FEDERAL COURT OF AUSTRALIA Barnes v Commissioner of Taxation [2007] FCA 3 EVIDENCE – legal professional privilege – communications including documents placed by applicants or their servants and agents with their legal advisors for the purpose of receiving legal advice on tax and financial matters – principles applicable to claim – objections to affidavit evidence – liberty to file supplementary affidavits of servants and agents in relation to hearsay the subject of objection – opportunity not taken – no discharge of onus on applicants to establish the privilege Evidence Act 1995 (Cth) s 135 Income Tax Assessment Act 1936 (Cth) s 263 Allen Allen and Hemsley v Commissioner of Taxation (1989) 20 FCR 576 AWB Limited v Honourable Terrence Rhoderic Hudson Cole (No 5) [2006] FCA 1234 AWB Limited v Honourable Terrence Rhoderic Hudson Cole [2006] FCA 571 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 Grant v Downs (1976) 135 CLR 674 Kennedy v Wallace (2004) 142 FCR 185 Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 Packer v District Commissioner of Taxation (Qld) [1985] 1 Qd R 275 Waugh v British Railways Board [1980] AC 521 JOHN ERIC BARNES and JUDITH ANGELA BARNES v COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA WAD 26 OF 2006 NICHOLSON J 9 January 2007 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 26 OF 2006 BETWEEN: JOHN ERIC BARNES JUDITH ANGELA BARNES Applicants AND: COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: NICHOLSON J DATE OF ORDER: 9 january 2007 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicants claim of legal professional privilege in respect of the documents in the schedule to the within reasons for judgment be dismissed. 2. The applicants pay the respondent's costs of the application, including any costs arising from the issue of the writ of summons in the Supreme Court of Western Australia. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 26 OF 2006 BETWEEN: JOHN ERIC BARNES JUDITH ANGELA BARNES Applicants AND: COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: NICHOLSON J DATE: 9 january 2007 PLACE: PERTH REASONS FOR JUDGMENT 1 The applicants seek a declaration that legal professional privilege attaches to certain communications constituted by or disclosed in documents listed in a schedule, to the details of which reference will later be made. 2 The issue arose in the following circumstances. By notice dated 6 June 2005 issued pursuant to s 263 of the Income Tax Assessment Act 1936 (Cth) (the Notice), the respondent sought and was afforded access to all buildings, places, books, documents and other papers related, either directly or indirectly, to inter alia: (1) Barnes Development Pty Ltd; (2) Barnes Family Trust; (3) The first named applicant; (4) The second named applicant; (5) Multinational Technical Services Inc; (6) Pantheon Trust; (7) Phillip de Figueiredo; (8) Philip Jepson Egglishaw; (9) Roker Nominees Limited; (10) Roker Trustees (Jersey) Limited; (11) Sanderstead Limited; (12) Sapphire Superannuation Fund; and (13) Strachans SA. When affording the respondent such access the applicants asserted legal professional privilege attached to certain documents. 3 On 6 July 2005, the respondent and the applicants, through their solicitors, entered into an agreement titled 'Terms of Inspection' to facilitate access to the documents and to enable the applicants' claims of legal professional privilege to be asserted and tested. In accordance with that agreement and by a notice dated 22 July 2005, the applicants by their solicitors claimed legal professional privilege in respect of 79 documents identified in a schedule to the notice and set out in a schedule to the amended statement of claim. By a further notice dated 29 July 2005, the applicants by their solicitors claimed legal professional privilege in respect of a further three documents identified in a schedule to that notice and again set out in the schedule to the amended statement of claim. 4 The agreement provided inter alia: '… 35. The Commissioner will inspect the lists referred to in clauses 11 and 24 above. … [the Schedules] … 36. If, after doing so, the Commissioner still seeks to access any document or documents in …[the Schedules]… , the Commissioner will give 7 business days written notice to that effect to …[the Applicants] …, specifying such document or documents. 37. At the expiration of those 7 business days …[referred to in clause 36]… the Commissioner will access the documents taken to the premises as described in clause 6 under clauses 6, 10 and 28 but limited to those documents listed in the notice given by the Commissioner under …[clause]… 36 above, and the …[Applicants]… expressly agrees to him doing so and shall be taken to have waived any claim that the documents listed in the notice attract LPP, in whole or part, unless, and save to the extent that, within those 7 business days, the …[Applicants have] … commenced legal proceedings in a competent Court seeking to maintain LPP and serving the originating process on the Commonwealth …' 5 By a letter dated 2 December 2005 the respondent gave written notice to the applicants that he still sought access to all of the documents listed in the schedules to the applicants' notice. By letter dated 22 December 2005 the applicants claimed legal professional privilege in respect of a further 29 documents identified in the letter and set out as items in the schedule to the amended statement of claim. In January 2006, the respondent agreed to the further 29 documents being included among the documents over which legal professional privilege was claimed in the proceedings, subject to the respondent reserving his right to assert that the privilege in those documents had been waived. 6 The precise claim of privilege made by the applicants was in the following terms: '10. All of the communications recorded in, constituted by, or disclosed in, the documents in Schedule 1 are privileged because each of the documents is either: 10.1 a document created by the [applicants] and or their servants, or agents and provided to their solicitors for the sole, and therefore dominant, purpose of seeking and receiving legal advice; or 10.2 a copy document copied and provided by the [applicants] and or their servants or agents to their solicitors for the sole, and therefore dominant, purpose of seeking and receiving legal advice.' 7 When the matter first came on for hearing there were three issues before the Court: (a) whether any of those documents or the communications they evidence are subject to legal professional privilege; (b) whether the applicants have waived privilege in relation to the 29 documents or the communications they evidence; (c) whether the privilege does not attach to those documents or the communications they evidence because they were made in furtherance of a purpose that is contrary to public interest. The respondent no longer presses issues (b) or (c). 8 The claim of privilege in relation to the access to documents by the Notice under s 263 is to be determined according to the common law, and not Pt 3.10, Div 1 of the Evidence Act 1995 (Cth) since no evidence is, relevantly, sought to be adduced. Evidentiary issues 9 The only evidence before the Court was brought by the applicants. The documents in question are in evidence. In addition there is an affidavit of the first named applicant made with the authority of the second named applicant. 10 There are objections to the following three paragraphs of the affidavit of the first named applicant: '9. All of the documents that came into the possession of Mr Calder and Butcher Paull and Calder were for the purpose of advising my wife and I as to our tax and our legal position respect to tax, and financial matters. 10. I have seen the list of documents referred to in my Statement of Claim. The documents listed in the Statement of Claim are documents of the type referred to in paragraph 8. I claim privilege for those documents. 11. I refer to the Amended Statement of Claim and the Further and Better Particulars of Statement of Claim filed in these proceedings and say that the contents are true and correct to the best of my knowledge, information and belief.' 11 The respondent's objection to [9] is that it is conclusionary and devoid of any primary facts. His objection to [10] is the second sentence which he claims is also conclusionary. The reference which it makes to [8] is a reference to the following paragraph: '8. My wife and I wish to claim legal professional privilege in respect to the documents that we supplied to Mr Calder, his legal notes, and the correspondence passing between Mr Calder, my wife and I, and our other advisers.' The respondent's objection to [11] so far as it refers to the amended statement of claim is that it is putting into evidence the conclusion which the claim pleads. So far as that paragraph refers to further and better particulars, the applicants accept that it contains hearsay. In this aspect, it is objectionable as it stands. With reference to its application to the further and better particulars, these identify which of the documents in issue were created by the servants and agents of the applicants and provided to the applicants' solicitors by their servants or agents. Given that this hearsay objection was capable of remedy by further evidence and given that the hearing of the proceeding was adjourned until a date later in the year for the hearing of issue (c), I considered that liberty should be granted to the applicants to file evidence remedying the hearsay objections. 12 That opportunity having been offered, no additional evidence was filed by them. 13 It is common ground that all of the 111 documents in respect of which legal professional privilege is sought were in the possession of the applicants' solicitors and specifically of Mr Calder of that firm. It is in that context that [9] must be read. In my view [9] does contain reference to a primary fact and that is, that the applicants passed the documents into the possession of their solicitors and specifically of Mr Calder because they wished to seek his advice on their legal position with respect to tax and financial matters. That is, the paragraph should not be read as expressing a conclusion pre-empting the task of the Court. Rather, it is stating why it was that the applicants placed the documents in the possession of their solicitors. I therefore do not allow the objection to [9]. 14 In relation to the second sentence of [10], the applicants accept it adds nothing to the evidence. It refers to facts covered both by [8] of the affidavit of the first named applicant and the agreed common ground. On that basis the objection should be allowed. 15 With reference to [11] and its application to the amended statement of claim, I accept the respondent's submission and allow the objection. 16 Accordingly, I will admit as exhibit A the affidavit of the first named applicant, other than the second sentence of [8] and [11]. Applicants' evidence 17 The effect of that evidence is that it establishes that the applicants became residents of Australia in July 1996 or thereabouts. They have been business people for many years, always consulting lawyers and accountants concerning financial and tax planning matters. 18 In accordance with that long standing practice, when they came to Australia they consulted lawyers and accountants. In particular, they consulted Mr Calder (a solicitor) of the applicants' solicitors and Mr Tayler (an accountant) of Paul M Tayler & Co. In the course of briefing Mr Calder concerning their financial tax matters they provided him with a number of documents. 19 The applicants depose: '5. In the course of briefing Mr Calder about our financial and tax matters, my wife and I provided him with a number of documents such as immigration papers, financial documents and copies of letters of advice from accountants and lawyers whom we had previously briefed. 6. My wife and I also sent letters and facsimiles to Mr Calder concerning our tax and financial affairs and he in turn wrote to us providing advice about our tax and financial matters. 7. I am aware that Mr Calder usually made notes of his conversations when he saw my wife and I.' 20 In the affidavit the applicants stated that they were formally the owners of two properties in the United Kingdom, namely, Field House and Rockhead Farm. In November 1997 they sold the two properties to Sanderstead Limited. The sale price was ₤415 000 for Rockhead Farm and ₤85 000 for Field House. They stated that the sale price was in accordance with valuations which they obtained at the time and which are in the possession of the respondent. At the time of the transfer the two properties were only a small part of their asset portfolio. They sought advice from Mr Calder regarding the sale, although that was only one element of the matters on which they sought his advice. 21 A large number of documents to which the respondent seeks access are not related to the two properties or to the Pantheon Trust. The two properties have a small holding income but otherwise have always been loss making. Neither of the applicants have any legal interest in Sanderstead Limited or the Pantheon Trust, not being directors, owners, beneficiaries or trustees. This is relevant in relation to whether the documents fall within the scope of the Notice. This point was not effectively argued. Applicable legal principles 22 The onus of establishing that legal professional privilege applies to the documents or the communications they evidence is on the applicants: Grant v Downs (1976) 135 CLR 674 (Grant v Downs 135 CLR) at 689; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332 (Mitsubishi Electric 4 VR). 23 A document created for the 'dominant purpose' of obtaining legal advice attracts privilege: Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 (Esso 201 CLR) at 73, at [61]. The 'dominant purpose' test is that expressed by Barwick CJ in Grant v Downs 135 CLR at 677: '… a document which was produced or brought into existence either with the dominant purpose of its author, or of the person or authority under whose direction, whether particular or general, it was produced or brought into existence, of using it or its contents in order to obtain legal advice or to conduct or aid in the conduct of litigation, at the time of its production in reasonable prospect, should be privileged and excluded from inspection.' The dominant purpose may be described as the ruling, prevailing, paramount or most influential purpose: see Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416; and Mitsubishi Electric 4 VR at 336-337. It is not the same as the 'primary' or the 'substantial' purpose, which do not describe the true basis of the privilege: Grant v Downs 135 CLR at 678. 24 Where two purposes are of equal weight, neither is dominant in the relevant sense. A document is not privileged from production where one purpose for its creation is to obtain legal advice, but there are one or more equally important purposes: see Waugh v British Railways Board [1980] AC 521 at 543; AWB Limited v Honourable Terrence Rhoderic Hudson Cole (2006) 152 FCR 582 (AWB v Cole 152 FCR) at [106]; Federal Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 279-280. 25 The question of dominant purpose may ultimately be decided, if need be, upon an inspection by the Judge of the document itself: see Grant v Downs 135 CLR at 677 and 689 and Esso 201 CLR at 70. It is accepted in this case that the Court will need to inspect the documents for the purpose of ascertaining the dominant purpose for which they were brought into existence and whether they are thus subject to the privilege. 26 The most recent judicial examination of the law of legal professional privilege is that carried out by Young J in AWB v Cole 152 FCR and AWB Limited v Honourable Terrence Rhoderic Hudson Cole (No 5) [2006] FCA 1234 (Cole No 5 FCA 1234). The general principles so far as they were relevant to the disposition of the case before him were summarised in Cole No 5 FCA 1234 at [44], the following paragraphs of which are particularly relevant to this proceeding: '(1) … The onus might be discharged by evidence as to the circumstances and context in which the communications occurred or the documents were brought into existence, or by evidence as to the purposes of the person who made the communication, or authored the document, or procured its creation. It might also be discharged by reference to the nature of the documents, supported by argument or submissions: see … Grant v Downs at 689; Commissioner of Taxation v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at 278 [30] ('FCT v Pratt Holdings'); and AWB v Cole at [63]. (2) The purpose for which a document is brought into existence is a question of fact that must be determined objectively. Evidence of the intention of the document's maker, or of the person who authorised or procured it, is not necessarily conclusive. It may be necessary to examine the evidence concerning the purpose of other persons involved in the hierarchy of decision-making or consultation that led to the creation of the document and its subsequent communication: see AWB v Cole at [110]. (3) … There will be cases in which a claim of privilege will not be sustainable in the absence of evidence identifying the circumstances in which the relevant communication took place and the topics to which the instructions or advice were directed: Kennedy v Wallace (2004) 142 FCR 185 ('Kennedy v Wallace') at 189–190 [12]–[17] per Black CJ and Emmett J and at 211–212 [144]–[145] and at 215–216 [166]–[171] per Allsop J; see also Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398. (4) Where communications take place between a client and his or her independent legal advisers, or between a client's in-house lawyers and those legal advisers, it may be appropriate to assume that legitimate legal advice was being sought, absent any contrary indications: Kennedy v Wallace (2004) 208 ALR 424 at 442 [65] per Gyles J; affirmed on appeal, Kennedy v Wallace at 191-192 [23]-[27] per Black CJ and Emmett J. In Kennedy v Wallace, Black CJ and Emmett J inclined to the view that in the ordinary case of a client consulting a lawyer about a legal problem in uncontroversial circumstances, proof of those facts alone will provide a sufficient basis for a conclusion that legitimate legal advice is being sought or given. … (7) The concept of legal advice is fairly wide. It extends to professional advice as to what a party should prudently or sensibly do in the relevant legal context; but it does not extend to advice that is purely commercial or of a public relations character: Balabel v Air India [1988] 1 Ch 317 ('Balabel') at 323 and 330; Nederlandse Reassurantie Groep Holding NV v Bacon and Woodrow [1995] 1 All ER 976 ('Nederlandse') at 983; Three Rivers District Council v Governor and Company of the Bank of England (No 6) [2005] 1 AC 610 ('Three Rivers') at 652-653 [43]-[44], 657-658 [59]-[60], 681 [114] and 683 [120]; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 ('Dalleagles') at 332-333; DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 ('DSE') at 161-173 [25]–[71]; and AWB v Cole at [100]-[101]. (8) Legal professional privilege protects the disclosure of documents that record legal work carried out by the lawyer for the benefit of the client, such as research memoranda, collations and summaries of documents, chronologies and the like, whether or not they are actually provided to the client: Daniels at 563 [44] per McHugh J; Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ('Propend') at 550 per McHugh J; Dalleagles at 333–334 per Anderson J; Trade Practices Commission v Sterling (1979) 36 FLR 244 ('Stirling') at 245–246 per Lockhart J; and Kennedy v Lyell (1883) 23 Ch D 387 at 407; Lyell v Kennedy (1884) 27 Ch D 1 at 31 per Bowen LJ; Propend Finance Pty Ltd v Commissioner of Australian Federal Police (1995) 58 FCR 224 at 266 per Lindgren J. … (11) Legal professional privilege protects communications rather than documents, as the test for privilege is anchored to the purpose for which the document was brought into existence. Consequently, legal professional privilege can attach to copies of non-privileged documents if the purpose of bringing the copy into existence satisfies the dominant purpose test: Propend at 507 per Brennan CJ, 544 per Gaudron J, 553-554 per McHugh J, 571-572 per Gummow J, and 587 per Kirby J. In Propend at 512, Brennan CJ added a qualification to this principle: if an original unprivileged document is not in existence or its location is not disclosed or is not accessible to the persons seeking to execute the warrant, and if no unprivileged copy or other admissible evidence is made available to prove the contents of the original, the otherwise privileged copy loses its protection.' 27 In order to apply these principles to the applicants' claim it is necessary to address each of the documents in question. consideration of documentS 28 It is important to observe that the evidence of Mr Barnes does not state precisely how each of the documents was created. This is also the case with regard to copies. His statement in [5] that he provided copies of letters of advice to Mr Calder does not make apparent whether the copy came into existence for the purpose of advice, whether a pre-existing copy was sent to Mr Calder or whether the copy before the Court was made by Mr Calder's office. The absence of such evidence permeates the resolution of his claim for privilege. 29 For example, there is no evidence enabling an understanding to be reached concerning the possibility that any particular faxed copy was created by the applicants for the dominant purpose of seeking the legal advice of Mr Calder. There is no evidence of what the fax number of the applicants was on each particular occasion (other than their names as a notation at the top of the document) or what the phone number of the recipient was and whether it was the number of Mr Calder. The Court is therefore unable to determine whether the faxed endorsements are referrable to some occasion prior to the applicants sending documents to Mr Calder for legal advice. 30 Additionally, it cannot be inferred from the fact that the documents were found in the possession of Mr Calder that they were created as originals or copies for the requisite dominant purpose in each case. 31 Likewise there is no evidence to explain why some of the documents bear the fax name of the applicants' accountant or whether the accountant created the copy. 32 There are some documents which on their face appear to be facsimile transmissions from the applicants to their solicitors. However, the copy in question appears to be a further copy of the facsimile transmission because it displays a photocopy of a punchmark, unlikely to be on the original. In the absence of specific evidence pertaining to each such document it cannot be said that the applicants have discharged the onus resting upon them. 33 Even where documents appear to be file copies of correspondence from the applicants' solicitors to the applicants, they also appear with a punch-hole suggesting they are further copies, the creation of which is unexplained by any evidence from the applicants' solicitors. 34 There are some documents apparently being copies of handwritten letters from the first named applicant to his solicitors. One is notated with writing indicating the date of its receipt by the solicitors. That suggests the original (or the copy original) has been recopied, possibly by the solicitors. However, there is no evidence to explain the creation of the copy. 35 The Court doubtless would have been greatly assisted by affidavit evidence from each applicant on each document and affidavits from Mr Calder and the applicants' accountants. However, when the opportunity was offered to the applicants to file such evidence, no additional evidence was tendered. 36 It is also the case that there is no evidence concerning the role and position of the various persons identified in the schedule and most importantly any agency that may have existed with them to the applicants, namely Phillip Egglishaw (documents 41, 47, 83, 84, 104 and 109), Phil de Figueiredo (documents 39, 43 and 108), Strachans (documents 38, 93, 96, 99, 102, 103, 105, 106, 107, 111), Sanderstead (documents 86, 87 and 100) and Pantheon Trust (documents 89 and 97). 37 Documents 54, 78 and 80 are accounts for legal fees; document 85 is a bank statement; and there are receipt and payment schedules; schedules of fees; and fee notes in relation to Strachans, Pantheon Trust and Sanderstead Limited (documents 85-89, 96, 99, 101, 103, 105 and 106). It is only where a solicitor's fee note discloses instructions, or advice sought or given that it would attract privilege: see Packer v District Commissioner of Taxation (Qld) [1985] 1 Qd R 275 at 276-277, 281-282 and 287; Allen Allen and Hemsley v Commissioner of Taxation (1989) 20 FCR 576 affirming 81 ALR 617; a fortiori, where the account or fee is not that of a solicitor. 38 Further, it is apparent from the description of many of the documents that they are not of a kind that would normally attract privilege. See for example: (a) document 2 – contact details; (b) document 3 – declaration of trust provisions; (c) document 4 – declaration regarding visa application; (d) document 21 – letter enclosing new wills; (e) documents 24 and 45 – transaction material; (f) document 55 – portfolio valuation; and (g) document 75 – outline of proposed development of holiday accommodation at Rock Head Farm, Glaisdale. 39 Consequently it is apparent that the applicants have failed to discharge the onus upon them to establish privilege. It is not sufficient that the documents are at the premises of the applicants' solicitors or that there is an assertion by the claimant applicants that they were copies in the possession of their solicitor for the purpose of him giving them advice. The effect of the evidence here is similar to that described by Black CJ and Emmett J in Kennedy v Wallace (2004) 142 FCR 185 at 189, at [13]: '[13] The appellant's decision to base his claim for privilege in this way was attended with considerable risk since, as Lockhart J observed in National Crime Authority v S (1991) 29 FCR 203 at 211, it is not sufficient for a party merely to assert a claim for privilege nor will an affidavit asserting the purpose for which a document was brought into existence followed by a statement about the category of legal professional privilege to which the document is said to belong necessarily be sufficient. Moreover, in the leading case of Grant v Downes (1976) 135 CLR 674, Stephen, Mason and Murphy JJ warned against the erroneous view that the privilege is "necessarily or conclusively established by resort to any verbal formula or ritual" (at 689). In the same case, their Honours also observed that whatever the facts may be, it is always for the party claiming privilege to show that the documents for which the claim is made are in fact privileged. … [15] … Mr Kennedy agreed that he had little recollection of the actual circumstances under which the notes were prepared. While Mr Kennedy's uncertainty about matters such as the precise time of the preparation of the documents is not decisive, when coupled with the failure to explain his thought processes, it could legitimately have been seen by the trial judge as relevant and significant.' 40 Although there is an entire absence of document by document evidence I have examined each document and rule on it in accordance with the notations added to the schedule. SCHEDULE 1 Date Summary of Content Original Recipient No of Pages 'SCHEDULE' 1 Undated Facsimile forwarding letter from client's solicitor (UK) to Cooper Parry Paul Tayler 5 Claim rejected: no evidence of dominant purpose of creation of copy. 2 Undated Miscellaneous contact details NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 3 Undated Declaration of Trust provisions NA 44 Claim rejected: no evidence of dominant purpose of creation of copy 4 4/03/96 Declaration for people applying business skills (Migrant) Visa subclasses 127, 128, 129 and 130 Australian High Commission London 1 Claim rejected: no evidence of dominant purpose of creation of copy 5 12/03/96 Providing background information in relation to Mr and Mrs Barnes and their financial affairs Anthony Austin 5 Claim rejected: no evidence of dominant purpose of creation of copy 6 15/03/96 Comments/response to questions raised regarding Australian Taxation implication of the Barnes' affairs Yvonne Goldingham, Eversheds 6 Claim rejected: no evidence of dominant purpose of creation of copy 7 18/03/96 Response to enquiries contained in letter of 15 March 1996 regarding John & Judy Barnes Yvonne Goldingham, Eversheds 5 Claim rejected: no evidence of dominant purpose of creation of copy 8 18/03/96 Request of further clarification of Australian Taxation Law implication Jeff Faure, Minter Ellison 2 Claim rejected: no evidence of dominant purpose of creation of copy 9 19/03/96 Request for clarification of Australian Taxation implications of proposed financial arrangements Jeff Faure, Minter Ellison 4 Claim rejected: no evidence of dominant purpose of creation of copy 10 19/03/96 Request for further legal advice and confirmation of appropriateness of proposed arrangements Jeff Faure, Minter Ellison 2 Claim rejected: no evidence of dominant purpose of creation of copy 11 19/03/96 Response to various enquiries contained in letter of 18 March 1996 Yvonne Goldingham, Eversheds 3 Claim rejected: no evidence of dominant purpose of creation of copy 12 20/03/96 Advice on Australian Taxation Law Yvonne Goldingham, Eversheds 3 Claim rejected: no evidence of dominant purpose of creation of copy 13 22/03/96 Legal advice on proposed financial arrangements Yvonne Goldingham, Eversheds 2 Claim rejected: no evidence of dominant purpose of creation of copy 14 1/04/96 Confirmation of issue of Australian Visas and enclosing various documents (eg UK passports) Mr and Mrs Barnes 5 Claim rejected: no evidence of dominant purpose of creation of copy 15 2/04/96 Request for advice regarding Australian Taxation Law Jeff Faure, Minter Ellison 1 Claim rejected: no evidence of dominant purpose of creation of copy 16 3/04/96 Advice in response to specific questions regarding CFC regime, FIF regime and general tax provisions Yvonne Goldingham, Eversheds 4 Claim rejected: no evidence of dominant purpose of creation of copy 17 3/04/96 Request for advice regarding Australian Taxation Law Jeff Faure, Minter Ellison 3 Claim rejected: no evidence of dominant purpose of creation of copy 18 4/04/96 Response/answers to Ms Golinghams facsimile/request of same date Yvonne Goldingham, Eversheds 3 Claim rejected: no evidence of dominant purpose of creation of copy 19 12/04/96 Request for further information Jeff Faure, Minter Ellison 1 Claim rejected: no evidence of dominant purpose of creation of copy 20 15/04/96 Response to queries raised in facsimile of 12 April 1996 Yvonne Goldingham, Eversheds 2 Claim rejected: no evidence of dominant purpose of creation of copy 21 20/05/96 Letter enclosing new Wills Mr and Mrs Barnes 1 Claim rejected: no evidence of dominant purpose of creation of copy 22 21/06/96 Advice on possible cash flows John Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 23 21/06/96 Advice regarding sale of company assets and proceeds of sale D Styles, Barclays Bank 2 Claim rejected: no evidence of dominant purpose of creation of copy 24 30/07/96 Post completion check list John Barnes 9 Claim rejected: no evidence of dominant purpose of creation of copy 25 2/08/96 Request for further information in preparation of UK tax returns Mr and Mrs J Barnes 2 Claim rejected: no evidence of dominant purpose of creation of copy 26 6/02/97 Letter containing advice and attaching statements of account as at 5 February 1997 John Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 27 2/04/97 Provision of background information Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 28 7/04/97 Letter enclosing letter and forms received from general accident Mr and Mrs Barnes Claim rejected: no evidence of dominant purpose of creation of copy 29 8/04/97 Handwritten notes of meeting between Mr and Mrs Barnes and Mr Calder NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 30 9/04/97 Facsimile attaching copies of Eversheds questions to Minter Ellison Greg Calder and Paul Tayler 1 Claim rejected: no evidence of dominant purpose of creation of copy 31 28/04/97 Request for advice and provision of copy wills Greg Calder 9 Claim rejected: no evidence of dominant purpose of creation of copy 32 12/05/97 Letter requesting further meeting Greg Calder 2 Claim rejected: no evidence of dominant purpose of creation of copy 33 21/05/97 Notes taken during meeting between Mr Calder and Mr Tayler and Mr and Mrs Barnes NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 34 21/05/97 Answer for request for UK bank account details Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 35 10/06/97 Draft Deed of Indemnity NA 4 Claim rejected: no evidence of dominant purpose of creation of copy 36 11/06/97 Documents copied to Mr Calder by Mr Barnes together with request for further legal advice Greg Calder 6 Claim rejected: no evidence of dominant purpose of creation of copy 37 11/06/97 Draft Deed of Indemnity NA 5 Claim rejected: no evidence of dominant purpose of creation of copy 38 16/06/97 Response by Strachans regarding enquiries made of them by Mr Barnes Greg Calder 3 Claim rejected: no evidence of dominant purpose of creation of copy 39 18/06/97 Enquiries regarding arrangements or proposed arrangements in respect of the Barnes' affairs Mr De Figueiredo 2 Claim rejected: no evidence of dominant purpose of creation of copy 40 18/06/97 Letter of advice Mr and Mrs Barnes 1 Claim rejected: no evidence of dominant purpose of creation of copy 41 18/06/97 Note of telephone attendance of Mr Calder on Mr Egglishaw regarding Mr and Mrs Barnes NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 42 18/06/97 Documents copied to Mr Calder Greg Calder 4 Claim rejected: no evidence of dominant purpose of creation of copy 43 19/06/97 Copy letters provided by Mr De Figueiredo to Mr Calder regarding the Barnes' affairs Greg Calder 5 Claim rejected: no evidence of dominant purpose of creation of copy 44 6/08/97 Letter from GLC to Cooper Parry enclosing various list of documents Messrs Coopers-Parry 1 Claim rejected: no evidence of dominant purpose of creation of copy 45 14/11/97 Solicitor's letter confirming sale of Rock Head Farm and Field House together with completion statement and bank account statement Mr J Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 46 1/10/98 Statement of Residential Complimentary Health Care Centre at Rock Head Farm, Glaisdale NA 3 Claim rejected: no evidence of dominant purpose of creation of copy 47 6/10/98 Notes of meeting between Mr Calder, Mr and Mrs Barnes and Mr Egglishaw NA 2 Claim rejected: no evidence of dominant purpose of creation of copy 48 30/10/99 Letter confirming meeting with Mr Calder on 29 October 1998 attaching list of documents held in safe custody by Butcher Paull & Calder Joyce Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 49 3/12/99 Summary of position and financial planning objectives Mr and Mrs Barnes 2 Claim rejected: no evidence of dominant purpose of creation of copy 50 22/03/00 Notes regarding meeting between Mr Barnes and Mr Calder NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 51 13/02/01 Discussion document regarding potential UK residency for Mr and Mrs Barnes Greg Calder 4 Claim rejected: no evidence of dominant purpose of creation of copy 52 5/02/02 Note of advice given during meeting between GLC and MB on 5 February 2002 NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 53 17/04/03 Notes and instructions provided to Mr Calder to prepare for proposed meeting on 30 April 2003 Greg Calder 5 Claim rejected: no evidence of dominant purpose of creation of copy 54 20/06/03 Account for legal fees together with schedule detailing services provided Paul Tayler & Co Pty Ltd 3 Claim rejected: no evidence of dominant purpose of creation of copy 55 2/11/03 Up to date portfolio valuation together with receipt and payments schedules John Barnes 13 Claim rejected: no evidence of dominant purpose of creation of copy 56 24/09/04 Enclosing letter of instruction regarding proposed Spanish property acquisition Greg Calder 3 Claim rejected: no evidence of dominant purpose of creation of copy 57 27/09/04 Notes regarding proposed Spanish property purchase Greg Calder 6 Claim rejected: no evidence of dominant purpose of creation of copy 58 11/10/04 On forwarding of letter from Mr Barnes to "Phillip" together with various other documents relating to Rock Head Farm Greg Calder 10 Claim rejected: no evidence of dominant purpose of creation of copy 59 18/10/04 Advice regarding meeting relating to possible acquisition of Spanish property Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 60 19/10/04 Handwritten notes following telephone conversation NA Claim rejected: no evidence of dominant purpose of creation of copy 61 20/10/04 Notes regarding proposed Spanish property purchase Greg Calder 10 Claim rejected: no evidence of dominant purpose of creation of copy 62 21/10/04 Notes following meeting NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 63 1/11/04 Facsimile attaching UK company structure notes Greg Calder 4 Claim rejected: no evidence of dominant purpose of creation of copy 64 19/11/04 Email attaching email to Sam Lawson Greg Calder 2 Claim rejected: no evidence of dominant purpose of creation of copy 65 5/12/04 Structural diagram and figures noted in meeting with Mr and Mrs Barnes NA 2 Claim rejected: no evidence of dominant purpose of creation of copy 66 6/12/04 Provision of draft business plan for discussion in upcoming meeting Greg Calder 26 Claim rejected: no evidence of dominant purpose of creation of copy 67 7/12/04 Comments for consideration at pending meeting with Greg Calder John Barnes 2 Claim rejected: no evidence of dominant purpose of creation of copy 68 17/01/05 Response to request for advice John Barnes 5 Claim rejected: no evidence of dominant purpose of creation of copy 69 18/01/05 List of questions regarding Defra grant application Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 70 18/01/05 Confirmation receipt of previous email Phillip De Figueiredo 2 Claim rejected: no evidence of dominant purpose of creation of copy 71 20/01/05 Request for contact Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 72 20/01/05 Comment on earlier conversations John Barnes 1 Claim rejected: no evidence of dominant purpose of creation of copy 73 21/01/05 Confirmation of intention not to proceed with Defra submission Mark Shelton 3 Claim rejected: no evidence of dominant purpose of creation of copy 74 27/01/05 On forwarding of received facsimiles and confirmation of upcoming meeting Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 75 1/02/05 Outline of proposed development of holiday accommodation at Rock Head Farm, Glaisdale NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 76 9/02/05 Email attaching Baker Tilly document (see above) Strachans 1 Claim rejected: no evidence of dominant purpose of creation of copy 77 25/02/05 Note of meeting between Mr Calder and Mr and Mrs Barnes NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 78 3/03/05 Letter enclosing account detailing legal services provided between 4 March 2004 and 25 February 2005 Barnes Development Pty Ltd 4 Claim rejected: no evidence of dominant purpose of creation of copy 79 15/06/05 Instructions to solicitor Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 'SCHEDULE B' 80 3/03/05 Letter enclosing account detailing legal services provided between 4 March 2004 and 25 February 2005 Barnes Development Pty Ltd 4 Claim rejected: no evidence of dominant purpose of creation of copy 81 15/06/05 Instructions to solicitor Greg Calder 1 Claim rejected: no evidence of dominant purpose of creation of copy 82 15/06/05 Request from solicitor to secretary to open new file Sheila Vink 1 Claim rejected: no evidence of dominant purpose of creation of copy "LETTER DATED 22 DECEMBER 2005" 83 Undated Resignation signed by Phillip Egglishaw Roker Trustees (Jersey) Limited Claim rejected: no evidence of dominant purpose of creation of copy 84 Undated Appointment signed by Phillip Egglishaw NA Claim rejected: no evidence of dominant purpose of creation of copy 85 Bundle of Standard Chartered Bank Statements from Jilette Company Limited for the period 29 October 1997 to 24 September 1998 NA 56 Claim rejected: no evidence of dominant purpose of creation of copy 86 Undated Sanderstead Limited receipts and payment schedule comprising two pages covering the period 24 October 1997 to 2 July 1998 and two pages covering the period 24 October 1997 to 29 September 1998 NA Claim rejected: no evidence of dominant purpose of creation of copy 87 Undated Sanderstead schedule of fees NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 88 Receipts and payment schedule comprising one page for the period 16 September 1997 to 30 September 1997, one page covering the period 1 October 1997 to 2 July 1998 and 1 page covering the period 1 October 1997 to 29 September 1998 NA Claim rejected: no evidence of dominant purpose of creation of copy 89 Undated Pantheon Trust schedule of fees NA 1 Claim rejected: no evidence of dominant purpose of creation of copy 90 Undated Net assets statement/current value NA 9 Claim rejected: no evidence of dominant purpose of creation of copy 91 11/09/96 Facsimile from Mr & Mrs Barnes to Paul Tayler together with a letter from Eversheds to Alan Woods Paul Tayler 3 Claim rejected: no evidence of dominant purpose of creation of copy 92 7/02/97 Letter from John Barnes to Paul Paul Tayler 1 Claim rejected: no evidence of dominant purpose of creation of copy 93 10/06/97 Telefax from Strachans to Greg Calder with enclosure Greg Calder 3 Claim rejected: no evidence of dominant purpose of creation of copy 94 20/06/97 Deed of Indemnity 4 Claim rejected: no evidence of dominant purpose of creation of copy 95 20/06/97 Telefax from Strachans to Greg Calder with enclosure Greg Calder 2 Claim rejected: no evidence of dominant purpose of creation of copy 96 15/09/97 Letter and fee note from Strachans to Mr and Mrs Barnes Mr & Mrs Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 97 14/10/97 Two letters from Cooper Parry to Mr and Mrs Barnes enclosing receipts and payment schedule in respect of the Pantheon Trust Mr & Mrs Barnes 3 Claim rejected: no evidence of dominant purpose of creation of copy 98 23/10/97 Letter from John Barnes to Steve Dosdale together with the enclosures referred to therein Steve Dosdale 5 Claim rejected: no evidence of dominant purpose of creation of copy 99 29/12/97 Letter, fee note and detailed fee note from Strachans to Mr and Mrs Barnes Mr & Mrs Barnes 8 Claim rejected: no evidence of dominant purpose of creation of copy 100 9/01/98 Letter enclosing Insurance Certificate, Schedule and Policy wording from Sanderstead Limited to Greg Calder Greg Calder 11 Claim rejected: no evidence of dominant purpose of creation of copy 101 31/03/98 Letter from Strachans to Greg Calder with fee notes Greg Calder 10 Claim rejected: no evidence of dominant purpose of creation of copy 102 12/07/98 Strachans fee notes Greg Calder 5 Claim rejected: no evidence of dominant purpose of creation of copy 103 16/09/98 Letter from Strachans to Greg Calder with fee notes Greg Calder Claim rejected: no evidence of dominant purpose of creation of copy 104 30/09/98 Letter from Quilter & Co to Phillip Egglishaw enclosing current valuations Phillip Egglishaw 14 Claim rejected: no evidence of dominant purpose of creation of copy 105 20/10/98 Letter from Strachans to Greg Calder enclosing a copy of their fee note Greg Calder 5 Claim rejected: no evidence of dominant purpose of creation of copy 106 22/12/98 Letter and fee note from Strachans to Mr and Mrs Barnes Mr & Mrs Barnes 7 Claim rejected: no evidence of dominant purpose of creation of copy 107 17/10/03 Telefax from Strachans to John Barnes John Barnes 2 Claim rejected: no evidence of dominant purpose of creation of copy 108 19/12/03 Telefax from Phillip de Figueredo to Greg Calder Greg Calder 2 Claim rejected: no evidence of dominant purpose of creation of copy 109 12/01/04 Letter from John Barnes to Phillip Egglishaw Phillip Egglishaw 1 Claim rejected: no evidence of dominant purpose of creation of copy 110 19/11/04 Email from John Barnes to Sam cc to Mark Shelton Sam Lawson 1 Claim rejected: no evidence of dominant purpose of creation of copy 111 7/12/04 Telefax from Strachans to Greg Calder enclosing facsimile from Strachans to John Barnes Greg Calder 3 Claim rejected: no evidence of dominant purpose of creation of copy I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. A/Associate: Dated: 9 January 2007 Counsel for the Applicants: A Bevilacqua Solicitor for the Applicants: Butcher Paull and Calder Counsel for the Respondent: R Robertson SC Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 26 October 2006 Date of Judgment: 9 January 2007