ARW v Comptroller of Income Tax: Public Interest Privilege & Discovery in Tax Avoidance Case

ARW appealed the High Court's decision regarding the Comptroller of Income Tax's application for an extension of time to file further arguments and to admit further evidence, as well as the Attorney-General's intervention in the dispute. The case originated from a tax refund claim by ARW, which the Comptroller later deemed a tax avoidance arrangement. The Court of Appeal dismissed both appeals, upholding the High Court's decisions.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeals dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

ARW appeals against the High Court's decision regarding the Comptroller of Income Tax's application for further arguments and intervention by the Attorney-General.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Attorney-GeneralRespondentGovernment AgencyAppeal DismissedWon
Khoo Boo Jin of Attorney-General’s Chambers
Sivakumar s/o Ramasamy of Attorney-General’s Chambers
Kwek Mean Luck of Attorney-General’s Chambers
Ng Shi Zheng Louis of Attorney-General’s Chambers
Comptroller of Income TaxRespondentGovernment AgencyAppeal DismissedWon
ARWAppellantCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Andrew Phang Boon LeongJustice of the Court of AppealNo
Chao Hick TinSenior JudgeYes

4. Counsels

Counsel NameOrganization
Khoo Boo JinAttorney-General’s Chambers
Sivakumar s/o RamasamyAttorney-General’s Chambers
Kwek Mean LuckAttorney-General’s Chambers
Ng Shi Zheng LouisAttorney-General’s Chambers
Mak Sushan MelissaAllen & Gledhill LLP
Colin LiewEssex Court Chambers Duxton (Singapore Group Practice)
Tan XeauweiAllen & Gledhill LLP
Toby Landau QCEssex Court Chambers Duxton (Singapore Group Practice)
Fong Cheng Yee DavidDrew & Napier LLC
Shirleen LowDrew & Napier LLC
Davinder Singh s/o Amar SinghDrew & Napier LLC
Srruthi IlankathirDrew & Napier LLC

4. Facts

  1. In 2003, ARW's group underwent a Corporate Restructuring and Financing Arrangement, obtaining a $225m loan.
  2. From 2004 to 2006, ARW filed tax returns claiming interest expenses for the $225m loan, receiving $9.6m in tax refunds.
  3. In 2007, the Comptroller reviewed cases with significant tax refunds and audited ARW, concluding it was a tax avoidance arrangement.
  4. The Comptroller invoked s 33 of the Income Tax Act, issuing notices of additional assessment, challenged by ARW.
  5. The Court of Appeal agreed that the Comptroller could not recover refunds via additional assessment but left open a common law action.
  6. The Comptroller commenced Suit 350 against ARW to recover the Tax Refunds based on unjust enrichment.
  7. ARW sought discovery of internal IRAS documents, resisted by the Comptroller on grounds of privilege and irrelevance.

5. Formal Citations

  1. ARW v Comptroller of Income Tax and another and another appeal, , [2018] SGCA 85

6. Timeline

DateEvent
Appellant's group of companies underwent a Corporate Restructuring and Financing Arrangement.
A $225m loan was obtained from a bank.
The $225m loan was returned to the bank on the same day through a series of transactions.
Appellant filed tax returns, showing interest expenses for the $225m loan.
Appellant filed tax returns, showing interest expenses for the $225m loan.
Appellant filed tax returns, showing interest expenses for the $225m loan.
Comptroller reviewed cases in which significant amounts of tax refunds were paid out.
Comptroller concluded that the Appellant had used a tax avoidance arrangement.
Comptroller commenced Suit No 350 of 2014 against the Appellant for the recovery of the Tax Refunds.
Appellant took out the Discovery Application.
Judge granted the Discovery Application.
Comptroller filed for leave to appeal against the judgment.
Comptroller filed a Notice of Change of Solicitor.
Comptroller filed the EOT Application and the Further Evidence Application.
AG filed the Intervention Application.
Oral arguments of parties were heard.
Judgment reserved.

7. Legal Issues

  1. Extension of Time
    • Outcome: The court held that it had jurisdiction to extend the time period prescribed under s 28B(1)(b) of the SCJA.
    • Category: Procedural
    • Related Cases:
      • [2002] 2 SLR(R) 336
      • [1998] 2 SLR(R) 646
  2. Admissibility of Further Evidence
    • Outcome: The court held that further evidence may be allowed in support of new arguments, but should not be allowed where the evidence is sought to support or strengthen previously raised arguments.
    • Category: Procedural
    • Related Cases:
      • [1954] 1 WLR 1489
  3. Public Interest Privilege
    • Outcome: The court held that the AG has standing to intervene in the Relevant Applications by virtue of the AG’s position as the guardian of the public interest.
    • Category: Substantive
    • Related Cases:
      • [1995] 1 AC 274
      • [1973] AC 388
  4. Joinder of Parties
    • Outcome: The court held that the AG was rightly joined to the proceedings under O 15 r 6(2)(b) of the ROC.
    • Category: Procedural
    • Related Cases:
      • [2018] 1 SLR 894

8. Remedies Sought

  1. Recovery of Tax Refunds

9. Cause of Actions

  • Unjust Enrichment

10. Practice Areas

  • Civil Litigation
  • Tax Litigation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Comptroller of Income Tax v AQQCourt of AppealYes[2014] 2 SLR 847SingaporeCited for the court's decision that the Comptroller was not entitled to recover the Tax Refunds by way of additional assessment but left open the possibility of a common law action in unjust enrichment.
Comptroller of Income Tax v ARWHigh CourtYes[2017] SGHC 16SingaporeCited for the Judge's decision to grant the Discovery Application, finding the Internal Documents to be both relevant and necessary, and not protected by any legal professional privilege.
Deepak Sharma v Law Society of SingaporeCourt of AppealYes[2017] 2 SLR 672SingaporeCited for the AG’s role as the ‘guardian of the public interest’.
Jeyaretnam Kenneth Andrew v Attorney-GeneralCourt of AppealYes[2014] 1 SLR 345SingaporeCited for the Government being perceived as the guardian of ‘public interests’.
R v Chief Constable of West Midlands Police, Ex parte WileyHouse of LordsYes[1995] 1 AC 274England and WalesCited for the principle that the Attorney-General for England and Wales, “as the guardian of the public interest”, has a “unique responsibility” as regards the law of public interest privilege.
R v Lewes Justices, Ex parte Secretary of State for Home DepartmentHouse of LordsYes[1973] AC 388England and WalesCited for the principle that the Attorney-General for England and Wales, “as the guardian of the public interest”, has a “unique responsibility” as regards the law of public interest privilege.
Zainal bin Kuning and others v Chan Sin Mian Michael and anotherHigh CourtYes[1996] 2 SLR(R) 858SingaporeCited as an example where public interest privilege had been raised by a public officer under s 126(1) EA, and the AG appeared as counsel for the public officer’s organization.
Banque Nationale de Paris v Hew Keong Chan GaryHigh CourtYes[2000] 3 SLR(R) 686SingaporeCited as an example where public interest privilege had been raised by a public officer under s 126(1) EA, and the AG appeared as counsel for the public officer’s organization.
Chan Hiang Leng Colin and others v Public ProsecutorHigh CourtYes[1994] 3 SLR(R) 209SingaporeCited as an example where public interest privilege had been raised by a public officer under s 126(1) EA, and the AG appeared as counsel for the public officer’s organization.
Ernest Ferdinand Perez De La Sala v Compañia De Navegación Palomar, SA and othersCourt of AppealYes[2018] 1 SLR 894SingaporeCited for the two-part inquiry for joinder of parties under O 15 r 6(2)(b) of the ROC.
Abdul Gaffer bin Fathil v Chua Kwang YongHigh CourtYes[1994] 3 SLR(R) 1056SingaporeCited for the test of necessity in O 15 r 6(2)(b)(i) of the ROC.
Family Food Court (a firm) v Seah Boon Lock and another (trading as Boon Lock Duck and Noodle House)High CourtYes[2008] 4 SLR(R) 272SingaporeCited for the principle that the mere fact that two parties have similar interests does not prevent either of them from being joined to the proceedings.
Thomson Plaza (Pte) Ltd v Liquidators of Yaohan Department Store Singapore Pte Ltd (in liquidation)Court of AppealYes[2001] 2 SLR(R) 246SingaporeCited for the principle that the judge has an inherent jurisdiction to recall his decision and to hear further arguments, so long as the order is not yet perfected.
Denko-HLB Sdn Bhd v Fagerdala Singapore Pte LtdCourt of AppealYes[2002] 2 SLR(R) 336SingaporeCited for the test to apply in deciding whether an extension of time should be granted under s 28B(1) SCJA.
Lee Hsien Loong v Singapore Democratic Party and others and another suitHigh CourtYes[2008] 1 SLR(R) 757SingaporeCited for the test for an extension of time to file a notice of appeal.
The Tokai MaruHigh CourtYes[1998] 2 SLR(R) 646SingaporeCited for the test that applies to extensions of time generally.
Sun Jin Engineering Pte Ltd v Hwang Jae WooCourt of AppealYes[2011] 2 SLR 196SingaporeCited for the principle that the court has to balance the competing interests of the parties concerned when deciding whether to extend the prescribed timeline for an act to be done.
Nomura Regionalisation Venture Fund Ltd v Ethical Investments LtdHigh CourtYes[2000] 2 SLR(R) 926SingaporeCited for the low threshold adopted by the court in assessing the chances of succeeding on appeal for the purposes of an application for an extension of time to appeal.
Aberdeen Asset Management Asia Ltd and another v Fraser & Neave Ltd and othersHigh CourtYes[2001] 3 SLR(R) 355SingaporeCited for the principle that as long as it cannot be said that there are no prospects of the applicant succeeding on the appeal, this factor ought to be considered neutral rather than against the applicant.
Travista Development Pte Ltd v Tan Kim Swee Augustine and othersHigh CourtYes[2007] 3 SLR(R) 628SingaporeCited for the principle that further evidence cannot be adduced in any situation in further arguments.
Singapore Press Holdings Ltd v Brown Noel Trading Pte Ltd and othersHigh CourtYes[1994] 3 SLR(R) 114SingaporeCited as one of the reasons why the procedure for further arguments exists.
Ladd v MarshallCourt of AppealYes[1954] 1 WLR 1489England and WalesCited for the three factors that would be a useful starting point in determining whether sufficient reasons exist to justify the admission of such evidence.
Park Regis Hospitality Management Sdn Bhd v British Malayan Trustees Ltd and othersHigh CourtYes[2014] 1 SLR 1175SingaporeCited for the summary of the position in law regarding the admission of further evidence in an interlocutory appeal.
Ann Masters v To Keng LamHigh CourtYes[2004] 2 SLR(R) 392SingaporeCited for the distinction to be drawn between matters which had characteristics of a full trial or where oral evidence had been recorded, and matters which were generally ‘interlocutory’ in nature.
Jurong Town Corp v Wishing Star LtdHigh CourtYes[2004] 2 SLR(R) 427SingaporeCited for the principle that the court should guard against attempts by a disappointed party seeking to ‘retrieve lost ground in interlocutory appeals’ by relying on evidence which he could or should have put before the court below.
BNX v BOE and another appealCourt of AppealYes[2018] 2 SLR 215SingaporeCited for the principle that the Ladd v Marshall factors apply as the criteria for determining whether there exist “special grounds” warranting the admission of further evidence.
Public Prosecutor v Mohd Ariffan bin Mohd HassanCourt of AppealYes[2018] 1 SLR 544SingaporeCited for the clarification of the ambit of the Reasonable Diligence Factor.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 15 r 6(2)(b)
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 92 r 4
Rules of Court O 57 r 9A(4)(b)
First Schedule to the Supreme Court of Judicature Act para 7

14. Applicable Statutes

Statute NameJurisdiction
Income Tax Act (Cap 134, 2008 Rev Ed) s 33Singapore
Evidence Act (Cap 97, 1997 Rev Ed) s 126Singapore
Income Tax Act (Cap 134, 2014 Rev Ed) s 6(3)Singapore
Supreme Court of Judicature Act (Cap 322, 2014 Rev Ed) s 28B(1)Singapore
Supreme Court of Judicature Act (Cap 322, 2014 Rev Ed) s 18(2)Singapore
Application of English Law Act (Cap 7A, 1994 Rev Ed) s 3(1)Singapore
Government Proceedings Act (Cap 121, 1985 Rev Ed) ss 8 and 9Singapore
Attorney-General (Additional Functions) Act (Cap 16A, 2017 Rev Ed) s 4(1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Public Interest Privilege
  • Tax Avoidance Arrangement
  • Discovery Application
  • Further Arguments
  • Extension of Time
  • Joinder of Parties
  • Internal Documents
  • Official Secrecy
  • Tax Refunds
  • Guardian of Public Interest

15.2 Keywords

  • Public Interest Privilege
  • Tax Avoidance
  • Discovery
  • Attorney-General
  • Extension of Time

17. Areas of Law

Area NameRelevance Score
Civil Procedure90
Public Interest Privilege75
Evidence Law60
Official Secrecy40
Revenue Law40
Administrative Law30
Judicial Review20
Contract Law20
Constitutional Law20
Corporate Law10

16. Subjects

  • Civil Procedure
  • Tax Law
  • Public Interest
  • Discovery