Skinner and Rowley v The Queen - [2016] NZSC 7

IN THE SUPREME COURT OF NEW ZEALAND

SC 79/2015
[2016] NZSC 7

BETWEEN	BARRIE JAMES SKINNER Applicant
AND	THE QUEEN Respondent

SC 126/2015
BETWEEN	DAVID INGRAM ROWLEY Applicant
AND	THE QUEEN Respondent

Court:	William Young, Glazebrook and Arnold JJ
Counsel:	R M Lithgow QC for Applicant 79/2015 R C Laurenson for Applicant 126/2015 H W Ebersohn for Respondent
Judgment:	15 February 2016

JUDGMENT OF THE COURT

ALeave to appeal is granted on the question whether s 109 of the Tax Administration Act 1994 precluded conviction on counts 101–110 (Rowley v R [2015] NZCA 233, (2015) 27 NZTC ¶22-011).
BIn all other respects the applications for leave to appeal are dismissed save that, in the case of Mr Rowley’s challenge to his sentence, this is with the reservation identified in [23].

____________________________________________________________________

REASONS

Background

The applicants were accountants who operated a taxation advisory business known as Tax Planning Services Ltd (TPS). Following a lengthy trial before Kós J (who sat without a jury) they were convicted on numerous charges involving the dishonest use of documents, attempting to pervert the course of justice and supplying false information to the Inland Revenue Department as to their income.[1]
[1]R v Rowley [2012] NZHC 1778, (2012) 25 NZTC ¶20-133 [Rowley (HC)].
On the Judge’s findings, the applicants created false tax positions for clients built around invoices in respect of transactions which had not taken place. These invoices resulted in the clients deriving income tax and GST benefits to which they were not entitled. The document use charges focused on the false income tax and GST returns which were filed by or on behalf of the clients.[2] The Judge found that they had attempted to pervert the course of justice by attempting to persuade clients to give false explanations to tax investigators and the provision to the clients of further false documentation to support such explanations.[3] The Judge also found that they had not returned as income their shares of the benefits of the frauds and, in this way, had supplied false information to the Inland Revenue Department.[4] We will refer to these last charges as alleging tax evasion.
[2]See at [39]–[393]. A summary of the Judge’s conclusions on these charges is provided at [460]–[462].
[3]See at [394]–[433] and, in summary form, at [463]–[466].
[4]See at [434]–[457] and, in summary form, at [467]–[468].
Subsequent appeals to the Court of Appeal against conviction (by both applicants) and sentence (by Mr Rowley) were dismissed.[5]

The Judge’s conclusion as to the falsity of the transactions and the significance of voluntary disclosures

[5]Rowley v R [2015] NZCA 233, (2015) 27 NZTC ¶22-011 (Ellen France P, Harrison and Stevens JJ) [Rowley (CA)].

Most of the TPS clients involved in the charges conceded, pursuant to voluntary disclosures, the tax positions that they had previously asserted. On the Crown case these disclosures had, in many instances, been made on the advice of the applicants. These disclosures were in reasonably general terms and did not go…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZSC 7
Decision Date: 15 February 2016

CaseChat Overview and Summary

In the Supreme Court of New Zealand, the case of Skinner and Rowley v The Queen dealt with the convictions and sentences of two accountants who had operated a taxation advisory business, Tax Planning Services Ltd (TPS). The applicants were convicted on various charges, including the dishonest use of documents, attempting to pervert the course of justice, and supplying false information to the Inland Revenue Department regarding their income. Their appeals against conviction and sentence were dismissed by the Court of Appeal, and they sought leave to appeal to the Supreme Court. The legal issues before the Supreme Court included the admissibility of certain affidavits, the falsity of the transactions, the role of voluntary disclosures, and the interpretation of section 109 of the Tax Administration Act 1994 in relation to the tax evasion charges.

The Supreme Court found that the voluntary disclosures were properly considered by the Judge and did not amount to a miscarriage of justice. They also determined that the Court of Appeal had adequately addressed the applicants' arguments regarding the admissibility of the affidavits. The Court found no error in the Court of Appeal's analysis of the tax evasion charges. However, the Court granted leave to appeal on the issue of whether section 109 of the Tax Administration Act 1994 precluded conviction on the tax evasion counts. The Court concluded that this issue raised a question of general or public importance and warranted further consideration. The Court dismissed the applicants' appeals in all other respects, including Mr Rowley's challenge to his sentence, with the reservation that the sentence may need to be revisited if the appeals in relation to the tax evasion charges are allowed.

In summary, the Supreme Court granted leave to appeal on the issue of whether section 109 of the Tax Administration Act 1994 precluded conviction on the tax evasion counts, while dismissing the applicants' appeals in all other respects. The Court's decision highlighted the importance of properly considering the role of voluntary disclosures and the interpretation of relevant legislation in tax fraud cases.

Orders