John David Hardie v Commissioner of Inland Revenue

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeArnold J
Judgment Date23 August 2010
Neutral Citation[2010] NZCA 389
Docket NumberCA325/2010
Date23 August 2010
John David Hardie
Commissioner of Inland Revenue

[2010] NZCA 389


O'Regan P, Arnold and Ellen France JJ


CA326 2010


Application for special leave to appeal against a decision entering judgment for the payment of outstanding tax on the grounds that the appeal was arguable and raised issues of general importance, namely whether Māori as tangata whenua had an obligation to pay tax.


Appellant in person

C K Wood and T Gillbanks for Respondent

  • A The application for special leave to appeal in CA325/2010 is declined. Accordingly, the application to amend the grounds of appeal and the application for a stay (CA326/2010) are also declined.

  • B The applicant must pay the respondent costs for a standard application on a band B basis and usual disbursements.


(Given by Arnold J)


The applicant, Mr Hardie, makes three associated applications in relation to two decisions of Stevens J. In the first decision, Stevens J entered judgment against Mr Hardie for unpaid taxes and penalties amounting to $10,335,160.32. 1 In the second, Stevens J refused him leave to appeal from that decision and refused to grant a stay so that he could pursue an appeal to this Court.


Mr Hardie applies for:

  • (a) Special leave to appeal against Stevens J's decision entering judgment against him for the outstanding tax (CA325/2010);

  • (b) Leave to amend his grounds of appeal in CA325/2010; and

  • (c) A stay of execution until the appeal and an associated judicial review application are determined (CA326/2010).


Mr Hardie did not file tax returns between 31 March 1992 - 30 April 2006. The Commissioner of Inland Revenue (the Commissioner) issued default tax assessments under s 106 of the Tax Administration Act 1994 (the Act), with the result that Mr Hardie was assessed as owing unpaid tax and penalties amounting to $10,341,410.32. Mr Hardie did not challenge the assessments either through statutory dispute resolution procedures or before the Taxation Review Authority.


The Commissioner brought proceedings in the District Court to recover the debt. The proceedings were served on Mr Hardie on 14 August 2006 but he took no steps to defend them. Accordingly Judge Taumaunu entered judgment by default for the Commissioner. After the judgment was sealed, Mr Hardie was successful in having the decision set aside. There was then a defended hearing before

Judge Recordon on 21 May 2007, at which Mr Hardie appeared in person. The Judge reserved his decision

Soon after the May 2007 hearing, Mr Hardie advised the District Court he was preparing judicial review proceedings. On 17 April 2007 Judge Recordon stayed the proceedings in the District Court pending the outcome of the judicial review proceedings. On 11 June 2007 Mr Hardie filed those proceedings, alleging the Commissioner had made the default tax assessments unreasonably. He sought a confidentiality order in connection with those proceedings, which was declined. 2 In July 2008, over a year after the judicial review proceedings were instituted, Mr Hardie discontinued them. Judge Recordon advised in a minute dated 3 November 2008 that the stay was rescinded and a decision would be issued in respect of the defended hearing in due course.


Mr Hardie then wrote to the District Court, advising that he intended to apply for a further stay of proceedings while he initiated another set of judicial review proceedings in the High Court. He did not, however, file any such proceedings.


On 4 March 2009Judge Recordon delivered judgment in favour of the Commissioner. 3 He held that Mr Hardie's failure to supply the Commissioner with the information required or to use proper challenge procedures meant the Commissioner was entitled to make the default assessments. There had to be provision for the assessment of tax in the absence of voluntary compliance by the taxpayer, even though the assessment would necessarily involve informed estimates. 4


Mr Hardie appealed Judge Recordon's decision to the High Court. At the hearing on 9 March 2010, Mr Hardie claimed that the Commissioner had made an error in his calculations because he did not employ anyone from March 2004. The Commissioner accepted that PAYE of $6,250 should be deducted from the total sum owing. Mr Hardie also submitted that he was exempt from paying tax due to his

status as tangata whenua; alleged various breaches of the New Zealand Bill of Rights Act 1990; and said the Judge should not have relied upon the Commissioner's assessments. In a judgment delivered on 19 March 2010 Stevens J dismissed the appeal save for the small PAYE deduction. 5 Judgment was entered for the debt of $10,335,160.32

Meanwhile, on 11 March 2010 Mr Hardie filed judicial review proceedings against the Commissioner in the High Court. We understand that this proceeding is still on foot.


On 23 April 2010 Stevens J heard three applications:

  • (a) the Commissioner's application for costs;

  • (b) Mr Hardie's application for leave to appeal to the Court of Appeal; and

  • (c) Mr Hardie's application for a stay of execution pending final disposition of the appeal.


Mr Hardie did not appear at the hearing. After various unsuccessful attempts to contact Mr Hardie, counsel for the Commissioner asked the Judge whether he had received from Mr Hardie a “notice of application for enquiry and adjournment”, such document having been delivered to counsel that morning. The document was not filed with the Court prior to the hearing but was received later that day. It was contradictory in parts and indicated an intention to withdraw the application for leave to appeal.


Having obtained the document after the hearing, Stevens J noted that insofar as it requested an adjournment, that request was declined. 6 Having regard to Mr Hardie's very limited success in obtaining a reduction of the debt, the Judge held

the Commissioner was entitled to the full amount of costs sought. 7 Stevens J then considered Mr Hardie's application...

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3 cases
  • Hardie v The Commissioner of Inland Revenue
    • New Zealand
    • Court of Appeal
    • 28 September 2011
    ...2 NZLR 99 at [59]. 3 Tax Administration Act 1994, part 4A. 4 CIR v Hardie DC Waitakere CIV-2006-090-1540, 4 March 2009. 5 Hardie v CIR [2010] NZCA 389, (2010) 24 NZTC 6 At [17]. 7 Tax Administration Act 1994, ss 106(1) and 106(1D); Goods and Services Tax Act, s 27(1). 8 Tax Administration ......
  • Hardie v The Commissioner of Inland Revenue Coa
    • New Zealand
    • Court of Appeal
    • 28 September 2011
    ...5 6 Bankruptcy proceedings await the disposition of this appeal. CIR v Hardie DC Waitakere CIV-2006-090-1540, 4 March 2009. Hardie v CIR [2010] NZCA 389, (2010) 24 NZTC At [17]. How did the Commissioner come to his assessments? [15] We must begin by establishing on what basis the Commission......
  • John David Hardie v Commissioner of Inland Revenue
    • New Zealand
    • Court of Appeal
    • 23 August 2010
    ...COURT OF APPEAL OF NEW ZEALAND CA325/2010 CA326/2010 [2010] NZCA 389 BETWEEN JOHN DAVID HARDIE Applicant AND COMMISSIONER OF INLAND REVENUE Respondent Hearing: 17 August 2010 Court: O'Regan P, Arnold and Ellen France JJ Counsel: Appellant in person C K Wood and T Gillbanks for Respondent Ju......

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