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The Federal Court (Greenwood J) has dismissed an application for an interlocutory injunction made by the taxpayer in respect of the proposed examination by the Commissioner of documents seized in 2006 in New Zealand by the New Zealand Inland Revenue Commissioner (IRD). The taxpayer alleged, amongst other things, that the seizure of the documents was unlawful, and that he had been denied the right to claim legal professional privilege in respect of the documents.

Earlier, the taxpayer had, in separate proceedings, commenced actions both in New Zealand and Australia following the seizure of the documents. In the New Zealand proceedings, the New Zealand High Court established a procedure under which any documents for which a claim for legal professional privilege was not made or if made was unsuccessful would be made available to the Australian Taxation Office. In the event, the taxpayer failed to assert legal professional privilege in relation to any of the documents under this procedure, and the documents were made available to the ATO by the IRD . The Australian proceedings were not pursued, being effectively abandoned in December 2006.

On the basis that the taxpayer had waived his right to claim legal professional privilege both in New Zealand and Australia, his application of an interlocutory injunction against the Commissioner was dismissed. Other grounds advanced by the taxpayer, including the ground that irrespective of whether the search and seizure operations undertaken in New Zealand were lawful and the supply of the documents to the ATO was lawful, an intervening change of purpose had occurred as the Commissioner now sought access to the documents for use in a criminal investigation, and that purpose was not a proper purpose, were also dismissed.

Petroulias v FCT [2010] FCA 1464 (Federal Court, Greenwood J, 23 December 2010).


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