Anglo American Investments Pty Ltd (Trustee) (No 2) v Commissioner of Taxation

Counsel for the Respondent: Ms K Stern SC with Ms J Jacques and Ms C Ensor

Solicitor for the Respondent: Australian Government Solicitor

LOGAN J: 1 The evidence for the applicant, Anglo American Investments Proprietary Limited as Trustee for the Anglo American Charitable and Cultural Trust (Anglo American), in this taxation appeal, includes a number of affidavits made by its sometime director, Mr Vanda Russell Gould. In an affidavit made on 10 June 2019 and filed in Court by leave yesterday, Mr Gould states at [7] and [17] the following: 7. During the entire period Melbourne Corporation has been at the Gateway Building the arrangements for storage of my Australian private entities' financial records has been as follows: a. At the Gateway Building office premises there is a room which is set aside and used exclusively by Melbourne Corporation and its staff. This is the room where John Carson and Elissa Hardy work. The room has shelves full of folders. The material held in the folders includes financial records dating from more recent financial years for various Melbourne Corporation client entitles, including my Australian private entities such as Anglo American and Darlington McCarthur; b. Melbourne Corporation maintains a computer server containing business records of Melbourne Corporation clients. The computers of the Melbourne Corporation staff are all connected to this server, although my personal computer is not connected to the server. c. The Melbourne Corporation staff use software called Xero to record accounting transactions that have occurred in the financial years after 2012. Prior to 2012, the Melbourne Corporation staff used software called MYOB. The Melbourne Corporation staff have access to historical MYOB records for my Australian private entities. d. Melbourne Corporation keeps boxes of archival records at a storage facility that is physically removed from the Gateway Building. Elissa Hardy has maintained an Excel Spreadsheet which lists the boxes in the archive ('Archive List'). In the Archive List, each box is identified by a number and there is a brief description of the folders that each box contains. … 17. I read the documents, referred to in Paragraph [102], after they had been drafted. I observed that the text of the documents provided: a. Darlington McCarthur would transfer assets and investments to the trustee of Anglo American Charitable and Cultural Trust; b. The trustee of Anglo American would pay Darlington McCarthur for the assets and investments; c. My other Australian private entities would transfer assets and investments to the trustee of Anglo American; and d. Anglo American would assume debts owed by the transferor entities (mentioned in "c" above) to Darlington McCarthur Pty Ltd. 2 To understand [17], it is necessary, as that paragraph indicates on its face, also to read it in conjunction with [102] of an earlier affidavit made by him. In that paragraph he states: 102 I organised for legal documents to be prepared to implement the transactions I describe above. A set of documents were prepared by the law firm, Henry Davis York. I had retained this law firm for the purpose of representing me in the divorce proceedings initiated by my wife. I regularly liaised with the lawyers from Henry Davis York about those matters. I thought it was important to document the proposed transaction because of the divorce proceedings. 3 Upon Anglo American seeking to read and rely upon the affidavit of 10 June 2019, objection was taken on behalf of the respondent Commissioner of Taxation (Commissioner) to the paragraphs in it which I have just identified. For present purposes, it is sufficient to focus just upon one aspect of the objection. The objection was that the paragraphs concerned were not admissible under s 48 of the Evidence Act 1995 (Cth) (Evidence Act). That Act follows the so-called Uniform Evidence Act model. It is not just convenient but, in my view, procedurally fair to both parties (but if anything rather more to the Commissioner) to rule now on the question as to whether or not, having regard to s 48 and in particular s 48(4)(b), what is found in [17] of the affidavit can be regarded at all as evidence of the contents of the documents there referred to. 4 Materially, s 48 provides: (1) A party may adduce evidence of the contents of a document in question by tendering the document in question or by any one or more of the following methods: (a) adducing evidence of an admission made by another party to the proceeding as to the contents of the document in question; (b) tendering a document that: (i) is or purports to be a copy of the document in question; and (ii) has been produced, or purports to have been produced, by a device that reproduces the contents of documents; (c) if the document in question is an article or thing by which words are recorded in such a way as to be capable of being reproduced as sound, or in which words are recorded in a code (including shorthand writing)--tendering a document that is or purports to be a transcript of the words; (d) if the document in question is an article or thing on or in which information is stored in such a way that it cannot be used by the court unless a device is used to retrieve, produce or collate it--tendering a document that was or purports to have been produced by use of the device; (e) tendering a document that: (i) forms part of the records of or kept by a business (whether or not the business is still in existence); and (ii) is or purports to be a copy of, or an extract from or a summary of, the document in question, or is or purports to be a copy of such an extract or summary; (f) if the document in question is a public document--tendering a document that is or purports to be a copy of the document in question and that is or purports to have been printed: (i) by the Government Printer or by the government or official printer of a State or Territory; or (ii) by authority of the government or administration of the Commonwealth, a State, a Territory or a foreign country; or (iii) by authority of an Australian Parliament, a House of an Australian Parliament, a committee of such a House or a committee of an Australian Parliament. (2) Subsection (1) applies to a document in question whether the document in question is available to the party or not. ... (4) A party may adduce evidence of the contents of a document in question that is not available to the party, or the existence and contents of which are not in issue in the proceeding, by: (a) tendering a document that is a copy of, or an extract from or summary of, the document in question; or (b) adducing from a witness evidence of the contents of the document in question. Note 1: Clause 5 of Part 2 of the Dictionary is about the availability of documents. Note 2: Section 182 gives this section a wider application in relation to Commonwealth records and certain Commonwealth documents. 5 The reason why it is desirable to make a ruling now is that given on behalf of the Commissioner, which is that it is influential, if not determinative, of a particular subject for cross-examination. In other words, if truly [17] is just not admissible at all, if for no other reason than it cannot be regarded as compliant with s 48(4)(b), there is no need to direct attention to that subject in cross-examination. 6 There are a number of assumptions to make in relation to the ruling. 7 First, and this is an assumption I was mutually invited to make for the purposes of the ruling, is, that Mr Gould's evidence in [17] is to be treated as credible. The concession on behalf of the Commissioner for the purposes of the ruling in no way binds the Commissioner in relation to a challenge to Mr Gould's credibility. There is also an assumption, which is that a condition precedent concerning non-availability is met. The subject of whether or not other elements for admissibility, including not available to the party, as that concept is known for the purposes of that section, is assumed for the moment in Anglo American's favour. It will be necessary later in the proceedings, because the Commissioner's objection also includes that ground, to make a ruling on that subject. 8 Our revenue law does not require that persons subject to taxation retain documents indefinitely. It prescribes particular times within which in the ordinary course documents must be retained. 9 There is also a series of time limits specified within which assessments may be amended. But where the Commissioner forms a view as to fraud or evasion, those time limits disappear. The Commissioner has formed such a view in this case. Whether or not that view is impeachable is one of the issues in the case. But for present purposes its impact in relation to this taxation appeal is that there are a series of documents (and those are the ones referred to in [17]), which are up to a quarter of a century (or more) old. 10 So the point at large, whilst it has not arisen in a taxation appeal before (so far as the researches of counsel and my own have disclosed), is by no means one which is inconceivably just unique to the present case. One might apprehend that the point could arise in many cases where the Commissioner, many years after the event of execution of documents, chooses, on the basis of an opinion formed as to fraud or evasion, to amend an assessment, which then becomes the subject of a later taxation appeal. 11 Section 48 is part of a suite of law reform measures found in Ch 2, Pt 2.2 of the Evidence Act. Section 51, also within Pt 2.2, expressly provides that the "principles and rules of the common law that relate to the means of proving the contents of documents are abolished". The point was made on behalf of Anglo American, and it is, with respect, a sound point, that the abolition evident in s 51 and the law reform qualities of, materially, s 48 should not be subverted by, to adopt a revenue law description, "muffled echoes of old arguments": Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 414. 12 So I approach the question of admissibility with that particular character of the provision in mind. Further, and perhaps tritely, the text of the statute has to be given primacy and means what it says. 13 So what meaning then should be given to evidence of the contents of the document in question? Quite apart from any revenue law authority examples, there is very little domestic authority about s 48(4)(b) at all. It is referred to in passing by Brereton J in Metropolitan Petar v Mitreski [2010] NSWSC 1187 (Metropolitan Petar v Mitreski), where a question arose as to whether an affidavit which purported to give evidence of the contents of the constitution of an association was sought to be read. His Honour acknowledged that the course of a witness endeavouring to prove the contents of a document by giving the affidavit equivalent of oral evidence was open, making reference to s 48(4)(b). But the question of admissibility on that case turned not upon a consideration of what might constitute evidence of the contents, but rather the other issue which is at large for later determination in this case also, namely whether unavailability within the definition of the term in the dictionary, cl 5 of the equivalent Evidence Act 1995 (NSW) had been established. So all that I derive from Metropolitan Petar v Mitreski is that proof by affidavit of the contents is a permissible means but nothing more. 14 In Winter v Nemeth [2018] NSWSC 644 (Winter v Nemeth), Campbell J, over an objection, ruled that secondary oral evidence of the contents of a document would be admissible under s 48(4)(b) of the equivalent Evidence Act 1995 (NSW). His Honour, though, did not detail any particular principles which might attend or expand upon the meaning of contents of a document. So there is no particular precedent value in Winter v Nemeth on this point. 15 Another New South Wales case, Minassian v Minassian [2010] NSWSC 708, also saw a controversy arise as to whether particular secondary evidence could be admitted under s 48. In that case at [43] and [44], Ball J stated: 43. Section 48 of the Evidence Act 1995 sets out how a party may adduce evidence of the contents of a document. Relevantly, it permits a party to prove the contents of a document by adducing evidence of an admission made by another party to the proceeding as to the contents of the document (s 48(1)(a)) or, where the document in question is not available to a party, by "adducing from a witness evidence of the contents of the document in question" (s 48(4)). Clause 5 of the Dictionary of the Evidence Act relevantly provides that a document is taken not to be available to a party if "it cannot be found after reasonable inquiry and search by the party". Section 51 of the Evidence Act abolishes the common law principles applicable to the proof of the contents of a document. 44. Although s 51 of the Evidence Act abolishes the common law principles relating to the admissibility of evidence to prove the contents of documents, it does not affect the principle that, at least where property disputes are in question, clear and convincing evidence of the contents of the lost document is necessary. In Maks v Maks (1986) 6 NSWLR 34, for example, the plaintiff sought to establish by oral secondary evidence the contents of a declaration of trust by the defendant in favour of the plaintiff in respect of a half share in a house. McLelland J said (at 36): "I am of the opinion that where the original writing is not produced and secondary evidence is relied on, there must be clear and convincing proof not only of the existence, but also of the relevant contents, of the writing, of the same order as the proof required to establish an entitlement to the rectification of a written instrument ..., the two classes of case being to my mind in relevant respects analogous." See also Mack v Lenton (1993) 32 NSWLR 259 at 261 per Young J; Chapman v Luminis Pty Ltd (No 2) [2000] FCA 1010 at [29] per von Doussa J. His Honour also stated at [49] - [50]: 49. However, I do not accept Mr Loofs interpretation of s 48(4) of the Evidence Act. That subsection permits a party to adduce evidence of the "contents' of the document. That evidence could take the form of evidence from a person who has seen the document and who can give evidence about what it contained. It could also take the form of another document that purported to record the contents of the document that is unavailable: Lewis v Nortex Pty Ltd (in liq) [2002] NSWSC 337. However, I do not think that it includes evidence concerning people's intentions or beliefs from which the contents of the document might be inferred. That evidence is not evidence of the contents of the document. 50. For similar reasons, I do not think admissible hearsay evidence of the contents of a document (such as evidence from a witness that Mr Minas told the witness about the contents of the 1980 agreement) is admissible under s 48(4). That evidence is evidence of what one person said to another concerning the contents of the document in question. It is not itself evidence of the contents of the document. [sic] Notably, his Honour also observed at [53], that there was nothing in s 48(4) which suggested that it set out an exclusive means of proving the contents of a document not available to a party. Beyond these particular observations, though, I do not find the case of assistance in relation to what may constitute evidence as to the contents of a document. 16 I do have a concern, and it is one voiced on behalf of Anglo American, that the reference to Maks v Maks (1986) 6 NSWLR 34 (Maks v Maks), and in particular a statement as to a need for clear and convincing proof, may be setting the bar rather too high. I say that because, first, s 142 of the Evidence Act is applicable in relation to proof in this proceeding, including proof of the contents of a document. Further, if one goes back in time in the cases, in relation to proof of the contents of lost wills, one finds in Brown v Brown (1858) 27 LJQB 173 at 178, this statement by Lord Campbell CJ: It was the common case of a written instrument which had been lost or destroyed; and when the instrument itself is thus not extant or forthcoming, secondary evidence of its contents is admissible, whether it be a will or any other written document. Then if secondary evidence is admissible, it cannot surely be contended that a person who has read the document and says he recollects it, shall not be allowed to state what he recollects of its contents. The weight of the evidence is another matter, - that is for the jury; that the evidence is admissible there cannot be a doubt. 17 Here, Anglo American is not obliged to prove to demonstration the contents, only on the balance of probabilities. Further, the statement made by Lord Campbell CJ is not prescriptive as to what may acceptably be regarded as proof of the contents, just that a recollection by someone who has read them was regarded at common law as acceptable. 18 What is clear enough, though, is that there are some limits to what constitutes acceptable evidence of the contents. In another lost will case, Woodward v Goulstone (1886) 11 App Cas 469 (Woodward v Goulstone), the following statement was made by the then Lord Chancellor, Lord Herschell, at 474 - 475, in relation to an endeavour to prove by oral of parole, in other words, oral evidence, of particular legacies in an allegedly lost will: … but I cannot help thinking that, as regards the will which was propounded in the present case, some of the legacies contained in it, and the most important legacies, are practically supported by no evidence at all. According to Peters, all that he was told by Morgan, at the time when he was proposing to make his will, about Woodward was that he proposed to leave him something handsome; and if he did as he had intended, no doubt he did leave him something handsome; but on the strength of the statement by Woodward of this conversation, in which he asked him whether he would give up business if he were left £5000, a will is put forward by Peters, and probate is asked of it, in which the sum of £5000 is left to Woodward. It seems to me utterly impossible to grant probate of a will, or at all of a part of it, which is only proved by evidence such as that. Later, at 475, Lord Herschell stated: But if upon mere loose statements of the recollection of witnesses as to what has been said to them at some time or other, you were to grant probate of, and to establish as the will of the testator, something which no one had ever seen or purported to be able to depose to from recollection, it seems to me that you would be doing that which would be in the highest degree dangerous, and the more so when those statements are statements of witnesses (and one knows how fallible human memory is even when there is no interest to bias in it) who have the strongest possible interest in remembering what they remember and in forgetting what they forget. 19 The latter sentences in this passage from Woodward v Goulstone do seem to be consistent with Maks v Maks. But it is necessary also not to conflate whether particular evidence is evidence of the proof of contents with the weight one might give such evidence. Perhaps the high water mark of proof of contents of lost wills - and I find the case instructive by analogy - is Sugden v Lord St Leonards (1876) 1 PD 154. In that case, a daughter gave oral evidence of the contents of a lost will, which evidence was admitted. When one looks at the type of evidence which Miss Sugden gave as to the contents of the will, which was regarded as admissible, there is something of the flavour of words to the effect in her evidence. In other words, though she had read the document in question and was regarded as a reliable witness, notwithstanding her personal interest in the matter, nonetheless her recollection, whilst good, was imperfect. The flavour of that is most apparent in this passage from Lord Jessel MR's separate judgment, at 232: Miss Sugden, herself tells us, first, as regards the personality, that there were some legacies the particulars of which she is unable to recollect; and, secondly, as regards a considerable portion, in fact the larger portion, of the real estate, that there were some limitations over after the seven life estates, besides the estates limited to the issue of the tenants for life, the particulars of which she does not remember, although she does remember that other estates were left amongst the members of the family. 20 Returning, then, to [17] of Mr Gould's affidavit, it seems to me that it is no less general in its description of the relevant document's contents than was that of Ms Sugden. It was put on behalf of the Commissioner that there is a conclusive quality in relation to the descriptions employed by Mr Gould, but that was so also in a sense in relation to Ms Sugden's evidence as to particular legacies. It is necessary, in my view, not to confuse weight with admissibility. In my view, the descriptions offered by Mr Gould are descriptions of the contents of the documents concerned. 21 It would be subversive, in my view, of the law reform measures contained in the Evidence Act to approach what may constitute evidence of a document's contents narrowly. Of course, evidence of the kind that is no more than a series of loose statements would be unacceptable: Woodward v Goulstone. But this is evidence from a man who, even on the evidence already heard, has postgraduate qualifications in commerce, is a chartered accountant and, having regard to Ms Sua's evidence, is also of quite some commercial sophistication. That also means that it is hardly surprising that he has used the terminology that he has in [17] to describe the contents. It is just the sort of description of contents one might expect of a man with that particular background and experience. None of this, I emphasise, is in any way to indicate whether or not those descriptions are to be regarded as reliable, only that I regard them as compliant with the requirement found in s 48(4)(b), as to evidence as to contents of the documents concerned. I rule accordingly. 22 The same objection was made to para 19, which reads: 19. I read this document after it had been prepared. I observed that the text of the document provided: b. Anglo American would no longer owe a debt to Darlington McCarthur Pty Ltd; and b. Anglo American would owe a debt to Swire Investments Ltd of equal size to Anglo American's existing debt to Darlington McCarthur. 23 It would follow necessarily from what I have already said that I overrule that objection and regard what is found there as a description of the contents, which is compliant with s 48(4)(b). I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.