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28 Apr 2009
Appeal Status

Tax advice documents to be discovered

2009 case note – tax opinions are relevant and discoverable in tax avoidance cases; admissibility and the taxpayers' non-disclosure right - tax advice, discovery.

ANZ National Bank Limited & Others v Commissioner of Inland Revenue


ANZ is required to discover to the Commissioner opinions provided by its tax advisor, Pricewaterhouse Coopers (PwC).

Impact of decision

The Court of Appeal confirms that tax opinions are relevant and discoverable in tax avoidance cases. The judgment discusses relevance, admissibility and the taxpayers’ non-disclosure right in relation to tax avoidance documents.


The litigation between ANZ and the Commissioner involves a challenge by ANZ to assessments made by the Commissioner in relation to financing transactions known as "repo" transactions.

ANZ received advice from PwC in relation to the repo transactions that are the subject of the challenge proceedings. At the relevant time, a partner of PwC was providing what was essentially the in-house tax function at ANZ and, in addition, PwC provided “sign off” opinions on the tax aspects of the repo transactions. ANZ accepts that the descriptions of the factual elements of the transactions contained within these tax opinions are discoverable, but says that the actual advice given on the tax aspects of the transactions is not relevant to the Court’s decision as to whether the arrangements of which the transactions formed part amounted to tax avoidance, and should not therefore be discoverable.

The principal submission made by ANZ was that the tax advice was not relevant to the question of whether the arrangements of which the repo transactions formed part were tax avoidance arrangements. The determination of whether an arrangement amounts to tax avoidance requires an objective assessment. In light of the objective nature of the assessment required, subjective views of a tax adviser as to the way in which disputed transactions could be effected by tax legislation were of no relevance.

In the High Court Wild J ruled that the tax opinions were discoverable: ANZ National Bank Ltd v Commissioner of Inland Revenue (No 2) (2008) 23 NZTC 21,918. ANZ appealed against that ruling.


The Court of Appeal stated that relevance in terms of the Peruvian Guano test is not the same as the test for relevance when determining admissibility of evidence (section 7 of the Evidence Act 2006). In terms of the Peruvian Guano test, it is sufficient if the tax opinions could fairly lead the Commissioner to a train of inquiry which may have the effect of advancing his case or damaging that of ANZ. The Court held that the tax opinions meet the broad relevance test for the issues of whether the guarantee procurements fee is a sham and the purpose of the arrangement.

The Court held that the tax advice may assist the Commissioner in establishing the scope of the arrangements at issue. The Court agreed that, if the tax advice include the nature and size of the guarantee procurement fee and the purpose for which that fee is charged, they will be relevant to the Commissioner’s sham argument. Whether they will be admissible as evidence can be determined later as already indicated, their discoverability does not necessarily mean they will be admissible.

Tax Administration Act 1994