FYMS and Commissioner of Taxation

The Administrative Appeals Tribunal (AAT) considered the dispute between FYMS and the Commissioner of Taxation concerning the relevance of certain documents. FYMS sought access to documents that had been seized by the Australian Crime Commission (ACC) as part of the Criminal Asset Confiscation Taskforce's operations, which the Commissioner intended to use in tax proceedings against FYMS. FYMS claimed privilege over these documents, arguing they were protected by legal professional privilege.

The primary legal issue before the Tribunal was whether the documents were subject to legal professional privilege, specifically distinguishing between external legal advice and internal legal advice. The Tribunal had to determine the nature of the advice sought and provided, and whether it met the criteria for privilege, particularly in the context of documents generated internally within an organisation.

Deputy President Bernard J McCabe P reasoned that legal professional privilege protects confidential communications made for the dominant purpose of giving or receiving legal advice. The Tribunal found that while communications with external legal advisors are generally presumed to be for the dominant purpose of seeking legal advice, this presumption does not automatically apply to internal communications. The Tribunal carefully examined the content and context of each document to ascertain whether the dominant purpose of their creation was to seek or provide legal advice, rather than for other commercial or operational purposes.

The Tribunal ultimately determined that some of the documents were not protected by legal professional privilege, as their dominant purpose was not the seeking or giving of legal advice. Consequently, these documents were considered relevant to the tax proceedings.