Taylor v Commissioner of Inland Revenue

Graham Herbert Taylor appeals against a decision of the District Court which upheld a default judgment entered against him in favour of the Commissioner of Inland Revenue. The appeal was filed out of time and requires leave to proceed. The High Court considered the application on the papers. The Court held that the appeal was hopeless as the District Court was correct to find that it had no jurisdiction to entertain an argument as to the validity of the assessment which was subject to a judgment in the District Court. The appeal was dismissed with costs to the Commissioner on a 2B basis.

The Court considered the principles for extending time to appeal, including the length of the delay, the reasons for the delay, the conduct of the parties, the prejudice to the respondent, and the significance of the issues raised. The Court found that the delay was not due to any inadvertent error, Mr Taylor had not adequately explained the delay, and there was no particular prejudice to the Commissioner other than additional costs associated with the ongoing proceedings. The Court also found that the issues raised in the appeal were not significant, and that the appeal was hopeless because the District Court was correct to find that it lacked jurisdiction to entertain an argument as to the validity of the assessment.

The Court held that the District Court was correct to find that it lacked jurisdiction to entertain an argument as to the validity of the assessment because of s 109 of the Tax Administration Act 1994. The Court confirmed that once an assessment has been made its correctness can only be challenged in proceedings under the Tax Administration Act. A disputant subject to various requirements is entitled to challenge an assessment by commencing proceedings in the hearing authority. The Court found that the District Court was correct to find that s 109 of the Tax Administration Act applied and as a result there was no defence to the claim by the Commissioner. The Court also found that it had no jurisdiction to entertain an argument as to the validity of the assessment which was subject to a judgment in the District Court.