Jacobs v Commissioner of Inland Revenue COA

• Jurisdiction: New Zealand
• Judge: Arnold,Randerson,Stevens JJ
• Judgment Date: 22 February 2012
• Neutral Citation: [2012] NZCA 30
• Docket Number: CA771/2011
• Court: Court of Appeal
• Date: 22 February 2012

Between

Heather Anne Jacobs

Appellant

and

Commissioner of Inland Revenue

Respondent

[2012] NZCA 30

Court:

Arnold, Randerson and Stevens JJ

CA771/2011

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against High Court's dismissal of an appeal against a Taxation Review Authority (“TRA”) decision — appellant argued Commissioner of Inland Revenue should be deemed to have accepted an out of time notice of proposed adjustment — was accepted that appellant's proceedings before TRA did not amount to a challenge commenced under Part 8A Tax Administration Act 1994 (challenges) triggering appeal rights — s26A (challenges appealed to High Court) and s28 (removal to Court of Appeal) Taxation Review Authorities Act 1994 — whether jurisdiction to hear appeal — whether Authority was an inferior court for purposes of s67 Judicature Act 1908 (appeals against decisions of High Court on appeal — leave)

Counsel:

D G Hayes for Appellant

M Deligiannis and L A Herbert for Respondent

• A The appeal is dismissed for want of jurisdiction.

• B If the appellant wishes to pursue an appeal, she must apply to the High Court for leave to appeal under s 67 of the Judicature Act 1908.

• C The appellant must pay costs to the respondent as for a standard appeal on a band A basis together with usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Randerson J)

Introduction

1 The appellant appeals against a decision by Heath J 1 in which he dismissed her appeal against a decision of the Taxation Review Authority (the TRA). 2

2 In brief, the appellant owed substantial arrears of income tax to the respondent Commissioner. Following a meeting with Inland Revenue officials on 27 November 2009 to discuss her tax affairs, the appellant lodged a Notice of Proposed Adjustment (NOPA) on 3 December 2009 seeking adjustments for the 1999, 2000 and 2001 tax years. The NOPA was rejected forthwith by the Commissioner on the grounds that it had been lodged outside the required response period under the Tax Administration Act 1994.

3 At no time has the appellant relied on the exceptional circumstances provisions set out in the Tax Administration Act under which the Commissioner has a discretion to accept a NOPA despite the fact that it has been lodged out of time. Instead, the appellant alleged that the Commissioner's officials agreed at the November 2009 meeting to accept a NOPA out of time. That allegation is denied by the Commissioner.

4 The appellant then launched proceedings before the TRA effectively seeking a ruling that the Commissioner had agreed to accept the late NOPA. Her case was that if there had been such an agreement, then s 89H(2) of the Tax Administration Act meant that the Commissioner was deemed to have accepted the proposed adjustment since he did not reject the NOPA within the relevant response period.

5 The Commissioner opposed the appellant's claim on the basis that there had been no agreement to accept the late NOPA and that a valid timely NOPA was a pre-requisite to deemed acceptance under s 89H(2).

6 The TRA found as a fact that the Commissioner had not agreed to accept a late NOPA and also accepted the Commissioner's argument that he was not deemed to have accepted the NOPA under s 89H(2) since it was lodged out of time and was invalid for that reason. Those findings were upheld by Heath J in the High Court.

The jurisdiction issue

7 For the Commissioner, Ms Deligiannis submitted that this Court had no jurisdiction to entertain the appeal. Her argument was straightforward:

• (a) In order to have an appeal as of right to this Court, the appellant must fall within ss 26A and 28 of the Taxation Review Authorities Act 1994. Section 26A(3) of that Act provides that appeals are only available in respect of challenges commenced under Part VIIIA of the Tax Administration Act. Mr Hayes for the appellant now accepts that the proceedings brought before the TRA did not amount to a challenge commenced under Part VIIIA of the Tax Administration Act. 3

• (b) The only possible pathway for an appeal in the circumstances was by seeking leave of the High Court to appeal to this Court under s 67 of the Judicature Act 1908 against decisions of the High Court on appeal from an “inferior court”. For the purposes of this section, the TRA was an inferior court.

8 Mr Hayes did not strenuously resist the proposition that the TRA was an inferior court for the purposes of s 67 of the Judicature Act. It is well established that the mere application of the “court” label does not determine the issue; the functions and processes of the body at issue must be examined. Lord Scarman has described a court of law (sometimes referred to as a court of judicature) as “a body established by law to exercise, either generally or subject to defined limits, the

judicial power of the state. In this context, judicial power is to be contrasted with legislative and executive (ie administrative) power.” 4

9 Although, as Lord Edmund-Davies...