IEL Finance Limited v Commissioner of Taxation [2006] FCA 267

FEDERAL COURT OF AUSTRALIA

IEL Finance Limited v Commissioner of Taxation [2006] FCA 267

INCOME TAX – large corporate group – inter-group transactions undertaken over six consecutive fiscal years – transactions involving inter-group interest bearing borrowings principally by one group member and transfers of tax losses arising out of those borrowings to other group members – prior primary and appellate claims by proceedings in Federal Court made by borrowing member against the Commissioner for interest deductibility in respect of one fiscal year – decision at first instance and on appeal in relation to that fiscal year adverse to that single group member – findings made in context of those proceedings as to assessability to tax of that group member in respect of some transactions for differing fiscal years – after conclusion of single fiscal year further proceedings commenced by the same corporate group member together with other corporate group members in respect of transactions involving borrowings and transfers of tax losses in respect of antecedent as well as subsequent fiscal years to that resolved by Federal Court in favour of Commissioner – whether issue estoppel, Anshun estoppel and/or abuse of process should operate in favour of Commissioner in respect of deductions for losses of antecedent and subsequent fiscal years – meaning of privies – authority in Australian Courts of earlier decisions of Privy Council and House of Lords – summary judgment application of Commissioner granted Income Tax Assessment Act 1936 (Cth) ss 51(1), 79E and 80G and Part VII Tax Administration Act 1953 (Cth) Part IVC Federal Court Rules O 20 r 2 subrule 2(1)(b) and (c) and Order 52B

Spassked Pty Ltd v Commissioner of Taxation (No. 5) (2003) 197 ALR 553 cited and applied Spassked Pty Ltd v Commissioner of Taxation (2003) 136 FCR 441 cited and applied General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 applied Dey v Victorian Railways Commissioners (1948-1949) 78 CLR 62 applied Jackson v Goldsmith (1950) 81 CLR 446 referred to Effem Foods Pty Ltd v Trawl Industries of Australia Pty Limited (1993) 43 FCR 510 referred to Blair v Curran (1939) 62 CLR 464 applied Rogers v The Queen (1994) 181 CLR 251 referred to Trawl Industries of Australia Pty Ltd (in liquidation) v Effem Foods Pty Limited (1992) 36 FCR 406 referred to Spalla v St George Motor Finance Ltd (No 6) [2004] FCA 1699 applied Walton v Gardiner (1993) 177 CLR 378 applied Sea Culture International Pty Ltd v Scoles [1991] 32 FCR 275 referred to Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537 discussed Hoysted v Federal Commissioner of Taxation [1926] AC 155; (1925) 37 CLR 290 discussed Henderson v Henderson (1843) 3 Ha 100 discussed Murphy v Abi‑Saab (1995) 37 NSWLR 280 applied Johnson v Gore Wood & Co [2002] 2 AC 1 cited Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 applied Taylor v Ansett Transport Industries Limited [1987] 18 FCR 342 cited Mohamed Falil Abdul Caffoor, The Trustees of the Abdul Gaffoor Trust v Commissioner of Income Tax Colombo [1961] AC 584 discussed and distinguished Broken Hill Proprietary Company Limited v The Municipal Council of Broken Hill (1925) 37 CLR 284 discussed and distinguished The Council of the Municipality of Broken Hill v The Broken Hill Proprietary Company (1922) 30 CLR 400 discussed and distinguished Chamberlain v Deputy Commissioner of Taxation (1987-1988) 164 CLR 502 discussed Chamberlain v Commissioner of Taxation (1991) 21 FCR 21 cited Federal Commissioner v Wade (1951) 84 CLR 105 referred to Society of Medical Officer of Health v Hope [1960] AC 551 discussed and distinguished Federal Commissioner of Taxation v A.N.Z. Savings Bank Ltd (1994) 181 CLR 466 referred to Falk v Haugh (1935) 53 CLR 163 cited and discussed Viro v The Queen (1978) 141 CLR 88 referred to Orica Ltd v Federal Commissioner of Taxation (2001) 182 ALR 77 not followed Queensland Trustees Limited v Commissioner of Stamp Duties (1956) 96 CLR 131 applied Commissioner of Taxation v Dulux Holdings Pty Ltd (2001) 113 FCR 436 referred to re Sharpe (1944) QSR 26 referred to Cook v Cook (1986) 162 CLR 376 cited and discussed Skelton v Collins (1966) 115 CLR 94 referred to Hawkins v Clayton (1986) 5 NSWLR 109 referred to Federal Commissioner of Taxation v Cappid Pty Ltd (1970) 127 CLR 140 distinguished Saffron v Federal Commissioner of Taxation (1981) 30 FCR 578 discussed and distinguished Arthur JS Hall & Co v Simons [2002] 1 AC 615 discussed R v O'Halloran (2000) 36 ACSR 315 discussed