Cable & Wireless Australia & Pacific Holding BV v Deputy Commissioner of Taxation (Special leave decision)
Court appealed from: Federal Court of Australia (Full Court)
Cable & Wireless Australia & Pacific Holding BV
v. Deputy Commissioner of Taxation
 FCAFC 71
2017 ATC 20-617
 HCASL 231
Date of decision: 14 September 2017
Result: The High Court dismissed the special leave application with costs.
Special leave application results
Yesterday the High Court refused the taxpayer's special leave application to appeal the Full Court's decision in Cable & Wireless & Pacific Holding BV (in liquidation) v Commissioner of Taxation  FCAFC 71 ( HCASL 231)on the papers.
The issues in this case involved a share buy-back conducted by Cable & Wireless Optus Ltd ('Optus') in 2001, and considered the extent to which an amount debited to a buy-back reserve was a debit to an account of Optus's share capital and therefore not a dividend paid to its shareholders. The taxpayer had argued that the buy-back reserve was an account of share capital and therefore the amount it received was not a dividend. The taxpayer claimed to be entitled to a refund of approximately $452m in overpaid dividend withholding tax.
The Full Court decided that the amount debited to the buy-back reserve was not a debit to Optus's share capital. The Court analysed the transaction undertaken, noting the way that transaction was presented to the ATO in 2001, and concluded that commercial, economic and legal reality was that the buy-back reserve was not seen as a reduction in Optus's share capital. This was consistent with the principles espoused by the High Court in Consolidated Media Holdings, which was decided in different factual context.