Federal Court of Australia

Elzain v Deputy Commissioner of Taxation [2024] FCA 873

ORDERS

THE COURT ORDERS THAT:

1.    The applicants’ application for leave to appeal dated 22 April 2024 be dismissed.

2.    The applicants pay the respondent’s costs of the application, as agreed or taxed.

3.    Subject to further order, for a period of seven days from the date of these orders:

(a)    the Court’s reasons for judgment dated today be and remain confidential to the parties and not be published to the public; and

(b)    the transcript of the hearing on 22 July 2024 and the exhibits that went into evidence at that hearing be and remain confidential to the parties and publication be prohibited, other than to the Court and the parties (on the ground that such an order is necessary to prevent prejudice to the proper administration of justice).

4.    Subject to further order, paragraph 3 of the order made on 19 April 2024 in proceeding number VID 1082 of 2023 be extended for a period of seven days from the date of these orders.

5.    Subject to further order, for the period referred to in paragraph 3 of the orders made on 8 April 2024 in proceeding number VID 1082 of 2023, on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the exhibits that went into evidence at the hearing on 22 July 2024, to the extent that they are or reproduce documents that are the subject of the non-publication and/or confidentiality orders made on 8 April 2024 in proceeding number VID 1082 of 2023, be and remain confidential to the parties and publication be prohibited other than to the Court and the parties.

6.    There be liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MOSHINSKY J:

Introduction

1    These reasons deal with an application for leave to appeal from judgments and an order made by the primary judge in relation to an application for suppression and non-publication orders and confidentiality orders.

2    The proceeding at first instance (number VID 1082 of 2023) (the Original Proceeding) was commenced by the Deputy Commissioner of Taxation (the DCT) against six members of the Elzain family and a family company called Mad Maxx Pty Ltd (the Elzain parties). The DCT sought judgment in respect of certain tax-related liabilities and applied on an ex parte basis for freezing orders. The freezing orders were made by O’Bryan J as duty judge. The DCT relied on a large volume of material in support of the application for the freezing orders. Subsequently, the Elzain parties applied for suppression and non-publication orders in respect of large parts of that material. That application came before McElwaine J (the primary judge) as duty judge. The primary judge decided to make suppression and non-publication orders in respect of most, but not all, of the material that was the subject of the application for suppression/non-publication orders: Deputy Commissioner of Taxation v Elzain [2024] FCA 342 (the First Reasons). The primary judge made orders dated 8 April 2024 to give effect to those reasons (the 8 April Orders).

3    On 8 April 2024, the Elzain parties sent an email to the primary judge’s chambers requesting that he refrain from publishing the First Reasons (or publish a redacted form of those reasons). The primary judge refused that application and published reasons for that refusal: Deputy Commissioner of Taxation v Elzain (No 2) [2024] FCA 346 (the Second Reasons).

4    In anticipation of the Elzain parties filing the present application for leave to appeal, orders were made by Rofe J as duty judge to the effect that the First Reasons and the Second Reasons not be published, and the court file for the Original Proceeding be suppressed, until the hearing and determination of the Elzain parties’ application for leave to appeal.

5    The application for leave to appeal is dated 22 April 2024 and is supported by an affidavit of Dimitrios Diakou, of Diakou Faigen, Lawyers, the solicitors acting for the Elzain parties, dated 22 April 2024. At the hearing of the application, the parties tendered a number of documents that are contained in an Application Book and a Supplementary Application Book.

6    The Elzain parties have provided a draft notice of appeal that sets out six grounds of appeal. However, grounds 5 and 6 were “not pressed” at the hearing before me (T51). As indicated during the hearing, I take this to mean they have been abandoned (T73).

7    In my respectful opinion, there is no discernible error in the applicable principles stated by the primary judge or in his Honour’s application of those principles to the facts of this case. In my view, the decision of the primary judge is not attended with sufficient doubt to warrant it being reconsidered by the Full Court. Accordingly, the application for leave to appeal will be dismissed.

8    I will make ancillary orders preserving the confidentiality of the relevant materials (including these reasons) for a period of seven days, to give the Elzain parties an opportunity to consider whether to make an application for special leave to appeal to the High Court. I will also reserve liberty to apply, in case the Elzain parties wish to apply for an extension of that seven day period.

Background

The Original Proceeding

9    On 19 December 2023, the DCT commenced the Original Proceeding.

10    On 20 December 2023, following an ex parte hearing, O’Bryan J made freezing orders against each of the Elzain parties and listed the matter for interlocutory hearing on 29 December 2023.

11    On 28 December 2023, by consent of the parties, Button J (as duty judge) adjourned the interlocutory hearing to 24 January 2024, with a timetable for the filing of evidence and submissions.

12    On 23 January 2024, by the consent of the parties, the primary judge set down the DCT’s freezing order application for interlocutory hearing on 31 January 2024. Both parties filed evidence and written submissions in respect of the DCT’s freezing order application.

13    On 30 January 2024, the Elzain parties filed an interlocutory application seeking suppression and non-publication orders pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) and orders that certain documents or information be marked as confidential and not capable of inspection (by a person who is not a party to the proceeding) pursuant to r 2.32 of the Federal Court Rules 2011. The interlocutory application also sought interim suppression orders.

14    On 31 January 2024, the freezing order application settled in principle between the parties and the balance of the proceeding (including the Elzain parties’ interlocutory application) was adjourned to 12 February 2024.

15    On 9 February 2024, the Elzain parties filed an amended interlocutory application.

16    On 12 and 13 February 2024, the Elzain parties’ amended interlocutory application was heard by the primary judge. During the course of the hearing, the primary judge invited the Elzain parties to consider the scope of their application.

17    On 22 February 2024, the Elzain parties filed a second amended interlocutory application. This was the final version of the Elzain parties’ interlocutory application.

The 15 March 2024 reasons

18    On 15 March 2024, the primary judge published on a confidential basis to the parties his reasons for judgment in respect of the Elzain parties’ application. The 15 March 2024 reasons are the same as the First Reasons (which were published to the public on 8 April 2024) save for a minor difference in one paragraph, namely [69] (as explained in the Second Reasons at [13]).

19    At [1]-[12] of the 15 March 2024 reasons, the primary judge outlined the Elzain parties’ interlocutory application and its procedural history.

20    At [13]-[18], the primary judge outlined the context in which the Elzain parties’ interlocutory application was to be considered. In particular, his Honour outlined the Original Proceeding and the making of the freezing orders in the proceeding.

21    At [19]-[29], the primary judge outlined the grounds on which the Elzain parties submitted that suppression and non-publication orders should be made.

22    The primary judge discussed the applicable principles at [30]-[56], referring in particular to: A v Commissioner of Taxation [2016] FCA 1307 (A v Commissioner); Lee v Deputy Commissioner of Taxation [2023] FCAFC 22; 296 FCR 272 (Lee); and Commissioner of Taxation v [Respondent] [2023] FCA 1176 (Commissioner v Respondent).

23    At [57]-[99], the primary judge applied those principles to the facts of the case. His Honour structured his reasons by reference to eight claims made by the Elzain parties. Relevantly for present purposes, his Honour reasoned as follows in relation to the Elzain parties’ fifth claim:

81    The fifth claim concerns the relevance of the confidentiality regime at Div 355 of Sch 1 to the TAA. As explained in Lee, this is clearly relevant but not determinative. It supports the making of orders that extend to essentially private information provided to and exchanged with the Commissioner, such as tax file numbers, correspondence between the Commissioner and the respondents and their advisers relating to the review and amendment assessment process, minutes of meetings with officers of the ATO, correspondence from the Commissioner requesting information, notices issued pursuant to the coercive powers at Div 353 of Sch 1 to the TAA and the documents obtained in consequence the exercise of those powers, the AUSTRAC funds transfer documents and the international travel records of individual respondents.

82    My reasons for being satisfied that it is necessary to make the orders sought in accordance with this claim overlap with the justification for making the orders on other grounds. I have concluded that the application fails in relation to the position papers of the Commissioner, and other documents that explain the reasons of the Commissioner for the amended assessments, save that those documents should be redacted to remove the contentions of misconduct, and personal data such as bank account details. It is also the case that the amended redactions now sought to the Dinh affidavit and my conclusions as to which remaining portions in issue may properly be the subject of orders pursuant to s 37AG of the FCA Act makes available a large amount of the material relevant to the freezing order applications. On that basis an inquirer will be able to determine why O’Bryan J made the orders based on the summaries and analysis in that material and the requirement to safeguard the public interest in open justice will be met.

(Emphasis added.)

24    Although the primary judge referred to the Commissioner’s “position papers” (plural), it seems that there is only one position paper in the material. Nothing turns on this.

25    Ultimately, the primary judge accepted that most, but not all, of the material that was the subject of the Elzain parties’ application should be made the subject of non-publication and confidentiality orders.

26    His Honour gave the Elzain parties the opportunity to prepare draft orders to give effect to his reasons.

27    On 4 April 2024, the Elzain parties provided draft orders that endeavoured to give effect to the primary judge’s reasons.

Further hearing on 8 April 2024

28    On 8 April 2024, a further hearing took place before the primary judge. His Honour indicated that he was generally satisfied with the draft orders save for four matters. The first and second of these matters are relevant for present purposes. The first matter was that the draft orders provided for redaction of the words “serious misconduct” and “misconduct” in his Honour’s reasons for judgment of 15 March 2024. His Honour ruled that he was not prepared to make these redactions. His Honour gave reasons for this conclusion in the Second Reasons, as set out below.

29    The second of the four matters was whether there was any inconsistency between the primary judge’s conclusion in relation to the Commissioner’s position paper and reasons for decision (his Honour had decided, in the 15 March 2024 reasons, not to make a non-publication order or confidentiality order in respect of these documents) and the judgment of Thawley J in Deputy Commissioner of Taxation v Wu [2024] FCA 250 (Wu (No 1)). The primary judge concluded that there was no inconsistency at the level of principle, and provided reasons in respect of this matter in the Second Reasons, as discussed below.

The First Reasons

30    During the hearing on 8 April 2024, which was initially conducted in closed court, the primary judge stated that he was moving into open court. His Honour then published the First Reasons to the public. As noted above, the First Reasons are the same as the reasons published on 15 March 2024 save for a minor adjustment to [69] (as explained in the Second Reasons at [13]).

The 8 April Orders

31    The primary judge subsequently made the 8 April Orders. The orders are lengthy, given the amount of material that was the subject of non-publication and confidentiality orders. Paragraph 8 of the orders provided that the Elzain parties’ second amended interlocutory application was “otherwise dismissed”.

The Second Reasons

32    Following the hearing on 8 April 2024, the Elzain parties’ solicitors emailed the primary judge’s chambers requesting that he refrain from publishing the First Reasons (or that he publish a redacted form of those reasons) pending an application for leave to appeal. His Honour refused to do so, and set out his reasons in the Second Reasons, which were published on 9 April 2024.

33    In the Second Reasons, at [6]-[13], the primary judge outlined and gave reasons in respect of the four matters that had been dealt with at the 8 April 2024 hearing. It is sufficient for present purposes to refer to the first two matters.

34    As noted above, the first of the four matters was that the Elzain parties’ draft orders proposed the redaction of the words “serious misconduct” and “misconduct” where they appeared in the reasons for judgment delivered on 15 March 2024. His Honour provided reasons for not acceding to this request at [6]-[8] of the Second Reasons. These reasons included that, at the hearing on 8 April 2024, in response to a question whether the Elzain parties pressed this part of the draft orders, senior counsel for the Elzain parties said that they did not (transcript 8 April 2024, p 4).

35    As noted above, the second of the four matters was whether there was an inconsistency between the primary judge’s conclusion regarding the Commissioner’s position paper and reasons for decision and the judgment of Thawley J in Wu (No 1). In that case, Thawley J did make a suppression order in respect of such material. The primary judge stated in the Second Reasons:

10    I do not read his Honour’s reasons as formulating a principle of general application in these types of cases. Rather, his Honour was persuaded to make the orders relating to this material based on his assessment of the degree of reputational harm likely to be suffered by the respondents in consequence of the serious nature of the material and the allegations made by the Commissioner. So much is clear from the reasons at [41(1)], [43], [58] and [59(a)].

11    In this case I am satisfied that the respondents have made out a case for the making of suppression and non-publication orders relating to a substantial portion of the material contained within the Commissioner’s affidavits, including material in the position papers and other documents that explain the Commissioner’s reasons for the amended assessments, to the extent that this material references the contentions of misconduct, the basis therefor and personal data such as bank account details: [82]. Otherwise, I was not satisfied on the evidence that this material should be suppressed. Ultimately, I reached an evaluative decision that differs from that of Thawley J. This is not a difference at the level of principle.

36    At [14]-[36] of the Second Reasons, the primary judge dealt with the Elzain parties’ informal application that he refrain from publishing the First Reasons (or publish a version of the First Reasons with the words “serious misconduct” and “misconduct” redacted). His Honour rejected that application. His Honour’s reasons include that, insofar as the Elzain parties’ draft orders sought redaction of the words “serious misconduct” and “misconduct” from the 15 March 2024 reasons, senior counsel for the Elzain parties said at the hearing on 8 April 2024 that this part of the draft orders was not pressed. Further, the primary judge noted that the First Reasons had been published to the public during the hearing on 8 April 2024.

The application for leave to appeal

37    The Elzain parties seek leave to appeal from the judgments of the primary judge and paragraph 8 of the 8 April Orders.

38    Grounds 1 to 4 of the draft notice of appeal are:

1.    The primary judge erred in refusing to suppress the whole of the ATO position paper and reasons for decision (RFDs) exhibited to the affidavit of Dung Dinh sworn 18 December 2023:

(1)    ATO position paper in respect of Maxcon Developments Pty Ltd in the period 1 July 2017 to 30 June 2018: Exhibit DD-1, pp 204-269.

(2)    audit reasons for decision in respect of the First Respondent for the period 1 July 2021 to 30 June 2022: Exhibit DD-1, pp 3067-3102.

(3)    audit reasons for decision in respect of the Second Respondent for the period 1 July 2021 to 30 June 2022: Exhibit DD-1, pp 3103-3136.

(4)    audit reasons for decision in respect of the Third Respondent for the period 1 July 2021 to 30 June 2023: Exhibit DD-1, pp 3137-3174.

(5)    audit reasons for decision in respect of the Fourth Respondent for the period 1 July 2021 to 30 June 2022: Exhibit DD-1, pp 3175-3210.

(6)    audit reasons for decision in respect of the Fifth Respondent for the period 1 July 2021 to 30 June 2022: Exhibit DD-1, pp 3211-3246.

(collectively referred to as “the ATO position paper and RFDs”) in paragraph [82] of the reasons and by only making orders for the partial redaction of those documents.

2.    The primary judge erred in refusing to suppress the whole of the ATO position paper and RFDs by:

a.    not applying the principle, or failing to recognise, that the administration of justice is prejudiced if the necessary consequence of reading or deploying evidence on an ex parte application for a freezing order is complete disclosure of all the material regardless of the consequences.

b.    not applying the principle, or failing to recognise, that ss 37AF and 37AE of the Act, read together, recognise that the administration of justice might be prejudiced if the open justice principle is pursued without regard to context or consequences.

c.    having accepted in paragraphs [74] to [76] that if the allegations made against the Appellants entered the public domain it would likely cause the Appellants adverse consequences, severe reputational harm and commercial harm, by not applying the principle, or failing to recognise, that the consequence of a failure to suppress the ATO position paper and RFDs would be unfairness to the Appellants of a kind which prejudices the administration of justice.

d.    not applying the principle, or failing to recognise, that the prejudice to the administration of justice lies in the procedural and substantive unfairness to the Appellants (and the same applies a fortiori to third parties) in not having had the opportunity to seek to prevent the material from being deployed in open court and in not having the opportunity in the proceedings to answer the material which is likely to cause them harm, so that in the absence of an order under s 37AF in respect of the ATO position paper and RFDs, the principle of open justice will have been pursued inflexibly without regard to the context or circumstances of the particular case.

3.    The primary judge erred in refusing to redact references to “misconduct” and “serious misconduct” in the catchwords and paragraphs [20], [51], [55], [74]-[76] and [82] of the Court’s reasons in Deputy Commissioner of Taxation v Elzain [2024] FCA 342, because:

a.    those references to “misconduct” or “serious misconduct” were not anodyne or harmless in the absence of suppression of the whole of the ATO position paper and RFDs because those references direct attention to the presence of material in the court file, namely the whole of the Commissioner’s reasons for decision, that will (if not suppressed) identify the alleged misconduct or serious misconduct; and

b.    even if the whole of the ATO position paper and RFDs were to be suppressed, those references are likely to expose the Appellants to enquiries in a commercial context and thereby expose the Appellants to the very risk of the commercial harm that the primary judge accepted would be likely to result if suppression orders were not made.

4.    The primary judge erred in publishing the Court’s reasons in Deputy Commissioner of Taxation v Elzain (No 2) [2024] FCA 346, being reasons why the Court would not redact references to “misconduct” and “serious misconduct” in Elzain, and in using those terms again in Elzain (No 2) because:

a.    Deputy Commissioner of Taxation v Wu [2024] FCA 250 and Deputy Commissioner v Wu (No 2) [2024] FCA 269, which his Honour followed on this issue, were distinguishable because in Wu and Wu (No 2) certain matters had already entered the public domain, such that a general summary of the Deputy Commissioner’s position would not cause any additional harm to the taxpayers; and

b.    in this case, for the reasons set out in paragraphs 3.a and 3.b hereof, references to “misconduct” and “serious misconduct” would, if not redacted, be likely to cause the very harm apprehended by the Appellants and accepted by the Court.

39    As noted above, the Elzain parties do not press grounds 5 and 6 in their draft notice of appeal.

40    Grounds 1 and 2 of the draft notice of appeal relate to his Honour’s decision not to make a suppression order in respect of the Commissioner’s position paper and reasons for decision. Ground 3 relates to the primary judge’s decision not to redact the words “serious misconduct” and “misconduct” in the First Reasons. While ground 4 contends that his Honour erred in publishing the Second Reasons (that is, the whole of the Second Reasons), during oral submissions senior counsel for the Elzain parties clarified that they only seek the redaction of certain words in the Second Reasons (the words “serious misconduct” and “misconduct” and comparable expressions) (T51-52). The scope of the application for leave to appeal is therefore quite narrow.

Applicable principles

Leave to appeal

41    The applicable principles for an application for leave to appeal are well established. The Court must consider: (a) whether, in all the circumstances, the decision at first instance is attended with sufficient doubt to warrant its reconsideration on appeal; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398-399 per Sheppard, Burchett and Heerey JJ.

42    In Forte Sydney Carlingford Development Pty Limited v Forte Sydney Carlingford Pty Limited [2024] FCAFC 9, Markovic and Halley JJ stated the following principles, which are equally applicable here:

52    Appellate courts are to exercise particular caution in reviewing decisions relating to practice and procedure: see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170 at 177. The restraining orders made by the primary judge which are the subject of this appeal are matters of practice and procedure.

53    That said, in Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238 a Full Court of this Court (Dowsett, Foster and Yates JJ) observed at [29] that, while the test set out in Décor is appropriate for the general run of cases, it should not be applied as if it were a hard and fast rule and each case must be considered on its merits. At [33]-[34] the Full Court said:

33    In Ex parte Bucknell, the High Court emphasised the importance of the Court considering the practical operation or effect of the interlocutory order from which leave to appeal is sought. Leave should readily be granted if, as a practical matter, the interlocutory order has the effect of determining the whole of the proceeding or an important issue in the proceeding.

34    In Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [53], Gummow and Hayne JJ said that, although the grant of an interlocutory injunction is a matter of practice and procedure, where matters of principle are involved, an appeal “stands somewhat above the ordinary appeal in a matter of practice and procedure”.

Suppression orders

43    The principles applicable to the making of suppression orders in a similar context to the present case were recently considered by the Full Court in Lee. In that case, the DCT had applied on an ex parte basis for freezing orders, which had been granted. Subsequently, an application was made for suppression orders in respect of the entirety of affidavits that had been relied on by the DCT. The primary judge refused to make such orders. An application for leave to appeal was filed. The Full Court (comprising Thawley, Stewart and Abraham JJ) heard the application for leave to appeal together with the appeal (if leave were granted).

44    The Full Court granted leave to appeal, but dismissed the appeal. The Full Court indicated at [107] that, had the appellants not run their case on an all or nothing basis (see [77]), the Full Court would have been inclined to make a suppression or non-publication order in respect of the bank account numbers contained in one of the affidavits. However, no such order was sought, and the third party that was granted access indicated that such material would not be published; accordingly, there was no immediate necessity for such an order.

45    The Full Court discussed Div 355 of Sch 1 to the Taxation Administration Act 1953 (Cth) (Div 355) (which is headed “Confidentiality of taxpayer information”) at [28]-[64] of its reasons. The Full Court concluded at [64]:

Division 355 does not provide a basis in the way contended by the appellants for interfering with the primary judge’s orders, although it may be accepted that Div 355, together with other statutory provisions, may be relevant as part of the context in which to decide whether in any given case it is appropriate to make a suppression order.

46    The Full Court considered suppression orders more generally at [65]-[105]. Their Honours’ reasons included:

87    The issue required by the statute to be addressed was whether the making of a suppression order (a non-publication order was not sought) was, in the proved circumstances, “necessary to prevent prejudice to the proper administration of justice”: s 37AG(1)(a).

88    If it is established that a suppression order is “necessary to prevent prejudice to the proper administration of justice”, then it would be erroneous not to make it: Hogan 1 at [33]. If it is not “necessary”, then it cannot be made. The word “necessary” in s 37AG(1)(a) is a strong word, not dealing with trivialities: Hogan 1 at [30].

89    As the primary judge noted at [28], all five justices of the High Court (French CJ, Gummow, Hayne, Heydon and Kiefel JJ) in Hogan 1 stated at [31] (footnotes omitted):

It is insufficient that the making or continuation of an order under s 50 [of the FCA Act] appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some “balancing exercise”, the order appears to have one or more of those characteristics.

90    It follows from the statutory language that it is necessary to identify the contended prejudice to the proper administration of justice that would result if the order is not made. The fact that a person will suffer reputational or commercial harm from publication of evidence relied upon in open court does not have the necessary consequence that the proper administration of justice is or will be prejudiced. Such harm can be an inevitable part of open justice.

91    That is not to deny that there might be circumstances where likely reputational or commercial harm from the publication of particular information might be such that an order is “necessary to prevent prejudice to the proper administration of justice”. There are numerous examples of when that might occur. The publication of bank account numbers which might be misused if published and which are wholly irrelevant to understanding the work of the court or the reasons for a decision furnishes an example. One would justifiably think less of the justice system if there was no way of suppressing the publication and dissemination of harmful information which was unnecessary to achieving an object informing the open justice principle.

…

97    A suppression order might be shown to be “necessary to prevent prejudice to the proper administration of justice”, for example, where it is made in respect of particular information which could be misused or cause significant harm, being information which is not germane to securing the objective of open justice. If the principle of open justice is not advanced by publication of particular information in the evidence (such as bank account details or passwords), the publication of which might reasonably be expected to facilitate wrongdoing, it might reasonably be concluded that a suppression order is “necessary to prevent prejudice to the proper administration of justice”. …

Consideration

47    In relation to grounds 1 and 2 of the draft notice of appeal, the Elzain parties’ first argument is that the Commissioner’s position paper and reasons for decision contain significant amounts of material that is covered by Div 355. While not suggesting that this is determinative, the Elzain parties submit that this is a relevant consideration (consistently with Lee at [64]). The Elzain parties submit that there is an inconsistency in the primary judge’s approach. They submit that, on the one hand, his Honour accepted that a large amount of material (approximately 800 pages) that was covered by Div 355 should be the subject of a suppression or non-publication order: see the First Reasons at [81]. However, on the other hand, his Honour, at [82] of the First Reasons, did not make a suppression or non-publication order in respect of the whole of the position paper and the reasons for decision (but only certain parts of these documents). The Elzain parties submit that the parts of the position paper and the reasons for decision that were not suppressed, or made the subject of a non-publication order, contain material that is derived from documents that the primary judge accepted should be suppressed on the basis that the information is protected by Div 355. Further, the Elzain parties submit that the primary judge’s conclusion regarding the Commissioner’s position paper and reasons for decision is inconsistent with the conclusion reached by Thawley J in Wu (No 1) in respect of materially similar documents.

48    The Elzain parties also submit that it was an error for the primary judge (at [82] of the First Reasons) to focus on whether the position paper and reasons for decision would assist the public to understand why the Court made the freezing orders, rather than focussing on whether the ground in s 37AG(1)(a) of the Federal Court of Australia Act was made out. They submit that that ground may be made out even if the material is very helpful for the public to understand what happened in court.

49    In relation to grounds 3 and 4, the Elzain parties contend, in summary, that it was an error of the primary judge not to make a suppression or non-publication order in respect of the words “serious misconduct” and “misconduct” where they appear in the First Reasons and Second Reasons. The Elzain parties submit that these words are a “signpost” that such conduct is present in the material that his Honour accepted should be suppressed or the subject of a non-publication order. As such, they submit, publication of these words is apt to undermine or undo the protection provided by the non-publication orders that were made by the primary judge.

50    In my view, for the reasons that follow, the decision of the primary judge is not attended with sufficient doubt to warrant its reconsideration on appeal.

51    In relation to grounds 1 and 2, the primary judge correctly set out the applicable principles relating to the making of suppression orders, based on the judgment of the Full Court in Lee: see the First Reasons at [30], [31], [33], [40]-[43], [46], [47], [49], [68]-[70], [78]-[79], [81]. His Honour correctly stated (at [81]) that the confidentiality regime in Div 355 was relevant but not determinative. In reaching the conclusion that a suppression or non-confidentiality order should not be made in respect of the whole of the Commissioner’s position paper and reasons for decision, the primary judge made an evaluative decision on the facts of the particular case, in circumstances where his Honour was immersed in and evidently familiar with the relevant material. Once it is appreciated that the fact that information is covered by Div 355 is relevant but not determinative (see Lee at [64], [99]), there is no necessary inconsistency between: (a) the conclusion the primary judge reached in relation to the approximately 800 pages of material; and (b) the conclusion that the primary judge reached in relation to the position paper and reasons for decision.

52    Although the primary judge at [81]-[82] of the First Reasons was considering the Elzain parties’ fifth claim (which was based on Div 355), the primary judge indicated that his reasons with respect to this claim overlapped with other grounds: see [82]. Thus, his Honour’s reasons for accepting or rejecting the Elzain parties’ contentions in respect of the fifth claim cannot be looked at in isolation from his reasons with respect to other claims. Of present relevance, his Honour considered, at [70]-[72] of the First Reasons, whether certain material would be relevant to understanding why the freezing order had been made, and on what evidence. In this context, the approach taken by the primary judge is consistent with, and appears to reflect, the approach indicated in Lee at [97], where the Full Court stated:

A suppression order might be shown to be “necessary to prevent prejudice to the proper administration of justice”, for example, where it is made in respect of particular information which could be misused or cause significant harm, being information which is not germane to securing the objective of open justice.

53    Consistently with the above passage, it was open to the primary judge to reach a different result with respect to the approximately 800 pages, on the one hand, and the position paper and reasons for decision, on the other, on the basis of a different assessment of whether the information was “germane to securing the objective of open justice”.

54    While the result in relation to documents of this type was different in Wu (No 1), it does not follow that his Honour’s approach was inconsistent with that taken in Wu (No 1): each case will turn on its own facts (including the evidence and submissions presented). The difference in the result of these cases is insufficient to indicate (let alone establish) error.

55    Finally, I do not consider that the wording of the last sentence of [82] of the First Reasons indicates an error of principle as submitted by the Elzain parties. The authorities make clear that whether a document is relevant to understanding the Court’s decision does inform the inquiry as to whether a suppression or non-publication order is necessary to prevent prejudice to the proper administration of justice: Lee at [91], [97]; Wu (No 1) at [44]. In summary, it was open to the primary judge to reach the conclusion that he did (not to make a suppression or non-publication order in respect of the Commissioner’s position paper and reasons for decision), and there is no arguable error in his approach or decision.

56    In relation to grounds 3 and 4, a significant difficulty for the Elzain parties is that senior counsel for the Elzain parties did not press the point at the hearing before the primary judge on 8 April 2024. At p 3 of the transcript, the primary judge asked senior counsel why he should redact the relevant words in his reasons (as suggested in the draft orders provided by the Elzain parties in advance of the hearing). Senior counsel responded by referring to the redactions to be made to the underlying documents. Further discussion took place between the primary judge and senior counsel in relation to the issue, during which the primary judge referred to the judgment of Thawley J in Deputy Commissioner of Taxation v Wu (No 2) [2024] FCA 269 (Wu (No 2)), in which his Honour declined to redact his judgment. Senior counsel made submissions seeking to distinguish that case. His Honour questioned whether there was any basis for distinguishing the case, having regard to Wu (No 2) at [7]. The following exchange then took place between senior counsel for the Elzain parties and the primary judge (at p 4 of the transcript):

[SENIOR COUNSEL:] 7, yes, I’ve looked at that. Thank you, your Honour. Yes, so in – and I see that in the Wu (No 1), if we could call it that, 41(2) talks about the Commissioner asserted that the respondents engaged in dishonest conduct and evasion. 61(2) – 61(1), rather, the Commissioner’s view that the respondents had behaved dishonestly, his Honour did not redact those.

HIS HONOUR: And it would seem that my words were somewhat more anodyne.

[SENIOR COUNSEL:] I think that’s right, your Honour.

HIS HONOUR: So do you press that?

[SENIOR COUNSEL:] No, your Honour.

HIS HONOUR: Thank you.

[SENIOR COUNSEL:] May your Honour please.

57    In submissions before me, senior counsel for the Elzain parties submitted that, in the above passage, he was not withdrawing the point; he was merely saying that he did not wish to argue the point any further. I have significant difficulty with that way of reading the above exchange. In my view, the exchange objectively conveys that senior counsel was not pressing, in the sense of abandoning, the point.

58    Further and in any event, there does not appear to be any arguable error in the decision of the primary judge not to redact the words “serious misconduct” and “misconduct” in the First Reasons and those words (and comparable expressions) in the Second Reasons. The words merely summarised, in a fair and neutral way, allegations that had been made by the DCT and were revealed by other documents or parts of documents that were not to be redacted (in particular, the unredacted parts of the affidavit of Dung Dinh dated 18 December 2023, being the principal affidavit relied on by the DCT in seeking and obtaining the freezing orders).

59    I note for completeness that the Elzain parties submit that, although the decision at first instance concerns a matter of practice and procedure, this is not an ordinary case of such a decision because it has a significant, practical effect on the Elzain parties’ interests. In considering whether there is sufficient doubt as to the correctness of the primary judge’s decision, I have had regard to the practical importance of the decision for the Elzain parties.

60    For these reasons, the decision of the primary judge is not attended with sufficient doubt to warrant its reconsideration on appeal.

61    In light of the above, it is unnecessary to consider the second limb of the test for leave to appeal, relating to substantial injustice.

62    If and to the extent that the Elzain parties submit that leave to appeal should be granted because the application/appeal raises an important issue of principle, the principles applicable to the making of suppression orders in a similar context have been recently considered by a Full Court in Lee. The applicants did not suggest that any of the principles stated in Lee were wrong.

Conclusion

63    It follows that the application for leave to appeal is to be dismissed. At the hearing of the application, it was accepted by both parties that, in this event, costs should follow the event. I will therefore also make an order that the Elzain parties pay the DCT’s costs of the application for leave to appeal.

Associate:

Dated:    7 August 2024

SCHEDULE OF PARTIES