Commissioner of Inland Revenue v Palmer

[2016] NZHC 966

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-1341 [2016] NZHC 966

IN THE MATTER

of the Insolvency Act 2006

AND

of the bankruptcy of Michael Brett Palmer

BETWEEN

THE COMMISSIONER OF INLAND REVENUE

Judgment Creditor

AND

MICHAEL BRETT PALMER Judgment Debtor

Hearing:	12 May 2016
Appearances:	Mr Ching for Commissioner Mr Jones for Official Assignee Mr Palmer in person
Judgment:	12 May 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

THE COMMISSIONER OF INLAND REVENUE v PALMER [2016] NZHC 966 [12 May 2016]

[1]      This application for annulment of bankruptcy was filed on 23 March 2016. The original adjudication was on the basis of debts owed to the Commissioner.  The Commissioner had obtained a judgment based on assessments which had been made against Mr Palmer.   The judgment was entered in the District Court at the North Shore in an amount of $28,000 approximately on 22 January 2014.  That judgment has not been overturned or modified by any subsequent appeal or review proceeding. Mr Palmer was adjudicated bankrupt and the current application seeks annulment of that adjudication which was made on 4 September 2014.

[2]      Mr Palmer is essence has attempted to establish that the debt which the Commissioner used as the basis for the adjudication proceedings and for which it proved in Mr Palmer’s  bankrupt estate ought  not to stand.   He claims that the assessments underlying the judgment ought to be reviewed.  He has been assiduous, it is fair to say, to provide information to the Commissioner in an attempt to persuade the Commissioner of the justice of his point of view.

[3]      The  Commissioner  has  not  been  swayed  by  these  representations  from Mr Palmer.  Unfortunately on at least one occasion there has been delays on the part of the Commissioner which are difficult to explain.  The latest determination by the Commissioner was apparently only emailed to Mr Palmer yesterday.  The affect of that communication is that the Commissioner affirmed her position that the assessments would not be amended and nor would further time be put into investigating the position.

[4]      The question that the application for annulment poses is whether the debts have been paid or satisfied and therefore the authority under s 309(1)(b) of the Insolvency Act 2006 can be exercised to annul the adjudication.1

[5]      The Court sitting in bankruptcy though is bound by the provisions of various statutes  including  the  Tax Administration Act  1994.    The  essence  of  it  is  that assessments cannot be called into question in Court proceedings except where there

is a properly constituted proceeding by way of appeal or judicial review against the

1 See report of Official Assignee dated 30 November 2015.

assessment.  Such applications are not heard by this Court and there are none before this Court.  None has actually been filed in the appropriate Court which is the High Court.  Therefore no grounds upon which this Court can go behind the debt of the tax payer the Commissioner.  The assessments are in other words to be regarded by this Court as conclusive.  This is not a matter of this Court exercising a discretion to ignore Mr Palmer’s application.   What I have said reflects the obligation that this Court has to comply with the law just as private citizens must.  The legislature has reposed very considerable discretions in the Commission of Inland Revenue.  There are very limited ways in which her determinations can be attacked.  It is not for this Court to express a view on whether that is a good thing or a bad thing:  that is the law.    The  Commissioner  in  this  case  has  declined  to  amend  the  assessments. Whether Mr Palmer agrees with that or not, she is within her legal entitlements in doing so.   Therefore there is no basis upon which this Court can ignore the assessments which the Commissioner has declined to amend pursuant to s 113 of the Tax Administration Act.

[6]      Mr Palmer feels aggrieved as well by the fact that he has been asked to pay what he regards as usurious interest rates.  Again, those interest rates are applied by the Commissioner acting on the authority of legislation which the New Zealand Parliament has enacted and there is no dispensing power available to this Court in this  jurisdiction  to  vary  those  amounts  that  are  claimed  for  interest  and  other statutory charges.

[7]      For all of those reasons I am unable to accept that Mr Palmer’s application for an annulment is brought on sound grounds.  There is no evidence that the debt has been paid.  The only way in which Mr Palmer could succeed is if the debt had

been extinguished but he is not able to do so. Therefore his application must fail.

J.P. Doogue

Associate Judge