FEDERAL COURT OF AUSTRALIA Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196 Citation: Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196 Parties: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 v MARK KONZA, DEPUTY COMMISSIONER OF TAXATION and THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA File number: VID 1173 of 2010 Judge: LANDER J Date of judgment: 9 March 2012 Corrigendum: 15 March 2012 Catchwords: TAXATION – notices to furnish information issued by Deputy Commissioner pursuant to s 264(1)(a) of Income Tax Assessment Act 1936 (Cth) – notices directed to Australian bank – information sought in notices provided to bank from subsidiary in Vanuatu – information stored electronically in Australia – whether notices invalid – whether notices require bank to breach common law and statutory confidentiality obligations under Vanuatu law – whether s 264 authorises Commissioner to issue notices that infringe foreign sovereignty – whether notices were issued for a proper purpose – whether notices are uncertain – whether bank "not capable of complying" with notices within meaning of s 8C(1B) of Taxation Administration Act 1953 (Cth) – application dismissed Legislation: Administrative Decisions (Judicial Review) Act 1977 (Cth), s 5, s 16(1) Crimes Act 1914 (Cth), s 4AA, s 19B Evidence Act 1995 (Cth), s 76, s 79(1) Financial Institutions Act [Cap 254] (Vanuatu), s 17(7), s 46(3) Income Tax Assessment Act 1936 (Cth), s 8, s 264, s 264(1) Income Tax Assessment Act 1997 (Cth), s 995-1 International Companies Act [Cap 222] (Vanuatu), s 125, s 125(1) Judiciary Act 1903 (Cth), s 39B(1), s 39B(1A) Penal Code [Cap 135] (Vanuatu), s 2(a) Taxation Administration Act 1953 (Cth), s 8C, s 8C(1), s 8C(1A), s 8C(1B), s 8E(1), s 8E(2), s 8E(3), s 8G, s 8G(1), s 8H, s 8H(1), s 8H(2), s 8H(3), s 8ZF Trust Companies Act [Cap 69] (Vanuatu), s 9 Cases cited: Australian Securities Commission v Bank Leumi Le-Israel (1995) 134 ALR 101 distinguished Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) (1996) 69 FCR 531 distinguished Bank of Valletta plc v National Crime Authority (1999) 164 ALR 45 applied Commissioner of Taxation v De Vonk (1995) 61 FCR 564 cited Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 considered Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 considered Hart v Commissioner of Taxation (2005) 148 FCR 198 cited Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 considered May v Commissioner of Taxation (1999) 92 FCR 152 cited McCormack v Commissioner of Taxation (2001) 114 FCR 574 cited Nanus Asia Co Inc v Standard Chartered Bank [1990] 1 HKLR 396 cited O'Reilly v The Commissioners of The State Bank of Victoria (1983) 153 CLR 1 cited Smorgon v Australia and New Zealand Banking Group Ltd (1976) 134 CLR 475 cited The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 cited Tournier v National Provincial and Union Bank of England [1924] 1 KB 461 considered Wanganui – Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581 considered Date of hearing: 11, 12, 13, 14 July 2011 Place: Adelaide (heard in Melbourne) Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 192 Counsel for the Applicant: Mr A Archibald QC with Mr D Batt SC and Ms L De Ferrari Solicitor for the Applicant: Allens Arthur Robinson Counsel for the Respondents: Mr P Hanks QC with Mr T Murphy SC and Mr C Horan Solicitor for the Respondents: Australian Government Solicitor FEDERAL COURT OF AUSTRALIA Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196 CORRIGENDUM 1 In paragraph 9 of the Reasons for Judgment, after the reference to s 16(1)(c) second appearing, include the words "(which should be s 16(1)(d))". I certify that the preceding one numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment herein of the Honourable Justice Lander. Associate: Dated: 15 March 2012 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1173 of 2010 BETWEEN: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 Applicant AND: MARK KONZA, DEPUTY COMMISSIONER OF TAXATION First Respondent THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Second Respondent JUDGE: LANDER J DATE OF ORDER: 9 March 2012 WHERE MADE: adelaide (heard in melbourne) THE COURT ORDERS THAT: 1. The application be dismissed. 2. The cross-claim be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 1173 of 2010 BETWEEN: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 Applicant AND: MARK KONZA, DEPUTY COMMISSIONER OF TAXATION First Respondent THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Second Respondent JUDGE: LANDER J DATE: 9 MARCH 2012 PLACE: ADELAIDE (heard in MELBOURNE) REASONS FOR JUDGMENT 1 Australia and New Zealand Banking Group Limited (ANZ) carries on a banking business in Australia. It has been issued with two notices requiring it to provide certain information about customers who have or who have had accounts with it or any of its subsidiaries in Vanuatu. The notices were issued by the first respondent Mr Konza, a Deputy Commissioner of Taxation (Deputy Commissioner), pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA). The Deputy Commissioner is a person to whom the Commissioner of Taxation (Commissioner) has delegated the power to issue notices under s 264 of the ITAA. ANZ challenges the validity of the two notices issued by the Deputy Commissioner. 2 ANZ argued that the notices are invalid for three reasons. 3 First, ANZ argues that if it were to comply with the notices it would breach certain common law confidentiality obligations owed by it to the relevant customers of ANZ Vanuatu, as well as certain secrecy provisions enacted in Vanuatu. It submits that s 264 does not authorise the Deputy Commissioner to issue a notice that would require it to breach these obligations or provisions. 4 Secondly, it argues that because the notices seek information in respect of all customers in certain categories who have or have had an account in Vanuatu without limiting the information sought to customers who are or might be liable to pay income tax in Australia, they are invalid. Given that the notices do not limit the information sought to such customers, ANZ argues that the notices require it to determine which customers might be liable to pay income tax in Australia. Accordingly, it submits that the notices cannot be regarded as having been issued for the purposes of either the ITAA or the Income Tax Assessment Act 1997 (Cth) (ITAA 1997), and so are not authorised by s 264. 5 Thirdly, it argues that each notice is uncertain. In its statement of claim ANZ also contended that the notices were oppressive, but no arguments were put in support of that assertion. 6 Further and in the alternative, ANZ argues that it is not capable of complying with either notice, within the meaning of "not capable of complying" in s 8C(1B) of the Taxation Administration Act 1953 (Cth) (TAA). 7 For those arguments ANZ invokes the jurisdiction of the Court pursuant to s 39B(1) and s 39B(1A)(c) of the Judiciary Act 1903 (Cth). ANZ also seeks to have the decision to issue the notices reviewed pursuant s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) on the basis that the notices were not authorised by the ITAA; that they involve an error of law; that they are contrary to law; and that they constitute an improper exercise of the power conferred by s 264 because the result of the exercise of that power is uncertain. 8 ANZ seeks an order in the nature of prohibition preventing the respondents from taking steps to enforce compliance with the notices. It also seeks an order in the nature of certiorari quashing or setting aside the notices. It seeks a declaration that each of the notices is invalid on the basis that they were not authorised by s 264 of the ITAA, and a declaration that ANZ is "not capable of complying" with the notices within the meaning of s 8C(1B) of the TAA. 9 The respondents have cross-claimed seeking a declaration or alternatively an order pursuant to s 16(1)(c) of the ADJR Act that both notices are valid, and a declaration or alternatively an order pursuant to s 16(1)(c) of the ADJR Act requiring ANZ to furnish the Commissioner with the information sought in each of the notices. Facts 10 The Court was provided with a Statement of Agreed Facts to which was attached the two notices that are the subject of this proceeding. The Court was also provided with a Supplementary Statement of Agreed Facts to which was attached two letters dated 17 December 2010 written by the Deputy Commissioner to ANZ, and which accompanied the two notices. The facts which follow are drawn from those statements, letters and notices, the evidence contained in the statements of the lay and expert witnesses, and the oral evidence. 11 ANZ carries on a banking business in Australia. It is not licensed to carry on a banking business in Vanuatu. However, its subsidiary, ANZ Bank (Vanuatu) Ltd (ANZ Vanuatu), is licensed to carry on and does carry on a banking business in Vanuatu. 12 In order to carry on its banking business in Vanuatu, ANZ Vanuatu must hold a licence under the Financial Institutions Act [Cap 254] of Vanuatu (FI Act). Under s 17(7) and s 46(3)(d) of the FI Act, the Reserve Bank of Vanuatu has the power to revoke ANZ Vanuatu's licence if it is satisfied that ANZ Vanuatu is carrying on its banking business in a manner that is detrimental to the interests of depositors, its creditors, or the general public of Vanuatu. 13 ANZ Vanuatu uses an information technology system described as the "Commercial Banking System" (CBS). Information is entered into the CBS in Vanuatu using a retail front end system called "BeamNet". The information includes a new customer record or account, the financial transactions on the account, and customer information which is updated from time to time. That information is then stored on "Finet", which is part of the CBS information technology system, such that the account information of ANZ Vanuatu customers is kept in digital form on a server located in Vanuatu. The information on Finet is placed into files for the purpose of transmission to Australia. 14 ANZ maintains a digital database in Australia called the "Global Information Warehouse" (GIW). The GIW contains certain information in respect of bank accounts in Vanuatu held by customers of ANZ Vanuatu. The GIW receives information electronically transmitted by ANZ Vanuatu from its CBS in Vanuatu to the GIW in Australia in accordance with the terms and conditions under which that information was provided to ANZ Vanuatu. 15 The files which are transmitted from the Finet system in Vanuatu to the GIW in Australia are stored for a period of 24 months. The information contained in the files is used by ANZ for a number of reasons, including reporting and analysis by authorised business and corporate users in performing responsibilities in the finance, risk, regulatory and compliance, tax, marketing, and other business function areas. 16 It is not disputed that the tables in the GIW relating to Vanuatu customer account information contain fields for customer address, nationality code, domicile code, and currency code, or that those fields contain the information contained in the equivalent fields in the files transmitted from ANZ Vanuatu's CBS to the GIW. 17 On 17 December 2010 the Deputy Commissioner issued ANZ a document headed "Notice pursuant to section 264 of the Income Tax Assessment Act 1936." The parties have referred to this document as the "Vanuatu_GIW_AUS_links Notice." For ease of reference I shall refer to it as the First Notice. 18 In this document the Deputy Commissioner stated that pursuant to s 264 of the ITAA ANZ was required to produce certain information relating to the period 1 July 2008 to 30 November 2010 for customers who held or who had previously held accounts in Vanuatu with ANZ or any of its subsidiaries, and whose account information matched one or more of the criteria set out in Schedule A to the notice. The relevant part of the notice is as follows: Schedule A For each customer who has and/or have had account/s with the Australia and New Zealand Banking Group Limited in Vanuatu, and who: 1. have stated on account opening forms that their nationality is Australian, and/or 2. have stated their domicile is Australia; and/or 3. have given a residential or business address in Australia, an Australian address for correspondence and/or have any other Australian contact details; and/or 4. have an account whose currency code is recorded as Australian dollars. please provide the following information relating to the period of 1 July 2008 to 30 November 2010 inclusive from the 'Global Information Warehouse' for each account: 1. the account number; 2. any identifiers of the customer including the name, date of birth, gender, telephone number, residential address, business address, address for correspondence of the customer; 3. nationality of the customer; 4. domicile and/or country of residence of the customer; 5. the Tax File Number or Australian Business Number (if any) of the customer; 6. the name, address, address for correspondence, date of birth, gender and Tax File Number or Australian Business Number (if any) of each authorised signatory to the account. "Australia and New Zealand Banking Group Limited" is defined in the notice to include any subsidiary or affiliate of ANZ. It therefore includes ANZ Vanuatu. 19 The First Notice required ANZ and its subsidiaries or affiliates to provide this information in electronic format to the Deputy Commissioner by 21 January 2011. 20 The First Notice was accompanied by a letter dated 17 December 2010 from the Deputy Commissioner to Mr Adams of ANZ, in which the Deputy Commissioner wrote: We refer to our recent discussions regarding the Bank Transparency Strategy, in particular accessing Vanuatu related banking information stored in Australia and New Zealand Banking Group Limited's (ANZ) Global Information Warehouse (GIW), and to Mr Stephen Green's (General Manager, Taxation, ANZ) email of 26 February 2010 to Mr Malcolm Allen (Assistant Commissioner, Australian Taxation Office (ATO)) that included profiles of a number of jurisdictions, including Vanuatu. The information ANZ supplied for Vanuatu stated that as at 31 December 2009, the total number of Vanuatu accounts was 21,618 and the number of accounts held by Australian nationals was 1,331. Further we understand (from ANZ's legal position paper provided to the ATO via email on 2 December 2009) that the Vanuatu information is stored in Australia on the ANZ's GIW in a "masked" format. The ATO discussed the nature and extent of the masking with the appropriate ANZ staff via teleconference on 1 April 2010 and via subsequent emails. Following these discussions we understand that while the names of the account holders are "masked", other details, such as the account holder's address, account numbers, transaction details, and in some cases, gender, date of birth and country of residence, are not masked and that there is at least two years of transaction data recorded on your GIW. 21 On the same day ANZ received another document from the Deputy Commissioner. This document was also headed "Notice pursuant to section 264 of the Income Tax Assessment Act 1936." The parties have referred to this document as the "Vanuatu_GIW_Promoter_address Notice." I shall refer to it as the Second Notice. The format of this document is the same as the First Notice. It states that ANZ, which is defined in the notice to include any of its subsidiaries or affiliates, is required to provide to the Deputy Commissioner certain information relating to the period 1 July 2008 to 30 November 2010 pursuant to s 264 of the ITAA. The information sought had to be provided electronically by 21 January 2011. 22 The information sought in the Second Notice is different from that sought in the First Notice. Schedule A to the Second Notice states as follows: Schedule A For each customer who has and/or have had account/s with the Australia and New Zealand Banking Group Limited in Vanuatu, and who: 1. have an account whose currency code is recorded as any currency other than the Vanuatu Vatu; and 2. have provided one or more of the following elements as a part of any address recorded for the customer: a. PKF Vanuatu; b. P.O. Box 95; c. PKF House; d. Moores Rowland; e. P.O. Box 257; f. Windsor House; g. The Melanesian Hotel; h. Geoffrey Gee and Partners; i. Raffea House; j. P.O. Box 782; k. Barrett and Partners House; l. P.O. Box 240; m. Hawkes Law house; n. P.O. Box 212; o. P.O. Box 1401; p. Moore Stephens House; q. Transpacific Haus; or r. International Corporate Services Ltd please provide the following information relating to the period of 1 July 2008 to 30 November 2010 from the 'Global Information Warehouse' for each account: 1. the account number; 2. any identifiers of the customer including the name, date of birth, gender, telephone number, residential or business address, address for correspondence; 3. in the case of an entity other than natural persons, any identifiers of the officers of the customer including name, date of birth, gender, telephone number, address, address for correspondence; 4. nationality of the customer and/or the officer of the customer; 5. domicile and/or country of residence of the customer and/or the office of the customer; 6. the Tax File Number or Australian Business Number (if any) of the customer and/or the office of the customer; and 7. the name, address, address for correspondence, date of birth, gender and Tax File Number or Australian Business Number (if any) of each authorised signatory to the account. 23 The Second Notice was also accompanied by a letter dated 17 December 2010, again written by the Deputy Commissioner to Mr Adams. It is not necessary to set out the first two paragraphs of this letter because they are in the same terms as the other letter, but the letter contained a further paragraph which stated: We note that while ANZ have identified 1,331 accounts with an identified link to Australia (based on information regarding the customers [sic] nationality provided to the ANZ), the ATO's investigations, including Project Wickenby, have indicated that there may be a larger number of Australians attempting to avoid their Australian taxation obligations. This is due to the extensive use of interposed entities including International Business Corporations (IBCs) and local trust companies. These entities often have addresses care of local or other international promoters, disguising any Australian connection. We would expect that the "know your customer" rules operative at the relevant times would not necessarily identify all such Australians. Accordingly, we require information not limited to the 1,331 Australians ANZ have identified. 24 Both notices set out the penalties for failing to comply with each notice. 25 ANZ has not provided the information sought in either the First or Second Notices. Instead it has brought these proceedings. Legislative Framework 26 At the relevant time, s 264(1) of the ITAA provided: (1) The Commissioner may by notice in writing require any person, whether a taxpayer or not, including any officer employed in or in connexion with any department of a Government or by any public authority: (a) to furnish him with such information as he may require; and (b) to attend and give evidence before him or before any officer authorized by him in that behalf concerning his or any other person's income or assessment, and may require him to produce all books, documents and other papers whatever in his custody or under his control relating thereto. 27 The ITAA does not provide any sanctions or any processes in the event that the addressee of a notice under s 264 does not comply with the notice. The consequences of a person's failure to comply with a notice issued under s 264 are addressed in the TAA. A person who refuses or fails to furnish information or to produce a book, paper, record or other document to the Commissioner or another person when and as required under s 264 commits an offence: s 8C(1)(e) of the TAA. Subsection 8C(1) provides: 8C Failure to comply with requirements under taxation law (1) A person who refuses or fails, when and as required under or pursuant to a taxation law to do so: (a) to furnish an approved form or any information to the Commissioner or another person; or (aa) to give information to the Commissioner in the manner in which it is required under a taxation law to be given; or (b) to lodge an instrument with the Commissioner or another person for assessment; or (d) to notify the Commissioner or another person of a matter or thing; or (e) to produce a book, paper, record or other document to the Commissioner or another person; or (f) to attend before the Commissioner or another person; or (g) to apply for registration or cancellation of registration under the A New Tax System (Goods and Services Tax) Act 1999; or (h) to comply with a requirement under subsection 45A(2) of the Product Grants and Benefits Administration Act 2000; or (i) to comply with subsection 82-10F(4) of the Income Tax (Transitional Provisions) Act 1997; is guilty of an offence. 28 "Taxation law" is defined in s 2 of the TAA to have the meaning given by the ITAA 1997. "Taxation law" is defined in s 995-1 of the ITAA 1997 to mean: (a) an Act of which the Commissioner has the general administration (including a part of an Act to the extent to which the Commissioner has the general administration of the Act); or (b) legislative instruments made under such an Act (including such a part of an Act); or (c) the Tax Agent Services Act 2009 or regulations made under that Act. 29 Subsection 8C(1)(a) would appear to address a person who has been given a notice under s 264 of the ITAA by the Commissioner. An offence under s 8C(1) is an offence of absolute liability: s 8C(1A) of the TAA. However, s 8C(1B) of the TAA provides that s 8C(1) does not apply to the extent that the person is "not capable of complying with the relevant paragraph". Specifically, it provides that: (1B) Subsection (1) does not apply to the extent that the person is not capable of complying with the relevant paragraph. Note: A defendant bears an evidential burden in relation to the matters in subsection (1B), see subsection 13.3(3) of the Criminal Code. 30 Subsection 8E(1) of the TAA provides for the penalties for an offence by a person under s 8C. An offence is punishable on conviction and by a fine not exceeding 20 penalty units. A penalty unit means $110: s 4AA of the Crimes Act 1914 (Cth) (Crimes Act). Subsections 8E(2) and (3) address second and subsequent offences. Section 8ZF provides for the penalties where the offender is a corporation. 31 In addition to the penalties which might be imposed for a conviction for an offence against s 8C of the TAA, the court has power to order the person to comply with the requirement made under the taxation law for which the person has been convicted within a specified time: s 8G(1). Subsection 8G(1) provides: (1) Where: (a) a person is convicted before a court of an offence against section 8C or subsection 8D(1) or (2); or (b) a court makes an order under section 19B of the Crimes Act 1914 in relation to a person in respect of an offence against section 8C or subsection 8D(1) or (2); in relation to the refusal or failure of the person to comply (whether in whole or in part) with a requirement made under or pursuant to a taxation law, the court may, in addition to imposing a penalty on the person or making such an order in relation to the person, as the case may be, and notwithstanding that the time for complying with the requirement or any other such requirement has passed, order the person to comply with: (c) the requirement; and (d) such other requirements made, or that could be made, in relation to the person under or pursuant to the taxation law as the court considers necessary to ensure the effectiveness of the first-mentioned requirement; within a specified time or at a specified place and time. 32 Section 19B of the Crimes Act referred to in s 8G(1) of the TAA empowers the court to make orders when the court is satisfied that it is inexpedient for the court to inflict any punishment other than nominal punishment, or that it is expedient to release the offender on probation. Nothing more needs to be said about that particular section. 33 Section 8G is engaged if a person is convicted of an offence under s 8C or the court makes an order under s 19B of the Crimes Act because of a refusal or failure by the person to comply with a requirement made under a taxation law. The court may in addition to imposing a penalty order the person to comply with the requirement within a specified time. Relevantly, s 8G empowers the court to make an order requiring a person to comply with a s 264(1)(a) notice previously given by the Commissioner if the person has been convicted under s 8C for failure to comply with the notice by furnishing the information sought in the notice. 34 Section 8H of the TAA provides for the penalties for a person's failure to comply with an order under s 8G. Subsection 8H(1) provides: (1) A person who refuses or fails to comply with an order under subsection 8G(1) is guilty of an offence punishable on conviction by a fine not exceeding 50 penalty units or imprisonment for a period not exceeding 12 months, or both. 35 Section 8H is only engaged if a person has been convicted under s 8C for a failure to comply with a requirement of a taxation law and an order has been made under s 8G that the person comply with the requirement and the person has also failed to comply with the s 8G order. Subsection 8H(1) makes that failure an offence for which the person may be punished in accordance with the section. A person who is convicted under s 8H of the TAA must necessarily have also been convicted under s 8C of the TAA or been dealt with in accordance with s 19B of the Crimes Act. 36 Subsection 8H(2) provides that an offence under s 8H(1) is an offence of strict liability. Why s 8H(2) provides that an offence under s 8H(1) is an offence of strict liability and s 8C(1A) provides that an offence under s 8C(1) is an offence of absolute liability is an interesting question that does not need to be explained for the purpose of deciding this application. There are two other matters of curiosity in relation to s 8H(3). The first is in the drafting, and the second is in the substance. 37 Like s 8C(1B), s 8H(3) provides that s 8H(1) does not apply to the extent that the person is not capable of complying with "the relevant paragraph". Section 8H(1), unlike s 8C(1), does not have any "paragraphs" and it is not clear to what paragraph s 8H(3) is referring. The offence in s 8H(1) is in failing to comply with an order made under s 8G(1), not in failing to comply with any paragraph. 38 The second curiosity occurs when considering what work s 8H(3) has to do. As already observed, s 8H is only engaged when a person has failed to comply with s 8C and thereby committed an offence and an order has been made under s 8G. The person must have been able to comply with the s 264 notice and furnish the information sought otherwise the person would have avoided being convicted of the offence by relying upon s 8C(1B). The order made under s 8G would presumably be to comply with the notice given under s 264. It is difficult to think that a person who did not have a defence under s 8C(1B) would have a defence under s 8H(3) unless the person's circumstances changed materially. However, that is not the issue in this proceeding and nothing more needs to be said about those two matters in s 8H. 39 The last matter to notice is that the fine under s 8H for failing to comply with an order under s 8G is significantly greater than the fine provided for in s 8E. Moreover, s 8H provides for a penalty of imprisonment when the person's conduct justifies such a penalty. The Disposition of Part of the Application and the Cross-Claim 40 The legislation allows me to dispose of part of the application and the whole of the cross-claim immediately. 41 ANZ has sought, in the event that the Court refuses the first declaration because the notices are valid, a declaration that it is "not capable of complying" with the notices within the meaning of those words as used in s 8C(1B) of the TAA. 42 ANZ pleaded in paragraph 38 of its Statement of Claim (SOC) that because of the circumstances pleaded in the SOC it was "not capable of complying" with s 8C(1)(a) within the meaning of s 8C(1B) of the TAA. The three circumstances it relies on are a duty of confidentiality it owes to its customers under the law of Vanuatu and that the provision of the information would breach that law (paragraphs 13-16 of the SOC); that the provision of the information would constitute a criminal offence under s 125 of the International Companies Act [Cap 222] (Vanuatu) (International Companies Act) and s 9 of the Trust Companies Act [Cap 69] (Vanuatu) (Trust Companies Act) (paragraphs 20-21 of the SOC); and that the notices are uncertain or oppressive (paragraph 32 of the SOC). 43 ANZ's argument that it is not capable of complying with the notices only arises if the notices are otherwise valid. Because the argument assumes that the notices are valid, it must be assumed that none of the reasons advanced by ANZ on the application have been made out. In particular, it must be assumed that the notices are not invalid because they infringe Vanuatu's sovereignty or that they require ANZ or its employees to commit a criminal offence in Vanuatu. It must also be assumed that even if the notices were to have that effect, that would not be a reason to invalidate the notices. Moreover, it must be assumed that the notices are not invalid because they have been issued other than for the purpose for which the ITAA provides. Lastly, it must be assumed that the notices are not invalid because of uncertainty. Therefore, when considering whether a declaration of the kind sought should be granted it must be assumed that the notices are valid. 44 The question whether ANZ is capable of complying with the notices only arises if ANZ does not comply with the notices. It will only arise in the event that ANZ is prosecuted under s 8C of the TAA. If ANZ were prosecuted under s 8C, it could plead by way of defence that it was not capable of complying with s 8C(1)(a) and was not able to furnish the information sought by the Deputy Commissioner in the notices. 45 If the notices are valid then s 8C of the TAA makes it an offence not to furnish the information sought. ANZ would, if prosecuted, have to provide reasons why it could not furnish the information. None of the reasons which it has advanced in contending that the notices are invalid could be relied upon under s 8C(1B) because the assumption is that the notices are valid. ANZ might have other reasons why, if it were prosecuted, it was not capable of complying with the notices, but those reasons should not be the subject of speculation in advance of a prosecution. 46 Moreover, a declaration of the kind sought should not be made because it assumes, if the declaration is to have any utility, that ANZ will not comply with the notice because it is not capable of complying. It might be that if the notices were found to be valid ANZ could show the respondents that it was not capable of complying and, if the respondents were satisfied, no proceeding would be brought under s 8C. In any event the question whether a party, and in this case ANZ, is capable of complying will only arise if a prosecution is brought under s 8C, and it will be for the court which has jurisdiction to hear the prosecution, which is not this Court, to determine that question. The alternative declaration sought cannot be made. 47 The two declarations or orders sought by the respondents in the cross-claim also need not be made. The first declaration or order sought in the cross-claim does not need to be made if the Court dismisses ANZ's challenge to the validity of the notices. The notices will be presumed to be valid. 48 This Court should not make the second declaration or order sought in the cross-claim because in my opinion the declaration is unnecessary and the Court does not have power to make the order. 49 The respondents seek a declaration that s 264 of the ITAA requires ANZ to furnish the Commissioner with the information set out in the notices. There is no need to make a declaration of that kind. Section 264 speaks for itself. If the notices are valid the section requires compliance. No declaration to that effect is necessary if the notices are not complied with. The Commissioner may proceed to a prosecution under s 8C of the TAA if the notices are valid. No declaration is necessary. 50 In the alternative to the declaration, the respondents seek an order pursuant to s 16(1)(c) of the ADJR Act that ANZ furnish the information. Section 16(1)(c) of the ADJR Act provides: (1) On an application for an order of review in respect of a decision, the Federal Court or the Federal Magistrates Court may, in its discretion, make all or any of the following orders: … (c) an order declaring the rights of the parties in respect of any matter to which the decision relates. 51 However, that section would not authorise this Court to make the order sought. Section 264 of the ITAA does not include machinery for compulsion. A failure to comply is an offence under s 8C of the TAA. If this Court declares the notices to be valid then ANZ will have to furnish the information or face the risk of prosecution. If ANZ were prosecuted ANZ would be entitled to plead by way of defence s 8C(1B). The court hearing the prosecution would decide whether ANZ was capable of complying with s 8C(1)(a) of the TAA and, in turn, s 264 of the ITAA. If this Court were to order ANZ to furnish the information ANZ would not be entitled, if it failed to comply with the Court's order, to plead s 8C(1B) of the TAA on any further proceeding brought in this Court against it for a failure to comply with the Court's order. 52 The machinery to enforce compliance with a s 264 notice is in the TAA. If the notices are valid and ANZ fails to comply with them it is for the Commissioner to decide whether to institute proceedings by way of a prosecution under s 8C. If those proceedings were instituted and a conviction recorded the Commissioner could then consider whether to seek an order under s 8G of the TAA. The Commissioner should use the statutory procedure given in the TAA to enforce compliance with the notices under s 264 of the ITAA. 53 In the event that the notices are valid both ANZ and the Commissioner should proceed in accordance with the statutory regime in the ITAA and the TAA. 54 For those reasons I would not make the alternative declaration sought by ANZ or the declarations or orders sought by the respondents on the cross-claim in the event that the notices are valid. The scope of s 264 55 Before considering the remaining submissions advanced on behalf of ANZ in relation to the validity of the notices, it is necessary to make some general comments about the operation and scope of s 264 of the ITAA. 56 Section 264 of the ITAA falls to be construed without reference to the machinery provisions in the TAA. The fact that the provisions to which I have referred in the TAA make a failure to comply with s 264 an offence will not affect the reach and limits of s 264. The proper construction of s 264 is to be determined by an examination of the provision itself in the context of the powers given to the Commissioner by the ITAA: The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543; [2002] HCA 49 at [33] per Gleeson CJ, Gaudron, Gummow and Hayne JJ and at [46] per McHugh J. 57 Section 264 is given to the Commissioner to assist the Commissioner in performing the Commissioner's functions and responsibilities under the ITAA. Section 8 of the ITAA makes the Commissioner responsible for the "general administration" of the ITAA. The Commissioner's functions and responsibilities include the assessment of taxable income of a "taxpayer"; the assessment of the tax payable on that income; and the collection of the assessed tax. 58 Section 264(1) confers upon the Commissioner very broad investigatory powers in order for the Commissioner to perform those functions: Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 at 206 per Hill J. The scope of the powers is both extensive and wide-ranging, and is largely unconstrained: Hart v Commissioner of Taxation (2005) 148 FCR 198; [2005] FCA 1748 at [93] per Greenwood J. 59 The breadth of the Commissioner's powers under s 264 was identified by Mason J in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 536: The strong reasons which inhibit the use of curial processes for the purposes of a "fishing expedition" have no application to the administrative process of assessing a taxpayer to income tax. It is the function of the Commissioner to ascertain the taxpayer's taxable income. To ascertain this he may need to make wide-ranging inquiries, and to make them long before any issue of fact arises between him and the taxpayer. Such an issue will in general, if not always, only arise after the process of assessment has been completed. It is to the process of investigation before assessment that s 264 is principally, if not exclusively, directed. 60 The powers that are given under s 264 must, of course, be exercised for the purposes of the ITAA: Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 659-660 per Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ. In May v Commissioner of Taxation (1999) 92 FCR 152; [1999] FCA 287 at [16] the Full Court said: It is clear enough that "the powers contained in s 264(1) … must be exercised for the purposes of the [ITA Act]": Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 659. But subject to that, they "should be circumscribed only by reference to the limitations which are expressed in that section": Commissioner of Taxation (Cth) v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 535. They may, without any issue or dispute of fact having arisen with a taxpayer, be used to conduct a "fishing expedition" in the sense of "a wide-ranging inquiry to ascertain a taxpayer's taxable income": Industrial Equity Ltd v Deputy Commissioner of Taxation at 662. 61 Two separate and distinct powers are contained in s 264. First, s 264(1)(a) authorises the Commissioner to require any person, whether the taxpayer or not, to furnish the Commissioner with information as the Commissioner requires to assist the Commissioner in carrying out the Commissioner's statutory duties. Secondly, s 264(1)(b) authorises the Commissioner to require a person to attend and give evidence before the Commissioner or some other authorised person "concerning his or any other person's income or assessment." The Commissioner may in the exercise of the power under s 264(1)(b) require that same person to produce "all books, documents and other papers whatever in his custody or under his control relating thereto." 62 The two separate powers are independent of each other. Paragraph (b) only applies to natural persons: Smorgon v Australia and New Zealand Banking Group Ltd (1976) 134 CLR 475. Paragraph (a) is not so constrained. 63 In the present case the Commissioner relies on the power contained in s 264(1)(a) to support the issuing of the two notices. The power in s 264(1)(a) is wider than that conferred by s 264(1)(b). In Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd Mason J said at 535: …in s 264(1)(b) the power to compel evidence is restricted to evidence "concerning his or any other person's income or assessment" and the power to require production is confined to documentary records "relating thereto", that is, to "his or any other person's income or assessment". However, the power to require information contained in par (1)(a) is not similarly limited. 64 In enacting s 264(1)(a) Parliament has conferred "very broad investigative powers" on the Commissioner, powers which are "inquisitorial and coercive", and which "of their very nature must impinge upon the liberty of the subject": see Fieldhouse v Commissioner of Taxation at 206 per Hill J; May v Commissioner of Taxation at 159. It is not necessary that there be a dispute between the Commissioner and a taxpayer before the Commissioner can invoke the power in subparagraph (a). 65 There are limits on the power contained in s 264(1)(a). Like all statutory powers the power must be used in a bona fide manner for the purpose or purposes for which it was conferred, which means that "its exercise be not excessive in the circumstances of the case": O'Reilly v The Commissioners of The State Bank of Victoria (1983) 153 CLR 1 at 48 per Mason, Murphy, Brennan and Deane JJ; Fieldhouse v Commissioner of Taxation at 206 per Hill J. In Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd at 535 Mason J said of s 264(1)(a): As it is a power given to the Commissioner for the purpose of enabling him to perform his functions under the Act it must be circumscribed by reference to this purpose. 66 Accordingly, the Commissioner must exercise the statutory power for the purposes of the ITAA, the primary purpose of which is the levy of tax upon taxable income. The Commissioner is permitted to conduct a "fishing expedition", in the sense of a "wide-ranging" inquiry, to ascertain a taxpayer's taxable income: Industrial Equity Ltd v Deputy Commissioner of Taxation at 662 per Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ. In Industrial Equity Ltd v Deputy Commissioner of Taxation, Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ said at 661 that the Commissioner will be "acting for the purposes of the Act so long as he is endeavouring to fulfil his function of ascertaining the taxable income of taxpayers." 67 Subsection 264(1) does not abrogate any claim for legal professional privilege which would otherwise be available, although the existence of legal professional privilege does not limit the power of the Commissioner to issue notices under s 264(1)(b) requiring the production of documents that might be the subject of legal professional privilege. However, if a notice is given requiring a person to furnish information or produce documents which are protected by legal professional privilege, the notice does not require the addressee to furnish the information or produce the documents: Fieldhouse v Commissioner of Taxation at 201-202 per Lockhart J. 68 On the other hand, s 264 abrogates the privilege against self-incrimination: Commissioner of Taxation v De Vonk (1995) 61 FCR 564. That privilege is inconsistent with the power given to the Commissioner to interrogate a taxpayer about the taxpayer's sources of income. If the taxpayer was entitled to plead the privilege to excuse an answer, the Commissioner's power to ascertain a person's taxable income and assess and collect income tax on that income would be stultified. 69 ANZ submitted that Commissioner of Taxation v De Vonk was wrongly decided because the reasoning in that case is inconsistent with the High Court's reasoning in The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission. However, Commissioner of Taxation v De Vonk is a decision of the Full Court and is binding upon a single judge until the Full Court says otherwise, or until the High Court overrules it expressly or by necessary implication. Because that has not occurred, this Court remains bound by the decision. In any event, the correctness of the decision in Commissioner of Taxation v De Vonk is not directly relevant to the decision on this application, which is another reason for a judge at first instance to resist ANZ's invitation. 70 A s 264(1)(a) notice requires an addressee to furnish information notwithstanding any contractual obligation of confidentiality that the addressee of the notice might owe to a third party. A banker and customer's contractual arrangements include, where no express term otherwise provides, an implied term that the banker will not divulge to a third party any information relating to the customer, including transactional details, without the customer's consent: Tournier v National Provincial and Union Bank of England [1924] 1 KB 461. However, that implied term is itself subject to the qualifications mentioned by the Court of Appeal in Tournier v National Provincial and Union Bank of England. Banks LJ, when speaking of the qualifications to the contractual duty of confidentiality, said at 473: There appears to be no authority on the point. On principle I think that the qualifications can be classified under four heads: (a) Where disclosure is under compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of the bank require disclosure; (d) where the disclosure is made by the express or implied consent of the customer. 71 A banker, like any other person, must comply with the law. A term would not be implied in a contract between a bank and its customer which required the bank to keep confidential that which the law required to be disclosed. The duty imposed on a bank by reason of the contractual arrangements with its customer to keep the customer's information confidential is subject to the bank's duty to comply with the law: Smorgon v Australia and New Zealand Banking Group Ltd at 488. 72 In Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd, Gibbs ACJ said at 521: …the existence of the contractual duty provides no just cause or excuse for refusing or neglecting to produce the documents. It is likely that documents which relate to the income or assessment of a taxpayer will often be entrusted by him to another, for example, to a Bank, a solicitor or an accountant. The Parliament cannot have intended that a person whose taxation affairs were under consideration could protect his documents from disclosure simply by binding the person to whom they were entrusted to refrain from producing them. Gibbs ACJ concluded at 522 that: The terms of a contract made between the taxpayer and the custodian of his documents would appear quite irrelevant for the purposes of s 264(1), and there is nothing in the provisions of the sub-section that would support the view that the existence of a contractual duty, or an arrangement short of a contract, to refrain from producing the documents should be regarded either as having the effect that the documents were not in the custody or under the control of the person who in fact had them in his custody or under his control, or as providing just cause or excuse for failing to produce them. See also May v Commissioner of Taxation at 159; Fieldhouse v Commissioner of Taxation at 208 per Hill J. 73 The Commissioner cannot exercise the powers given under either s 264(1)(a) or (b) without the Commissioner first serving a notice in writing on the relevant person or entity. The notice must be issued for the purpose of ascertaining the taxable income of a taxpayer, although it does not need to identify the person whose affairs are the subject of the notice: Fieldhouse v Commissioner of Taxation at 207 per Hill J; McCormack v Commissioner of Taxation (2001) 114 FCR 574; [2001] FCA 1700. In Fieldhouse v Commissioner of Taxation, Hill J said at 207 that where the notice simply seeks information the Commissioner "need not identify in the notice the person in connection with whose income or assessment the request for information is made." 74 In some cases the person to whom the notice is addressed may not be a taxpayer and the information which is sought to be furnished will relate to a third person: Industrial Equity Ltd v Deputy Commissioner of Taxation at 661 per Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ; May v Commissioner of Taxation at 159. Section 264 permits such a course because the "ascertainment of taxable income may require the Commissioner to look to persons, other than the relevant taxpayer, for information bearing upon the taxable income of that taxpayer": Industrial Equity Ltd v Deputy Commissioner of Taxation at 661 per Mason CJ, Brennan, Deane, Dawson, Toohey and McHugh JJ. 75 Thus the Commissioner has broad powers under s 264. These powers include the power to conduct extensive and intrusive inquiries into the affairs of a taxpayer, providing that those inquiries are undertaken in order to ascertain that taxpayer's taxable income. 76 Since the TAA makes the failure to comply with a notice under s 264 an offence and imposes penalties, and because of the intrusive nature of the power, a notice issued under that section must be sufficiently clear to enable the addressee to determine what information or documents the addressee is required to provide. The notice must indicate to the addressee what is required of the addressee. An unintelligible notice is not a good notice under the section and would be liable to be set aside. In Fieldhouse v Commissioner of Taxation, Hill J said at 208: …the approach to be adopted is to ask in respect of any particular request whether a reasonable man in the position of the addressee of the notice can fairly comply with it and not be thereby exposed to the possibility of penalty for non-compliance having regard to the manner in which the notice is formulated. 77 Where documents are sought under s 264(1)(b), which is as I have said a narrower power than s 264(1)(a), it is sufficient if the Commissioner identifies the documents by reference to a class without having to descend into detail and identify the documents, document by document. In Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd, Mason J, in the context of s 264(1)(b), said at 537 that it is: … for the recipient to decide for himself, difficult though the task may be, which of the documents answer the description. If his decision is wrong he exposes himself to prosecution and penalty. The existence of this hazard is not a sufficient basis for the conclusion that the section requires the Commissioner to give a notice in such terms as would enable the recipient on reading it and on examining the documents in his custody or control to determine whether they fall within the ambit of the Commissioner's powers. To so hold would be to impose an impossible burden on the Commissioner. In many, if not most, cases he will be unaware of the contents of the documents of which he seeks production. He concluded at 537-538 that: As the Commissioner's coercive power to require production is limited, any notice given in exercise of the power must in terms conform to the statutory limitations if it is to be valid. It will in my view conform to those limitations only if it clearly confines the documents to be produced to the class of which the Commissioner is authorized to require production, though it may go on to include particular documents on the footing that they fall within that class. If not so limited, the notice fails on its face to express the limitation which the section places on the Commissioner's authority. Because the exercise of the power casts onerous obligations on the recipient of a notice, and because the recipient (not being the taxpayer) is only justified, vis-À-vis the taxpayer, in producing the taxpayer's documents without his consent in response to a valid demand, it is for the Commissioner so to formulate his notice that this limitation on his authority is drawn to the attention of the recipient. ANZ's Remaining Submissions 78 In its written submissions in support of its opening ANZ identified the grounds upon which it said that the notices were invalid in this way: (a) s 264(1)(a) of the 1936 Act [the ITAA] does not authorise notices which, as the notices do, infringe foreign sovereignty, violate fundamental rights, and require a direction to employees to commit criminal offences; (b) the notices are not issued for the purposes of the 1936 Act or the Income Tax Assessment Act 1997 (Cth), because of the scope of the persons whose information they seek and because they are an excessive exercise of power in the circumstances; and/or (c) the notices are uncertain. 79 Those are the issues which need to be addressed to determine whether ANZ is entitled to the first declaration which is sought in the application: that is, that both notices are invalid; and for the consequential orders which are sought in relation to that declaration, namely prohibition and certiorari. For the reasons already given, the other declaration and order which is sought by ANZ, and the declaration and orders which are sought in the cross-claim, need not be further addressed. Do the Notices Infringe Foreign Sovereignty? 80 ANZ's first argument that the notices are invalid because they are not authorised by s 264 is put by way of three limbs. First, s 264 does not authorise the Commissioner or Deputy Commissioner to issue a notice that would infringe upon foreign sovereignty. Secondly, s 264 does not authorise the issuing of notices which would violate, in the sense of affect, fundamental rights. Thirdly, s 264 does not authorise the issuing of a notice that would require the addressee of the notice to direct their employees to commit criminal offences in order for the addressee to comply with the notice. These three limbs to ANZ's first argument are predicated on the proposition that the law of Vanuatu prohibits the disclosure of information by ANZ to the Deputy Commissioner. If by reason of the law in Vanuatu the disclosure of the information is prohibited, then, so ANZ's first argument goes, the notices are invalid because s 264 does not confer a power on the Commissioner to issue notices that infringe upon foreign sovereignty, impinge upon fundamental rights, or require the addressee to direct its employees to commit criminal offences. 81 In my view ANZ's first argument must fail for the fundamental reason that s 264 authorises the Commissioner to issue a notice to an Australian company asking it to produce information that is stored in Australia. It is ANZ, not ANZ Vanuatu, to whom the notices are addressed. It is ANZ which holds the information in Australia and it is ANZ that is required to comply with the notices. Whether the disclosure of the information by ANZ would mean that either ANZ or ANZ Vanuatu contravenes the law in Vanuatu is not to the point. The information is held in Australia by an Australian company, and in my view s 264 authorises the Commissioner, or in this case the Deputy Commissioner, to issue the notices. 82 It is true that the Notices define ANZ to mean ANZ and any subsidiary or affiliate of ANZ "as defined in Division 6, Part 1.2 of the Corporations Act", and that ANZ Vanuatu would be a subsidiary within the meaning of s 46, which is included in that Division of the Corporations Act 2001 (Cth). Therefore, the notices require ANZ to furnish any information held by ANZ Vanuatu that is addressed by the notices. 83 However, the notices require ANZ and ANZ Vanuatu to furnish information from the GIW. ANZ Vanuatu is not required to provide any further information than that already contained in the GIW. The reach of the notices does not extend beyond information previously given by ANZ Vanuatu to ANZ in compliance with ANZ's own internal obligations. The information which is to be provided is that already contained in the GIW and in the possession of ANZ. ANZ Vanuatu is not being asked, because it is a subsidiary of ANZ, to furnish any information apart from that in the GIW. 84 It cannot be the case, as ANZ has contended, that an Australia company could avoid disclosing information it held in Australia on the basis that the information, and thereby the company, was subject to the law of another jurisdiction. If that were the case it would seriously constrain the Commissioner's ability to collect information in the course of performing the Commissioner's functions and responsibilities under the ITAA. Parliament cannot have intended this when it enacted s 264. As I have already pointed out, s 264 confers very broad investigatory powers on the Commissioner. There is no reason to read s 264 as being subject to a foreign law that might purport to have extra-territorial effect in circumstances where the information is held by an Australian company in Australia. 85 In Bank of Valletta plc v National Crime Authority (1999) 164 ALR 45; [1999] FCA 791 a notice was issued under s 29(1) of the National Crime Authority Act 1984 (Cth) which required a foreign bank to produce documents that were held in Malta. There was no argument as to the validity of the notice and the question for the court was whether the bank had a "reasonable excuse" which entitled the bank to refuse to produce the documents because compliance with the notice would mean that the bank would commit an offence against the confidentiality provisions of the laws of Malta. Justice Hely concluded that even if there was a reasonable risk that the production of the documents by the bank would involve the commission of an offence, that did not constitute a "reasonable excuse" to not comply with the notice. 86 In this case the notices given under s 264 are not rendered invalid because by providing the information in compliance with the notices and the law of Australia, ANZ, or more particularly ANZ Vanuatu, might thereby contravene the law of Vanuatu. To hold otherwise would be inconsistent with Hely J's decision in Bank of Valletta plc v National Crime Authority, a decision with which I agree. 87 ANZ also argued that s 264(1)(a) should not be construed as abrogating fundamental rights, privileges or immunities unless by necessary intendment or implication, and it is not to be read as extending to cases governed by foreign law. 88 It was contended that because of the generality of the words used the power given in s 264(1) "is unlikely to contain the necessary implication abrogating fundamental rights, privileges, immunities, and is unlikely not to be able to be construed so as to avoid breaches of international comity, because general words will almost always be able to be given some operation, even if the operation is limited in scope." 89 The issue, it was contended by ANZ, was whether the general words in s 264(1)(a) should be construed as authorising an exercise of power which infringes foreign sovereignty by overriding rights and obligations under foreign law, and at the same time violates the fundamental right of a person: (a) not to be compelled to contravene the law, including foreign law; (b) not to be compelled to act in a way which exposes that person to criminal punishment, including deprivation of liberty; and (c) to privacy, including under foreign law. 90 In support of its contention ANZ relied upon the dicta of Dixon J in Wanganui – Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581 at 601, where, according to ANZ, his Honour stated a common law principle or rule of construction. 91 That case was a private international law case concerning the proper law governing a contract between a resident of Australia (AMP) incorporated in New South Wales and a resident of New Zealand, Wanganui – Rangitikei Electric Power Board (the NZ Board). The NZ Board borrowed money from AMP. The NZ Board was to pay interest which was secured by AMP by debenture upon a special rate to be levied annually during the currency of the loans, on the rateable property and the district controlled by the local authority. 92 The monies were advanced in New Zealand but the repayments were made in New South Wales. The NZ Board's authority to raise the loans and secure those loans was given by New Zealand statute. The NZ Board sought to repay the debentures in New South Wales in accordance with an amount of interest which would be then reduced according to a New South Wales statute, the Interest Reduction Act 1931 (NSW) (Interest Reduction Act). 93 The Court concluded that the Interest Reduction Act did not apply to the NZ Board's obligations because of the proper construction of the Interest Reduction Act. At 600-601, in the passage relied on by ANZ, Dixon J said: The case is one for applying what I believe to be the well settled rule of construction. The rule is that an enactment describing acts, matters or things in general words, so that, if restrained by no consideration lying outside its expressed meaning, its intended application would be universal, is to be read as confined to what, according to the rules of international law administered or recognised in our Courts, it is within the province of our law to effect or control. The rule is one of construction only, and it may have little or no place where some other restriction is supplied by context or subject matter. But, in the absence of any countervailing consideration, the principle is, I think, that general words should not be understood as extending to cases which according to the rules of private international law administered in our Courts, are governed by foreign law. As the present statute deals with the discharge pro tanto of obligations, it ought to be understood as confined to those obligations which arise under the law of New South Wales. 94 The question in that case was whether the appellant, the NZ Board, could take advantage of a New South Wales statute and obtain a reduction in interest rates which otherwise would not be available to it under New Zealand law. The principle which Dixon J said was a rule of construction has nothing, in my respectful opinion, to do with the matter under consideration in this proceeding. 95 The question in this proceeding is whether the Deputy Commissioner is entitled to issue a notice directed to an Australian company to furnish information held by that Australian company in Australia. The notices do not in any way impact upon the sovereignty of Vanuatu, or upon Vanuatu law. Nor do the notices impact or deal with the relationship between ANZ and its customers, either in Vanuatu or in Australia. The comments of Dixon J in Wanganui – Rangitikei Electric Power Board v Australian Mutual Provident Society do not mean that an Australian company is immune from the reach of s 264 where the Australian company has information relevant to a notice given under s 264(1)(a) just because the information has been provided to it by its subsidiary which carries on business in a foreign jurisdiction. The notices given under s 264(1)(a) do not purport to require ANZ to furnish any information other than the information it holds in Australia in the GIW. How ANZ came to hold that information is an internal matter between ANZ and ANZ Vanuatu. 96 ANZ also relied upon Australian Securities Commission v Bank Leumi Le-Israel (1995) 134 ALR 101, and the reasons of the Full Court on appeal in Australian Securities Commission v Bank Leumi Le-Israel (Switzerland) (1996) 69 FCR 531. In that case the Australian Securities Commission (ASC) gave notices in the form of substantial shareholder notices to two Swiss shareholders in relation to their shareholdings in an Australian company. The notices required the Swiss shareholders to disclose the persons who had the beneficial interest in their shareholdings. Both Swiss companies refused to comply with the notices on the ground that the disclosure of that information would breach Swiss secrecy regulations. The ASC then sent further notices, with which again the Swiss shareholders refused to comply. 97 Justice Sackville held at first instance, in a decision which was approved on appeal, that there was no obligation upon the shareholders to comply with the notices because, upon the true construction of the legislation under which the notices were given, the legislation did not have effect upon Swiss corporate citizens resident in Switzerland. 98 His Honour, after discussing the authorities, said at 124: Clearly, very considerable caution must be exercised before construing legislation so as to impose duties on foreigners which create a risk that they may be required to contravene foreign law. Ultimately, however, the question is one of ascertaining the intention of the legislature by reference to the language used and the objects of the legislative scheme. 99 The facts of that case are different to the facts in the present case. The notices in the present case are directed to an Australian bank in Australia, and require it to furnish information held by it in Australia. Although, as already observed, ANZ Vanuatu is encompassed within the notices given, the notices do not require any subsidiary of ANZ to furnish information held outside of Australia. The only information which is sought is that which is contained within the GIW in Australia. 100 It follows then that I reject ANZ's argument that the notices were not authorised by s 264 because they impact upon Vanuatuan sovereignty by requiring ANZ to contravene the law of Vanuatu in order to comply with them. However, even if s 264 were limited in the manner submitted by ANZ, I am, for the following reasons, not satisfied that disclosure of the information by ANZ would contravene the law in Vanuatu. 101 ANZ argued that the applicable law to determine the banking relationship between the bank and its customers is the law of the place where the customer's account is held. The law of that place will determine the banker's obligations of confidence in respect of any information coming to the banker's attention by reason of its contractual relationship: Nanus Asia Co Inc v Standard Chartered Bank [1990] 1 HKLR 396. That contention is no doubt correct, but it goes no further than establishing that as between the banker and its customer the law governing their relationship is the law of the place where the customer account is held. Thus, it may be accepted that the law of Vanuatu governs the relationship between ANZ Vanuatu and its customers. 102 Next ANZ contended that because the law of Vanuatu governed the relationship between ANZ Vanuatu and its customers, ANZ could not be compelled to give the information sought in the notices. It was contended that under Vanuatu law there was a non-statutory obligation of confidentiality between a bank and its customers, as well as a statutory obligation of confidentiality imposed upon a bank in respect of international companies and trust companies. 103 ANZ called expert evidence for the purpose of establishing these obligations of confidentiality. It is necessary to address that evidence. 104 The opinion rule expressed in s 76 of the Evidence Act 1995 (Cth) (Evidence Act) provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed. There are exceptions to the rule. Section 79(1) provides: (1) If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge. 105 ANZ tendered parts of two exhibits to two separate affidavits of Mr Ellum affirmed on 24 May 2011 and 30 June 2011, and parts of two exhibits to two separate affidavits of Dr Corrin sworn on 1 June 2011 and 30 June 2011. The exhibits were tendered pursuant to the exception in s 79 of the Evidence Act. The four exhibits contained the opinions of the authors as to the law in Vanuatu. The respondents did not take issue with their tender. 106 Both Mr Ellum and Dr Corrin were called to give evidence and were cross-examined on their reports. The respondents did not contend that Mr Ellum and Dr Corrin did not have the specialised knowledge required in s 79, or that the opinion evidence proffered by the witnesses was not wholly or substantially based upon that knowledge. Nor did the respondents contend that the opinion evidence could not be received on any other basis. 107 At the conclusion of the evidence I had doubts about whether the evidence was admissible, but because no objection was taken I admitted the evidence. However, I did not find the evidence particularly helpful. 108 Mr Ellum is a practicing solicitor who was Attorney-General of Vanuatu between 1994 and 1996. Dr Corrin is an Associate Professor of Law at the University of Queensland. Both gave evidence in relation to two aspects of the law in Vanuatu. First, they were cross-examined about whether the identity and account information of a customer who opens a bank account with a bank in Vanuatu is subject to a non-statutory obligation of confidentiality imposed upon the bank and/or a third party recipient of the information. Secondly, they were cross-examined about whether there were any statutory obligations of confidentiality in relation to such information. 109 Both Mr Ellum and Dr Corrin expressed the opinion that ANZ Vanuatu is subject to a non-statutory obligation of confidentiality under the law of Vanuatu in respect of the account information of its customers. They both agreed that the source of this non-statutory obligation of confidentiality was contractual, being either an express or implied term of the contractual arrangements between ANZ Vanuatu and its customers. Both accepted in cross-examination that if the contracts contained an express term that permitted ANZ Vanuatu to disclose any information that came into ANZ Vanuatu's possession as the customer's banker, then the non-statutory obligation of confidentiality would be displaced to the extent permitted by the express term. 110 Evidence of the terms and conditions applicable to various different types of standard ANZ Vanuatu accounts was introduced by ANZ. In cross-examination, Mr Hanks QC, counsel for the respondents, took both Mr Ellum and Dr Corrin to a number of different clauses in these terms and conditions. Both Mr Ellum and Dr Corrin agreed that the clauses they were taken to were relevant when identifying the extent of the non-statutory obligation of confidentiality. 111 Mr Ellum also agreed with the cross-examiner that the contractual obligations of confidentiality owed by ANZ Vanuatu to its customers will determine the extent of the confidentiality obligations owed by ANZ to those customers in that ANZ would be subject to the same obligations as its subsidiary. However, Dr Corrin was of the view that there could be an equitable obligation of confidence between ANZ and ANZ Vanuatu, and that this equitable obligation would not necessarily represent the contractual terms relating to confidentiality between ANZ Vanuatu and its customers. 112 I very much doubt that the extensive evidence in relation to the non-statutory obligation of confidence was admissible under s 79 of the Evidence Act. I accepted the evidence because there was no objection to me receiving it. However, I think that given the similarities between Australian law and the law of Vanuatu in this area, and because the law of Vanuatu in this respect is based largely on the English common law, I am in a position to determine the nature of any non-statutory obligation of confidence to which ANZ might be subject. 113 In my view the non-statutory obligation of confidence is no different to that which pertains under Australian law, and any express or implied contractual obligation of confidentiality will have to yield to any law that required the provision of confidential information. Therefore, if ANZ is obliged by law to produce any confidential information it has obtained from ANZ Vanuatu, the statutory obligation to which ANZ is subject will override any non-statutory obligation of confidence it may owe to ANZ Vanuatu or the customers of ANZ Vanuatu. As I have already pointed out, s 264 overrides any non-statutory obligation of confidentiality that the addressee of a s 264 notice might owe to a third party. This applies to an Australian company, which holds the information sought in Australia, regardless of whether the non-statutory obligation of confidentiality is one that arises under Australian law or a foreign law, providing that the Commissioner is exercising his or her powers for the purposes of the ITAA. 114 In any event, as I have said, both experts agreed that the source of the non-statutory obligation of confidentiality was contractual, and that the extent of the obligation would be subject to the express terms and conditions of the contracts existing between ANZ Vanuatu and its customers. There was evidence of a number of standard form agreements ANZ Vanuatu used at various times, which contained terms that would allow disclosure of the account information of any customer who was a party to the agreements to regulatory and taxation agencies outside of Vanuatu. As I have said, the two experts were taken to the terms and conditions in cross-examination, and both agreed that those terms might affect the non-statutory obligation of confidentiality. Having looked at the terms and conditions I agree. 115 However, ANZ submitted that the respondents had to establish that there was consent "across the board" in relation to all of the information stored in the GIW that is sought in the notices. The respondents argued that ANZ must establish that the disclosure of the information would amount to a breach of non-statutory obligations of confidence. Unsurprisingly, both ANZ and the respondents submitted that the other had failed to discharge their evidentiary onus. 116 I accept the respondents' argument that ANZ must establish the particular pieces of information sought in the notices that are subject to the non-statutory obligation of confidence and those that are not. It was up to ANZ to establish that there was a non-statutory obligation of confidence. The claim must identify the information subject to that obligation. Subject to what I have said about the scope of s 264, I am prepared to accept that there was such an obligation. But only ANZ can know, through ANZ Vanuatu, which customers have signed contacts that permit the disclosure of information to law enforcement and regulatory agencies outside of Vanuatu and which customers have not. 117 Dr Corrin and Mr Ellum were also asked whether there were any relevant statutory obligations of confidentiality in Vanuatu. They were provided with the International Companies Act and the Trust Companies Act, and in particular were referred to s 125 of the International Companies Act and s 9 of the Trust Companies Act. 118 It was an agreed fact that at all relevant times s 125 of the International Companies Act provided: 125 Secrecy (1) Any person who, except when required by a court of competent jurisdiction, with respect to any company otherwise than for the purposes of the administration of this Act or for the carrying on of the business of the company in Vanuatu or elsewhere, divulges, attempts, offers or threatens to divulge or induces or attempts to induce other persons to divulge any information concerning or respecting: (a) the shareholding in, or beneficial ownership of any share or shares in a company; (b) the management of such company; or (c) any of the business, financial or other affairs or transactions of the company; shall be guilty of an offence. (2) Any person who contravenes the provisions of subsection (1) shall, on conviction, be liable to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 5 years or to both such fine and imprisonment. 119 Likewise, it was an agreed fact that at all material times s 9 of the Trust Companies Act provided: 9 Preservation of secrecy (1) Except when lawfully required to do so by any court of competent jurisdiction within Vanuatu or under the provisions of any law in force in Vanuatu or, in the case of any public officer, for the purpose of the performance of his duties or the exercise of his functions under this Act, no person shall, unless specifically so authorised by the trust company concerned, disclose to any other person any information entrusted to him in confidence, or acquired by him, in his capacity or in the course of his duties as public officer, employee, agent, liquidator, receiver or in a professional or similar fiduciary relationship, respecting the affairs of any trust company whatsoever, whether while employed or acting in such capacity or after he has ceased to be employed or to act in such capacity or relationship. For the avoidance of doubt, the provisions of this section shall have effect with respect to any such information entrusted to or acquired by any person respecting the affairs of any trust company whether such information was entrusted to or acquired by him before or after the commencement of this subsection. (2) Every person who contravenes the provisions of subsection (1) shall be guilty of an offence and liable on conviction to a fine not exceeding VT100,000 or to imprisonment for a term not exceeding 6 months, or to both such fine and imprisonment. 120 Mr Ellum and Dr Corrin were asked to consider the operation of s 9 and s 125. Specifically, insofar as the customers of ANZ Vanuatu comprise trust companies or international companies, they were asked to consider whether the disclosure or divulging of customer identities or account information would contravene either of these provisions. 121 Mr Ellum said that both s 125 and s 9 would be contravened if some element of the offence took place in Vanuatu. He referred to s 2(a) of the Penal Code [Cap 135] (Vanuatu) (Penal Code), which states: 2. Offences partly or wholly abroad The criminal law of the Republic [of Vanuatu] shall apply – (a) to any offence of which an element has taken place within the territory of the Republic [of Vanuatu]; … Provided that no alien may be tried for an offence against the criminal law of the Republic [of Vanuatu] solely by virtue of this section unless he has been arrested within the territory of the Republic [of Vanuatu] or has been extradited to it. 122 Mr Ellum's evidence was not easy to follow, but he appeared to express the opinion in cross-examination that if ANZ disclosed the information sought in the two notices to the respondents it would thereby be contravening s 9 and s 125. His opinion appeared to be based on the following reasoning. Section 2(a) of the Penal Code means that an element of the offences contained in s 9 and s 125 has to occur in Vanuatu. The obtaining of the information mentioned in s 125(1)(a), (b) and (c) by ANZ is an element of the offence contained in s 125, just as the entrusting of information in circumstances of confidence is an element of the offence in s 9. The information in question was obtained by and entrusted to ANZ in Vanuatu. Therefore, s 125 and s 9 would operate if there was any disclosure by ANZ in Australia. 123 I reject that reasoning. The obtaining of the information by ANZ is not an element of the offence in either s 125 or s 9. With respect, I am not sure that Mr Ellum understood the elements of the offences in s 125 and s 9. He referred to the obtaining of the information as part of "the chain of causation", although at one point conceded that ANZ might be able to raise as a defence to any prosecution for disclosure of the information in Australia the fact that no element of the offence took place in Vanuatu. When Mr Hanks put to him that in order for a prosecution to be successful under s 125 the prosecution would have to establish two things, namely that the information had been divulged and that the information fell within the terms of the section, he conceded that neither of those things would occur in Vanuatu if ANZ were to disclose the information held in the GIW to the respondents. He made the same concession when Mr Hanks put to him that the three elements of the offence in s 9 were the disclosure of information; respecting the affairs of a trust company; and that the information was entrusted in confidence. 124 Dr Corrin took a different approach. She started with the proposition that there is a presumption against the extra-territorial operation of legislation in Vanuatu, and that therefore s 125 and s 9 will only attach penal consequences to disclosures outside of Vanuatu if the presumption against extra-territorial operation is displaced. In her opinion there is no express provision in Vanuatu that renders either enactment operative in relation to disclosures of information outside of Vanuatu. According to Dr Corrin, the question then is whether the terms of s 125 and s 9 displace the presumption against extra-territorial operation. 125 In Dr Corrin's opinion s 9 does not displace the presumption against extra-territorial operation, and so ANZ is not subject to that provision when it acts outside Vanuatu. However, she expressed the view that s 125 probably does apply extra-territorially. She reached this view for three main reasons. First, because the International Companies Act is a remedial piece of legislation and should be given a "fair and liberal construction and interpretation." Secondly, because "[t]he whole tenor of the Act is 'international' in the sense that it governs companies which carry on business outside Vanuatu." Thirdly, because s 125 states that the section does not apply where a disclosure takes place "for the carrying on of the business of the company in Vanuatu or elsewhere", which "strongly suggests that the duty [of confidentiality] is of extra-territorial effect." 126 She did not refer to s 2(a) of the Penal Code, and she was not taken to it during cross-examination. Therefore, she did not offer any opinion as to the effect of s 2(a) or whether that section required an element of an offence against s 125 to take place in Vanuatu. 127 Both Mr Ellum and Dr Corrin accepted that s 125 and s 9 contain exceptions that could be raised by ANZ as a defence to any prosecution, including, in relation to s 9, that the trust company consented to the disclosure. 128 Once again, I not sure that the evidence given by Mr Ellum and Dr Corrin in relation to the operation of s 125 and s 9 was expert evidence. Once it is established that s 125 and s 9 apply in Vanuatu I think that I am in a position to determine whether those sections apply to the information held by ANZ. In my view they do not. I agree with Dr Corrin that s 9 of the Trust Companies Act does not displace the presumption against extra-territorial operation. I also agree that the exception in s 125 suggests that the section is intended to apply extra-territorially. However, I think that s 2(a) of the Penal Code means that an element of the offences in ss 9 and 125 has to take place in Vanuatu. The information will be furnished in Australia, not Vanuatu, and, as I have said, the obtaining of the information by ANZ is not an element of either offence. In these circumstances none of the elements of the offences will occur in Vanuatu. In these circumstances compliance by ANZ with the notices will not mean that ANZ or any of its employees will have committed an offence against s 9 or s 125. 129 Ultimately, none of this really matters as I have found that s 264 overrides any obligation of confidence ANZ may owe to ANZ Vanuatu or ANZ Vanuatu's customers, and ANZ and its employees are subject to the law in Australia. It and its employees are required to comply with the law in Australia, and ANZ would not be acting unlawfully or in breach of any duty it owes to its employees by directing its employees to access the information in the GIW and provide it to the respondents. Section 264 authorises the issuing of notices to an Australian company that seek production of information that is stored in Australia. Accordingly, the notices are valid irrespective of whether the disclosure of the information sought in the notices by ANZ would involve a contravention of the law of Vanuatu, or would be contrary to any of the fundamental rights identified by ANZ. Were the Notices Issued for a Proper Purpose? 130 The second issue raised by ANZ was that the notices were not issued for a proper purpose. It was argued that the notices were invalid because they sought information concerning persons who would not be liable to pay income tax in Australia. The notices, so it was contended, make no attempt to limit the categories of requested information to persons who are or may be liable to the assessment and payment of Australian income tax. In those circumstances, it was argued that the notices had been issued for a purpose not authorised by s 264. 131 As I have already pointed out, s 264 confers a wide power on the Commissioner. It permits the Commissioner to conduct "wide-ranging inquiries…long before any issue of fact arises between [the Commissioner] and the taxpayer": Commissioner of Taxation v Australia and New Zealand Banking Group Ltd at 536 per Mason J. The Commissioner is not required to identify in a notice issued under s 264 the person or persons in connection with whose income or assessment the request for information is made: Fieldhouse v Federal Commissioner of Taxation at 207 per Hill J; McCormack v Commissioner of Taxation. 132 The only limits on the Commissioner's power are that the power must be exercised bona fide and for the purposes of enabling the Commissioner to perform his functions under the ITAA. In my view there is nothing to suggest that the Commissioner is acting in bad faith, or acting for a purpose other than the ascertainment of persons or entities who are or might be liable to the assessment and payment of income tax in Australia. 133 I do not accept ANZ's submission that the notices were issued for an improper purpose because they seek information in respect of persons or entities who are not liable to the assessment and payment of Australian income tax. Section 264 is meant to assist the Commissioner in ascertaining whether persons or entities are liable to pay Australian income tax. It cannot be limited in the way that ANZ contends. If ANZ's submission were to be accepted it would mean that the Commissioner's power to seek information under s 264 would be limited to information directly relating to the assessable income of Australian taxpayers. That would effectively prevent the Commissioner from carrying on an investigation as to whether or not persons may have assessable income because the Commissioner has no way of knowing whether the information sought in the notices relates to persons who are or might be liable to pay Australian income tax. 134 The notices may require the production of information relating to an individual who ultimately is found not to be liable to pay Australian income tax. But the point is that the Commissioner has no way of knowing this until the information is produced. As long as the notices were issued for the purpose of ascertaining whether persons or entities are or might be liable to pay income tax in Australia the notices will have been issued for a valid purpose. 135 The First Notice calls for the production of information relating to the accounts of customers who have a specified connection with Australia. Moreover, just prior to the schedule in the notice, which sets out the information sought, appears the following paragraph: The Australian Taxation Office (ATO) is charged with the administration of Australia's taxation and other related revenue legislation. An effective revenue administration instils community confidence into the environment in which the tax system operates. The gathering of information, strategic research and risk assessment processes are important ingredients in the proper administration of both the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 and in ensuring community expectations around the tax system are met. In this regard it is requested the information requested hereunder be provided. While the Deputy Commissioner cannot by the Deputy Commissioner's own statement invest himself or herself with power, it is evident from this paragraph, and from the nature of the information sought, that the First Notice was issued for the purpose of ascertaining whether the persons in respect of whom the information is sought, whoever they may be, are liable to pay income tax in Australia. There is nothing to suggest that the Deputy Commissioner acted for any other purpose. 136 The Second Notice is wider than the First Notice. It calls for the production of information relating to customers who have an account whose currency code is recorded as any currency other than the Vanuatu Vatu and who have provided one or more of a number of elements listed in the notice as a part of any address recorded for the customer. The Second Notice contains the same paragraph as that appearing in the First Notice at [135]. 137 While the Second Notice might result in the production of information relating to customers of ANZ Vanuatu who are not liable to pay Australian income tax, this does not mean that the notices were issued for a purpose not authorised by s 264. What matters is whether the Deputy Commissioner was acting for the purposes of the ITAA. Like the First Notice, there is nothing to suggest that the Deputy Commissioner was acting for any purpose other than the ascertainment of whether the customers who fall within the terms of the notice are liable to pay Australian income tax. 138 The respondents contended that regard could be had to the letters that were sent with the notices on 17 December 2010. I have referred to these letters above at [20] and [23]. I do not think that I can use the letters that accompanied the notices to construe the notices. The notices themselves must be sufficiently clear to enable ANZ to comply with them. However, I think that the letters can be used as evidence to support the finding that the Deputy Commissioner issued the notices for the purpose of ascertaining whether persons or entities are liable to pay Australian income tax, and thus for a purpose under the ITAA. It is clear from the letters that the notices were seeking the furnishing of such information. The letters support the respondents' contentions that the notices were issued for a purpose for which s 264 is designed. 139 Ultimately, ANZ bears the onus of establishing that the notices were issued for an improper purpose. Once it is accepted that s 264 authorises the issuing of notices that may require the disclosure of information relating to persons who are customers of ANZ Vanuatu who are not liable to pay income tax in Australia, it follows that ANZ has not discharged this onus. The Deputy Commissioner was acting in accordance with the Commissioner's responsibilities under the ITAA when he issued the two notices to ANZ. For these reasons I reject ANZ's argument that the notices were not issued for a proper purpose. Are the Notices Uncertain? 140 The last issue raised by ANZ as to the validity of the notices was that both notices were uncertain. 141 The respondents did not dispute that for a notice to be valid it must be sufficiently clear to allow the addressee of the notice to be able to identify the documents that are required to be produced. The obligation for clarity arises because of the provisions of the TAA which make failure to comply with s 264(1)(a) an offence. No one should be put at risk of committing an offence because the information that is sought is not readily identified in a manner that would allow the addressee to furnish the requested information. 142 With respect to this issue, both parties agreed that the question of validity ought to be addressed in the manner suggested by Hill J in Fieldhouse v Commissioner of Taxation, where his Honour said at 208: Where information is required by the section to be furnished, the request for information should be so framed as to be sufficiently clear to convey to the addressee what information is sought and a notice which was unintelligible would obviously be bad. However, it does not follow from this that the question of the validity of a notice should be approached carpingly by engaging in a narrow analysis of each word in an attempt to find some latent ambiguity in it. Rather the approach to be adopted is to ask in respect of any particular request whether a reasonable man in the position of the addressee of the notice can fairly comply with it and not be thereby exposed to the possibility of penalty for non-compliance having regard to the manner in which the notice is formulated. 143 A party to whom a s 264(1)(a) notice is directed may be requested to furnish information that the addressee is aware of but which is not recorded in documents in the possession of the addressee. 144 For the purpose of clarity the notice may identify the taxpayer or the class of taxpayer whose affairs are the subject of the Commissioner's inquiry. However, the notice need not necessarily contain that information because in some circumstances the particular taxpayer or group of taxpayers will not be known to the Commissioner. In other circumstances the Commissioner may not want to identify the person or persons the subject of the Commissioner's notice to the addressee. However, if the absence of that information makes the notice unintelligible to the addressee because the addressee is unable to reasonably identify the information that is sought to be furnished then the notice will be invalid for uncertainty. 145 The notice must give sufficient information to the addressee to allow the addressee to identify the information that is sought without requiring the addressee to guess or speculate upon the information that is required. The notice must be intelligible to an addressee who is prepared in good faith to respond to it. Whilst an addressee has an obligation to comply with the notice and furnish the information, the addressee must not approach the notice in the carping way referred to by Hill J in Fieldhouse v Commissioner of Taxation. The addressee is not entitled to embark upon an overzealous examination of the notice in an attempt to find an ambiguity which would allow the addressee to say that the addressee might be at risk of committing a criminal offence because the addressee might not fully comply with the notice. 146 Of course no addressee should be put in a position whereby the addressee is at risk of committing a criminal offence. However, a reasonable addressee would not approach a consideration of the notice by reasoning that because non-compliance with the notice is a criminal offence the addressee should attempt to avoid having to comply with the notice. 147 In short, whether the notice is valid will be determined by considering whether a reasonable person who has received a notice under s 264(1)(a), mindful of his or her obligations to comply with Australian law, would on the criteria identified in the notice be able to furnish the information requested in the notice. 148 ANZ argued that the notices are uncertain because the customers identified in both notices are customers of ANZ Vanuatu and the accounts are the accounts of those customers, and ANZ does not know what information a customer has given in Vanuatu. The customers are not customers of ANZ, nor are the accounts those of customers of ANZ. 149 ANZ submitted that because the contents of the customer name field in Vanuatu data held by ANZ are irreversibly marked, and because account opening forms are not held by ANZ but are held by ANZ Vanuatu in Vanuatu, ANZ does not know what information a customer may have "stated or given" to use the words in the First Notice, or "provided" to use the words in the Second Notice, in Vanuatu, and what information may be recorded in Vanuatu which is not contained in the GIW. 150 In support of this submission ANZ tendered an affidavit of Mr Lewis, who is employed by ANZ as its Head of Information Management Delivery and is responsible for the integrity of the GIW. In that affidavit Mr Lewis deposed that before customer information from ANZ Vanuatu is transferred from the Finet system to the GIW the "customer name" field is masked by ANZ Vanuatu in Vanuatu. According to Mr Lewis: It is technologically impossible to retrieve from the Vanuatu files transmitted to the GIW the information in the "customer name" field in the form it was before it was masked by ANZ Vanuatu in Vanuatu. 151 In cross-examination, Mr Lewis maintained that it was not possible to unmask the customer name field for information sent from ANZ Vanuatu to the GIW. His evidence was not disputed and must be accepted. 152 ANZ also contended that it could not be sure that the information that ANZ Vanuatu entered into Finet was accurately entered, and therefore cannot be sure that that which is contained in the GIW, which is derived from the Finet entry, is also accurate. 153 It further argued, as it had in relation to whether the notices were issued for a proper purpose, that the customers who are the subject of the notices may not be Australian taxpayers and that the notices are uncertain because they require ANZ to determine which customers are liable to pay income tax in Australia. 154 Finally, it argued that both notices are not limited to the information stored in the GIW because in both notices the criteria identifying the persons about whom information is sought is the criteria identified in the First Notice in paragraphs 1 to 4, and in the Second Notice in paragraphs 1 and 2. Moreover, ANZ also contended that neither notice limits the customers to present customers or to such customers of ANZ Vanuatu as may have had accounts during the period in respect of which the notices require the furnishing of the information from the GIW. Rather, ANZ contended that the notices refer to any customer who has had an account with ANZ Vanuatu at any time. 155 For all of those reasons ANZ argued that it could not fairly determine how the criteria set out in the two notices could be evaluated and applied. 156 ANZ also addressed particular aspects of the notices which it said make the notices invalid for uncertainty. In respect of the First Notice, which identifies the customer by reference in paragraph 3 to a person who has given "… any other Australian contact details", ANZ said the criterion is so wide as to be uncertain. It also argued in respect of the First Notice that the expression in paragraph 2, second appearing, in Schedule A to "any identifiers of the customer" is uncertain. 157 In respect of the Second Notice ANZ again contended that in paragraph 2, second appearing, the expression "any identifiers", and the expression in paragraph 3 "any identifiers of the officers of the customer", where the customer is not an actual person, are too uncertain to make the notice capable of being complied with. 158 Paragraph 3 the Second Notice requires ANZ to identify the officers of the customer. ANZ argued that it would have to know where each corporate customer was incorporated or registered so as to identify who might be an officer within the meaning of the legislation which authorises the incorporation or registration. That, it was said, would require ANZ to search in any jurisdiction in which the corporate customer might have been incorporated. 159 In its closing submissions ANZ went further claiming that in the case of both notices the notices do not identify the customers to whom the notices relate by reference to the GIW, and in those circumstances it is uncertain how far ANZ must search in order to furnish the information sought. Mr Archibald QC, who appeared for ANZ, submitted that the notices might on one reading require ANZ to approach its subsidiary, ANZ Vanuatu, and seek the information. 160 The respondents argued that both notices must be read as a whole and understood in the context of the whole of the documents. 161 The respondents contended that whether ANZ Vanuatu customers may or may not be Australian taxpayers was not to the point because first, the information sought from non-Australian taxpayers may be relevant in relation to the taxable income of Australian taxpayers, and secondly, it may be found after the information is furnished that ANZ Vanuatu's non-Australian taxpayers should be Australian taxpayers. A "fishing expedition" of the kind referred to in Industrial Equity Ltd v Deputy Commissioner of Taxation is permitted. 162 Although the identification of customer accounts is not expressly limited to information in the GIW, that, it was contended, does not make the notices themselves uncertain. There is a distinction between notices which are invalid because they are uncertain, and notices with which compliance is difficult. 163 In the case of these notices, it was contended that the notices ought to be read as requiring information about customer accounts which are only in the GIW. In those circumstances ANZ, it was said, could comply with the notices because it has the information in the GIW. If in fact ANZ has other information from other sources apart from the GIW which would identify customer accounts in the GIW it ought to use that information to comply with the notices. If the GIW and other information available to ANZ does not assist to identify customer accounts to which the notices apply then that does not make the notices uncertain, but relieves ANZ from furnishing information in relation to those customer accounts. 164 The respondents argued that the words "identifiers" or "other Australian contact details" or "officer" ought to be read in context, and having regard to the information available to ANZ in the GIW. 165 The respondents contended that there was no evidence that ANZ would find it unduly difficult or oppressive to obtain the information from the GIW and to provide the information to the Commissioner. Even if the notices required ANZ to devote considerable resources to respond to the notices that would not make the notices uncertain or oppressive: McCormack v Federal Commissioner of Taxation at 591 per Sackville J. 166 It contended that ANZ's submission that it is not able to comply with the notices because it does not know the information provided by the customer to ANZ Vanuatu should be rejected because any reasonable person in the position of ANZ would understand that the notices are directed to information recorded in the data fields in the GIW as having been conveyed by customers in connection with their own account. The information provided by Finet in Vanuatu to the GIW, which includes a customer's address, nationality, domicile and currency code, would be the information to which ANZ would need to respond. 167 The respondents put in their closing written submissions: 82. In other words, in complying with the Notices, ANZ can proceed on the basis that, to the best of its knowledge and belief, the information in the relevant fields on the GIW is a record of information given, stated or provided by the customer in connection with the account. 82.1. There is no evidence to suggest that ANZ regards the account information held on the GIW as inaccurate or unreliable for the purposes of its business and corporate users. On the contrary, the integrity and accuracy of the information on the GIW is, and has been, sufficient for the ANZ to carry out key business functions (finance, risk, marketing) and meet its regulatory and compliance and tax obligations. 82.2. Further, the claim of confidentiality advanced by ANZ must assume that the information on the GIW is the information of the customers. 83. In so far as any of the criteria contained in the Notices might arguably be construed as extending beyond information that is within the knowledge of ANZ (for example, because it is not recorded in the GIW), that would ultimately be relevant only in determining the extent to which ANZ is capable of complying with the Notices for the purposes of s 8C(1B) of the TAA. 83.1. For example, to the extent that ANZ is not capable of complying with the Notices because it does not know information that may have been conveyed by customers to ANZ Vanuatu, ANZ may have a defence to any prosecution for non-compliance with the Notices. 83.2. Taken at its highest, ANZ's submission is merely that, on a literal reading of the criteria, it is not in a position accurately to determine the outer limits of the information covered by the Notices. 83.3. While this proposition is not conceded by the Respondents, it does not in any event lead to a conclusion that ANZ "cannot fairly determine how [the criteria] are to be evaluated and applied". The Notices were neither inherently ambiguous nor unintelligible. (Footnotes omitted) 168 In determining whether these notices are uncertain, and therefore invalid, it has to be remembered that ANZ has developed an information recording system, being the GIW, which records in the case of customers of ANZ Vanuatu information provided to it by ANZ Vanuatu. ANZ is aware of the way in which ANZ Vanuatu gathers its information stored in Finet, and ANZ imposes upon ANZ Vanuatu the criteria for ANZ Vanuatu to report that information to ANZ. 169 The First Notice consists in paragraphs 1-4 of a definition of ANZ customers and their accounts about whom information is sought. ANZ customers are only those customers of ANZ Vanuatu. That follows because ANZ does not conduct a banking business in Vanuatu and, within the ANZ Group, ANZ Vanuatu conducts the only banking business in Vanuatu. 170 Therefore, ANZ knows that the customers to whom reference is made in the preamble to the First Notice are all customers of ANZ Vanuatu. The evidence suggests that the only information that ANZ has in its records of the business of ANZ Vanuatu is that which has been collected by ANZ Vanuatu in its Finet system and provided to ANZ for storage in its GIW. ANZ knows that the information it has is contained in the GIW, and on a reading of the First Notice it would understand that the only information which it must furnish is that contained in the GIW and no other information. That follows from the words "please provide the following information relating to the period of 1 July 2008 to 30 November 2010 inclusive from the Global Information Warehouse for each account", which appear in the Schedule in both notices. These words make it clear that the only information that is sought is that contained in the GIW and for the period mentioned, 1 July 2008 to 30 November 2010. 171 Because the First Notice is restricted to the information contained in the GIW, a reasonable reading of the customer accounts to which the notice is directed are those customers and those accounts which ANZ Vanuatu has provided to ANZ for inclusion in the GIW. 172 ANZ has two sources of information: first, that which is contained in the GIW; and secondly, that which is within its possession but not contained in the GIW. In respect of those customers and accounts that are identified in Schedule A in paragraphs 1-4 ANZ must interrogate the GIW to determine if any customers or accounts come within the four criteria identified in paragraphs 1-4, and interrogate its other records to determine whether other records identify customers or accounts of the kind mentioned in paragraphs 1-4. 173 Once it has determined the customers and the accounts to which the notice refers, it is clear enough, on a reasonable reading of the notice, that the only information ANZ has to provide is that contained in the GIW. In other words, if ANZ has other information in relation to the customers and accounts that is not contained in the GIW that information need not be provided. 174 In the First Notice the customers will have a connection with Australia, either because they are Australian, or are domiciled in Australia, or have a residential or business address in Australia, or an Australian address for correspondence, or Australian contact details, or have an account in Australian dollars. None of those criteria necessarily mean that the customer will be an Australian taxpayer. An Australian national may not be a taxpayer because that person may not have a taxable income. The same is true of a person who matches the other criterion. 175 However, the customer that the First Notice attempts to capture does not only possess one of the criteria in the First Notice, but also has opened an account in Vanuatu with ANZ Vanuatu. That might be explained by the person being a tourist or an expatriate resident in Vanuatu, or it might be because the person wishes to take advantage of the law of Vanuatu, which is designed to keep secret a person's financial affairs. 176 It is wrong to assume that these notices are bad because they may require ANZ to furnish information about a person who is not an Australian taxpayer. A notice under s 264(1)(a) when directed to a bank is not limited to customers of the bank who are known to be Australian taxpayers. As I have said, to impose such a restriction would render the powers given in s 264(1) nugatory insofar as the powers might be used to require banks to furnish information about their customers. 177 What the First Notice requires ANZ to address is persons who possess one of the criteria in paragraphs 1-4. If so far as ANZ knows a customer is not one who possesses any of the criteria in paragraphs 1-4 then ANZ need not furnish the information sought in respect of that customer. 178 The criteria that has been adopted is criteria which would more likely mean that the customer is an Australian taxpayer because he or she is an Australian national or domiciled in Australia or has a residential or business address in Australia or uses an account in Vanuatu in Australian dollars. Alternatively, the criteria would make it more likely that the customer would have relationships with Australian taxpayers. The First Notice requires ANZ in respect of a customer of that kind to furnish the information referred to in paragraphs 1-6 of the notice, but only if that information is contained in the GIW. 179 Indeed, as I have said, if ANZ has that information within it, but the information is not included in the GIW, ANZ is not obliged to furnish the information. The information that is sought must be in the GIW, which means that it must have been supplied by ANZ Vanuatu through the Finet system. 180 The Second Notice is less explicit insofar as it attempts to identify the customers to whom the notice seeks to address. 181 The first criterion is different to the fourth criterion in the First Notice in that it seeks customers who have an account in a currency code other than the Vanuatu Vatu. On the face of it, it is difficult to understand how if someone had for example an account in American dollars that person would be likely to be an Australian taxpayer or be in any way associated with an Australian taxpayer such that any information that is supplied would be likely to relate to an Australian taxpayer's taxable income. 182 However, the notice does not have to tell ANZ that the customer is an Australian taxpayer or likely to be so, or likely to be in some relationship with an Australian taxpayer. It must only identify for ANZ the customers to whom the notice is directed. The first criterion, that the customer is someone who has an account in a currency code apart from the Vanuatu Vatu, is very wide. However, the customers which the notice seeks to identify are addressed in the further criterion because in the case of the Second Notice, unlike the First Notice, the two criteria are conjunctive. If a customer is caught by the second criterion but not the first, ANZ would not have to produce the information sought in the notice in respect of that customer. 183 A reasonable addressee would read the Second Notice as directing it to search the GIW for customers who have an account in a currency other than the Vanuatu Vatu and who have one or more of the "identifiers" set out in the second criterion in the notice in their address code. 184 ANZ is able to determine from the criteria in the Second Notice the customers in respect of whom the Deputy Commissioner seeks the account information requested in Schedule A. I am satisfied that information regarding a customer's address is stored in the GIW and that this is not masked by ANZ Vanuatu. It can therefore be retrieved by ANZ. 185 I do not accept ANZ's submission that the reference to "any identifiers" in paragraphs 2 and 3 of the Second Notice is uncertain. In my view it is clear from the words which follow the expression that it means any piece of information in the GIW that ANZ can identify, that might be used to identify the customer, such as the customer's date of birth, gender, telephone number or address. Where the customer caught by the criteria is a company, and ANZ has details or "identifiers" of officers of that company in the GIW, then it must provide that information. However, given that the notice is limited to information contained in the GIW, ANZ is not required to search elsewhere for these details. ANZ is merely required to search the GIW for the information sought in Schedule A relating to the customers caught by the criteria. If no customers are caught by the criteria no information will be furnished. Similarly ANZ is only required to use its best endeavours to find the information sought in respect of any customers caught by the criteria when it searches the GIW. It may be that the information is not in the GIW, or ANZ is simply unable to link the information with the customers caught by the criteria, although Mr Lewis' evidence would suggest that the way which information is stored in the GIW would mean this is unlikely. 186 A reasonable addressee would read the notices in a way that would not mean the notices are uncertain. The notices require ANZ to produce information contained in the GIW. The information ANZ is required to produce is set out in the schedules to the notices. The customers in respect of whom the information must be furnished are those caught by the criteria set out in the notices. Whether these customers are or might be liable to pay Australian income tax is not something that the notices require ANZ to determine. Whether the information furnished proves to be accurate is also not to the point. Nor is it to the point whether ANZ knows what information a customer has "stated or given" or "provided". All ANZ has to do is to furnish to the Deputy Commissioner the information sought in the notices that is contained in the GIW. Conclusion 187 In my view s 264 authorises the Deputy Commissioner to issue a notice to an Australian company asking it to furnish information that is stored in Australia. There is no reason to read s 264 as subject to a foreign law purporting to have extra-territorial effect in circumstances where the relevant information is held by an Australian company in Australia. In any event, I do not think that disclosure of the information would breach the non-statutory or statutory obligations of confidence under the law of Vanuatu. 188 I reject ANZ's argument that the notices were not issued for a proper purpose. In my view s 264 allows the Deputy Commissioner to issue notices that may require the disclosure of information relating to persons who are not liable to pay income tax in Australia, providing that the notices are issued for the purposes of the ITAA, including the ascertainment of whether an individual or entity is liable to pay Australian income tax. ANZ has not established that the notices were issued for an improper purpose. 189 I also reject ANZ's argument that the notices are uncertain. In my view the notices are directed to information contained in the GIW. ANZ is required to produce information stored in the GIW that meets the criteria set out in the notices. It matters not that the information produced may not be information relating to the affairs of persons who are or may be liable to the assessment and payment of income tax in Australia. It also does not matter that ANZ cannot verify the accuracy of the information contained in the GIW. 190 Finally, it is not appropriate to make any declarations or orders as to whether ANZ is or is "not capable of complying" with the notices, within the meaning of those words in s 8C(1B) of the TAA, at this stage. Whether ANZ is capable of complying with the notices will only arise if a prosecution is brought under s 8C of the TAA. It will be a matter for the court that has jurisdiction to hear the prosecution to determine whether ANZ is capable of complying with the notices at the time the prosecution is brought. The machinery to enforce compliance with s 264 is in the TAA and, if necessary, the respondents should use the statutory procedure in the TAA to enforce compliance with the notices. 191 It is also not necessary to make the first declaration or order sought in the cross-claim. The second declaration or order sought in the cross-claim should not be made. 192 For these reasons both the applicant's application and the respondents' cross-claim should be dismissed. I will hear the parties as to costs. I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. Associate: Dated: 9 March 2012