation appeal or in the related taxation recovery proceeding. In relation to the claim that it had an interest in the enforcement of its laws, which included the International Banking Act 2005 (Samoa), the Full Court noted that that Act did not form part of the law of Australia and that such a factual matter should have been argued at first instance.
(Hua Wang Bank Berhad v FCT [2013] FCAFC 28, Full Federal Court, Logan, Jagot and Robertson JJ, 13 March 2013.)
[LTN 49, 13/3/13]