Full Court affirms decision – Commissioner permitted to request the information

CUB Australia Holding Pty Ltd v Commissioner of Taxation [2021] FCAFC 171


Following the Federal Court’s decision and our case summary of that decision, [https://www.cornwalls.com.au/cub-australia-holding-pty-ltd-v-commissioner-of-taxation-2021-fca-43/], CUB appealed to the Full Federal Court.

The Full Court has delivered its judgment, dismissing the appeal and upholding the primary judge’s decision.

Brief background to case

Readers will recall that as part of an audit, the Commissioner issued CUB with a compulsory notice under s 353-10 of Sch 1 to the Taxation Administration Act 1953 (Cth) (TAA), requiring CUB to furnish certain information. CUB refused to provide some of the requested documents on the ground of legal professional privilege (LPP).

The Commissioner insisted on further particulars for the documents over which CUB was claiming LPP, including the title of the documents (subject line for emails), the authors and the recipients of the documents, so that he could assess the basis of CUB’s LPP claim.

CUB refused to provide this additional information on the basis that such information was itself subject to LPP. CUB instead offered to provide details of the process it had applied in identifying documents that it considered were subject to LPP. It also offered to test a representative sample (or all the documents) with an independent reviewer. The Commissioner did not consider that details of CUB’s process would assist and was not yet in a position to determine whether he desired to have the claims tested by an independent reviewer.

Subsequently, after some back and forth, the Commissioner issued a further compulsory s 353-10 notice purportedly requiring CUB to provide the very information it refused earlier (title of documents, author of documents, name of persons to whom documents were communicated etc).

Grounds of appeal before the Full Court

The arguments raised on appeal by CUB can be summarised as follows:

  1. The primary judge did not take into account the relevant authorities and did not consider that there can be multiple purposes for issuing a s 353 notice.
  2. The primary judge was wrong to find that the Commissioner, in issuing the notice, was motivated by a proper purpose. The primary judge ought to have found, argued CUB, that the Commissioner possessed the improper purpose of seeking to determine the LPP claim.

Full Court decision (Middleton, McKerracher and Griffiths JJ) – both grounds rejected 

The Full Court rejected the first ground on the basis that while the primary judge did not explicitly refer to the ratio from the decisions in Thompson[1] and Samrein[2], it was quite clear from the reasons and from the oral arguments and submissions that the primary judge had understood and did apply those authorities.

Given the primary judge found there was only one purpose (or only one substantial purpose) rather than multiple purposes, it was unnecessary to further consider CUB’s alternative proposition that there was some other collateral or incidental purpose that was improper and could also be said to be a ‘substantial purpose’.

The second ground was also rejected. After indicating this ground was essentially challenging a finding of fact,  the Full Court nonetheless agreed with the primary judge that despite some of the Commissioner’s correspondence using the word ‘determine’, the overall context demonstrated that the Commissioner’s purpose was not to determine for himself the validity of the LPP claims.

Rather, the Full Court agreed with the primary judge that the Commissioner’s purpose was to enable him to make an informed decision as to whether an alternative dispute resolution process would be an appropriate method of resolving any disputed LPP claims. In this respect, the Full Court also observed that even if all the requested information was provided, it would have been insufficient to determine the LPP claim.

The forensic decision not to cross-examine the (ATO) deponent that the s 13 reasons of decision did in fact contain the actual reasons for issuing the notice meant it was no longer open, as a matter of fairness, for CUB to subsequently submit those reasons were in part false.

For further information, including a greater explanation of the arguments and court decision, please refer to the earlier article on the first instance decision because that reasoning by the primary judge was upheld.[https://www.cornwalls.com.au/cub-australia-holding-pty-ltd-v-commissioner-of-taxation-2021-fca-43/]

Broader context

This decision was made in the context of the Commissioner continuing to take a hard line on privilege claims. At present, the Commissioner is in court accusing PwC of inappropriately utilising the legal arm of its firm in order to inappropriately claim privilege in respect of tax advice that was not predominantly prepared by the legal arm or legal practitioners acting in that capacity.


For further information regarding the above, please contact the author, or any member of our Tax team.


This information and contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.

[1] Thompson v Randwick Municipal Council [1950] HCA 33; (1950) 81 CLR 87

[2] Samrein Pty Ltd v Metropolitan Water Sewerage and Drainage Board (1982) 56 ALJR 678; (1982) 41 ALR 467