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15 Apr 2008
Appeal Status
Not appealed

Accountants' advice documents must be discovered

2008 case note - interlocutory application made by CIR for discovery of ANZ's accountants' advice documents granted - relevance, confidentiality, tax avoidance.

ANZ National Bank Limited and Ors v The Commissioner of Inland Revenue CIV 2005-485-1037, 1038, 1039; 2006-485-1105, 1108, 1109, 1111. (Discovery application)


An interlocutory application made by the Commissioner for discovery of ANZ's accountants' advice documents was granted. The documents were relevant and not confidential.


The Commissioner has investigated a number of structured financing arrangements entered into by the ANZ and the National Bank ("ANZ"). Following this investigation amended income tax assessments have been issued. The basis for the reassessments is that the structured finance transactions are tax avoidance arrangements and the Commissioner is able to counteract the tax advantage gained. ANZ has challenged the reassessments but the substantive question relating to whether the transactions amount to tax avoidance has not yet been heard.

These proceedings arose out of the discovery phase of the substantive litigation. ANZ failed to provide for inspection copies of certain documents relating to tax advice it received from KPMG and PWC in relation to the structured finance transactions. The Commissioner sought discovery and inspection of these documents.

ANZ opposed the application for discovery on the grounds that the documents were not relevant and were confidential.


With regard to the question of relevance the Court proceeded on the basis of the settled law that the test for tax avoidance was objective and was determined by reference to the arrangement itself, not the subjective motives of the parties to the arrangement.

ANZ considered the subjective opinions of their tax advisors regarding the tax consequences as irrelevant to the Court's objective determination of whether the structured finance transactions constituted tax avoidance. However, the Commissioner relied on the proposition that the PWC tax advice documents formed part of the overall tax avoidance arrangement and were therefore relevant. The Commissioner also argued the tax advice documents might prove or disprove a matter which would be of consequence to the determination of tax avoidance. In particular the Commissioner cited eight aspects central to the determination of the substantive case which the PWC and KPMG document might go towards proving or disproving.

The Court accepted that the PWC and KPMG documents might be relevant to the determination of those eight aspects and were therefore relevant.

With regard to whether the documents were confidential ANZ relied on section 69(2)(b) of the Evidence Act 2006 ("EA"). This provision gives the Court the overriding discretion to order non-disclosure if the public interest in disclosure is outweighed by countervailing public interest in preventing harm to a relationship of confidence or maintaining the free flow of information.

ANZ argued the relationship between itself and its accountant tax advisors was one which came within the scope of section 69(2) (b) of the EA. This was rejected by Wild J on the following grounds:

  • Accountants' advice is not privileged and is discoverable if it is relevant.
  • The clear legislative intent of Parliament is not to extend privilege to accounting advice.
  • Given the clear intent of Parliament it would be improper for the Court to exercise its discretion under section 69 of the EA to extend confidentiality to accountants' advice as an entire class of documents.
  • There was no evidence that the relationship between ANZ and its accountant tax advisors would be harmed unless confidentiality was ordered.
  • The proper evidential foundation was not laid for asserting confidentiality in relation to individual documents.
  • The ANZ did not comply with the High Court Rules in relation to its claims of confidentiality.

The PWC and KPMG tax advice documents were held to be relevant and not confidential under the EA. The Commissioner's application for discovery of the PWC and KPMG tax advice documents relating to the structured finance transactions was allowed.

Evidence Act 2006, Tax Administration Act 1994