Niwa v Commissioner of Inland Revenue

[2019] NZHC 853

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE

CIV 2019-443-9

[2019] NZHC 853

BETWEEN

DONALD JAMES NIWA

Applicant

AND

THE COMMISSIONER OF INLAND REVENUE

Respondent

Hearing:	On the papers
Counsel:	Applicant in Person
Judgment:	17 April 2019

JUDGMENT OF ELLIS J

[1]                  On 3 April 2019 the Registry accepted for filing a “statement of claim” from Mr Niwa. It did not, however, release the notice of proceeding and attached memorandum for service.  Rather, the claim was referred to me as Duty Judge under r 5.35A of the High Court Rules 2016 (HCR) on the basis of the Registry’s belief that, on the face of the proceeding, it is “plainly an abuse of the process of the court”.

[2]                  If I agree with the Registry’s assessment, then r 5.35B confers on me the power (amongst others) to strike the proceeding out.

NIWA v THE COMMISSIONER OF INLAND REVENUE [2019] NZHC 853 [17 April 2019]

Mr Niwa’s claim

[3]                  Mr Niwa’s claim is stated to be an application for judicial review. It clearly relates to a decision in the District Court in relation to debt proceedings brought by the Commissioner of Inland Revenue (the Commissioner) for outstanding income tax and GST, late payment penalties and use of money interest.1 Judge Hinton struck out Mr Niwa’s counterclaim and defence to that claim and ordered judgment for the Commissioner. He did so essentially on the basis that:

(a)Mr Niwa’s counterclaim and defence  were  predicated  on  what Judge Hinton described as challenges to the sovereignty of Parliament and to the jurisdiction of the courts;2

(b)Mr Niwa was, in any event, unable to challenge the validity or correctness of the assessments forming the basis of the Commissioner’s claim because the Tax Administration Act 1994 makes it clear that tax assessments issued by the Commissioner may only be challenged through the statutory disputes procedures, which have not been utilised by Mr Niwa; and so

(c)Mr Niwa had no defence to the claim.

[4]                  For reasons that will become apparent it is pertinent to note that, like all judgments of the District Court and  the  senior  courts,  the  entituling  capitalises Mr Niwa’s name.

[5]                  For ease of reference I annex a copy of the substantive part of Mr Niwa’s current pleading to this judgment. It will be observed that the ways in which Mr Niwa uses his name is unusual, including in particular:

1      Commissioner of Inland Revenue v Niwa [2016] NZDC 14075.

2      It seems that Mr Niwa also sought to argue that the Bills of Exchange Act 1908 precluded the Commissioner’s claim.

(a)        his variable (but deliberate) use of capitals and small case;

(b)the distinction he apparently seeks to draw between “Donald-James: of the family Niwa” and DONALD NIWA™;

(c)the use of Latin (ens legis)3 and, relatedly, the attempt to suggest that DONALD NIWA™ is not a “natural person”;

(d)the use of the thumb print by Donald-James’ signature;

(e)the allegation in paragraph 2 that the District Court Judge:

… proceeded after the belief I the living Individual Donald-James … was the “Defendant”

(f)        the allegation in paragraph 3 that the Judge:

… failed to call the Individual Donald-James to ask if he would accept role as ‘Defendant’, and used “Statutory Power” to proceed.

[6]                  The distinction  apparently  sought to be drawn here was also reflected in   Mr Niwa’s appearance in the District Court where Judge Hinton recorded that he wished to be referred to as “Donald James”.4

Discussion

[7]                  Practices of the kind now employed by Mr Niwa in his pleading come before the Courts not infrequently. They are generally given short shrift. Interestingly, however, they have also been the subject of jurisprudence and academic writing overseas. The most comprehensive analysis is undoubtedly that which is contained in the 188 page Canadian judgment in Meads v Meads.5

3      Which means “a creature of the law” or a legal, rather than a natural, person.

4      Judge Hinton recorded (at [3]) that he had eventually acceded to that request.

5      Meads v Meads 2012 ABQB 571.

[8]                  In Meads the Albertan Associate Chief Justice begins his judgment by giving those who engage in such practices a name: “Organized Pseudolegal Commercial Argument litigants” or “OPCA litigants”. He said:

[1]        This Court has developed a new awareness and understanding of a category of vexatious litigant. As we shall see, while there is often a lack of homogeneity, and some individuals or groups have no name or special identity, they (by their own admission or by descriptions given by others) often fall into the following descriptions: Detaxers; Freemen or Freemen-on-the- Land; Sovereign Men or Sovereign Citizens; Church of the Ecumenical Redemption International (CERI); Moorish Law; and other labels - there is no closed list. In the absence of a better moniker, I have collectively labelled them as Organized Pseudolegal Commercial Argument litigants [OPCA litigants], to functionally define them collectively for what they literally are. These persons employ a collection of techniques and arguments promoted and sold by “gurus” (as hereafter defined) to disrupt court operations and to attempt to frustrate the legal rights of governments, corporations, and individuals.

[2]        Over a decade of reported cases have proven that the individual concepts advanced by OPCA litigants are invalid. What remains is to categorize these schemes and concepts, identify global defects to simplify future response to variations of identified and invalid OPCA themes, and develop court procedures and sanctions for persons who adopt and advance these vexatious litigation strategies.

[3]        … One of the purposes of these Reasons is, through this litigant, to uncover, expose, collate, and publish the tactics employed by the OPCA community, as a part of a process to eradicate the growing abuse that these litigants direct towards the justice and legal system we otherwise enjoy in Alberta and across Canada. …

[4]        OPCA litigants do not express any stereotypic beliefs other than a general rejection of court and state authority; nor do they fall into any common social or professional association. Arguments and claims of this nature emerge in all kinds of legal proceedings and all levels of Courts and tribunals. This group is unified by:

1.a characteristic set of strategies (somewhat different by group) that they employ,

2.specific but irrelevant formalities and language which they appear to believe are (or portray as) significant, and

3.the commercial sources from which their ideas and materials originate.

This category of litigant shares one other critical characteristic: they will only honour state, regulatory, contract, family, fiduciary, equitable, and criminal obligations if they feel like it. And typically, they don’t.

[9]                 The Judge then specifically refers to the “names” issue, saying:6

OPCA litigants frequently adopt unusual variations on personal names, for example adding irrelevant punctuation, or using unusual capital and lower case character combinations. While OPCA litigants and their gurus put special significance on these alternative nomenclature forms, these are ineffectual in law and are meaningless paper masks. Therefore, in these Reasons, I will omit spurious name forms, titles, punctuation and the like.

[10]              The Judge notes the historical origins of OPCA claims (which he traces back to the 1990s in Canada, but earlier in the United States)7 and the fact that their basic tenets are often devised and then sold to apparently unwitting litigants by “gurus”. The purchasers appear to represent individuals from all parts of society, including the rich and famous.8 Then, he says:

[75] These claims are, of course, pseudolegal nonsense. A judge who encounters and reviews OPCA concepts will find their errors are obvious and manifest, once one strips away the layers of peculiar language, irrelevant references, and deciphers the often bizarre documentation which accompanies an OPCA scheme. When reduced to their conceptual core, most OPCA concepts are contemptibly stupid. Mr. Meads, for example, has presented the Court with documents that appear to be a contract between himself, and himself. One Mr. Meads promises to  pay  for  any  liability  of  the  other Mr. Meads. One owns all property, the other all debts. What is the difference between these entities? One spells his name with upper case letters. The other adds spurious and meaningless punctuation to his name. Mr. Meads (with punctuation) is the Mr. Meads who appeared in court. He says the Mr. Meads (all capitals) is the one who should pay child and spousal support.

6 At [7].

7      Indeed, the United States the Inland Revenue Service has issued a specific Ruling (Rev Ruling 2005-21) dealing with “Straw Man” claims, which it describes as claims “premised on the erroneous theory that most government documents do not actually refer to individuals.” The Ruling goes on to state:

Users of the “straw man” theory falsely claim that only documents using an individual’s name with “standard” capitalization, i.e., lower-case with only the beginning letters of each name capitalized, are legitimate. These individuals erroneously argue that the use of the individual’s name in all upper-case letters, which is common in some government documents, refers to a separate legal entity, called a “straw man.” These individuals also erroneously argue that, as a result of the creation of a “straw man,” they are not liable for the debts, including the tax debts, of their “straw man,” that taxing the “straw man” is illegal because the “straw man” is a debt instrument based upon the labor of a real person and is, therefore, a form of slavery, or that no tax is owed by the real individual because it can be satisfied, or offset, by money in a “Treasury Direct Account” held in the name of the “straw man.”

8      At [68] referring in particular to United States v Wesley Trent Snipes 2008 No 5:06-cr-22-Oc- 10GRJ US Dist (MD Fl, Feb 1 2008) . The Judge noted that Mr Snipes was at that time serving a three year prison sentence for income tax evasion.

[11]              The Judge divides the different types of OPCA concepts and arguments into a series of categories (and sub-categories). The broad categories or argument are as follows:9

(a)the litigant is not subject to court authority;

(b)obligation requires agreement;

(c)        double/split persons;

(d)unilateral agreements; and

(e)money for nothing schemes.

[12]              It is the third of these categories that is in play in the present case. In his discussion under that heading, the Judge said:10

[417]     A strange but common OPCA concept is that an individual can somehow exist in two separate but related states. This confusing concept is expressed in many different ways. The ‘physical person’ is one aspect of the duality, the other is a non-corporeal aspect that has many names, such as a “strawman”, a “corporation”, a “corporate entity”, a “corporate fiction”, a “dead corporation”, a “dead person”, an “estate”, a “legal person”, a “legal fiction”, an “artificial entity”, a “procedural phantom”, “abandoned paper work”, a “slave name” or “slave person”, or a “juristic person”.

[418]     Many OPCA nomenclature schemes relate to this duality. For example, the ‘lower case’ vs. ‘upper case’ name pairs indicates the ‘physical person’ and ‘non-corporeal aspect’, respectively. When “: Dennis-Larry: Meads::” says he acts “on behalf of DENNIS LARRY MEADS (juristic person)”, he appears to indicate he believes he has two separate aspects, and that the man in the courtroom (“::Dennis-Larry: Meads::”) is representing his other half (“DENNIS LARRY MEADS (juristic person)”). Other times OPCA litigants say they are “agents”, “trustees”, “owners”, “representatives” or “secured party” for their other aspect: …

[419]     A particularly surreal variation on this theme is … where the ‘physical litigants’ purported to intervene in the action against their ‘non-corporeal aspects’. …

9      I omit from this summary OPCA arguments that are peculiar to the Canadian legal system and structure.

10     (citations omitted).

[420]     The ‘dash colon’ and ‘family/clan/house of’ motifs uniformly indicate the ‘physical person’ half of these double/split individuals. Other times the ‘physical person’ is called a “natural person” or is described as being “flesh and blood” …. Mr. Meads adopts the latter kind of language, he (the physical litigant) is “the living flesh and blood sentient-man”.

[421]     There are different explanations for the non-corporeal similarity. Some OPCA gurus promote the idea that this aspect is created by the state, burdened with legal obligations, then ‘shackled’ to the physical person. Other OPCA gurus present the non-corporeal aspect as a part of a person that can be split away, and then burdened with obligations and debts.

[422]     Of course, either approach is legally ineffectual. Canadian law does not provide for a person to have two aspects - this entire concept is yet another ‘magic hat’. …

[423]     The answer is that, as Justice Gauthier observed, no matter whatever nomenclature the OPCA litigant wants to adopt to describe his ‘other self’, it is the person before the Court who is subject to its order.

[13]              The Judge goes on to speak about the particular manifestation of the split persona in the case before him and then makes some more general observations about how such “divided persons” behave in Court. In that respect he notes:11

[440] The in-court conduct of OPCA litigants who advance a double/split person approach can be confusing. They may ask to whom the court is talking. Or, like Mr. Meads, they may conclude that the court is addressing the “person” rather than the “soul”.

[441]  Detaxer  cases  provide  some  examples  of  this  kind  of  conduct.   R v Turnnir, reports how the defendant referred to himself both as “the taxpayer” and “the legal representative of the taxpayer”. During cross-examination when he was asked who signed a document; Turnnir replied: “Who are you talking to?”

[442] In Porisky Trial Decision at paras 60-61, Judge Myers  related this kind of dialogue:

[60] ... Mr. Porisky said he could not make that decision unless he understood whether he was to give evidence in his “inherent personality as a natural person with no intent to profit”. He wanted to tell the truth in the stand but the capacity he was to testify in would make a difference to his evidence. A few minutes later in the dialogue he said:

I need to know if I make the decision to get into the stand, from which perspective can I speak? Like therefore I need to know, in the eyes of the law, if one man is two persons, the natural or the legal, okay, which one can I speak as, or does it matter - am I have the liberty to speak the truth and qualify it so I can speak to everything? Because what it - they have

11     (citations omitted).

commingled a lot of stuff, and for me to properly address it, I'm going to have to be able to speak to everything to properly address it.

And later:

Again, I feel like I'm being railroaded because I'm asking for clear answers. I came here with a full intention on defending my - my rights and - and not having things being converted into something they're not, and I don't know how to do that if nobody's going to give me a straight answer. I thought Crown had a duty -- I read their web page and they talk about honour and integrity, and now I'm been led one thing -- and for me to speak to everything, I'm going to need to be able to speak to it from my starting point of my existence.

I didn't make it up. Sir John Salmond I think is a highly respected man. The Supreme Court relies on him. I didn't make it up that one man's two persons in the eyes of the law. And so from that perspective, I need -- that's why I tried to be as honourable and as open in the development of this, so that I could speak the truth and the whole truth from the proper perspective, so it does not get misconstrued or mislabelled or presumed to be something it's not. And that's what I need to know. If I make the decision and I go in that box, which person, in the eyes of the law am I?

THE COURT: You are Mr. Porisky.

THE ACCUSED PORISKY: Am I Russell Anthony Porisky in my inherent personality as a natural person, or am I a sovereign-granted personality?

THE COURT: You’re Russell Porisky.

THE ACCUSED PORISKY: That's fairly misleading because that's not clear enough for me, Your Honour.

...

THE COURT: Let’s assume you get into the stand and the Crown asks you, “What did you have for breakfast today?” Would it make a difference as to what capacity you were in?

THE ACCUSED PORISKY: For me, it would, Your Honour, yes.

[14]              In the Meads case, the Judge went on to conclude:

[445] ‘Double/split person’ schemes have no legal effect. These schemes have no basis in law. There is only one legal identity that attaches to a person. If a person wishes to add a legal ‘layer’ to themselves, then a corporation is the proper approach. The interrelationship between corporation and owner, and the legal effect of that ‘layer’ is clearly established in common law and statute.

[446] The ‘double/split’ person’ strategies all have a common underlying kernel; that the OPCA litigant is not the person before the court, or is not subject to the court’s jurisdiction. That allegedly falls on the other, non- corporeal (but otherwise similar) person. In other words, a litigant who advances a variation of this scheme says to the court ‘you have no jurisdiction over me - the person you want is someone else.’ That allegedly denies this Court’s authority, but of course fails in effect.

Conclusion

[15]              As noted earlier, Mr Niwa’s pleading and his conduct in the District Court (recorded in part in Judge Hinton’s decision) have all the hallmarks of one of these “split person” or “straw man” OPCA claims.

[16]              At a general level, it seems to me that it will inevitably be an abuse of process for a litigant to attempt to employ OPCA concepts in seeking to avoid or defeat any state, regulatory, contract, family or other obligations recognised by law. But more specifically it is an abuse of process to employ such concepts in an attempt to avoid judgment for a tax liability which is imposed and deemed correct by statute or to delay the Commissioner from enforcing such liability. Mr Niwa’s claim is struck out accordingly.

[17]              I have issued this judgment without hearing from Mr Niwa, as r 5.35B of the HCR permits me to do. But in accordance with that rule I also record that he has a right of appeal against this decision.

[18]              The Commissioner is to be served with a copy of this decision in accordance with r 5.35B(4).

Rebecca Ellis J