Auckland Christian Fellowship & Recreations v Commissioner of Inland Revenue

[2020] NZHC 1301

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2710

[2020] NZHC 1301

UNDER

Section 26A of the Taxation Review Authorities Act 1994

IN THE MATTER OF

The Goods and Services Tax Act 1985

BETWEEN

AUCKLAND CHRISTIAN FELLOWSHIP & RECREATIONS

Appellant

AND

THE COMMISSIONER OF INLAND REVENUE

Respondent

On the papers:	At Auckland
Judgment:	16 June 2020

JUDGMENT OF POWELL J

This judgment was delivered by me on 16 June 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

AUCKLAND CHRISTIAN FELLOWSHIP & RECREATIONS v THE COMMISSIONER OF INLAND REVENUE [2020] NZHC 1301 [16 June 2020]

[1]                  The appellant, an incorporated society, has appealed a decision of the Taxation Review Authority (“TRA”) confirming GST amounts owing and shortfall penalties.1

[2]                  The appeal was filed by a Mr S K Pillai.   At the first call of this appeal     Mr Pillai’s authority to file the appeal was queried by Mr Goosen on behalf of the respondent Commissioner. It transpired that Mr Pillai, a former trustee of the appellant, had in fact recently passed away and that alternative representation would be required. As a result I issued directions providing for the appellant to either appoint a solicitor to act for it on the appeal or to make a formal application seeking some sort of non-legal representation.

[3]                  The appellant subsequently filed an “application for non-legal representation”. This sought approval for Mr S Devathasan; the appellant’s primary witness before the TRA, a non-lawyer, and Mr Pillai’s son, to represent the appellant on the appeal. On behalf of the appellant Mr Devathasan submitted:

(a)Mr Pillai had considered that Mr Devathasan was the “most suitable and knowledgeable person to present the case in the High Court”;

(b)“the instructed solicitor [in the TRA] found it very difficult to understand the full background [and] … As a result many of the facts were not presented correctly”;

(c)the appellant “is in an extremely difficult financial situation and … non- legal representation will assist the trust financially very significantly”;

(d)“the issues involved are straight forward and can be considered without the assistance of legal representation”;

(e)in presenting the appeal Mr Devathasan would “have the full support and guidance from voluntary lawyers”; and

1      Auckland Christian Fellowship & Recreations v Commissioner of Inland Revenue [2019] NZTRA 6.

(f)Mr Devathasan would “undertake to meet all the High Court requirements of all rules and present [the] case completely as a third party similar to a solicitor as if [he] were not involved in any of the activities, but to purely discuss the previous judgment against the evidence submitted and the findings from the District Court proceedings”.

[4]                  In response Mr Goosen submitted the application is contrary to the settled common law position as set out by the Court of Appeal in Re J G Mannix Limited that:2

(a)A corporation has no right to be represented in the conduct of a case in Court except by a barrister or solicitor.3 However, Courts have a residual discretion to allow unqualified advocates to appear before them.4

(b)Apart from statutory exceptions, a corporation has no right to bring or carry on proceedings in Court except by a solicitor. This refers to the filing of pleadings and other documents.5

[5]Mr Goosen submitted that there are no exceptional circumstances in this case that warrant the Court to depart from the rule in Mannix. In Mr Goosen’s submission:

This is not an emergency matter where counsel is not available, or such a straight forward matter that the Court would not be assisted by counsel, or a situation where it would be unduly technical or burdensome to insist on counsel.

[6]                  As well as pointing out that this is a technical appeal which requires the application and interpretation of various provisions  in  the  GST  Act  1985  and  Tax Administration Act 1994, Mr Goosen submitted:

2      Re J G Mannix Limited [1984] 1 NZLR 309 (CA).

3 At [310].

4 At [314].

5 At [311].

In addition, the policy reasons identified by the Courts for the Mannix rule apply to this application. An independent solicitor would be ethically constrained to represent the Trust's interests and objectively assess the merits of the appeal. However, there is a real risk that Mr Devathasan will not be in a position to assist the Court in the same manner as counsel who would have an overriding duty to the Court. Mr Devathasan has a strong personal interest in the case. His own financial position is adversely affected by the TRA decision because the majority of the Trust's income is passed through to him in the form of rent. He is the landlord and principal creditor of the Trust.

Although Mr Devathasan was the sole witness for the Trust in the TRA, he inappropriately blames the solicitor that represented the Trust for the adverse factual findings that were made. The true position is that his evidence was rejected in a number of key respects. He would be required to analyse his own evidence and address the Court on the TRA’s reasons for rejecting it and finding it not to be plausible. This would clearly raise objectivity issues.

Mr Devathasan's assertion that his knowledge of background facts makes him better equipped "than any solicitor" to present the appeal indicates a lack of insight, objectivity and understanding of the appeal process, and therefore an inability to assist the Court in carrying out its appellate function. He seems to lack an appreciation of not being permitted to give further evidence or amend evidence on appeal.

Mr [Devathasan] asserts an intention to use the appeal process to see that the names of the Trust and his late father are "cleared in the eyes of the law". To support the Trusts tax position, Mr Devathasan refers to everyone that was involved as being "law-abiding Christians" who sacrificed their time and money for the benefit to the community. These assertions all indicate an inappropriate subjective emotive focus on matters that will not assist the Court in deciding the issues on appeal.

Mr Devathasan claims that non-legal representation will assist the Trust financially. However, proceeding with the appeal without objective professional legal advice puts the Trust at risk of an adverse costs order as well as continuing to incur use of money interest on its unpaid GST debts.

[7]                  Finally, Mr Goosen noted that the appellant had already made a number of procedural errors with regard to the prosecution of the appeal to date to support the submission that it was inappropriate to continue to rely upon non-legally qualified representation.

Discussion

[8]                  The matters raised by the Commissioner are compelling and entirely unanswered.  It  is  clear for all  of the  reasons stated  by the Commissioner, that   Mr Devathasan does not properly understand the role of counsel, nor is he equipped to properly represent the appellant in the appeal or to otherwise assist the Judge

hearing  the  appeal.     Given this position I have no hesitation in declining the application.

Decision

[9]                  The application for non-legal representation is declined. Should the appellant wish to proceed with the appeal it will have to instruct legal counsel. The appeal is adjourned back to the appeals list to be held at 9 am on 23 June 2020 to give the appellant the opportunity to instruct counsel and to liaise with the Commissioner over an appropriate timetable for the hearing of the appeal.

[10]              The Commissioner is entitled to costs on the application on a 2B basis. In the event that there is any dispute arising I will determine the issue after receiving memoranda.

Powell J