Henare v Commissioner of Inland Revenue
[2024] NZHC 2012
•23 July 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-3111
[2024] NZHC 2012
BETWEEN STEPHEN JAMES HENARE
Appellant
AND
THE COMMISSIONER OF INLAND REVENUE
Respondent
Hearing: 18 July 2024 Appearances:
Appellant in person
G C van der Merwe for respondent
Date of judgment:
23 July 2024
JUDGMENT OF JAGOSE J
This judgment was delivered by me on 23 July 2024 at 12.30pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Solicitors:
Legal Services Auckland, Inland Revenue, Auckland
Copy to:
Appellant
HENARE v THE COMMISSIONER OF INLAND REVENUE [2024] NZHC 2012 [23 July 2024]
[1] Stephen Henare appeals the 28 November 2023 decision of Judge A A Sinclair in the District Court at Auckland,1 summarily entering judgment against him in the amount of $902,927.33 plus accrued penalties and interest (and costs).2
Background
[2] On 28 August 2019, Muir J in this Court sentenced Mr Henare to five years and two months’ imprisonment on his guilty pleas to five representative charges of theft and one charge of attempting to pervert the course of justice.3 The theft charges related to transfers — from bank accounts belonging to a Māori land trust with approximately 400 beneficial owners, of which Mr Henare was a trustee — of some
$1.090 million initiated or authorised by Mr Henare, some $798,000 of which was transferred to bank accounts directly associated with him.4
[3] The Commissioner sought to recover Mr Henare’s assessed income tax, including on the amount obtained by him on the transfers, and student loan liabilities. When Mr Henare resisted, the Commissioner sought summary judgment against him on the necessary ground Mr Henare had no defence to its claim, as the Tax Administration Act 1994 provided an exclusive process for disputing tax assessments, of which Mr Henare had not availed.
[4] Mr Henare argued he was subject to release conditions preventing his involvement with the tax disputes process.5 In an earlier minute,6 the Judge observed neither asserted condition, each in any event being with the exception of “the prior written approval of a Probation Officer”, restricted his participation in the disputes process.7 She sought any contrary view from Mr Henare’s probation officer, who
1 Commissioner of Inland Revenue v Henare [2023] NZDC 26635.
2 At [15]–[17].
3 R v Henare [2019] NZHC 2126.
4 At [10].
5 Commissioner of Inland Revenue v Henare, above n 1, at [5]; Mr Henare was not to:
·be involved in the handling of money, provision of advice or management of the financial accounts or transactions, of any person or entity unless [he had] the prior written approval of a probation officer; or
·engage in any employment or have any roles in the affairs of any business, trust, company or other entity, unless [he had] the prior written approval of a probation officer.
6 Commissioner of Inland Revenue v Henare DC Auckland CIV-2023-004-0163, 10 November 2023 (Minute of Judge Sinclair).
7 Commissioner of Inland Revenue v Henare, above n 1 at [6].
ultimately only filed a copy of Mr Henare’s release conditions, and otherwise directed Mr Henare’s opposition to the Commissioner’s application.8
[5] Although the Judge said no opposition was filed,9 it appears the District Court Registry had in error rejected Mr Henare’s filing of a defence to the Commissioner’s claim. That was not fully resolved by the time the Judge heard the Commissioner’s summary judgment application.
Judgment under appeal
[6] The Judge identified the exclusive process by which a tax assessment may be disputed,10 which Mr Henare had not done,11 with the consequence s 109 of the 1994 Act prevented Mr Henare’s dispute of his assessment in the court and deemed the assessment correct.12 Her Honour gave summary judgment accordingly.
[7] On appeal, Mr Henare says the Judge’s decision was “disturbing, unfair and [prejudicial] against” him. He says he was not afforded “a fair trial”, and the Judge’s ‘unlawful’ grant of summary judgment without hearing his opposition illustrated her bias and “Systemic Bullying” and led to “unfair legal processes and procedures”. He claims the Judge’s grant of summary judgment breached his right against retroactive penalties.13
[8] Mr Henare also says the Commissioner’s pursuit of him, and its consequences for his mental health, has materiality for breaches of New Zealand’s international obligations or the Crown’s obligations under the Treaty of Waitangi Act 1975, referring to applications made in Waitangi Tribunal proceedings. He says his tax liability has been paid in full by the Māori Trustee Office on his behalf. He claims the Commissioner breached his obligations under the Official Information Act 1975 by avoiding disclosure of that payment. The Commissioner’s summary judgment
8 At [7].
9 At [8].
10 At [9].
11 At [10].
12 At [11]–[13], relying on Keighley v Commissioner of Inland Revenue (2003) 21 NZTC 18,467 (HC) at [2].
13 Referring to s 26 of the New Zealand Bill of Rights Act 1990, addressing retroactive penalties and double jeopardy.
application thus “is clearly trying to inflict further punishment, penalty and sentencing” on him by the Judge’s “unconstitutional illegal divisive” judgment.
[9] Mr Henare says the Judge erred accordingly, and the debt must therefore be dismissed and not reinstated, failing which he will appeal further. He provides a counsellor’s record, connected with the Abuse in Care Royal Commission of Inquiry, he felt the Commissioner’s conduct “triggered and compounded [his] previous abuse experiences by the state”.
[10] In supplementary submissions, after Venning J indicated s 109 presented difficulty for his appeal,14 Mr Henare asserted the Judge’s notes of evidence were “Invalid, Unofficial and Out of Order” as not sealed, stamped and signed by the Judge. He also argued s 109 is “not ‘Enforceable and Ineffective’” in respect of his appeal. He says I must allow his appeal to go on to the Court of Appeal and “seriously consider” his mental and physical health and wairua, while he is subject to the Parole Act 2002, as affected by the Commissioner’s “dubious and robust ‘witch hunt’” against him, resulting in “blatant misjudgement and character assassination” of him. He seeks costs and the Commissioner’s apology.
Approach on appeal
[11] Appeals to this Court from the District Court are general appeals,15 conducted by way of rehearing,16 in which Mr Henare bears the onus of satisfying me I should differ from the District Court’s decision. I only am justified in interfering with that decision if I consider the decision is wrong — in other words, the Judge erred.17
[12] I am to come to my own assessment of the merits of the case afresh, without deference to the Judge (save for some caution in differing on witness credibility, if I have not had her Honour’s advantage of observing any witnesses),18 including on
14 Henare v The Commissioner of Inland Revenue HC Auckland CIV-2023-404-3111, 7 May 2024 (Minute of Venning J) at [6], annexing Taylor v Commissioner of Inland Revenue [2023] NZCA 515, (2023) 31 NZTC 26-014 and Taylor v Commissioner of Inland Revenue [2024] NZSC 44.
15 District Court Act 2016, s 124.
16 Section 127.
17 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13].
18 At [13].
matters of fact and degree entailing a value judgment.19 If I differ from the Judge, she will be “wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ”.20 I may rely on the Judge’s reasons in reaching my own conclusions, but the weight I give those reasons is a matter for me.21
[13] To the extent the decision involved exercise of the Judge’s discretion, I only may interfere with it if Mr Henare establishes her Honour erred in law or principle, did not address relevant matters or took into account irrelevant matters, or was “plainly wrong”.22
[14] After hearing the appeal, I may make any decision I think should have been made, or direct the District Court to rehear the proceeding or consider and determine any particular matter or to enter judgment for a particular party, or make other orders I think fit, including for costs.23
Discussion
[15] Mr Henare’s complaint the Judge’s notes of evidence and judgment lack her signature or the District Court’s stamp or seal is addressed by this Court’s registry sourcing the same documents directly from the District Court. I am satisfied those documents on this Court’s file are legitimate copies of the Judge’s notes of evidence and judgment. I have not needed to consider the notes of evidence, but worked directly from the judgment obtained by the registry.
[16]On my review of that judgment, I see no error at all in the Judge’s decision:
(a)a tax assessment is a disputable decision,24
(b)disputable decisions:25
19 At [16].
20 At [16], referring to Wright v Powell [1982] 1 NZLR 473 (CA).
21 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31].
22 M v R [2024] NZSC 29, [2024] 1 NZLR 83 at [46], citing May v May (1982) 1 NZFLR 165 (CA)
at 170.
23 District Court Act, s 128; High Court Rules 2016, r 20.19(1).
24 Tax Administration Act 1994, s 3 (definition of “disputable decision”).
25 Section 109.
(i)only are open to objection under Part 8 or challenge under Part 8A of the Tax Administration Act;
(ii)may not be disputed in a court or any other proceeding “on any ground whatsoever”; and
(iii)otherwise are deemed correct in all respects; and
(c)Mr Henare brought no objection or challenge to the Commissioner’s assessment of his tax liability, which was finally determined;
(d)summary judgment is available once tax liability is finally determined;26
(e)objections or challenges to tax assessments are not open to being raised on summary judgment applications;27
(f)summary judgment requires the Judge be satisfied there is “no defence” to the claim,28 that is, “no arguable defence, meaning that there is no real question to be tried”, on generally undisputable facts as robustly and realistically assessed;29
(g)if so, there remains residual discretion if to order summary judgment;30 and
(h)the Judge correctly identified Mr Henare’s lack of defence to the Commissioner’s claim, by reason of s 109’s prohibition of any dispute to the Commissioner’s assessment of him, and was entitled therefore to enter summary judgment against him.
[17] If Mr Henare’s historic and personal circumstances afforded the Judge opportunity to exercise her discretion against ordering summary judgment, I cannot
26 Muir v Commissioner of Inland Revenue [2018] NZSC 81 at [24].
27 Russell v Commissioner of Inland Revenue [2015] NZCA 351 at [64], approving Commissioner of Inland Revenue v Russell [2014] NZHC 1296, (2014) 26 NZTC 21-074 at [71].
28 District Court Rules 2014, r 12.2(1).
29 Dumasia v Ikon Building Co-operation Ltd [2021] NZCA 292 at [44] (leave to appeal declined: Ikon Building Co-operation Ltd v Dumasia [2021] NZSC 135), citing Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) and Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.
30 Herring v Herring [2010] NZCA 500, [2011] 2 NZLR 433 at [24] and [33]–[34].
say she was ‘plainly wrong’ in exercising her discretion in favour of its order. The Judge had due regard for all relevant matters and disregarded any irrelevant matters. Given s 109’s unavoidable impact, nothing would have been served by requiring the Commissioner’s claim against Mr Henare to continue to trial with the same result.
[18] If, by reference to ‘retroactive penalties’, Mr Henare means he is not liable to be twice-punished,31 he is not so being punished: his tax liability is as a consequence of his income, whether or not lawfully obtained,32 and remains until paid. That liability is not ‘retroactive’, but his obligation at the time of receiving the income. And if, as Mr Henare contends, the Māori Trustee Office has paid his tax liability, then the Judge’s order will have been met; she still was not wrong to find that was his liability.
[19] Finally, it is regrettable if the District Court registry’s rejection of Mr Henare’s defence led to the Judge’s comprehension he had not filed any opposition to the Commissioner’s claim. But it did not matter, because the Commissioner bore the burden of satisfying the Judge Mr Henare had no defence,33 as I have explained at [16](f) above, and the effect of s 109 is nothing Mr Henare sought to raise in his defence could have provided any ‘real question to be tried’.
[20]The Judge did not err at all; much less, was plainly wrong.
Result
[21]Mr Henare’s appeal is dismissed.
Costs
[22] Costs are reserved for determination on short memoranda each of no more than five pages — annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate — to be filed and served by the Commissioner
31 That is, ‘double jeopardy’, as specified at s 26(2) of the New Zealand Bill of Rights Act: “No one who has been finally acquitted or convicted of, or pardoned for, an offence shall be tried or punished for it again.”
32 Income Tax Act 2007, s CB 32.
33 Harvey v Beveridge [2014] NZCA 72, [2014] NZAR 677 at [10]; Herron v Westpac New Zealand Ltd [2011] NZCA 544 at [29]; and Krukziener v Hanover Finance Ltd, above n 29, at [26], all citing MacLean v Stewart (1997) 11 PRNZ 66 (CA) at 69.
within ten working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.
—Jagose J
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