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The Federal Court (Edmonds J) has granted the Commissioner leave to use certain documents filed in the current proceedings, but not received into evidence:

  • in order to determine whether he will apply to the Court to set aside the decision of the Full Court of the Federal Court of Australia in Rawson Finances Pty Ltd v FCT [2013] FCAFC 26; (2013) 296 ALR 307 and the earlier decisions in relation to the same, on the basis that the judgment in that case was procured by fraud; and
  • in any proceeding instituted by the Commissioner for that purpose.

The Rawson case concerned assessments for the years of income ended 30 June 1997 and 1998, in which the Commissioner included in the taxpayer's (Rawson's) assessable income amounts it received in Australia from Mercantile Discount Bank ("MDB"), an Israeli bank: namely, $3 million in the 1997 year and $1.75 million in the 1998 year. Rawson at all times contended that the receipts were loans made to it by MDB. Further, in assessments or amended assessments for the same years, the Commissioner disallowed amounts claimed by Rawson as allowable deductions for interest allegedly paid on the loans. The AAT found in favour of the taxpayer at first instance, and the Full Court found no error of law in its decision, saying that it "was entitled to [weigh] the evidence as it saw fit provided that in so doing it did not lose sight of the decision it had to make (whether on the whole of the evidence Rawson had discharged the burden of proving the assessments were excessive)..."

Edmonds J held that the documents in the current proceedings supported the Commissioner's submission that certain material submissions advanced for the taxpayer in the Rawson case were known by that taxpayer to be false, and that the decision in that case was procured by fraud. Having considered all relevant circumstances, Edmonds J held that the Commissioner should be released from the obligation that documents not received into evidence cannot be used for any purpose other than that for which it was given.

BCI Finances Pty Ltd (in Liq) v FCT (No 3) [2014] FCA 958 (10 September 2014).

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