FEDERAL COURT OF AUSTRALIA Binqld Finances Pty Ltd (In Liq) v Tamarama Fresh Juices Australia Pty Limited; In the Matter of Binqld Finances Pty Ltd (In Liq) [2017] FCA 358 File number: NSD 1600 of 2015 Judge: FOSTER J Date of Orders: 31 March 2017 Date of Publication of Reasons: 5 April 2017 Catchwords: TAXATION – whether, upon the true construction of s 355-75 of the Taxation Administration Act 1953 (Cth) and in the events which have happened, the Commissioner of Taxation for the Commonwealth can be compelled to answer a subpoena for production calling for documents which contain protected information because the disclosure of such documents is necessary for the purpose of carrying into effect the provisions of a taxation law within the meaning of the exception provided for in s 355-75 Legislation: Administrative Decisions (Judicial Review) Act 1977 Bankruptcy Act 1966 (Cth), s 81 Corporations Act 2001 (Cth) Income Tax and Social Services Contribution Act 1936–1952, s 16 Income Tax Assessment Act 1936 (Cth), s 263 Income Tax Assessment Act 1997 (Cth), s 995-1 Judiciary Act 1903 (Cth), s 39B Taxation Administration Act 1953 (Cth), Div 355 of Sch 1 Taxation (Unpaid Company Tax) Assessment Act 1982 (Cth) Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010 (Cth) Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010 Federal Court Rules 2011, r 24.15 Cases cited: 12 Years Juice Foods Australia Pty Ltd v Federal Commissioner of Taxation [2015] FCA 741 BCI Finances Pty Limited (In Liq) v Binetter (No 4) (2016) 117 ACSR 18; [2016] FCA 1351 Canadian Pacific Tobacco Company Limited v Stapleton (1952) 86 CLR 1 Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257 Deputy Commissioner of Taxation v Nika Management Services Pty Ltd (unreported, Supreme Court, NSW, 6 December 1995) Donnelly v Davison (2000) 105 FCR 1 Hutchins v Federal Commissioner of Taxation (1986) 18 ATR 599 Norper Investments Pty Ltd v Deputy Commissioner of Taxation (1977) 7 ATR 463 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 Propend Finance Pty Limited v Commissioner of Australian Federal Police (1994) 27 ATR 584 Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 R v Murphy (1992) 23 ATR 422 R v Yates (1991) 102 ALR 673 Re Confitt Constructions Pty Ltd (In Liq) [1999] 2 Qd R 490 Re Fortex Pty Ltd and the Income Tax Assessment Act (1986) 17 ATR 690 Simionato Holdings Pty Ltd v Commissioner of Taxation (1995) 60 FCR 375 Date of hearing: 24 March 2017 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 116 Counsel for the First, Third, Fourth, Fifth, Sixth and Seventh Defendants: Mr J Hmelnitsky SC and Ms TL Phillips Solicitor for the First, Third, Fourth, Fifth, Sixth and Seventh Defendants: Speed and Stracey Lawyers Counsel for the Commissioner of Taxation: Mr S Lloyd SC and Mr L Livingston Solicitor for the Commissioner of Taxation: Australian Government Solicitor ORDERS NSD 1600 of 2015 IN THE MATTER OF BINQLD FINANCES PTY LTD (ACN 119 243 220) (IN LIQUIDATION) BETWEEN: BINQLD FINANCES PTY LTD (ACN 119 243 220) (IN LIQUIDATION) First Plaintiff LIGON 268 PTY LTD (ACN 051 824 081) (IN LIQUIDATION) Second Plaintiff E.G.L. DEVELOPMENT (CANBERRA) PTY LIMITED (ACN 008 517 646) (IN LIQUIDATION) (and another named in the Schedule) Third Plaintiff AND: TAMARAMA FRESH JUICES AUSTRALIA PTY LIMITED (ACN 003 994 072) First Defendant LIGON 237 PTY LIMITED (ACN 003 994 090) Second Defendant 12 YEARS JUICE PTY LTD (ACN 102 660 024) (and others named in the Schedule) Third Defendant JUDGE: FOSTER J DATE OF ORDER: 31 MARCH 2017 THE COURT ORDERS THAT: 1. The Interlocutory Application filed by the Commissioner of Taxation for the Commonwealth of Australia (Commissioner) on 3 February 2017 be dismissed. 2. The Commissioner pay the costs of the first and third to seventh defendants (the Nudie entities) of and incidental to the said Interlocutory Application. 3. Orders 1 and 2 above (the dismissal orders) be stayed until the later of: (a) If the Commissioner does not apply for leave to appeal from the dismissal orders by 4.00 pm on 18 April 2017, 4.01 pm on 18 April 2017; or (b) If the Commissioner applies for leave to appeal from the dismissal orders on or before 4.00 pm on 18 April 2017, when that Application for Leave is finally determined. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FOSTER J 1 On 12 December 2016, the plaintiffs served a subpoena to produce documents dated 9 December 2016 (subpoena) upon the Proper Officer of the Australian Taxation Office (ATO). The subpoena required the production of three particular categories of documents to a Registrar of the Court on 18 January 2017. 2 Attached to these Reasons for Judgment and marked "A" is a copy of the schedule to the subpoena in which the categories of documents required to be produced are described in detail. 3 When the subpoena was returned before the Registrar on 18 January 2017, the call on the subpoena was deferred to 1 February 2017 in order to allow the ATO time to consider its positon. On 1 February 2017, that call was again deferred, on this occasion to the next case management hearing fixed before me on 10 February 2017. 4 On 3 February 2017, the Commissioner of Taxation (Commissioner) filed an Interlocutory Application by which he sought an order pursuant to r 24.15 of the Federal Court Rules 2011 setting aside the subpoena. 5 The Commissioner also claimed an order for costs. 6 Last Friday (31 March 2017), I dismissed the Commissioner's claim for an order setting aside the subpoena. These are my reasons for doing so. Background 7 On 15 January 2015, the liquidators of B.C.I. Finances Pty Limited (In Liq) (BCI Finances) (Messrs Sheahan and Lock) caused that company to commence a proceeding against a number of individuals who are members of the Binetter family and against four corporations associated with that family, Erma Nominees Pty Limited, Ligon 159 Pty Limited, Ligon 158 Pty Limited and Milgerd Nominees Pty Ltd. That proceeding was commenced in the South Australian Registry of this Court (proceeding SAD 5 of 2015) (SAD5). It was subsequently transferred to the Sydney Registry. On 5 June 2015, I granted leave to BCI Finances to add as additional plaintiffs each of E.G.L. Development (Canberra) Pty Limited (In Liq), Ligon 268 Pty Ltd (In Liq) and Binqld Finances Pty Ltd (In Liq). 8 The Court has had to deal with many interlocutory applications in SAD5 over the last two years including multiple applications for and in relation to freezing orders. 9 On 18 November 2016, Gleeson J delivered a judgment in SAD5 by which her Honour determined all questions of liability (BCI Finances Pty Limited (In Liq) v Binetter (No 4) (2016) 117 ACSR 18; [2016] FCA 1351) (the liability judgment). 10 In the liability judgment, her Honour indicated that, subject to being satisfied that some relief was warranted, she would find in favour of the plaintiffs against all defendants except Margaret Binetter (the third defendant) and Gary Robert Binetter (the fifth defendant). Her Honour reserved for further consideration all questions of relief and the question of costs. 11 Her Honour did not deal with pecuniary relief in the liability judgment. Her Honour has since heard the plaintiffs' application for such relief and has reserved her judgment in respect of that application. 12 It can be immediately seen from even the most cursory consideration of the liability judgment that SAD5 is a very complex piece of litigation involving many questions of fact and law. It is sufficient for present purposes for me to adopt [1]–[8] of her Honour's Reasons for Judgment (reasons) as providing an adequate thumbnail sketch of the subject matter of SAD5. At those paragraphs, her Honour said: The applicants are four companies formerly associated with the families of Erwin and Emil Binetter, two brothers who came to Australia from Eastern Europe as refugees in 1950. Erwin and Emil Binetter are now both deceased. After an extensive audit by the Australian Taxation Office ("ATO") which commenced in about July 2006 ("tax audit"), the Commissioner of Taxation ("Commissioner") issued notices of assessment, amended assessment and penalty assessment to the various applicants between December 2009 and July 2010 ("revised assessments"). In the case of the second applicant ("EGL" or "EGL Development"), the revised assessments go back as far as the year ended 30 June 1992. In order to issue revised assessments going back so far in time, the Commissioner was required to form the opinion that there had been fraud or evasion. After several years disputing the revised assessments, the applicants went into liquidation. The joint and several liquidators of each of the applicants are John Sheahan and Ian Russell Lock ("liquidators"). The liquidators claim that the applicants are entitled to the monetary relief from the respondents, quantified principally by reference to the tax liabilities arising from the revised assessments. Claims for relief are also made with respect to the costs of the winding up of the applicants and there are claims for ancillary relief in the nature of charging orders over various identified assets. The claims totalled over $120 million as at 27 September 2015. In their opening submissions, the liquidators stated that the claims are primarily made on the basis of rights to equitable compensation. The claims are pleaded in a second further amended statement of claim filed 7 September 2015 ("statement of claim"). In summary, claims are based on allegations of: (1) breach of fiduciary, common law, equitable and or statutory duties owed to the various applicants by various respondents who were directors of the applicants at various times; and (2) knowing participation by other respondents in the breaches of duty by the director respondents. The alleged breaches by the director respondents concern the applicants' dealings with two banks in Israel: the Bank Hapoalim in the case of the first applicant ("BCI" or "BCI Finances") and the Israel Discount Bank ("IDB") in the case of the other applicants. The liquidators' case is based on a complex analysis of the transactions between the applicants and the two Israeli banks, and on the factual context in which those transactions took place from 1988. In summary, the liquidators argue that the respondents participated in a scheme for the purpose of evading or avoiding liability to pay income tax. The alleged scheme involved, as an important element, using funds in Switzerland or Israel (sometimes referred to as "offshore deposits") as security for advances from the Israeli banks of amounts equivalent to the offshore deposits. The liquidators contend that the respondents' conduct in participating in the scheme led the applicants to incur the liabilities which arose when the revised assessments were issued. Those liabilities comprise income tax, penalties and interest incurred under the Income Tax Assessment Act 1936 (Cth) ("ITAA 1936"), the Income Tax Assessment Act 1997 (Cth) ("ITAA 1997") and the Taxation Administration Act 1953 (Cth) ("TAA"). In summary, the liabilities arose from the disallowance of deductions for interest expenses claimed to have been paid to the Israeli banks and the inclusion of amounts transferred from the Israeli banks to the applicants as part of the applicants' assessable income. 13 On 3 December 2015, a little over ten months after SAD5 was commenced and just over two months after the liability hearing had concluded before Gleeson J, Messrs Sheahan and Lock caused the plaintiffs in SAD5 to commence this proceeding (NSD 1600 of 2015) against Tamarama Fresh Juices Australia Pty Ltd (Tamarama) and five other corporations (the third to seventh defendants) which had been associated with Tamarama in a significant Australian business called "Nudie Juices". I shall refer to Tamarama and the other five Nudie corporations as the Nudie entities. 14 The Nudie Juice business had been conducted by that side of the family of which Erwin Binetter was the patriarch. His sons Andrew and Michael Binetter had operated that business in recent years until it was sold in late 2014. The other Binetter-associated defendants in this proceeding were also connected to Erwin Binetter's side of the family. The eleventh and thirteenth defendants are domiciled in Israel. The twelfth defendant is domiciled in Switzerland. BCI Finances has discontinued all of its claims against the eleventh and twelfth defendants. 15 The allegations made by the plaintiffs in this proceeding are remarkably similar to the allegations made by the plaintiffs in SAD5. This proceeding is also a very complex matter both factually and legally. It may be that there is some overlap between the damages or compensation claimed in this proceeding and the pecuniary relief claimed in SAD5 but this will be a matter for trial if this proceeding survives the attack made by the Nudie entities to which I shall now refer. 16 On 24 June 2016, the Nudie entities filed an Interlocutory Application (the Nudie stay application) in which they sought the following relief: 1. An order pursuant to s 23 of the Federal Court of Australia Act 1976 that the whole of the proceeding be permanently stayed. 2. In the alternative to order 1 above, an order pursuant to: a. s 31A(2) of the Federal Court of Australia Act 1976; or b. rule 26.01(b) or (d) of the Federal Court Rules 2011, that the whole of the proceeding be summarily dismissed. 3. An order that the Applicants provide security for the costs of the First, Third, Fourth, Fifth, Sixth and Seventh Respondents of the proceeding. 4. Costs. 5. Such further orders as the Court sees fit. 17 The Nudie entities' claims for an order that the plaintiffs provide security for their costs have now been resolved. The Commissioner has given an undertaking to the Court to pay to the party entitled any costs order made against the plaintiffs or any of them. That undertaking also inures for the benefit of the second, eighth, ninth and tenth defendants (the Winmar companies). 18 The hearing of the Nudie stay application was not fixed until recently because the parties had sensibly held it in abeyance pending delivery of the liability judgment. 19 On 16 December 2016, the other Binetter defendants in this proceeding ie the Winmar companies filed an Interlocutory Application (the Winmar stay application) in which they sought the same relief as the Nudie entities had claimed in the Nudie stay application. 20 The hearing of the two stay applications referred to at [16] and [19] above was fixed for 31 March 2017 with a marking of "Not before 11.30 am". 21 The Nudie entities sought and procured leave to issue the subpoena in aid of the claims for relief made by them in the Nudie stay application. The Stay Applications 22 In support of the two stay applications, the Binetter interests will argue that the plaintiffs in this proceeding who are also the plaintiffs in SAD5 are estopped from bringing this proceeding upon the basis of the principles explained by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 and that, in any event, this proceeding is an abuse of process. 23 In this proceeding, so the argument runs, the liquidators, who control all of the plaintiffs in both proceedings, seek to establish the involvement and participation of the Nudie entities in the very breaches of duties that were alleged in SAD5 by reason of the common directorship of the plaintiffs and the Nudie entities with the consequence that the Nudie entities are said to have known or to be fixed with the knowledge of the scheme involving the Israeli and Swiss banks (the eleventh, twelfth and thirteenth defendants in this proceeding). The Nudie entities argue that the plaintiffs in this proceeding seek to re-agitate in this proceeding identical issues to those litigated by them in SAD5 and determined by Gleeson J in the liability judgment. The Winmar companies argue the same points. 24 The Nudie entities also contend that, because the plaintiffs did not join them as defendants in SAD5, having made a deliberate forensic and strategic decision not to do so, they are now estopped from proceeding against the Nudie entities in this proceeding. The Nudie entities also submit that, for essentially the same reasons, this proceeding is an abuse of process. The Winmar companies make the same contentions. 25 The Commissioner is the only external creditor of each of the plaintiffs. 26 It will be argued by the Nudie entities and the Winmar companies that the choices made in early 2015 by the liquidators of the plaintiffs as to which individuals and Binetter-related entities would be sued by one or more of the plaintiffs, and which would not, and the choices made by the Commissioner as to which Binetter-related entities would be sued directly by him, and which would not, were decisions made by the liquidators and several officers of the ATO acting in concert pursuant to an agreed plan of action which had been devised by those persons with the intention of securing control of the proceeds of sale of the Nudie Juice business in order to recoup the losses to the revenue occasioned by the Binetters' fraudulent tax evasion scheme, which was at the heart of the reasons given by Gleeson J for finding all but two of the defendants guilty of multiple breaches of duty in the liability judgment. 27 The documents sought by the Nudie entities by means of the subpoena will very likely expose for the consideration and evaluation by the Court the conduct of the liquidators and of the ATO officers which led to SAD5 being commenced in early 2015 with only one plaintiff, BCI Finances, and this proceeding being commenced on 3 December 2015, with four plaintiffs, the same four plaintiffs who were, by then, also the plaintiffs in SAD5, the second, third and fourth plaintiffs having been added as such on 7 June 2015. Some Important Facts 28 In support of his application to set aside the subpoena, the Commissioner read and relied upon the following affidavits, namely, the affidavits of: (1) Kathleen Chau affirmed on 3 March 2017; (2) Kathleen Chau affirmed on 10 March 2017; (3) Prishika Raj affirmed on 3 March 2017; (4) Prishika Raj affirmed on 10 March 2017; and (5) Prishika Raj affirmed on 23 March 2017. 29 He also tendered updated versions of the two tables which had been annexed to Ms Raj's affidavits. Those updated tables became Exhibits A and B respectively. 30 The Nudie entities did not tender any evidence on the question of whether the subpoena should be set aside. They contented themselves with the written and oral arguments which they presented to the Court. 31 The evidence tendered by the Commissioner established that: (a) Each of the documents called for by the subpoena had been received by the Commissioner or sent to the liquidators by the Commissioner for the purposes of tax recovery in accordance with the Commissioner's functions under Ch 2 of Sch 1 to the Tax Administration Act 1953 (Cth) (TAA); and (b) The documents in question were: (i) Provided by the liquidators to the Commissioner, or by the Commissioner to the liquidators, in order to enable the Commissioner to consider the liquidators' request for indemnity from the Commissioner for the costs of litigation in relation to debts owed to creditors, including the Commissioner; (ii) Provided by the liquidators to the Commissioner, or by the Commissioner to the liquidators, in order to facilitate the progress of tax recovery proceedings, including by providing updates from the liquidators to the Commissioner regarding the use of indemnity funds and the progress of liquidation proceedings; or (iii) Disclosed by the Commissioner to the liquidators, in the course of performing his duties under s 355-50 of Sch 1 to the TAA, in order to assist with proceedings to recover revenue. 32 At par 22 of her affidavit affirmed on 3 March 2017, Ms Chau said, in respect of that category of documents described at [31(b)(iii)] above: These documents were provided to the Liquidator by the Commissioner under s355-50 of Schedule 1 to the TAA to assist with proceedings to recover revenue because the causes of action run by the liquidators would facilitate the core of the Commissioner's duties, which is recovery of taxation revenue. But for the SAD 5 and SAD [sic] 1600 proceedings, the Commissioner would not have been able to recover any funds in relation to breaches of the taxation law by certain entities because the Commissioner was the sole third party creditor of the Nudie entities. 33 The Commissioner also proved that the information in the documents described at [31] above was acquired or acquired and communicated by him or officers of the ATO in the fulfilment of functions "as a taxation officer" and for the purposes of a taxation law. In addition, the evidence established that each of the documents called for by the subpoena was obtained by or disclosed to the Commissioner or officers of the ATO or disclosed to the liquidators for the purposes of tax recovery in accordance with the Commissioner's functions under Ch 2 of Sch 1 to the TAA. In addition, the documents referred to at [31(b)(iii)] above were communicated to the liquidators under a law that is a taxation law, namely, s 355-50 of Sch 1 to the TAA. 34 Accordingly, all of the documents called for by the subpoena were, for the purposes of s 355-30(1)(a), disclosed or obtained under or for the purposes of a law that was a taxation law when the information was disclosed or obtained. 35 Next, the evidence of Ms Raj established that the information in each document called for by the subpoena relates to the affairs of one or more entities to which the document relates. In particular, that evidence established that the documents called for by the subpoena can be divided into three separate categories by reference to the contents of those documents: (a) Documents in the first category contain information about freezing orders and include strategic discussions, commercially sensitive material, financial information, details of company structures, and discussions of liabilities and legal affairs in relation to entities that may be affected by the freezing orders in the substantive proceedings. These entities include entities that are not parties to SAD5 or to this proceeding; (b) Documents in the second category contain information about commencing proceedings against the entities to which these documents relate. These documents include discussion about financial affairs, information about financial relationships, information about legal affairs and information about strategic affairs in relation to entities that are not parties to this proceeding or to SAD5; and (c) Documents in the third category contain information about entities and include information about financial and business affairs and communications and accounts with financial institutions. 36 For the reasons explained at [35] above, each of the documents called for by the subpoena contains information that relates to the affairs of an entity (as to which, see s 355-30(1)(b) of the TAA). 37 For the purposes of s 355-30(1)(a)(c), the evidence established that the information in each document that is called for by the subpoena enables identification of the entity to which the information relates, either by disclosing the name of the entity directly, or its business details, or the court proceedings in which it is involved, or its financial information, or by otherwise enabling the entity to be identified upon reading the document in its context. 38 In s 355-75 of the TAA, "protected information" is information that: (a) Was disclosed or obtained under or for the purposes of a law that was a taxation law when the information was disclosed or obtained (s 355-30(1)(a)); (b) Relates to the affairs of an entity (s 355-30(1)(b)); and (c) Identifies, or is reasonably capable of being used to identify, the entity (s 355-30(1)(c)). 39 In light of the evidence of Ms Chau and Ms Raj, there is no doubt that all of the information in the documents called for by the subpoena is "protected information" as defined in s 355-30 of the TAA and thus is also "protected information" within the meaning of that expression in s 355-75 of the TAA. I so find. The Authorities on the Former Secrecy Provisions 40 In the period from 1936 to 2010, the relevant secrecy provisions were contained in s 16 of the Income Tax Assessment Act 1936 (Cth) (1936 Act). Some amendments were made to that section from time to time but the substance of the prohibition and the exceptions thereto remained the same throughout that period. 41 In December 2010, Div 355 of Sch 1 to the TAA came into force. That division enacted an entirely new secrecy regime which, for the most part, was not intended to change the existing law. At the same time, s 16 of the 1936 Act was repealed. 42 It is necessary, I think, to consider the law as it was applied under s 16 of the 1936 Act in order to appreciate the setting in which the 2010 amendments were made and to arrive at a correct interpretation of the secrecy provisions currently in force. 43 For these reasons, I now turn to the authorities on s 16 of the 1936 Act. 44 The first case that requires consideration is the decision of the High Court in Canadian Pacific Tobacco Company Limited v Stapleton (1952) 86 CLR 1 (Canadian Pacific). In that case, Dixon CJ, at first instance, and subsequently the Full Court (comprising McTiernan, Williams and Kitto JJ) were required to consider certain aspects of s 16 of the Income Tax and Social Services Contribution Act 1936–1952. At the time when Canadian Pacific was heard and decided, s 16 of the 1936 Act was in the following terms: (1) For the purposes of this section, 'officer' means a person who is or has been appointed or employed by the Commonwealth or by a State, and who by reason of that appointment or employment, or in the course of that employment, may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax. (2) Subject to this section, an officer shall not either directly or indirectly, except in the performance of any duty as an officer, and either while he is, or after he ceases to be an officer, make a record of, or divulge or communicate to any person any such information so acquired by him. (3) An officer shall not be required to produce in Court any return, assessment or notice of assessment, or to divulge or communicate to any Court any matter or thing coming under his notice in the performance of his duties as an officer, except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax. 45 A taxation officer (Mr Tobin) had obtained information in the course of an interview with a company director (Mr Pooley) in relation to transactions said to be in breach of an undertaking given in bankruptcy proceedings in which the Commissioner had lodged the only proof of debt. In that proof, the Commissioner claimed unpaid income tax and additional tax. When the contempt matter came before Dixon CJ, Counsel for Canadian Pacific objected to any evidence being given by Mr Tobin of a conversation which he had had with Mr Pooley on the ground that, by virtue of the provisions of s 16(2) of the 1936 Act, it was not competent for Mr Tobin to give evidence of that conversation and, in any event, that, having regard to the provisions of s 16(3) of the 1936 Act, the Court should, in the exercise of its discretion, exclude the evidence of the conversation. 46 At the foot of 5 in Canadian Pacific, Dixon CJ said that a very wide meaning should be given to the words in s 16(1) … "disclosed or obtained under the provisions of [the 1936 Act] or of any previous law of the Commonwealth relating to income tax". At 5–6, his Honour said: Having regard to the fact that the authority was produced, to the terms of s. 232 which are very wide and to the fact that the end in view, the end result so to speak, of the proceedings is the vindication of the revenue and the collection of the sums owing, I am disposed to think that the definition [referring to the clause extracted above] is sufficiently fulfilled. 47 His Honour then moved to consider the correct interpretation of s 16(2) of the 1936 Act. At 6–7, his Honour said: But, in any case, I think that the words "except in the performance of any duty as an officer" [in s 16(2)] ought to receive a very wide interpretation. The word "duty" there is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word "function". The exception governs all that is incidental to the carrying out of what is commonly called "the duties of an officer's employment"; that is to say, the functions and proper actions which his employment authorizes. In a case of this description I should think that did include the making of an affidavit in this Court, in a proceeding for the ultimate obtaining of revenue, even if the word "divulge" is used in a sense which includes the giving of evidence. 48 His Honour then made some remarks concerning s 16(3) which are not presently relevant. His Honour ultimately took the view that he would not exclude the evidence in the exercise of his discretion. 49 In the Full Court in Canadian Pacific, McTiernan J agreed with the construction which Dixon CJ had placed upon s 16. His Honour held that the exception provided for in s 16(2) of the 1936 Act applied because the furnishing of the information which was contained in that affidavit was connected with the office in which Mr Tobin was employed by the Commonwealth. His Honour went on to hold that the furnishing of this information for use as evidence in the motion before the Chief Justice was done in performance of Mr Tobin's duty as an officer. Williams and Kitto JJ agreed with McTiernan J. In a short judgment, Williams J said, in respect of s 16(3) of the 1936 Act (at 11): In express terms the sub-section only protects an officer from being required to do those things, it does not forbid his doing them. The difference between compellability and competency to give evidence is well known and the sub-section is concerned only with compellability and not with competency. 50 Justice Kitto agreed with the decision which Dixon CJ gave and also with the reasons which the Chief Justice had given for that decision. 51 In Norper Investments Pty Ltd v Deputy Commissioner of Taxation (1977) 7 ATR 463 (Norper), a question arose as to whether the Deputy Commissioner was obliged to answer a subpoena for production served upon by him by the defendant in a winding up petition (Norper). The Deputy Commissioner had filed a winding up petition against Norper seeking to wind up that corporation on a debt which comprised unpaid tax. Norper served a subpoena upon the Deputy Commissioner seeking documents relating to its own affairs. Counsel for the Deputy Commissioner resisted production upon two bases: First, that the documents called for were not sufficiently identified or specified and, second, upon the basis that the Deputy Commissioner could not be compelled to produce the documents because of the terms of s 16(3) of the 1936 Act. 52 Justice Needham rejected the first argument. He then considered the second argument. After quoting s 16(3) of the 1936 Act, his Honour said (at 463–464): It is suggested in the objection that the hearing of a petition for the winding-up of the company is not a procedure engaged in for the purpose of carrying into effect the provisions of the Act. In my opinion the Commissioner in recovering tax is acting for the purpose of carrying into effect the provisions of the Act. It is suggested that the issue of a petition for the winding-up of a company upon which an assessment has been served is not collecting or attempting to collect tax. In my opinion the issue of the process by the Commissioner, while it is a process available to him under the Companies Act, is an act done by him for the purpose of carrying into effect a duty imposed upon him under the Act of collecting taxation as it is assessed. I think it would be quite unreal to say that he was, in issuing a petition, not performing that duty which is imposed upon him under the Act. Therefore, I reject the objections to the subpoena. 53 In Re Fortex Pty Ltd and the Income Tax Assessment Act (1986) 17 ATR 690 (Fortex), Enderby J was called upon to consider s 16 of the 1936 Act which was in substantially the same form as it had been since at least 1952. At 697–698, his Honour said: [Counsel for the taxpayer (applicant)] made a final submission that, if all these submissions failed, then the applicant came within the exception to s 16 in sub-s (3) that "... it (was) necessary ...(that there be inspection) for the purpose of carrying into effect the provisions of [the 1936] Act …" This last submission would involve a finding that the role of the respondent in such an appeal is a role performed by his officers and cast upon him and them by the provisions of the [1936] Act and as such, a role he has necessarily to perform. In my opinion, the appeal sections of the Act do have that effect. I have little difficulty accepting that part of the submission. However, the applicant has to go further than persuade me that the respondent's role as a litigant is a role necessarily cast upon him by the [1936] Act. He has, also in my opinion, to persuade me that it is necessary for the proper performance of that role as a litigant that the documents be inspected. This is not an application for discovery. Discovery has been had. If it is not necessary that the documents be inspected by the applicant, then the applicant would not bring himself within the exception. I propose to consider this last submission first, because if it is upheld then the other submissions do not arise for consideration. Even if the documents qualify for the privilege described in s 16, they would escape, in the circumstances of this case, because of the exception. However, before doing so, it should be noted there is a question of whether the appropriate source of the privilege is s 16(2) or s 16(3) but in my opinion, it doesn't matter. In my opinion, s 16(2) does not give privilege in a situation where an "officer" is ordered by a Court, in a situation such as this, in the interests of ensuring a fair and just hearing of an appeal, to allow a person, such as the applicant, to have inspection of a document for which the only privilege claimed is a s 16 privilege. Such an inspection would be a divulging or communicating of information to another person but it would be a divulging or communicating done as an incident to the performance of his duty as an officer because those duties, in my opinion, extend to complying with orders of a Court in the conduct of litigation such as this in which the respondent is a party. A consideration of s 16(3) also requires a consideration of the part played in the administration of justice by discovery and inspection. It also requires a consideration of the words of its exception and in my opinion, comes closer to the problem I have to consider than sub-s (2). If the Parliamentary draftsman directly put his mind to the question I am considering, I consider he thought of the solution in terms of sub-s (3) rather than sub-s (2). Sub-section (3) by itself strictly only applies to the Court. It does not apply to a person other than the Court unless that is an implication to be read in. There is no point in there being a prohibition against production to a Court unless the prohibition extends to the parties. Notwithstanding the clear prohibition in sub-s (3), Mr Burns, while arguing strongly against the inspection of the documents by the applicant, accepted and told me that the respondent had no objection to the documents being produced to me and seen by me. This seemed to involve an acceptance that if the Court thought it necessary to see the documents then the sub-section did not apply. It seems to follow that if it does not apply to that extent, it would be because the divulging or communicating would be done for the purpose of carrying into effect the provisions of the Act. It is clear there can be cases where a judge declines discovery and also inspection because discovery and inspection are not necessary for a fair trial. There are other cases where they are essential. In my opinion, in those circumstances, s 16(2) does not prevent a divulging or communicating by an officer of the respondent by the production of documents in this way, if the Court, in the exercise of its judgment, considers that the administration of justice requires that it be done and so orders. In such a case, the officer would be acting in the performance of his duty. Similarly in my opinion, in such circumstances, s 16(3) does not operate to prevent production to the Court. It may so operate in other circumstances but not these. Mr Burns was correct in the concession he made. I am also of the opinion that the sub-section does not prevent the Court ordering that in the interests of justice and the proper fair hearing of an appeal, a litigant such as the applicant should have inspection of the documents if the Court considers them relevant and necessary. The Court's order makes the divulging or communicating necessary for the purpose of carrying into effect the provisions of the Act. 54 In Fortex, Enderby J analysed the issue tendered for consideration by him in respect of s 16 as a question of whether or not certain documents were privileged. With respect, I do not agree that s 16 can be construed as a source or foundation for a substantive category of privilege. Further, his Honour took the view that, if the Court thought it necessary to inspect the documents under challenge, then s 16(3) did not apply. His Honour reasoned that the production of such documents under compulsion as a result of an order of the Court would be done for the purpose of carrying into effect the provisions of the 1936 Act and that any officer who produced documents in answer to such an order would simply be doing his duty and thus fall within the relevant exception in s 16(3) of the 1936 Act. Again, I must respectfully disagree with his Honour's reasoning. The whole purpose of s 16(3) was to absolve an officer (as defined) from being required to produce material to the Court except when it was necessary to do so for the purpose of carrying into effect the provisions of the 1936 Act or other appropriate laws of the Commonwealth. 55 In Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257 (Nestle), the Full Court of this Court held that proceedings under the Administrative Decisions (Judicial Review) Act 1977 (Cth) for the review of a decision of the Commissioner of Taxation under s 206 of the 1936 Act are proceedings referable to the imposition, assessment, collection or recovery of revenue. The Court went on to hold that, in any such proceedings, it is "in the performance of any duty as an officer" within s 16(2) of the 1936 Act and accordingly not in contravention of s 16(2) for officers to comply with orders for discovery even though information of the kind referred to in the subsection is thereby divulged. The Full Court also held that the prohibition on the divulging of information imposed by s 16(2) of the 1936 Act is restricted to the divulging of information to "any person" which expression does not apply to a Court. The Full Court also held that a proceeding for judicial review of the kind which was before it is litigation concerned with "the carrying into effect the provisions of" the 1936 Act within s 16(3) of the 1936 Act so that in such proceedings an order to produce documents to the Court which are otherwise within the subsection cannot be resisted by officers of the Commissioner, such production being encompassed by the exception to the prohibition imposed by s 16(3) of the 1936 Act. By the time of the decision in Nestle, there had been amendments to s 16(3). However, these did not change the substance of the subsection. 56 At 261–263 in Nestle, the Full Court said: The principal question argued before us was whether s 16 rendered the documents in the possession of the Commissioner relating to his investigation of the taxpayer's affairs immune from the processes of discovery and inspection. The section has proved a fertile field for litigation, but it is now well tilled by judicial decision and little arable land remains. Section 16 is designed to preserve secrecy about a taxpayer's affairs when they come before the Commissioner and any officer. The central provisions of the section are subss (2) and (3). The effect of subs (2) is that an officer is prohibited, except in the performance of any duty as an officer, either while he is or after he ceases to be an officer, from making a record of or divulging or communicating to any person any information respecting the affairs of another person acquired by the officer. The expression "except in the performance of any duty as an officer" ought to receive a very wide interpretation. In Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1 Dixon CJ said at 6 that the word "duty": ".. is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word 'function'. The exception governs all that is incidental to the carrying out of what is commonly called 'the duties of an officer's employment'; that is to say, the functions and proper actions which his employment authorises. In a case of this description I should think that did include the making of an affidavit in this Court, in a proceeding for the ultimate obtaining of revenue, even if the word 'divulge' is used in a sense which includes the giving of evidence." The "duty" of an officer extends beyond the performance of work of an administrative nature such as processing returns, making assessments, considering and dealing with objections, conducting investigations into the affairs of taxpayers and matters of this nature. It includes the occasions on which he is required by the judicial process to produce documents or give evidence in courts, by affidavit or viva voce, concerning the affairs of some other person which he has acquired as an "officer", where the proceedings are referable to the imposition, assessment or collection of revenue. These include appeals to courts under Pt V of the Assessment Act, proceedings for the obtaining of revenue, applications challenging decisions of the Commissioner pursuant to s 39B of the Judiciary Act 1903 (Cth) and applications for review of decisions of the Commissioner under the Judicial Review Act with which this case is concerned. This approach is consistent with what was said by Kitto J in Mobil Oil Australia Pty Ltd v Commissioner of Taxation (1963) 113 CLR 475 at 500. The process of review under the Judicial Review Act enables this Court to determine whether the decision under challenge is lawful in the sense that it is within the power conferred on the Commissioner, a Deputy Commissioner or an "officer", or whether the prescribed procedures have been followed or whether the general rules of law including adherence to the principles of natural justice have been observed. The Court is empowered to enjoin action or to quash a decision it finds unlawful and to direct action to be taken in accordance with law. It may also compel action by a person or body who has not acted, but who ought to have done so. Proceedings under the Judicial Review Act (also pursuant to s 39B of the Judiciary Act 1903) involving decisions or conduct relating to the imposition, assessment, collection or recovery of tax are an essential part of the machinery which Parliament has provided to ensure that tax is levied and collected according to law. Compliance by "officers" (within the meaning of that expression in s 16) with orders of the Court for discovery and inspection of documents in proceedings of this kind readily falls within the scope of their duties as such officers for the purposes of s 16(2). There is another, but independent, ground for rejecting the Commissioner's argument that s 16(2) applies in this case to bar discovery and inspection. The prohibition imposed by the subsection is against divulging or communicating information to "any person" and this plainly could not apply to a court. A similar conclusion was reached by Jenkinson J in Hutchins v Federal Commissioner of Taxation (1986) 86 ATC 4549 at 4553 and by Enderby J in Re Fortex Pty Ltd (1986) 86 ATC 4351 at 4358. Section 16(2) cannot therefore avail the Commissioner in his assertion that it renders him or his officers immune from the processes of discovery and inspection in this case. Section 16(3) imposes a prohibition upon an officer producing in court certain documents or divulging or communicating to any court certain matters or things coming under his notice in the performance of his duties as an officer, but subject to the important exception: "... except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act ..." This exception covers the production of documents by an officer to courts or his giving evidence in proceedings before them for recovery of tax (Norper Investments Pty Ltd v Deputy Federal Commissioner of Taxation (1977) 77 ATC 4211); appeals to Supreme Courts against the disallowance of objections to assessments (Re Fortex Pty Ltd (supra)); appeals under the Taxation (Unpaid Company Tax) Assessment Act 1982 (Cth) (Hutchins v Federal Commissioner of Taxation (supra)); appeals to this Court from judgments of Supreme Courts on taxation appeals both at first instance and from decisions of boards of review; appeals to this Court from decisions of the Administrative Appeals Tribunal in tax matters which has recently subsumed the jurisdiction formerly exercised by boards of review; and proceedings pursuant to s 39B of the Judiciary Act 1903 or the Judicial Review Act involving challenges to decisions of officers of the Taxation Office of the kind mentioned earlier. Other proceedings in addition to these may be within the scope of the exception; but the principal ones appear to be those just mentioned. Proceedings for review of decisions of the Commissioner or a Deputy Commissioner or officers of the Australian Taxation Office are designed to ensure that any error or law which may vitiate or affect a relevant decision may be corrected by the review process, thus ensuring that tax is imposed and collected lawfully. The exception to the prohibition imposed by s 16(3) thus encompasses the production of documents by an "officer" or his divulging or communicating matters and things to a court in proceedings of this kind. The process of review under the Judicial Review Act does not extend to the class of decisions excluded by s 3 and Sch 1 of the Judicial Review Act. This includes decisions involved in the making of assessments or calculations of tax or decisions disallowing objections to assessments or calculations of tax or duty or decisions amending or refusing to amend assessments or calculations of tax or duty under the Assessment Act: par (e) of Sch 1. But decisions of the kind in question in this case are not excluded from review under the Judicial Review Act. The Commissioner's case on s 16 therefore fails. This effectively disposes of the appeal. 57 In Propend Finance Pty Limited v Commissioner of Australian Federal Police (1994) 27 ATR 584 (Propend), the applicants in the proceeding challenged the validity of certain search warrants. Apparently, the Commissioner had made available a significant volume of documentary material to the Australian Federal Police who had, according to the applicants, produced only a portion of that material to the Justice of the Peace who issued the search warrants. In the course of the proceedings, the applicants issued subpoenas addressed to the Commissioner. The Commissioner moved to set aside those subpoenas. Counsel for the Commissioner argued that the subpoenas need not be answered because of the operation of s 16(3) of the 1936 Act. At 591–592, his Honour said: Ms Fullerton submitted that this is not a case where disclosure is necessary for the purpose of carrying into effect the provisions of the Income Tax Assessment Act or of the Crimes (Taxation Offences) Act 1980 (Cth). It should be noted that s 4(1) of that Act provides that s 16 of the Income Tax Assessment Act has effect as if the Crimes (Taxation Offences) Act were part of that Act. It should also be noted that some of the offences specified in the warrants are offences against provisions of the Crimes (Taxation Offences) Act. Ms Fullerton submitted that, in the context of s 16(3), the word "necessary" means "indispensable" or "requisite". I would accept the second meaning. In The Commonwealth and the Postmaster-General v Process Advertising and Press Agency Co Ptv Ltd (1910) 10 CLR 457 at 469, Higgins J said: Now, the word "necessary" may be construed liberally, not as being absolutely or essentially necessary, but as meaning appropriate, plainly adapted to the needs of the Department – to "the carrying out" of the Act or its "efficient administration": McCulloch v Maryland 4 Wheat 316 at 421. This approach was adopted with respect to the word "necessarily" in s 51(1) of the Income Tax Assessment Act by Latham CJ, Rich, Dixon, McTiernan and Webb JJ. in Ronpibon Tin NL v FCT (1949) 78 CLR 47 at 56. I would reject Ms Fullerton's primary submission that matters arising out of an inquiry into taxation offences or out of the prosecution of taxation offences are not circumstances where disclosure can be "necessary" for the purpose of carrying into effect the provisions of the Income Tax Assessment Act or of the Crimes (Taxation Offences) Act. It is indeed an aim of a prosecution of a taxation offence of the type specified in the warrants to ensure that the provisions of those Acts are carried into effect, if not by the persons charged with the offences, at least by other taxpayers. A prosecution which deters persons from offending against the revenue assists in the ultimate task of enforcing the revenue law: see R v Yates (1991) 22 ATR 424; 102 ALR 673 at 677. 58 At 592, his Honour continued: The reason why, in my opinion, s 16(3) protects the material held by the Australian Taxation Office, is that, at the present time, it has not been shown that the disclosure of the documents held by the Australian Taxation Office would assist in carrying into effect the provisions of the Income Tax Assessment Act or those of the Crimes (Taxation Offences) Act. I have already held that the disclosure of the documents held by the Australian Federal Police is not required because the applicants at this stage are simply "fishing". The disclosure of documents held by the Australian Taxation Office is even one step further removed. Accordingly, as I have refused disclosure by the Australian Federal Police, it is not requisite or appropriate that there be disclosure by the Australian Taxation Office. 59 As a result, his Honour set aside the subpoenas issued to the Commissioner. 60 In Simionato Holdings Pty Ltd v Commissioner of Taxation (1995) 60 FCR 375 (Simionato), von Doussa J was called upon to consider the correct operation of s 16 of the 1936 Act in circumstances where the applicant (Simionato) sought judicial review of the Commissioner's decision to seize banking records belonging to it and of the Commissioner's decision to pass on those records and other information to the liquidator of a number of companies which were indebted to the Commissioner for unpaid tax. Simionato argued that the 1936 Act was concerned not with the collection and recovery of tax but rather only with the assessment of tax. That argument was rejected by von Doussa J. Simionato also argued that the communication to the liquidator and his legal representatives by the Commissioner's officers of information obtained pursuant to s 263(1) of the 1936 Act breached the secrecy provisions contained in s 16(2) of the that Act because such communication was not "in the performance of any duty as an officer". 61 Justice von Doussa held that the collection and recovery of tax is as much a purpose of the 1936 Act as is the assessment of tax. His Honour said that the effective raising of revenue requires that both functions be fulfilled. At 384–385, his Honour then said: The conclusion that the exercises of power under s 263 in the circumstances of this case were for the purposes of the ITA Act gains support from the decision of the High Court of Australia in Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1. In that case, the Commissioner of Taxation, upon a judgment for a tax debt, had successfully petitioned for the bankruptcy of the taxpayer. The Commissioner was the only creditor who proved in the bankruptcy. In the bankruptcy, motions were successfully brought to set aside many transactions. An appeal was brought against those judgments. One judgment against a company was stayed upon an undertaking not to dispose of assets. An officer of the Commissioner as part of an investigation inquiring into transactions which were in breach of the undertakings obtained evidence in exercise of an authority given under s 263, and then provided an affidavit deposing to that evidence (which included admissions) to the trustee to use on a motion to have the company and one of its directors adjudged guilty of contempt. The admissibility of the evidence was challenged on the ground that the communication of the evidence to the trustee and to the Court was in breach of s 16(2) of the [1936] Act. That challenge gave rise to the question, under the definition of "officer" in s 16(1), whether the evidence deposed to in the affidavit had been "disclosed or obtained under the provisions of this Act ...". Dixon CJ expressed the view that it had been, saying (at 5–6): "A very wide meaning should be given to those words, because of the policy of s 16(1). Having regard to the fact that the authority was produced, to the terms of s 232 which are very wide and to the fact that the end in view, the end result so to speak, of the proceedings is the vindication of the revenue and the collection of the sums owing, I am disposed to think that the definition is sufficiently fulfilled." Dixon CJ went on to hold (at 6) that the words "except in the performance of any duty as an officer" in s 16(2) should also receive a wide interpretation, and that the communication of the information in the affidavit provided to the trustee was not made in breach of s 16(2). An appeal to the Full High Court was dismissed. The decision is more directly relevant to the second of the grounds of challenge now raised by the applicant, but the conclusion that the requirements of s 16(1) were fulfilled because the proceedings under contemplation had the end in view of vindicating the revenue and the collection of tax supports the view that the exercises of power in the present case were for the purposes of the [1936] Act, as the end in view was not materially different. In my opinion the first contention of the applicant fails. The decisions and conduct under challenge were for the purposes of the [1936] Act. 62 In addressing the second ground argued by Simionato, his Honour said: The second ground argued by the applicant is that the communication of the information by Mr Merritt to Mr Macks was not "in the performance of any duty as an officer". Counsel for the applicant asked rhetorically: "What duty under the Income Tax Act is the officer who handed the material to Mr Meagher performing when he handed the documents to him?" This, counsel says, is the crucial question. To adopt the words of Dixon CJ in Canadian Pacific Tobacco Co Ltd v Stapleton the short answer, in my opinion, is '"the vindication of the revenue and the collection of sums owing'" by the companies in liquidation. The Chief Justice, in considering the proper interpretation of s 16(2) said (at 6): "... I think that the words 'except in the performance of any duty as an officer' ought to receive a very wide interpretation. The word 'duty' there is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word 'function'. The exception governs all that is incidental to the carrying out of what is commonly called 'the duties of an officer's employment'; that is to say, the functions and proper actions which his employment authorises." On appeal McTiernan J said (at 10): "I agree with the construction which the Chief Justice placed upon the section. That is expressed in the judgment which his Honour delivered at the hearing of the motion, after the argument upon the objection, founded upon s 16, to the admission of Mr Tobin's affidavit. He was an 'officer' within the meaning of s 16 of the Act. Having regard to the proceedings out of which the motion arose, the exception in subs (2) of s 16 applied to the affidavit, because the furnishing of the information which it contained for use as evidence in the motion, was connected with the office in which Mr Tobin was employed by the Commonwealth. The furnishing of this information for use as evidence in the motion was done in performance of Mr Tobin's duty as an officer." Williams and Kitto JJ expressed their agreement with the judgment of McTiernan J. The passage from the judgment of Dixon CJ concerning the concept of "duty" in s 16(2) has been adopted and applied in later cases, most recently by Lockhart J in Consolidated Press Holdings Ltd v Commissioner of Taxation (1995) 57 FCR 348 at 352. Under that interpretation I consider that the communication of the information obtained by Mr Merritt in exercise of power under s 263 was in the performance of a duty as an officer, because maximising the return to creditors in the liquidations of which the Commonwealth was one for large amounts was a function and duty which Mr Merritt's employment as an officer authorised. In my opinion the application for an order of review should be dismissed with costs. 63 In Re Confitt Constructions Pty Ltd (In Liq) [1999] 2 Qd R 490 (Confitt), Williams J was called upon to consider the correct interpretation of s 16(3) of the 1936 Act in the context of an appeal from an order made by a Registrar requiring the public examination of certain persons in the course of the winding up of Confitt Constructions Pty Ltd (Confitt Constructions). After the Registrar had made the order for examination, the Deputy Commissioner of Taxation for Queensland and one of his officers (Mr Shiels) were required to attend before the Magistrates Court to be examined on oath about the examinable affairs of Confitt Constructions. They were also directed to produce certain books and records of that company. In addition to appealing from the Registrar's decision to order the public examinations, the Deputy Commissioner and Mr Shiels also sought to have the summonses directed to them set aside. As his Honour noted at 491, the contention of the applicants was that an order such as that made by the Registrar could not be directed to either of them because of s 16 of the 1936 Act, principally subs (3). His Honour held that there was no doubt that each applicant, particularly Mr Shiels, had acquired information in respect of the taxation affairs of Confitt Constructions as a result of carrying out the duties of his office. The applicants argued that compliance with the summonses would necessarily entail each of them breaching s 16(3) of the 1936 Act. 64 Justice Williams undertook a review of the relevant authorities at 491–494. He referred to Canadian Pacific, Fortex, Hutchins v Federal Commissioner of Taxation (1986) 18 ATR 599 (Hutchins), Norper, Nestle and Simionato. 65 At 492, Williams J held that, although Dixon CJ in Canadian Pacific had not given specific consideration to the phrase "except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act" in s 16(3) of the 1936 Act, nonetheless, consistently with the general approach of Dixon CJ to the section, the exception in s 16(3) ought also, in the opinion of Williams J, be given a liberal construction. 66 In Hutchins, Jenkinson J appeared to take the same approach to s 16(2) as Enderby J had done in Fortex. 67 At 494, after concluding his analysis of the relevant authorities, Williams J said: It can thus be seen that the courts have given a liberal interpretation to the phrase "except when it is necessary to do so for the purpose of carrying into effect the provisions of this Act". The passages quoted tend to suggest that whenever the Commissioner, or an "officer", is involved in litigation in which the validity of an assessment or the validity of a payment of tax are in question then the Commissioner and the "officer" are carrying into effect the provisions of the Act, and if the court orders that it is necessary for them to divulge the information in question there is no breach of s. 16. In each of the cases referred to the nature of the proceedings in the court was relevant to the conclusion reached. I was somewhat concerned as to whether or not the examination by a liquidator of company officers and others pursuant to the provisions of the Corporations Law could be said to be a procedure for the purpose of carrying into effect the provisions of the Income Tax Assessment Act, but I have been persuaded by the reasoning of von Doussa J. that, at least in the circumstances before him, such an examination could be so regarded. This case is, however, somewhat different. The liquidator is seeking to question the lawfulness of the payment by Confitt of moneys to the Commissioner; he is essentially examining the lawfulness of the payment or payments with a view to recovering those moneys for the benefit of the creditors generally. If actual proceedings were commenced by the liquidator to recover those payments (say as a voidable preference) then the Commissioner and his "officers" would clearly be carrying into effect the provisions of the Income Tax Assessment Act by defending the claim. In that situation, consistently with the decisions referred to above, the court could order in the interests of justice the divulging of the information which would then be a divulging or communication necessary for the purpose of carrying into effect the provisions of the Act (namely the retention of moneys received by way of payment of income tax). If that is so then it is difficult to see why the position should be different at the examination stage. The examination is being conducted because the retention of the money in question is under threat; if the Commissioner then established that the payment received was lawful (for example, was not a preference) the revenue benefits because the money can be retained in the hands of the Commissioner. Clarification of the legal position at that stage could well result in significant savings to the revenue because additional legal costs would not be incurred. I have therefore come to the conclusion that the divulging of information by either applicant in the course of being examined by the liquidator in the Magistrates Court would not constitute a breach of s. 16(3) where it could be said that what they were doing was "necessary … for the purpose of carrying into effect the provisions of" the Income Tax Assessment Act. 68 In Donnelly v Davison (2000) 105 FCR 1 (Davison), Mr Davison's bankruptcy trustee (Mr Donnelly) issued a summons to Mr Davison to attend an examination in relation to his bankruptcy under s 81 of the Bankruptcy Act 1966 (Cth). Mr Davison sought review of that decision. In the context of that review, Mr Davison issued a subpoena to produce documents to the Commissioner. The Commissioner was the only creditor in the bankrupt estate and taxation officers were assumed to be providing funding to Mr Donnelly for the proposed examination. Mr Davison also issued a notice to produce to Mr Donnelly in substantially the same terms as the subpoena served upon the Commissioner. The Commissioner moved to set aside the subpoena served upon him and Mr Donnelly took the same course in respect of the notice to produce served upon him. These applications were the two applications with which Branson J dealt in Davison. 69 At 5 [4], her Honour set out the terms of s 16 of the 1936 Act. At 5 [5]–[6], her Honour said: It is thus necessary to determine whether "it is necessary … for the purpose of carrying into effect the provisions of [the 1936 Act]" for the documents sought by the subpoena to be produced to the Court. Before giving consideration to the authorities concerning s 16(3) of the 1936 Act, it is appropriate to notice the different purposes served by s 16(2) and s 16(3). Section 16(2) imposes a prohibition on the disclosure of information by an officer "except in the performance of any duty as an officer". Its principal purpose is to protect the confidentiality of information provided to officers by taxpayers. Section 16(3) does not prohibit disclosure of information which an officer is prepared to give under instructions from the officer's superiors (Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1). It is thus not the case that s 16(3) is principally concerned to protect confidential information in the interests of taxpayers. While s 16(3) assists in the protection of confidential information provided to officers by taxpayers, its principal purpose appears to be to protect officers from compulsion to disclose. 70 Her Honour then referred to Nestle at 262–263 and observed that, in Nestle, the types of proceeding which the Full Court expressly identified as being within the scope of the exception in s 16(3) of the 1936 Act all concerned the recovery of income tax or the determination of liability to pay income tax. 71 Justice Branson (at 6 [8]) then referred to Confitt and Simionato as possibly broadening the class of relevant proceedings for the purposes of s 16(3) of the 1936 Act. Her Honour then referred to the decision of Powell J in Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 (Purnell Bros). In that case, after referring to Norper and other cases, his Honour said (at 178–179): Whatever may be one's view as to the position in relation to taxation appeals or cases in which the Commissioner, as a plaintiff, is actively seeking to recover a debt for taxation, I am quite unable to see how it can be said that "it is necessary ... for the purpose of carrying into effect the provisions of the Act" that the documents sought to be produced in fact be produced for the purposes of an application to which the Commissioner is a stranger. (Citations omitted) Since, for this reason, the position of the Commissioner is very much akin to that of a witness who cannot give relevant evidence (see R. v. Baines (supra)), or of a witness subpoenaed to produce documents in his possession, which documents were the subject of Crown privilege (R. v. Lewes Justices; Ex parte Secretary of State (supra)), the effect, in the circumstances of this case, of s. 16(2), (3) of the Income Tax Assessment Act 1936 (Cth) provides an additional reason why the subpoena should be set aside. 72 Justice Branson then referred to Deputy Commissioner of Taxation v Nika Management Services Pty Ltd (unreported, Supreme Court, NSW, 6 December 1995) where Cohen J set aside a subpoena addressed to the Deputy Commissioner which had been issued by persons who were required to be present for examination by the liquidator of Nika Management Services Pty Ltd. In that case, Cohen J felt obliged to follow the decision of Powell J in Purnell Bros. In that case, his Honour indicated that he had "some uncertainty" as to whether the financing of an examination the results of which may be of assistance to the Commissioner in collecting tax is an act which is necessary for the purpose of carrying into effect the provisions of the 1936 Act. 73 At 7 [11] in Davison, Branson J said that the authorities to which she had referred up to that point appeared to reflect a view that the duties of a taxation officer within the meaning of s 16(2) of the 1936 Act may extend beyond that which "it is necessary to do … for the purpose of carrying into effect the provisions of the [1936 Act]" within the meaning of s 16(3). Her Honour then cited the judgment of Dixon CJ in Canadian Pacific at 6. 74 Her Honour then referred to the decision of von Doussa J in Simionato and remarked that it appeared to reflect the same approach to the construction of s 16(2) of the 1936 Act as had been adopted by Dixon CJ in Canadian Pacific. 75 At 7–8 [12]–[15], her Honour said: The terms of s 16(3) of the [1936] Act themselves suggest that information and documents can come to the notice of an officer "in the performance of his duties as an officer" which it will not be necessary for him or her to disclose "for the purposes of carrying into effect the provisions of this Act or of any previous law of the Commonwealth relating to Income Tax". In my view, the language of s 16(3), seen in the context of Pt II of the [1936] Act, discloses an intention that the circumstances in which an officer may be compelled in Court to disclose information or to produce documents should be limited to purposes directly arising out of the provisions of the [1936] Act or earlier income tax legislation. This seems to me to be the approach to the subsection which the Full Court adopted in Commissioner of Taxation (Cth) v Nestlé Australia Ltd. It is also the approach to the subsection adopted by Powell J in Purnell Bros Pty Ltd v Transport Engineers Pty Ltd. The Commissioner is not a party to the present proceeding. Although the Commissioner is the only creditor of Mr Davison's bankrupt estate, and may be assumed to be funding the proposed examinations, the examinations are proposed for the purpose of carrying into effect the provisions of the Bankruptcy Act. The proposed examinations do not directly arise out of the provisions of the [1936] Act. This, in my view, is the position even though steps taken by taxation officers to maximise the return to the Commissioner from Mr Davison's estate, including the provision of funding to Mr Donnelly as trustee of the estate, may be seen as steps taken in the performance of their duties as officers. I conclude that the subpoena seeks the production of documents in circumstances which would result in an officer divulging or communicating to the Court matters or things coming under the officer's notice in the performance of his or her duties as an officer, otherwise than when it is necessary to do so for the purpose of carrying into effect the provisions of the [1936] Act or any earlier Act relating to income tax. The subpoena addressed to the Proper Officer of the Australian Taxation Office will be set aside. It is unnecessary for me to give consideration to the submissions of the Commissioner that the subpoena is otherwise an abuse of process as it is too broadly expressed and therefore oppressive, as it involves "fishing", or because it seeks the production of documents that are irrelevant to the proceeding. 76 The critical part of her Honour's reasoning is found in the passages which I have extracted at [75] above. Her Honour took the view that the exception in s 16(3) of the 1936 Act ought to be confined to purposes directly arising out of the provisions of the 1936 Act or earlier Income Tax legislation. Her Honour appeared to base this conclusion upon the reasoning of the Full Court in Nestle and the reasoning of Powell J in Purnell Bros. 77 Having adopted that approach, her Honour then observed that the Commissioner was not a party to the proceeding before her Honour and that the proposed examinations did not directly arise out of the provisions of the 1936 Act. 78 In Davison, Branson J adopted a narrow interpretation of the exception in s 16(3) of the 1936 Act. The judgment of Powell J in Purnell Bros supported that approach although the judgment of the Full Court of this Court in Nestle did not. To the contrary, in my view, Nestle fitted comfortably within the line of authority with which I have dealt at [44]–[67] above. The authorities referred to in that line uniformly supported a liberal approach to the construction of s 16 and, in particular, the exception provided for in s 16(3). 79 I shall put to one side at the moment Davison and Purnell Bros. 80 Leaving aside those two cases, the following relevant propositions may be distilled from the authorities to which I have referred: (a) The exception provided for in s 16(2) ("… except in the performance of any duty as an officer …") should receive a very wide interpretation (Canadian Pacific at 6–7 per Dixon CJ and at 11–12 per Kitto J; Nestle at 261; Simionato at 384–385); (b) The exception in s 16(3) should also be given a liberal construction (Confitt at 492); (c) In every case, the nature of the proceeding in the Court is relevant to the conclusion reached about the applicability of the exception in s 16(3) (Confitt at 494); (d) The following classes of proceeding have been held to be "… for the purpose of carrying into effect the provisions of the 1936 Act" within the meaning of that expression in s 16(3): (i) A winding up proceeding instituted by the Commissioner where the debt relied upon to found the petition was unpaid tax (Norper); (ii) Judicial review proceedings in respect of a decision made by the Commissioner under s 206 of the 1936 Act (Nestle;) (iii) Proceedings for the recovery of tax; appeals to Supreme Courts against the disallowance of objections to assessments; appeals under the Taxation (Unpaid Company Tax) Assessment Act 1982 (Cth); appeals to the Full Court of this Court from judgments of Supreme Courts on taxation appeals; appeals to this Court from the Administrative Appeals Tribunal in tax matters; and proceedings under s 39B of the Judiciary Act 1903 (Cth) or the Administrative Decisions (Judicial Review) Act 1977 (Cth) involving challenges to decisions of officers of the ATO (Nestle at 262–263 and the cases cited in those passages). (iv) The collection of information from a taxpayer pursuant to s 263 of the 1936 Act (Simionato at 384–385); and (v) Applications under the Corporations Act 2001 (Cth) (and its predecessors) for orders for the examination of officers where the end in view of those applications is the recovery of tax (Confitt at 494); (e) The classes of proceedings that may fall within the scope of the exception in s 16(3) are not closed (Nestle at 263); and (f) The word "necessary" when used in the exception contained in s 16(3) means "requisite" (Propend at 591–592). 81 The decision of Powell J in Purnell Bros and the reasoning which underpinned that decision are not consistent with the other authorities. 82 Nor is the decision of Branson J in Davison consistent with the other authorities. In that case, her Honour took a narrow view of the scope of the exception in s 16(3) and expressed that narrow view by the use of the word "directly" in [12] and [13] (at 7–8) of her reasons. Her Honour noted that the Commissioner was not a party to the proceeding before her and held that the proposed examinations were for the purposes of the Bankruptcy Act 1966 (Cth), not the 1936 Act, even though the steps being taken by the officers of the ATO were being taken in order to maximise the return to the revenue from Mr Davison's estate. 83 In my judgment, these two cases are at odds with the other authorities and give effect to too narrow a view of the exception within s 16(3). I respectfully disagree with their Honours and decline to follow them. The Current Secrecy Provisions 84 The current secrecy provisions are found in Div 355 of Sch 1 to the TAA. That Division was introduced, in its current form, by the Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010 (Cth), which came into force on 17 December 2010. At the same time, s 16 of the 1936 Act was repealed. 85 The operation of the key provisions in Div 355 of Sch 1 to the TAA was relevantly outlined by Edmonds J in 12 Years Juice Foods Australia Pty Ltd v Federal Commissioner of Taxation [2015] FCA 741 (12 Years Juice Foods) at [40]–[48]. The claim for final relief in that case was a claim for judicial review of the Commissioner's decision to issue a number of notices of assessment to each of the applicants. In the context of challenging those assessments, the applicants served a notice to produce upon the Commissioner. The Commissioner produced documents in answer to that notice to produce but redacted 17 of those documents upon the basis that they contained "protected information" within Div 355 of Sch 1 to the TAA. 86 At [40]–[48], his Honour said: The Submissions on Div 355 of Sch 1 to the TAA Again, there is a good measure of agreement between the applicants and the Commissioner as to the proper construction of Div 355 of Sch 1 to the TAA ("Division 355" or "Div 355"), in particular what is "protected information" and the circumstances when it may, or may not, be entitled to withhold the production of documents containing such information pursuant to Div 355. As the Commissioner's counsel put it in her concise and well-reasoned submissions (at RS (20)): "It may be that there is no legal controversy in relation to Divison 355 at all". I believe not. For that reason, I have again first drawn on the applicants' submissions, if only because of their comprehensiveness. Division 355 makes it an offence for taxation officers to disclose tax information that identifies an entity, or is reasonably capable of being used to identify an entity, subject to certain exceptions: TAA, Sch 1, s 355-20. The objects of the Division are set out in s 355-10 of Sch 1 to the TAA in the following terms The objects of this Division are: (a) to protect the confidentiality of taxpayers' affairs by imposing strict obligations on *taxation officers (and others who acquire protected tax information), and so encourage taxpayers to provide correct information to the Commissioner; and (b) to facilitate efficient and effective government administration and law enforcement by allowing disclosures of protected tax information for specific, appropriate purposes. (Emphasis added): The core offence provision is contained in s 355-25, which provides: 355-25 Offence—disclosure of protected information by taxation officers (1) An entity commits an offence if: (a) the entity is or was a *taxation officer; and (b) the entity: (i) makes a record of information; or (ii) discloses information to another entity (other than the entity to whom the information relates or an entity covered by subsection (2)) or to a court or tribunal; and (c) the information is *protected information; and (d) the information was acquired by the first-mentioned entity as a taxation officer. The terms "protected information" and "taxation officer" are relevantly defined in s 355-30. The term "protected information" is defined to mean information that: (a) was disclosed or obtained under or for purposes of a law that was a *taxation law … when the information was disclosed or obtained; and (b) relates to the affairs of an entity; and (c) identifies, or is reasonably capable of being used to identify, the entity. The offence created by s 355-25 is subject to a number of exceptions: see, e.g., s 355-45 (disclosure of public available information); s 355-47 (disclosure of periodic aggregate tax information); s 355-50 (disclosure in performing duties). The generality with which each of these exceptions is expressed is not limited by reason of the existence of other exceptions: s 355-40. Most relevant for present purposes is s 355-50, which is in the following terms: 355-50 Exception—disclosure in performing duties (1) Section 355-25 does not apply if: (a) the entity is a *taxation officer; and (b) the record or disclosure is made in performing the entity's duties as a taxation officer. Note 1: A defendant bears an evidential burden in relation to the matters in this subsection: see subsection 13.3(3) of the Criminal Code . Note 2: An example of a duty mentioned in paragraph (b) is the duty to make available information under sections 3C and 3E. Without limiting subsection (1), records or disclosures made in performing duties as a *taxation officer include those mentioned in the following table: Records or disclosures in performing duties Item The record is made for or the disclosure is to ... and the record or disclosure ... 1 any entity, court or tribunal is for the purpose of administering any * taxation law. 2 any entity, court or tribunal is for the purpose of the making, or proposed or possible making, of an order under the Proceeds of Crime Act 2002 that is related to a *taxation law. 3 any entity, court or tribunal is for the purpose of criminal, civil or administrative proceedings (including merits review or judicial review) that are related to a *taxation law. No offence will be committed under s 355-25 where a taxation officer discloses "protected information" to the applicants, their advisors or the Court pursuant to the Notice. Such production is plainly within item 3 of s 355-50, that is, it is for the purpose of the present civil proceedings, being proceedings that are related to a taxation law. In this respect, the proceedings, while brought under s 39B of the Judiciary Act 1903 (Cth), are to set aside assessments made under ss 99A and 168 of the ITAA 1936: cf., Khorramdel v Secretary, Department of Social Services [2013] AATA 848 at [21]. That s 355-50 of Sch 1 to the TAA authorises the production, by the Commissioner or his officers, of documents sought under a notice to produce in proceedings under s 39B of the Judiciary Act in respect of a decision made under the ITAA 1936 is clear having regard both to the unambiguous terms in which the provision is expressed and also to the authorities in relation to s 355-50 and its statutory predecessors. 87 The term "taxation law" is defined in s 2 of the TAA by reference to the meaning given to that expression by the Income Tax Assessment Act 1997 (Cth), which defines "taxation law" in s 995-1 to mean: taxation law means: (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. 88 As Edmonds J noted in 12 Years Juice Foods, no offence will be committed under s 355-25 where a taxation officer discloses protected information "in performing [that officer's] duties as a taxation officer". Disclosures made in performing duties as a taxation officer include where the disclosure is made in administering a taxation law (Item 1 in the table forming part of s 355-50) or for the purpose of proceedings that are related to a taxation law (Item 3 of that table). 89 Section 355-50 is one of a number of exceptions provided for in Div 355, as to which see s 355-45 to s 355-75. 90 Section 355-75 provides for circumstances in which taxation officers may be relieved of the requirement, which would otherwise arise, to disclose certain material to a court or tribunal. That section provides: 355 75 Limits on disclosure to courts and tribunals An entity who is or was a *taxation officer is not to be required to disclose to a court or tribunal *protected information that was acquired by the entity as a taxation officer except where it is necessary to do so for the purpose of carrying into effect the provisions of: (a) a *taxation law; or (b) the Foreign Acquisitions and Takeovers Act 1975, if the entity acquired the information because of a request under subsection 138(4) of that Act. Note: See also section 8ZK of this Act (about protection of witnesses). 91 Subsection 355-75(b) is not presently relevant. 92 The present case concerns the true construction of s 355-75. In particular, the Court's attention is directed to the scope of the exception provided for within that section. 93 The explanatory memorandum in relation to the introduction of Div 355 (Tax Laws Amendment (Confidentiality of Taxpayer Information) Bill 2010), explanatory memorandum) relevantly included the following: Objectives of the new framework 1.15 The primary objective of the new framework is to protect the confidentiality of taxpayer information. Compliance with taxation laws could be adversely affected if taxpayers thought that their information could be readily disclosed. [Schedule 1, item 1, paragraph 355-10(a)] 1.16 The new framework gives effect to this primary objective by placing a general prohibition on the disclosure of taxpayer information. However, in recognition of the importance that taxpayer information can play in facilitating efficient and effective government administration and law enforcement, disclosures of taxpayer information are permitted in certain specified circumstances. … 94 Chapters 4 and 5 of the explanatory memorandum made clear that the general qualifications on the disclosure provisions in Div 355 "largely retain[ed]" the existing qualifications on non-disclosure in s 16 of the 1936 Act but also sought to "clarify and resolve ambiguities in the current law" and include some amendments thereto (see [4.9], [4.12], [5.7], [5.8]). The general operation of the new disclosure provisions was relevantly described at 4.32 as follows: 4.32 The disclosure provisions in the framework permit taxation officers and non- taxation officers to disclose taxpayer information in certain circumstances. However, they do not require them to do so. For information to be disclosed it must be an authorised disclosure and the entity with the information must exercise their discretion to disclose the information. (Italics in original). 95 As to the effect of s 355-50, the explanatory memorandum relevantly stated: 5.8 Taxation officers will continue to be able to disclose taxpayer information in the performance of their duties as a taxation officer. The new framework clarifies some existing ambiguities as to the breadth of such disclosures by providing a non-exhaustive list of disclosures that fall within the 'performance of duties' exception. Disclosures in the performance of a taxation officer's duties 5.12 Disclosure of taxpayer information by a taxation officer is permitted where the disclosure is made in the course of the taxation officer's duties. Generally, such disclosures facilitate the officer carrying out their responsibilities. For the avoidance of doubt, the new framework provides a non-exhaustive list of disclosures that fall within the scope of such a disclosure. These are further described below [Schedule 1, item 1, section 355-50]. ... Judicial and administrative proceedings related to a taxation law 5.20 It is not an offence for a taxation officer to disclose taxpayer information for the purposes of proceedings related to a taxation law. Disclosures to Courts, external legal advisers and to the Commonwealth Director of Public Prosecutions in relation to proceedings that are directly or indirectly related to a taxation law are therefore allowed. [Schedule 1, item 1, subsection 355- 50(2), item 3 in the table] (Emphasis added) 96 As to the purpose served by s 355-75, the explanatory memorandum stated: Limit on disclosures to courts and tribunals 4.17 Under the new framework and consistent with the current law, a taxation officer or another recipient of taxpayer information cannot be compelled to provide information to a court or tribunal. This recognises the significant loss of privacy that would result in the release of a taxpayer's information in an open court. [Schedule 1, item 1, sections 355-75 and 355-205, section 355-280] 4.18 As an exception, however, a taxation officer or another recipient of taxpayer information can be compelled to disclose taxpayer information to a court or tribunal where it is necessary for the purpose of carrying into effect a provision of a taxation law. Such a disclosure is closely aligned with the purpose for which the information is given and recognises that in some circumstances a court's powers to compel the production of information should be invoked to give effect to a provision of a taxation law. [Schedule 1, item 1, sections 355-75 and 355-205, section 355-280] (Emphasis added) 97 The Nudie entities placed particular reliance upon [4.18] of the explanatory memorandum. Those parties submitted that that particular paragraph revealed an intention on the part of the Parliament that the circumstances in which disclosure of protected information by a tax officer to a court could be compelled would be closely aligned to the purpose for which the information was given to the Commissioner or disclosed by him in the first place. Consideration and Discussion 98 The critical issue in the present case is whether production to the Court of the documents called for by the subpoena (which production would constitute disclosure to this Court of protected information that was acquired by the Commissioner and his officers as a taxation officer) should be required because such disclosure is necessary for the purpose of carrying into effect the provisions of a taxation law and is thus within the exception specified in s 355-75 of the TAA. For reasons already explained, it is quite clear that, unless the disclosure now sought to be compelled at the instigation of the Nudie entities is within that exception, the Commissioner cannot be compelled to answer the subpoena with the consequence that the subpoena ought to be set aside. 99 The Commissioner submitted that the exception in s 355-75 only operates if the relevant disclosure is necessary for the purpose of carrying into effect the provisions of a taxation law. He argued that the concept embodied in the text of the exception in that section is quite different from other exceptions found in tax law (eg "… except in the performance of any duty under the Act", as to which, see R v Yates (1991) 102 ALR 673 and R v Murphy (1992) 23 ATR 422). 100 Similarly here, in s 355-50 of the TAA the scope of the phrase "… in performing the entity's duties as a taxation officer …" is not the same as the scope of the exception in s 355-75. Neither party submitted that it was. 101 The Commissioner then submitted that this proceeding does not concern the recovery of income tax or the determination of liability to pay income tax nor is it referable to the imposition, assessment or collection of tax. He said that it concerns whether the defendants knowingly received the fruits of, or knowingly assisted in, breaches of duty (both fiduciary and statutory) by the directors of the plaintiffs. The Commissioner then argued that the Nudie stay application had even less to do with taxation as it was, in any event, collateral to the principal issues raised in this proceeding. 102 The Commissioner relied upon the reasoning of Branson J in Davison and ultimately submitted that the possibility that an indirect benefit from this proceeding might flow to the Commissioner as the only creditor of the plaintiffs was not sufficient to engage the exception in s 355-75 of the TAA. 103 As submitted by the Nudie entities, the issue before the Court essentially concerns the proper construction of s 355-75 and, in particular, the exception contained therein. 104 The task of the Court is to construe s 355-75 in its proper context and having regard to the purpose of that section in Div 355 as a whole. 105 The objects of that Division are specified in s 355-10 (as to which see [86] above and the extracts from the Reasons for Judgment of Edmonds J in 12 Years Juice Foods set out in that paragraph. The objects make clear that it is the intention of the legislature to secure a reasonable balance between the protection of taxpayers' confidential information, on the one hand, and the efficient and effective administration of government and law enforcement, on the other. Section 355-75 is the quintessential manifestation of the legislature's intention to strike such a balance. 106 In the explanatory memorandum in relation to the introduction of Div 355 (at pars 4.18 and 5.20), it is made clear that disclosures for the purposes of proceedings which are "related to a taxation law", whether directly or indirectly, are contemplated by the various exceptions to the prohibition specified in s 355-25 of the TAA. 107 The text of the exception contained in s 355-75 does not contain the word "directly". Further, as I have already observed, the extrinsic materials make clear that the legislature intended that the relevant proceeding may be directly or indirectly related to a taxation law. 108 The interpretation of s 355-75 is legitimately informed by consideration of the authorities which interpreted s 16(3). As I have found at [80] above, those authorities (with the exception of Purnell Bros and Davison) support a very wide or liberal interpretation of the exception embodied in s 16(3) and, in particular, give life to that exception in proceedings where the recovery of tax is not directly involved but is ultimately the end in view. 109 The Nudie entities submitted that, when interpreting the exception in s 355-75 of the TAA, the Court should adopt the interpretation of the word "necessary" favoured by Davies J in Propend. That is, I should interpret that word as meaning "requisite" or "plainly appropriate". I accept that submission. 110 The Nudie entities then submitted that, where protected information sought under a subpoena has been collected by the Commissioner and provided by the Commissioner to a third party (here, the liquidators of the plaintiffs) so as to enable that third party to commence a proceeding which has as its primary purpose or aim the recovery of tax indirectly, it is necessary for the carrying into effect of the provisions of a taxation law for the documents to be provided to the defendant parties in any such proceedings to the extent that they are relevant to the conduct of those proceedings by those defendant parties. That submission is correct and I also accept it. 111 The Nudie entities submitted that where, as here, the disclosure which was made by the Commissioner to the liquidators was for the purpose of administering a taxation law within the meaning of Item 1 of s 355-50(2) of the TAA, the need to establish the relevant necessary connection between the disclosure and the purpose of carrying into effect the provisions of the taxation law is made that much easier. 112 Here, in effect, the Commissioner has made disclosure of the relevant documents under s 355-50, a disclosure which he justified as legitimate under that section and which the Nudie entities accept was justified under that section, while at the same time claiming that he ought not to be compelled to produce the documents in answer to the subpoena because he is prevented from doing so by s 355-75 and the circumstances of the case do not bring the disclosure sought by the Nudie entities within the exception in s 355-75. 113 It seems to me that the concept of carrying into effect the provisions of a taxation law involves, directly or indirectly (inter alia), the recovery of unpaid tax, that is to say, the true or correct amount of unpaid tax. This means that the Court does not simply focus on the position of the Commissioner but looks at the nature of the relevant proceeding and the issues raised in that proceeding in order to determine if it involves the carrying into effect of a taxation law. 114 It is true that the claims for relief made in this proceeding are claims for compensation against the defendants for knowing receipt of the fruits of breaches of directors' duties by the directors of the plaintiffs and/or claims for compensation for knowing assistance in the breaches of such duties. However, the raison d'etre of the proceeding is the restoration to the plaintiffs of their losses occasioned by the implementation of an alleged tax fraud in circumstances where funds so restored to the plaintiffs will immediately be passed across to the Commissioner as the only creditor of the plaintiffs. The ultimate aim of the present proceeding or, the real purpose of the present proceeding, is to recover the unpaid tax which is the subject of the various assessments issued by the Commissioner against the plaintiffs. If that complexion of the present proceeding is correct, then it would be quite wrong to allow the Commissioner to disclose protected information to the liquidators for the purpose of advancing the liquidators' and the plaintiffs' interests in the present proceeding and thus the recovery of unpaid tax, while at the same time withholding the same documents from the defendants. Such a one sided outcome would not be conducive to the recovery of the correct or true amount of tax and would not be in the interests of justice. The disclosure sought by the Nudie entities is, therefore, necessary for the purpose of carrying into effect a taxation law being those parts of the Commonwealth taxation law which allows the Commissioner to issue assessments and to recover unpaid tax. Conclusions 115 For the reasons which I have now explained, on 31 March 2017, I dismissed the Commissioner's application to set aside the subpoena with costs. 116 The Commissioner also claimed legal professional privilege over some documents. I have not yet determined that claim. The parties agreed that that claim should not be addressed until after the Court had decided whether or not to set aside the subpoena. That claim will now have to be addressed in the usual way. I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate: Dated: 5 April 2017 ATTACHMENT A Schedule of documents The documents and things you must produce are as follows: "Nudie Entities" means the First and Third to Seventh Respondents in Federal Court proceedings NSD 1600/2015. "Noteholders" means the Second, Ninth and Tenth Respondents in Federal Court proceedings NSD 1600/2015. "Nudie Entity Assessments" means the notices of assessment issued by the Commissioner to the Nudie Entities dated 29 January 2015. "Noteholder Assessments" means the notices of assessment issued by the Commissioner to the Noteholders dated 16 February 2015. "260-5 Notices" means the notices issued by the Commissioner under s260-5 of the Taxation Administration Act 1953 to any of the Nudie Entities requiring any of them to pay all or any part of the Noteholder Assessments, dated between 20 February 2015 and 17 April 2015 inclusive. "Commissioner" means the Commissioner of Taxation or any person or persons on his behalf. "Liquidators" means each of the liquidators of the Applicants in NSD 1600/2015 and SAD 5/2015, and any person or persons on either of their behalf. "Loans" means any monies owing by any of the Nudie Entities to any of the Noteholders and includes any loans the liquidators consider may be purported loans or sham loans. "Schedule 4" means Schedule 4 of the Amended Statement of Claim and Further Amended Statement of Claim in proceedings SAD 5/2015. "Tribunal" means the Administrative Appeals Tribunal. "Schedules A, B, D and E" means schedules A, B, D and E of the Statement of Claim and Amended Statement of Claim in NSD 1600/2015. 1. All documents forwarded to or received from the Liquidators (including emails and attachments to emails), and all agenda and records of any meetings between the Liquidators and the Commissioner (including any minutes and notes) referring to: (a) the freezing orders to be obtained, that might be obtained or that were obtained by the Commissioner against any of the Nudie Entities (including Federal Court proceedings NSD 69/2015); (b) any of the Nudie Entity Assessments; (c) any of the Noteholder Assessments; or (d) any of the 260-5 Notices; dated or brought into existence between 14 January 2015 and 3 December 2015. 2. All documents forwarded to or received from the Liquidators (including emails and attachments to emails), and all agendas and records of any meetings between Liquidators and the Commissioner (including any minutes and notes) referring to: (a) the withdrawal of any of the 260-5 Notices by the Commissioner; (b) the Commissioner allowing or proposing to allow any of the objections to the Nudie Entity Assessments; (c) the Commissioner allowing or proposing to allow any of the objections to the Noteholder Assessments; (d) any action by the Nudie Entities against the Commissioner to have the Nudie Assessments declared invalid, void and of no effect (including Federal Court proceedings NSD 300/2015); (e) any action by any of the Noteholders to have the Noteholder Assessments declared invalid, void and of no effect (including Federal Court proceedings NSD 627/2015); (f) any action by any of the Nudie Entities and the Noteholders to have the 260-5 Notices set aside (including Federal Court proceedings NSD 626/2015); or (g) any proposal or suggestion for the Applicants in SAD 5/2015 to commence proceedings against one or more of the Nudie Entities (including the proceeding that was commenced in the Federal Court on 3 December 2015 No. NSD 1600/2015); dated or brought into existence between 14 January 2015 and 3 December 2015. 3. All documents forwarded to or received from the Liquidators (including emails and attachments to emails), and all agenda and records of any meetings between the Liquidators and the Commissioner (including any minutes and notes) referring to: (a) referring to any monies lent to or paid by the 11th to 13th named Respondents in NSD 1600/2015 to any of the Applicants in NSD 1600/2015 and that was indirectly lent or paid to any of the Nudie Entities; (b) referring to when the Liquidators or the Applicants became aware that monies paid by the 11th to 13th named Respondents in NSD 1600/2015 to Applicants was indirectly or paid to any of the Nudie Entities; (c) recording when the Liquidators or the Applicants received any of the documents to be produced in answer to [3](a) and [3](b) above; (d) referring to any consideration given by the Liquidators to amending the Statement of Claim or Amended Statement of Claim in proceedings SAD 5/2015 to join or not to join any of the Nudie Entities as respondents and any reason or reasons for not doing so; and (e) referring to any consideration given by the Liquidators to commencing proceedings against any of the Nudie Entities as respondents (including the proceedings that was commenced in the Federal Court on 3 December 2015 No. NSD 1600/2015) and any reason or reasons for doing so; dated or brought into existence between 14 January 2015 and 3 December 2015. SCHEDULE OF PARTIES NSD 1600 of 2015 Plaintiffs Fourth Plaintiff: B.C.I. FINANCES PTY LIMITED (ACN 055 988 531) (IN LIQUIDATION) Defendants Fourth Defendant: 12 YEARS JUICE FOODS PTY LTD (ACN 107 914 554) Fifth Defendant: 12 YEARS JUICE FOODS AUSTRALIA PTY LIMITED (ACN 110 000 265) Sixth Defendant: 12 YEARS JUICE FRANCHISING SYSTEMS PTY LIMITED (ACN 102 561 928) Seventh Defendant: REAL JUICE PTY LTD (ACN 102 244 842) Eighth Defendant: WINMAR INVESTMENT HOLDINGS PTY LTD (ACN 111 902 517) Ninth Defendant: DUNBA INVESTMENTS PTY LTD (ACN 125 403 072) Tenth Defendant: DUNMAF INVESTMENTS PTY LTD (ACN 125 403 054) Eleventh Defendant: BANK HAPOALIM B.M. Twelfth Defendant: BANK HAPOALIM (SWITZERLAND) LIMITED Thirteenth Defendant: ISRAEL DISCOUNT BANK LIMITED