Commissioner of Taxation and Hong & Anor

The Commissioner of Taxation (the applicant) sought interim injunctive relief against Mr Hong and Ms Biy (the respondents) in the Federal Court of Australia. The dispute concerned the potential dissipation of assets by the respondents, which the Commissioner alleged was in anticipation of, or in consequence of, tax liabilities. The orders sought were designed to preserve these assets pending the final determination of the proceedings.

The primary legal issues before the Court were whether the Commissioner had established a sufficient prima facie case to warrant the grant of interim injunctions, and whether the balance of convenience favoured the imposition of such restraints. Specifically, the Court had to consider if there was a real risk that the respondents would deal with their assets in a manner that would frustrate the recovery of any tax assessed as due and payable.

Hogan J granted interim injunctions restraining both Mr Hong and Ms Biy from dealing with specified assets, including a motor vehicle, shares in B Pty Ltd, and real property. Ms Biy, in her capacity as sole director and shareholder of B Pty Ltd, was also restrained from disposing of or dealing with the company's assets in a way that would reduce their value, other than in the ordinary course of business. The Court applied the principles governing the grant of interlocutory injunctions, requiring the applicant to demonstrate a serious question to be tried and that the balance of convenience favoured preserving the status quo. The costs of the application were reserved, and parties were granted liberty to apply on short notice.