Deputy Commissioner of Taxation v State Grid International Australia Development Company Limited [2022] FCA 139

Federal Court of Australia

Deputy Commissioner of Taxation v State Grid International Australia Development Company Limited [2022] FCA 139 File number(s): NSD 88 of 2022

Judgment of: PERRY J

Date of judgment: 16 February 2022

Date of publication of reasons: 22 February 2022

Catchwords: TAXATION – urgent interlocutory application for freezing orders with respect to prospective capital gains tax (CGT) liability in excess of $220m on implementation of approved scheme of arrangement for transfer of shares the following morning – where first respondent's CGT liability would arise on implementation of the scheme of arrangement – where first respondent is a foreign company incorporated in Hong Kong – where first respondent will have no substantial assets or residual business in Australia should the whole of the consideration owed to it under the scheme of arrangement be removed from Australia – where first respondent disputes prospective CGT liability – where real danger that the funds necessary to meet the prospective CGT liability would be removed from Australia absent freezing orders – where orders able to be fashioned to avoid risk of impeding or delaying implementation of the scheme of arrangement with consequential unknown and potentially unknowable third party impacts and possible breach of the scheme of arrangement – where balance of convenience fell in favour of freezing orders against the first respondent at least until the matter returns before the Court the following week when the respondents will have a proper opportunity to lead evidence and make submissions PRACTICE AND PROCEDURE – application for leave to serve outside Australia – where prima facie case established of prospective cause of action – where Australia is not an inappropriate forum – where proposed method of service permitted by Hague Convention – application for substituted service