Jacobs v Commissioner of Inland Revenue COA

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeArnold,Randerson,Stevens JJ
Judgment Date22 February 2012
Neutral Citation[2012] NZCA 30
Date22 February 2012
Docket NumberCA771/2011

[2012] NZCA 30



Arnold, Randerson and Stevens JJ


Heather Anne Jacobs
Commissioner of Inland Revenue

D G Hayes for Appellant

M Deligiannis and L A Herbert for Respondent

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)

The issue was: whether the TRA was an inferior Court for the purposes of s67 JA and leave was required to hear the appeal.

Held: The mere application of the court label did not determine whether a body was a court; the functions and processes of the body at issue must be examined. Although there was no unmistakeable hallmark by which a court or inferior court could unerringly be identified, a number of characteristics were commonly considered ( Attorney-General v British Broadcasting Corporation (UK)). The body should have been created by the state; its decisions should be concerned with the adjudication of legal rights; it should conduct its procedure in accordance with the rules of natural justice; its procedures normally would involve a public hearing with the power to receive evidence with cross-examination of witnesses and the hearing of argument on the issues before it; and it would adjudicate in a final and binding way on the issues before it (subject to any appeal).

A TRA was a court of inferior jurisdiction for the purposes of s67 JA. Section 13 TRAA (functions of Authority) made it clear that a TRA was to function as a judicial authority under taxation legislation. It was able to summon witnesses and cross examination was routinely permitted. It had wide powers to receive evidence but was otherwise subject to the provisions of the Evidence Act 2006 as if it were a court.

Although the hearing of an objection or challenge before a TRA was not open to the public, this was not a bar to a conclusion that a TRA was an inferior court as this was consistent with the legislative approach of maintaining privacy in respect of taxpayers' affairs. Its decisions were given in writing and included any findings of fact and reasons in law. Any such decision was final subject to available appeal rights. A TRA could also state a case for the HC.

It was therefore clear that a TRA was appointed by the state to exercise judicial authority to determine challenges and disputes under relevant taxation legislation and to adjudicate finally thereon, subject to any appeal. The processes adopted were consistent with those adopted by courts exercising judicial authority.

It was accepted that the proceeding before the TRA was not a challenge under Part 8A. J did not have a right of appeal and the Court had no jurisdiction to entertain an appeal. J would have to apply to the HC for leave to appeal s67 JA.

Although a final view could not be expressed without argument, there were some doubts about the jurisdiction of the TRA (and therefore of the HC on appeal) to hear and determine J's claim. In substance, J appeared to be seeking a declaration from the TRA that the Commissioner was deemed to have accepted the NOPA. She did not challenge any assessment or decision of the Commissioner. It was unclear whether a TRA had power to make declaratory orders of this nature.

Appeal dismissed for want of jurisdiction.

  • 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.


(Given by Randerson J)


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


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.


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.


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.


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).


The TRA found...

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2 cases
  • Jacobs v Commissioner of Inland Revenue Coa
    • New Zealand
    • Court of Appeal
    • 22 February 2012
    ...COURT OF APPEAL OF NEW ZEALAND CA771/2011 [2012] NZCA 30 BETWEEN HEATHER ANNE JACOBS Appellant AND COMMISSIONER OF INLAND REVENUE Respondent Hearing: 9 February 2012 Court: Arnold, Randerson and Stevens JJ Counsel: D G Hayes for Appellant M Deligiannis and L A Herbert for Respondent Judgmen......
  • Osborne and Osborne v Auckland City Council (now Auckland Council) Coa
    • New Zealand
    • Court of Appeal
    • 17 May 2012
    ...Rainey Law, Auckland for Applicants Heaney & Co, Auckland for Respondent 73 Compare Jacobs v Commissioner of Inland Revenue [2012] NZCA 30 and Andrew “Litigation” [2012] NZLJ 15 at 18; and Andrew Beck “Litigation” [2012] NZLJ 91 at 93–94. ...

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