Huang v Deputy Commissioner of Taxation

1. The orders in paragraphs 4-8 inclusive made by the Full Court of the Federal Court of Australia on 28 September 2020 be stayed until the later of: (a) the date of the determination of the Deputy Commissioner of Taxation's application for special leave to appeal to the High Court; or (b) in the event that special leave to appeal from the orders is granted, the date of the determination of that appeal.
2. The costs of the stay application be costs in the cause of any appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This is an interlocutory application by the Deputy Commissioner of Taxation against Mr Changran Huang dated 24 September 2020 in which the Deputy Commissioner seeks a stay of orders made by the Full Court of this Court on 28 September 2020. Under s 25(2) of the Federal Court of Australia Act 1976 (Cth), a single judge has jurisdiction to hear and determine an application for a stay of orders of a Full Court. 2 A judge of this Court made a freezing order in favour of the Deputy Commissioner against Mr Huang. Mr Huang applied for leave to appeal from those aspects of the freezing order which restrained his conduct with respect to assets he holds in the People's Republic of China (China) and in Hong Kong. Leave to appeal was granted and the appeal was allowed. The Full Court handed down its reasons on 17 August 2020 and made the following order: The applicant file within seven days consent minutes of order reflecting the conclusions in the Court's reasons. In the event the parties are unable to agree, the applicant file and serve within seven days draft minutes setting out the orders he seeks and a short note setting out the areas of dispute between the parties. (Huang v Deputy Commissioner of Taxation [2020] FCAFC 141.) 3 The parties were unable to reach agreement on all the outstanding issues and the Court handed down a second set of reasons dealing with the outstanding issues on 28 September 2020 (Huang v Deputy Commissioner of Taxation (No 2) [2020] FCAFC 160.) The Court made the following orders, relevantly: 4. The applicant be granted leave to appeal from Order 1 made by the Court in proceeding NSD 1490/2019 on 21 October 2019. 5. The applicant's appeal be allowed. 6. The orders made by the Court in proceeding NSD 1490/2019 on 21 October 2019 be varied by: (1) substituting Annexure A referred to in Order 1 with the Penal Notice directed to the applicant which is Annexure A to these orders; and (2) adding an Order 4 as follows: "The applicant is to pay 50% of the costs of the hearing on 17 October 2019 including the costs of preparing submissions for that hearing." 7. The respondent is to pay the applicant's costs of the appeal as agreed or taxed. 8. Upon agreement as to the amount or after taxation, the costs payable to the applicant by the respondent in this proceeding by Order 4 above and in proceeding NSD 1490/2019 by Order 4 on 21 October 2019 as inserted by Order 3 above, are to be set-off against the applicant's liability for the judgment sum and costs in proceeding NSD 1490/2019 by Orders 1, 2 and 3 on 19 December 2019. 9. Orders 4-7 inclusive be stayed until further order. 10. The Interlocutory application dated 24 September 2020 be fixed for hearing at 10:00 am (Sydney time) on Monday, 12 October 2020. 11. The applicant file and serve any affidavits and written submissions it intends to rely on in relation to the Interlocutory application referred to in Order 10 by 12:00 pm (Sydney time) on Wednesday, 7 October 2020. 4 In her Interlocutory application, the Deputy Commissioner sought the following orders: 1. This Interlocutory Application be made returnable instanter. 2. The Orders made by the Full Court of the Federal Court of Australia on 28 September 2020 be stayed until the later of: (a) 4.00pm on the 35th day from the date of those orders; or (b) in the event that an application for special leave to appeal to the High Court in respect of the orders is filed before the expiry of 28 days from the date of these orders, the date of the determination of that application for special leave to appeal; or (c) in the event that special leave to appeal from the orders is granted, the date of the determination of that appeal. 3. The parties have liberty to apply on 48 hours' notice. 4. Costs. 5. Such further or other orders as this Honourable Court deems fit. 5 By the time the application for a stay came on for submissions on 12 October 2020, the Deputy Commissioner had lodged her application for special leave to appeal with the High Court of Australia. The orders which the Deputy Commissioner seeks to have stayed are those in paragraphs 4-8 inclusive. 6 The Deputy Commissioner relies on an affidavit of Mr George Khouri sworn on 24 September 2020. Mr Khouri is an Australian public servant who is currently a Senior Technical Leader in the Australian Public Service, employed by the Debt Section of the Australian Taxation Office. Various matters are established by Mr Khouri's evidence and those matters are identified in the course of these reasons. Mr Khouri referred to a previous affidavit of Mr Yi Deng sworn on 16 September 2019 which the Deputy Commissioner also relies upon. Mr Deng's affidavit was before the primary judge and is referred to in the Full Court's first set of reasons (at [19]). As it happens, Mr Khouri summarises the key points based on Mr Deng's affidavit and it is not necessary for me to refer to Mr Deng's affidavit. 7 The Deputy Commissioner also relies on an affidavit of her solicitor. That affidavit annexed her application for special leave to appeal. The proposed ground of appeal if special leave is granted is in the following terms: The Full Court erred at [42]-[43] and [47] in imposing, as a jurisdictional precondition for the making of a worldwide freezing order, proof of a realistic possibility of enforcement of a judgment debt against assets of the defendant in each foreign jurisdiction to which the proposed order relates. 8 Each party relied on written submissions as well as oral submissions. The Deputy Commissioner's written submissions were dated 25 September 2020 and 9 October 2020 respectively, and Mr Huang's written submissions were dated 6 October 2020 and 9 October 2020 respectively. 9 As the application for special leave to appeal has now been filed, the orders sought by the Deputy Commissioner are as follows: (1) The orders made by the Full Court of the Federal Court of Australia on 28 September 2020 be stayed until the later of: (a) the date of the determination of the Deputy Commissioner's application for special leave to appeal to the High Court; or (b) in the event that special leave to appeal from the orders is granted, the date of the determination of the appeal. (2) The costs of the stay application be costs in the cause of any appeal. 10 For the reasons which follow, and subject to the identification of the relevant paragraphs of the orders of the Full Court, I have reached the conclusion that these orders should be made.