Huang v Deputy Commissioner of Taxation (No 2)

In the matter of Huang v Deputy Commissioner of Taxation (No 2), the Federal Court of Australia addressed an appeal concerning the variation of freezing orders and the setting off of costs orders. The Deputy Commissioner of Taxation had sought freezing orders against the applicant's non-Australian and Australian assets, which were subsequently varied following an appeal. The applicant, Mr Huang, sought further variation of the freezing orders and the setting off of costs orders. The legal issues before the court were whether the matter should be heard by the Full Court or a single judge in the original jurisdiction, whether the Full Court should set aside the order for costs made by the primary judge and make a new costs order, and whether the costs order against the respondent should be set off against the judgment sum and costs orders in her favour in the principal proceeding.

The court found that the issue of the variation of the freezing orders was not squarely raised on appeal, and that a further hearing and evidence may be required. The court concluded that it was more appropriate for the issue to be dealt with by a single judge in the original jurisdiction, as it would serve the interests of justice. The court also found that it was equitable to set off the costs orders against each other and the principal judgment, as the Deputy Commissioner was justified in seeking the freezing orders and was successful in doing so. The court varied the orders to exclude Mr Huang's non-Australian assets from the freezing orders and ordered that the Deputy Commissioner pay 50% of Mr Huang's costs of the hearing on 17 October 2019. The costs payable to Mr Huang by the Deputy Commissioner were to be set off against the judgment sum and costs orders in favour of the Deputy Commissioner.

In summary, the court allowed the appeal and varied the freezing orders to exclude Mr Huang's non-Australian assets. The court also ordered that the Deputy Commissioner pay 50% of Mr Huang's costs of the hearing on 17 October 2019 and set off the costs orders against each other and the principal judgment. The court's decision was based on the equitable nature of the set-off and the fact that the Deputy Commissioner was justified in seeking the freezing orders.