A freezing order made over worldwide assets has been upheld in an appeal to the High Court:
🌏 The ATO issued the taxpayer with assessments for liabilities and penalties of ~$141M following an audit & subsequently obtained a worldwide freezing order' * in the Federal Court.
🌏 The taxpayer appealed to the Full Federal Court against the 'worldwide' coverage of the freezing order. The appeal was allowed & orders varying the Worldwide Freezing Order (made by the primary Judge in the Full Court) were made so as to exclude the taxpayer's non-Australian assets.
🌏 The ATO appealed to the High Court. By majority, the High Court held that the Federal Court did have the power to make a freezing order over all of a taxpayer’s assets - including those located outside Australia. Orders were made to effectively reinstate the Worldwide Freezing Orders.
The majority in the High Court held that:
🔹 "Full Court of the Federal Court of Australia erred in holding that the power" was constrained by the principle that "may only be exercised if there is proof of a realistic possibility of enforcement of a judgment debt against the person's assets in each foreign jurisdiction to which the proposed order relates"
🔹 However, when on to note “the likely utility of a freezing order is undoubtedly relevant to the exercise of the court's discretion [whether] to grant a Worldwide Freezing Order”.
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*Worldwide Freezing Orders = an order restraining a person from disposing of, dealing with or diminishing the value of assets, including assets located in or outside Australia.
Full Case: DCT v Huang [2021] HCA 43, 8 December 2021