KUALA LUMPUR – December 6, 2016: Australia is seeking to strike out a lawsuit filed against it by a Malaysian timber tycoon by citing the legal doctrine of sovereign immunity.
The legal doctrine, also known as crown immunity, upholds the principle that a sovereign or state cannot commit a legal wrong and is immune from civil suits or criminal prosecution.
Speaking to reporters at the High Court here today, the Australian government’s lead counsel Datuk D.P. Naban said the Australian Tax Office (ATO) has sought to strike out Hii Yii An’s lawsuit by invoking the doctrine to allow it to prosecute the tycoon on Australian soil.
Hii had sued ATO on September 28 for tax assessment amounting to millions of dollars in relation to his income earned outside of Australia.
Justice S. Nantha Balan set January 20 to hear Australia’s application to strike out the case after meeting both parties.
Hii got into a tangle with the ATO after it changed his tax residency status to that of the country in December 2013.
This consequently led to him being accused of tax evasion totalling AUD$49,774,128.20 for the world tax assessment years from 2001 to 2009.
According to Australian law, any person who lives in the country for over six months or has chosen the country as his home needs to pay tax based also on earnings outside the country, known as the world tax.
One of Hii’s lawyers, Sarita Kandhar, said they will object the attempt to strike out the lawsuit because Hii has never abandoned his Malaysian domicile.
The argument raised by Hii’s legal team was that because Hii had never abandoned his Malaysian domicile, the Australian government had imposed extra-territorial jurisdiction on him and that the country’s taxation laws cannot be applied to Hii.
Throughout the case management period, Hii had also contended that he only made short visits to Australia to see his children and check on his investments there.
His lead counsel, Datuk Alvin John, also maintained that his client had been declaring his tax deductions in Malaysia throughout the said years.
“The ATO should have contacted Malaysian authorities before imposing the decision on him,” said John when contacted by The Mole.
Last month, John pledged to take his client’s case to the International Court of Justice if Australia refused to accept a ruling favourable to Hii.
The other defendants are the commissioner and deputy commissioner of the ATO.