The High Court unanimously allowed a demurrer and dismissed a proceeding by the plaintiffs whereby the plaintiffs, Glencore International AG (‘Glencore’) sought to invoke the Court’s jurisdiction under s 75(iii) of the Constitution to compel the defendants, the Australian Taxation Office (‘ATO’) to return certain documents (the ‘Glencore documents’) to them and to restrain the defendants’ further use of them.
The Glencore documents were created for the sole or dominant purpose of legal advice to Glencore with respect to the corporate restructure of Australian entities within the Glencore group. The advice was provided by Appleby (Bermuda) Limited (“Appleby”), an incorporated law practice in Bermuda. The Managing Partner of Appleby said that the Glencore documents were amongst documents colloquially described as the “Paradise Papers” which were stolen from Appleby’s electronic file management systems and provided to the International Consortium of Investigative Journalists. Glencore said that the ATO had obtained copies of the Paradise Papers, asserted that the Glencore documents are subject to legal professional privilege and sought an injunction requiring the ATO to return them and to provide an undertaking that they would not be referred to or relied upon. The ATO did not accede to those requests. Instead it argued that there was no cause of action entitling Glencore to relief, or that they were required to retain and use the documents for the purposes of s 166 of the Income Tax Assessment Act 1936 (Cth) (‘ITAA36’), which provides that the Commissioner must make an assessment of the taxpayer’s returns from the taxpayer’s returns “and from any other information in the Commissioner’s possession.”
The High Court held at  that it was clear that the Glencore documents were the subject of legal professional privilege, and that documents which were subject to legal professional privilege were exempt from production by court process or statutory compulsion. However, a declaration to this effect would not assist Glencore, because once the documents were in the ATO’s possession, they could be used in connection with the statutory powers under the ITAA36. Glencore would have to identify a juridical basis for an injunction to restrain the ATO’s use.