M & J Wetherill Co Ltd v Taxation Review Authority

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 134/01

BETWEEN	M & J WETHERILL COMPANY LTD AND OTHERS
Appellants

AND	TAXATION REVIEW AUTHORITY
First Respondent

AND	COMMISSIONER OF INLAND REVENUE
Second Respondent

CA 188/01
BETWEEN	COMMISSIONER OF INLAND REVENUE
Appellant

AND	M & J WETHERILL COMPANY LIMITED AND OTHERS
Respondents

Hearing:	27 February 2002
Coram:	Richardson P Gault J Tipping J
Appearances:	G J Judd QC for M & J Wetherill Co Ltd and Others A C Beck for Commissioner of Inland Revenue
Judgment:	14 March 2002

JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P

Introduction

This appeal and cross‑appeal against the judgment of O'Regan J reported at (2000) 20 NZTC 17,166 determining applications under the Judicature Amendment Act 1972 for judicial review of two decisions of the Taxation Review Authority (TRA), reported as Case U35 (2000) 19 NZTC 9,330 and Case 41 (2000) 19 NZTC 9,380 concern the filing of cases stated requested by taxpayers following the dismissal of their objections to assessments. There is an associated appeal by the Commissioner against O'Regan J's subsequent costs judgment of 6 July 2001.
The issues involved in the 28 cases, all relating to the application of the general anti‑avoidance provision to what has been called the J G Russell template, are essentially the same procedurally. Accordingly, they have been treated in these proceedings as in effect one matter and it is convenient to speak simply of "the taxpayer" and, where more than one date applies to different taxpayers, to refer only to the earliest date.
The objection and case stated regime has been superseded in respect of later tax years by the challenge proceedings provided for under Part VIIIA of the Tax Administration Act 1994 but the determination of the objections to the assessments in question remains to be dealt with under the earlier regime. There is also some question as to whether the applicable regulations are the Taxation Review Authority Regulations 1994 or 1998, but there are no material differences in the relevant provisions and, as in the High Court, it is convenient to refer to the 1994 Regulations.
Before turning to the judgment of O'Regan J it may assist to set out the immediately relevant legislative provisions and a short chronology of events.

The legislative provisions

Sections 134 and 136 as they read at the material times, are immediately relevant. By s134:
If an objection is not wholly allowed by the Commissioner, the objector may, within 2 months after the date on which notice of the disallowance is given to the objector by or on behalf of the Commissioner, by notice in writing to the Commissioner require that the objection be heard and determined by a Taxation Review Authority, and in that event the objection shall be heard and determined by an Authority, and the Taxation Review Authorities Act 1994 shall apply in respect of the institution, hearing, and determination of the proceedings on the objection.
Section 136 is directed to the referral of objections to the High Court by way of case stated in accordance with the section.   By subs (1):
(1)Notwithstanding anything in this Part, where -
(a)   An objection to an assessment is made in accordance with section 126(1) or accepted by the Commissioner under section 126(2); and
(b)   The objection is not wholly allowed by the Commissioner; and
(c)   The objection is one to which subsection (2) or subsection (3) applies
the objection may be referred directly to the High Court by way of case stated in accordance with this section.
Subsection (2) applies when an objection relates to a question of law only.   In that case either party may require direct referral to the High Court.   Where, as here, the objection relates to questions of fact as well as to questions of law, subss (3) and (4) apply.   They provide:
(3)Where an objection relates to a question of fact (whether or not it also relates to a question of law), -
(a)   The objector may, within 2 months after the date on which notice of the disallowance is given to the objector by or on behalf of the Commissioner, give notice in writing to the Commissioner that the objector desires the Commissioner to state a case for the opinion of the High Court, specifying in the notice the registry of that Court in which the objector desires the case to be filed.
(b)   The Commissioner may, in any case where the objector has under section 134 required the objection to be heard and determined by a Taxation Review Authority, notify the objector that the Commissioner desires the objection to be referred directly to the High Court.
(4)Where any notice is given by the objector or the Commissioner under subsection (3), the objection shall be referred directly to the High Court if both the Commissioner and the objector consent, or with the leave of that Court granted on the application of the objector or the Commissioner upon the ground that in the opinion of the Court, by reason of the amount of the tax in dispute between the parties or of the general or public importance of the matter or of its extraordinary difficulty or for any other reason, it is desirable that the objection be heard and determined by the High Court instead of by a Taxation Review Authority.
Then, by subs (9):
Where under this section an objection is to be referred directly to the High Court, the Commissioner shall, within 3 months after the date of service of the points of objection or within such further period as may be allowed under subsection (12), state and sign a case which shall comprise -
(a)   A notice in the prescribed form containing -
(i)Particulars of the assessment made by the Commissioner to which the objection has been made; and
(ii)The grounds of objection given by the objector; and
(iii)The question for the determination of the Court; and
(b)   The points of objection served by the objector; and
(c)   A notice in the prescribed form stating -
(i)Any further facts which the Commissioner considers are relevant to the issues to be determined by the Court; and
(ii)The issues which the Commissioner claims require to be determined by the Court.

And the case so stated and signed is to be filed by the Commissioner in the relevant Registry (subs (10)).

Subsections (12) and (13) then provide:
(12)The High Court may, on the written application of the objector or the Commissioner,
(a)   Extend the time for service by the objector on the Commissioner of the points of objection; or
(b)   Extend the time for the filing of the case by the Commissioner -
until such time as the Court thinks fit, whether the application is made before or after the expiry of the time limit:
Provided that when application is made for an extension of time more than 2 months after the date for service of the points of objection or the date for filing the case, as the case may be, an order for extension of time shall be made only in exceptional circumstances.
(13)Where the Commissioner fails to file a case within the time specified in subsection (9), or within such further time as may be allowed under subsection (12), the objector may apply to the High Court for an order directing the Commissioner to allow the objector's objection, and the High Court -
(a)   Shall make such an order accordingly, unless it is satisfied that there are reasonable grounds for the failure to file the case:
(b)   May, where it refuses to make such an order, make such other orders as in the circumstances it thinks fit, whether relating to the filing of the case in the High Court, the remitting of the objection to a Taxation Review Authority for hearing and determination, or otherwise.

By subs (20) a taxpayer has only one month in which to apply to the High Court under subs (3)(a) where the Commissioner refuses to consent to a direct referral but there is nothing equivalent to that subsection applying a time limit where it is the Commissioner who wishes to go to the High Court.

The relevant procedural provisions governing cases stated to the TRA, where the taxpayer requires the objection to be heard and determined by the TRA pursuant to s134, are provided for by s16 of the Taxation Review Authorities Act 1994 and are prescribed by regs 6 and 8 of the 1994 Regulations.
By s16(1) "the procedure for the institution, hearing and determination of any proceedings before an Authority" is to be in accordance with the provisions of the Act "and with any regulations relating to those proceedings, and, subject to those provisions, an Authority may determine the Authority's own procedure".
Regulation 6(1) requires that:
The Commissioner shall, within 3 months after the date of service of the points of objection or within such further period as may be allowed under regulation 8 of these regulations, state and sign a case which shall comprise - [as in s136(1)]

and the case so stated and signed must be filed by the Commissioner with the Registry of the TRA (reg 6(2)).

Regulation 6(4) provides:
Where the Commissioner fails to file a case within the time specified in subclause (1) of this regulation, or within such further time as may be allowed under regulation 8 of these regulations, the objector may apply to the Authority for an order directing the Commissioner to allow the objector's objection, and the Authority -
(a) Shall make such an order accordingly, unless it is satisfied that there are reasonable grounds for the failure to file the case:
(b) May, where it refuses to make such an order, make such other orders as in the circumstances it thinks fit, whether relating to the filing of the case, or otherwise.
Regulation 8 provides:
(1)The Authority may, on the written application of the objector or the Commissioner, as the case may be, -
(a) Extend the time for service by the objector on the Commissioner of the points of objection; or
(b) Extend the time for the filing of the case by the Commissioner until such time as the Authority thinks fit, whether the application is made before or after the expiry of the time limit.
(2)Where application is made for an extension of time more than 2 months after the date for service of the points of objection or the date for filing the case, as the case may be, an order for extension of time shall be made only in exceptional circumstances.
The 1994 Regulations replaced the Taxation Review Authority Regulations 1974 and imposed stricter obligations on the Commissioner. The previous six months allowed for filing a case was reduced to three months and reg 8(2) introduced a new obligation that, where an application for extension of time is made more than two months after the date for filing the case, an order for extension of time may be made "only in exceptional circumstances".

Chronology: key dates

[i]     On 12 May 1996 points of objection were received by the Commissioner following the request by the taxpayer for the filing of the case stated with the TRA.   That started the time for filing the case running under reg 6 and the same start time would apply under s136(9) if an objection were to be referred directly to the High Court.
[ii]On 8 October 1996 the Commissioner's application for leave to file the case stated in the High Court (s136(3)) was filed in the High Court.   The taxpayer opposed the Commissioner's application.   There were two earlier factual indications of the Commissioner's intent in that regard which should be mentioned.   First, by letter of 15 May 1996, that is, only three days after receipt of the taxpayer's notice requiring the case stated to be filed with the TRA, the Commissioner advised the taxpayer's agent (pursuant to s136(3)(b)) of his intention to state a case in the High Court rather than the TRA.   Second, on 12 August 1996 the Commissioner purported to sign and file a case stated in the High Court.
[iii]On 3 March 1997 the application first came before Salmon J at a directions conference.   Subsequently there were a series of hearings, minutes and a judgment of Baragwanath J (of 3 June 1997).   In that judgment Baragwanath J expressed the view that the matters would be better dealt with by the TRA if the TRA had sufficient available time; and the application was adjourned to allow the TRA time to consider whether he could conveniently deal with the objection.   We should add that in a subsequent minute of 13 October 1997 Baragwanath J also observed that to be seized of the objection the TRA would have to grant an extension of time pursuant to reg 8(2) and that the TRA might very well consider that the then present circumstances were "exceptional" within the meaning of the regulation.
[iv]On 14 July 1997, three months before that last minute was issued by Baragwanath J, the taxpayer filed an application with the TRA pursuant to reg 6(4) to have the objection allowed in consequence of the Commissioner's failure to state and file a case with the TRA within the time limits.
[v]On 6 November 1997, invoking reg 8, the Commissioner applied to the TRA for an extension of time for filing the case stated.
[vi]On 3 February 1998, Baragwanath J declined the taxpayer's application to dismiss the Commissioner's application of 8 November 1996 for leave to file a case stated in the High Court.   The Judge adjourned the Commissioner's leave application until 29 June 1998, with leave on seven days' notice to bring that application on earlier.   That was done to avoid the risk that the case would fall between the stools of the TRA and the High Court.
[vii]Over a period of eight days between 23 February and 4 March 1999 the TRA heard the applications by the taxpayer and the Commissioner (subparas [iv] and [v] above) respectively.   On 4 February 2000 the TRA granted the Commissioner's reg 8(2) application extending the time for filing the case to 31 March 2000, and then dismissed the taxpayer's reg 6(4) application (Case U35 (2000) 19 NZTC 9,330).
[viii]On an unidentified date between 4 February 2000 and 22 March 2000 the taxpayer filed with the TRA a notice of appeal to the High Court against the decision of 4 February 2000 (Taxation Review Authorities Act 1994, s26(2)).   On 22 March 2000 the Commissioner applied to the TRA to have the appeal struck out for want of jurisdiction.   On 14 April 2000 the taxpayer applied under s24(1) to the TRA for a case to be stated by the TRA to the High Court.   That provision empowers an Authority "at any time, before or during the hearing or before delivering the Authority's decision, on the application of either the objector or the Commissioner or of the Authority's own motion, state a case for the opinion of the High Court on any question of law arising in any proceedings before the Authority".
[ix]On 9 June 2000 the TRA dismissed the taxpayer's application for a case stated and, on the Commissioner's application, struck out the purported appeal (Case U41 (2000) 19 NZTC 9,380).
[x]The taxpayer brought proceedings for judicial review of the decisions of the TRA of 4 February 2000 and 9 June 2000 on which O'Regan J gave judgment on 9 May 2001 ((2001) 20 NZTC 17, 166).

The High Court judgment on review of the 4 February 2000 decision (Case U35)

The taxpayer argued that the Commissioner had made a number of errors of law in reaching the decision of 4 February 2000. O'Regan J accepted that the overall scheme of Part VIII (ss 124A to 138) of the Tax Administration Act 1994 required strict time limits to be observed by objectors and by the Commissioner and that failure to comply with those time limits triggered the sanctions under reg 6(4) and s136(13). However, he found that no time limit was specified for filing an application by the Commissioner for leave to refer an objection directly to the High Court under s136(3). The Judge held that the High Court had jurisdiction to consider an application for leave filed after the three months period but that the taxpayer was entitled to apply under reg 6(4) for an order that its objection be allowed. He went on to hold that, because the Commissioner's separate application under reg 8 for an extension of time was made more than two months after the three months allowed by reg 6 for filing the case in the TRA, an order for extension of time could be made only in exceptional circumstances (reg 8(2)).
Turning to reg 6(4) and reg 8 and the relationship between them, the Judge reached three conclusions. First, in considering whether there are "reasonable grounds" under reg 6(4) the TRA should consider only those matters affecting the Commissioner's failure to file the case with the TRA in time. Second, where the Commissioner subsequently makes a reg 8 application, the taxpayer is entitled to have its application dealt with first. Going first to reg 8 and extending the time period would render the taxpayer's earlier in time reg 6(4) application nugatory. Third, if the TRA finds that there are reasonable grounds, it should refuse the taxpayer's application for an order directing the Commissioner to allow the objection and should consider the exercise of its discretion to extend time to the Commissioner, in this case recognising that reg 8(2) can only be exercised in exceptional circumstances.
Turning to the TRA's decision of 4 February 2000, O'Regan J accordingly held that the TRA had erred in law in several respects. The TRA was in error in not considering the "reasonable grounds" test under reg 6(4) before proceeding to consider the reg 8 application (para [87]). It was in error in not taking the approach that, if there were reasonable grounds, it could still have refused to extend time under reg 8, because the fact that something constitutes reasonable grounds does not necessarily mean that it also constitutes exceptional circumstances (para [88]). It was in error in not confining the reasonable grounds consideration to facts and circumstances which occurred before the statutory period expired (para [89]).
By way of relief, and dealing in turn with the taxpayer's specific claims in sequence O'Regan J (para 129]:
[i]made an order reviewing the TRA decision of 4 February 2000;
[ii]made an order setting aside the decision and remitting the matter to the TRA for reconsideration;
[iii]declined to make a declaration that where the Commissioner seeks leave to file in the High Court, the Commissioner must, within the time limit for filing a case with the TRA, apply to the High Court for leave and that an application filed after that date is incompetent;
[iv]made an order directing the TRA to reconsider the taxpayer's application under reg 6(4) for an order directing the Commissioner to allow the taxpayer's objection;
[v]having ordered reconsideration by the TRA of its decision in the light of the Judge's findings, refused a declaration requiring the TRA to direct the Commissioner to allow the taxpayer's objection or a declaration as to the grounds to be taken into account by the TRA under reg 6(4) and reg 8(2), or a declaration seeking particular decisions from the TRA on its reconsideration of the matter.
The taxpayer has appealed against the refusal of relief under [iii], but not as to [v], and the Commissioner has cross‑appealed against the orders made under (i), (ii) and (iv).

The High Court judgment on review of the 9 June 2000 decision (Case U41)

In case there were a successful appeal against his decision on Case U35, the Judge dealt with the taxpayer's challenges in Case U41 to the TRA's refusal to state a case for the opinion of the High Court and to the TRA's striking out the taxpayer's appeal to the High Court against the TRA decision in Case U35.
There were three questions proposed for the case stated on which the Judge focussed. They all related to the existence or otherwise of a right of appeal and the jurisdiction of the TRA to hear an application to strike out an appeal against its own decision.

O'Regan J concluded that the TRA had erred in law in exercising the discretion whether or not to state a case as requested and in exercising the discretion to strike out:
[104] I find that s24 gave the TRA a discretion as to whether or not to state a case in relation to the questions affecting appeal rights and the strike out application. That is a broad discretion, but one which must be exercised according to law. I find the Authority failed to consider a relevant matter, namely the nature of the questions relating to appeal rights and the desirability that the extent of appeal rights from decisions of the TRA ought to be determined by the Court rather than the TRA, especially where no precedent exists. I find the TRA ought to have considered whether it was desirable to obtain guidance from the High Court as to whether the TRA ought properly to strike out an appeal against its own decision in circumstances where the nature of appeal rights was uncertain. I also find the TRA was wrong to consider the discretion under s24 to be entirely subjective, that is, exercisable only if the Authority itself wished to have a ruling from the High Court. It ought to have considered whether it was appropriate, given the nature of the questions, that the High Court rather than the Authority be asked to determine them.
Then, as to the jurisdiction of the TRA to strike out the appeal, the Judge held that, although the original decisions of the TRA were interlocutory in nature, they were appealable as having some substantive effect on rights and liabilities in issue (Association of Dispensing Opticians of New Zealand Inc v Opticians Board [2000] 1 NZLR 158) (para [36]). He therefore concluded that the TRA erred in its interpretation of s26(1) and should have stated a case as required under s26 so that the appeal could be determined by the High Court.
However, in view of his findings and orders on Case U35 the Judge declined to grant relief for the errors identified in Case U41.
As a precautionary measure counsel reargued the issues in Case U41 before us.

Case U35: interpretation issues

The central issues on the appeal are essentially questions of statutory construction turning on analysis of the scheme of the legislation, including the regulations, and the language of the particular provisions.
While there was considerable focus in the argument on the time for filing a Commissioner's leave application for referral of the objection to the High Court, the starting point in this case must be s134 and reg 6. That is because, except where the objection relates to a question of law only, the Commissioner has to accept the taxpayer's nomination of the TRA as the forum. If the Commissioner desires to have an objection involving questions of fact referred directly to the High Court, the Commissioner must either secure the consent of the taxpayer or the leave of the High Court. The TRA remains the forum unless and until that happens.
Where the taxpayer requires that the objection be heard by a TRA (s134), the Commissioner is required by reg 6(1) to state and sign a case within three months after the date of service of the points of objection or within such further period as may be allowed under reg 8. Curiously, neither reg 6(1) nor reg 6(2) specifies when the signed case is to be filed, but both reg 6(4) and reg 8 assume that the same three months time limit applies. However, nothing turns on that in this case.
Regulation 6(4) provides that where the Commissioner fails to file a case within the time specified in reg 6(1), i.e. 3 months, or within such further time as may be allowed under reg 8, thus essentially mirroring reg 6(1), "the objector may apply to the Authority for an order directing the Commissioner to allow the objector's objection, and the Authority - (a) Shall make such an order accordingly, unless it is satisfied that there are reasonable grounds for the failure to file the case".
The first question which arises is as at what time are the reasonable grounds to be assessed. Mr Judd for the taxpayer supported the conclusion and reasoning of O'Regan J that the TRA was confined to facts and circumstances which occurred before the statutory time expired. Mr Beck for the Commissioner submitted that, where at any time before the hearing of the reg 6(4) application the Commissioner applied under reg 8 for an extension of time, the TRA was entitled to deal first with the reg 8 application and, if granted, to regard the application under reg 6(4) as falling away. It appears implicit in that argument that, even in the absence of a reg 8 application, "reasonable grounds" are to be assessed at the date of hearing and involve consideration of everything that has arisen up to that time.
There are obvious difficulties in both those stances. First, Mr Judd's proposed interpretation does not adequately recognise that in terms of reg 6(4)(a) the TRA is to direct the Commissioner to allow the objection unless it is satisfied that "there are reasonable grounds for the failure to file the case". It is not that "there were reasonable grounds" at an earlier specified date for the failure.
Second, reg 8 expressly allows for an application for extension of time to be made after the expiry of the three months' time limit. If a reg 8 application were filed after that time and before the filing of a reg 6(4) application, that would surely have to be part of the reasonable grounds inquiry, even though in terms of the opening conditional phrase of reg 6(4) (and Mr Judd's submission) it arose subsequent to the expiry of the only existing time limit. Why, then, should it matter whether the reg 8 application was made before or after the filing of the reg 6(4) application?
Third, the unlikelihood that the framers of the regulations intended such a time warped interpretation is perhaps highlighted by the passage of time in this case. The three months expired on 12 August 1996. The reg 6(4) application was filed on 14 July 1997. The reg 8 application was filed on 6 November 1997. The two applications were heard by the TRA in February/March 1999 and the decision was given on 4 February 2000. While that passage of time does not indicate any concern for the need for celerity in the resolution of tax disputes, and stands in sharp contrast to what is readily achievable under the new challenge proceedings, it also brings home the unreality of determining procedural issues in 1999/2000 in relation to an existing tax dispute by focussing entirely on what happened before mid August 1996. It is sufficient that what happened subsequently bears on the failure to file the case within the three months.
These three considerations are strong pointers to the conclusion that reasonable grounds under a reg 6(4) application are to be assessed by the TRA as at the date of hearing and so having regard to everything that has happened up to that time bearing on the failure to file the case and readiness to do so.
There is, however, a further interpretation difficulty inherent in Mr Beck's submission. There is an obvious difference between the reasonable grounds yardstick under reg 6(4) and the exceptional circumstances requirement under reg 8(2) where an application for extension of time is made more that two months after the date for filing the case. It is highly unlikely that the framers of the Regulations would have contemplated that the Commissioner could avoid meeting the exceptional circumstances requirement by simply not making a reg 8 application, resisting the reg 6(4) application, and, if satisfying the reasonable grounds test under para (a), then seeking an order relating to the filing of the case under para (b). Neither would the framers of the regulations have contemplated that taxpayer and Commissioner would engage in lengthy trench warfare.
What in our view must have been intended was that these regulations be read together and that the signing and filing of cases stated would follow an orderly and timely path, but not necessarily time specified at each step. It could reasonably be expected that, if the Commissioner had difficulty in meeting the three months time limit for reasons such as time needed for considering whether to seek to file the case in the High Court, the Commissioner would take steps to seek an early reg 8 extension. And the imposition of the higher test of exceptional circumstances applying after a further two months was obviously intended as a sanction to encourage celerity on the Commissioner's part. Read together in that way it would reasonably have been assumed that in the ordinary course, where the taxpayer filed a reg 6(4) application, the Commissioner would already have filed, or would ahead of the hearing have filed, a reg 8 application which would be determined ahead of the reg 6(4) application and, if granted, would lead to the falling away of the reg 6(4) application. If the Commissioner nevertheless failed to file a reg 8 application, insisted on the reg 6(4) application proceeding, and satisfied the TRA that an order under para (a) should be refused, the TRA could reasonably, depending on the particular circumstances, refuse to make an order under para (b), leaving the Commissioner to make an application under reg 8 and to face the exceptional circumstances requirement for an extension of time under reg 8(2).
The remaining question is whether the procedural provisions for referring cases to the High Court affect these tentative conclusions as to the s134 and regs 6 and 8 procedures.
Section 136(1) applies, "notwithstanding anything in this Part", and so notwithstanding the unqualified language of s134. But we see nothing in s136 which affects the interpretation conclusions which we have already reached. In particular, while subs (3)(a) sets a two months time limit for a taxpayer to give notice of the taxpayer's desire for the case to be stated to the High Court and, if the Commissioner declines, subs (20) then imposes a time limit of one month on the taxpayer seeking a non‑consensual referral to the High Court, there is nothing equivalent either under subs (3)(b) or otherwise applying to the Commissioner (paras [7] and [9] above). That absence of specific time limits must be seen as deliberate and we cannot discern any basis elsewhere in the legislation for the implication of a time limit against the Commissioner. On the contrary, where, under the statutory scheme a specific time limit was thought appropriate, express provision was made, as in subs (9) and s134 itself.
Of course, if the TRA makes an order under reg 6(4)(a), it will then be too late for the Commissioner to seek an order under s136. And dilatoriness on the Commissioner's part may properly be weighed in the exercise of the discretions under regs 6(4) and 8(1).

Case U35: conclusions

For these reasons we consider that O'Regan J erred in material respects in his interpretation conclusions.
In the result we are not persuaded that the TRA erred in granting the Commissioner's reg 8(2) application extending the time for filing the case to 31 March 2000 and then dismissing the taxpayer's reg 6(4) application. In that regard the circumstances subsequent to the expiry of the extra two months under reg 8(2) have to bear on the failure to file the case stated within that time or on the exercise of the discretion under that regulation. But we do not understand the TRA to have held otherwise.
It follows that the appeal by the taxpayer must be dismissed, the cross‑appeal by the Commissioner (paras [19] and [20] above) must be allowed and the application for judicial review must be dismissed.

Case U41

In the light of the conclusions and reasoning in relation to O'Regan J's judgment on review of Case U35, there could be no basis for a separate appeal to the High Court in respect of those matters. However, we are not to be taken as accepting that there is jurisdiction to appeal from a decision of that kind except as relating to "the determination on the objection" (Taxation Review Authorities Act 1994 s26) which, arguably, is confined to the ultimate substantive determination of an objection.

Result

The appeal by the taxpayer as it relates to Case U35 is dismissed and the cross‑appeal by the Commissioner is allowed (paras [19] and [20] above), the orders made in the High Court are quashed and the application for judicial review is dismissed. The appeal as it relates to Case U41 is dismissed as is the application for judicial review.
In the result the appeal by the Commissioner against the costs order in the High Court lacks any substratum and is dismissed without costs. Any issues as to the costs of the Commissioner in the High Court should be determined by that court.
The Commissioner is entitled to costs on the substantive appeal which are fixed at $5,000 together with all reasonable disbursements as fixed, if necessary, by the Registrar.

Solicitors
B M Grierson, Auckland, for M & J Wetherill Co Ltd and Others
Crown Law Office, Wellington, for Commissioner of Inland Revenue

[2002] NZCA 54

14 March 2002