JMA Accounting Pty Ltd v Michael Carmody, Commissioner of Taxation [2004] FCAFC 274

JMA Accounting Pty Ltd v Michael Carmody, Commissioner of Taxation [2004] FCAFC 274

The appeal was allowed because, although the respondents' proposed procedure for protecting claims to legal professional privilege was reasonable and copying unread privileged documents did not itself infringe the privilege, the s 263 power required a reasonable effort to distinguish relevant from irrelevant material. Bulk copying all e-mail store folders without examining their contents, and downloading the full Sunnybank server work file directory without knowing whether the information was relevant, were impermissible and not a reasonable exercise of the search and copying power.

Jurisdiction
Australia
Judgment Date
14 October 2004
Procedural Posture
Appeal From a Judge of the Federal Court of Australia Concerning Review of ATO Access and Copying of Documents Under S 263 of the Income Tax Assessment Act 1936 (cth) / Appeal
Outcome
Appeal allowed; orders made by the trial judge set aside; respondents ordered to deliver specified copied e-mails and documents to the appellants and to pay costs of the appeal and proceedings below.
Legal Topics
['income Tax Investigation' 'search and Seizure' 'documents Held on Computers' 'legal Professional Privilege' 'reasonableness of Search and Copying']
['taxation' 'administrative Law' 'legal Professional Privilege'] ['income Tax Investigation' 'search and Seizure' 'documents Held on Computers' 'legal Professional Privilege' 'reasonableness of Search and Copying']

Case Brief

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Procedural Posture

Appeal From a Judge of the Federal Court of Australia Concerning Review of ATO Access and Copying of Documents Under S 263 of the Income Tax Assessment Act 1936 (cth) / Appeal

Legal Issues

  1. 1 ["Whether ATO officers exercising powers under s 263 of the Income Tax Assessment Act 1936 (Cth) infringed legal professional privilege by copying documents, including potentially privileged documents, from JMA's computers." 'Whether JMA was denied a real or genuine opportunity to make a claim for legal professional privilege.' 'Whether the copying of all e-mail store folders and documents downloaded from computer servers was a reasonable exercise of the s 263 power.' 'Whether the officers copied documents without proper consideration of whether they were required for the purposes of the Income Tax Assessment Act.']

Ratio Decidendi

The appeal was allowed because, although the respondents' proposed procedure for protecting claims to legal professional privilege was reasonable and copying unread privileged documents did not itself infringe the privilege, the s 263 power required a reasonable effort to distinguish relevant from irrelevant material. Bulk copying all e-mail store folders without examining their contents, and downloading the full Sunnybank server work file directory without knowing whether the information was relevant, were impermissible and not a reasonable exercise of the search and copying power.

Court Disposition

Appeal allowed; orders made by the trial judge set aside; respondents ordered to deliver specified copied e-mails and documents to the appellants and to pay costs of the appeal and proceedings below.

Orders

  • ['The appeal be allowed.' 'The orders made by the trial judge be set aside.' "Within seven days the respondents deliver to the appellants copies of all e-mails taken on 5 and 6 May 2004 from the appellants' computers located at their office at 360 Queen Street, Brisbane." "Within seven days the respondents deliver...