Suckling v R

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeEllis J
Judgment Date10 May 2016
Neutral Citation[2016] NZCA 187
Docket NumberCA468/2015
Date10 May 2016

[2016] NZCA 187



French, Simon France and Ellis JJ


Morris Burton Suckling
The Queen

Appellant in person

P D Marshall for Respondent

Appeal against conviction and sentence imposed in the District Court following conviction on five charges of knowingly providing misleading income tax returns and 10 charges of evading the assessment or payment of GST — the appellant was sentenced to one year's imprisonment, with leave to apply for home detention — the Inland Revenue Department claimed that the appellant had been using Trusts to avoid the payment of tax – the appellant had initiated the disputes process under s109 Tax Administration Act 1994 (TAA) to disputes the Commissioner's assessments – he argued that until this process was complete, s109 acted as a bar to the criminal proceedings against him or alternatively precluded the use of the assessments in any criminal proceeding – leave had been granted by the Supreme Court in another case to argue the s109 point – whether s109 TAA precluded the determination of the criminal charges — whether the start date of a sentence of imprisonment should be deferred under s100(1) Sentencing Act 2002 (start date of sentence of imprisonment) for up to two months on humanitarian grounds.

The issues were: whether s109 and the parallel disputes process acted as a bar to the criminal proceedings; and whether the start date of a sentence of imprisonment should be deferred under s100(1) Sentencing Act 2002 (SA) (start date of sentence of imprisonment) for up to two months on humanitarian grounds.

Held: In light of the recent grant of leave in Skinner, it had to be acknowledged the final word on the operation of s109 in a criminal context was yet to come. However, S's case had to be decided on the basis of the authorities as they presently stood.

S's submission was that s109 required either that the disputes process be completed before the criminal proceedings could be pursued or that the assessments were not admissible in the criminal proceedings. There were a number of fundamental difficulties with this position.

While it was true that if S prevailed in his tax dispute he could not then be guilty of the criminal charges, that did not mean the tax dispute had to be determined first. Section 109 TAA did not, in the current case, operate to preclude S from contending at trial that the income was received by another entity and that he was not therefore liable for the tax. Section 109 TAA did not operate as a bar to the criminal proceedings. The real problem for S was that, for whatever reason, he chose not to cross-examine the IRD's witnesses at trial and he chose neither to give nor to call evidence himself. Nor had he addressed the jury. The end result was that through no fault of the Court or the IRD, the jury had no way of knowing what his defence was.

Secondly, the correctness or otherwise of the income tax assessments issued had not formed part of the IRD's case in relation to the charges of providing false information ( Rowley v R). The IRD had not relied on the assessments as proof of anything. It had been open to S to contend the information provided was not false because the income was not received by him. Again, the HC did not hold s109 TAA would operate to prevent him from making that argument.

Even in relation to the GST charges, the IRD had not sought to rely on the assessments issued as proof of their correctness and therefore of S's liability. The Commissioner established by means of other evidence that S was operating a seed treatment business on his own account, that he met the statutory threshold for GST registration and that he failed to return any GST when he knew he was required to do so. The assessments had been properly admitted as a part of the relevant factual narrative but that they had no more relevance than that.

S's intended defence was fanciful, at best. The factual narrative strongly suggested the Trust structure was an amateur contrivance created after the event.

In terms of what the jury knew about the position S was taking, the transcript made it clear the jury was aware in general terms that he was disputing the assessments. To the extent it was not aware of the precise basis for the dispute (which was in any case unmeritorious), that was as a result of the choices S had made about the conduct of his trial.

S's submission on the sentencing appeal was without merit. The Judge's sentencing notes made it clear he had not relied on the assessments themselves but rather on the evidence of the IRD investigator. The fact the investigator's evidence supported the assessments was neither here nor there.

Neither could S argue that he was taken by surprise. He was advised when he would be sentenced and a pre-sentence report was sought and obtained. S had ample time to prepare.

The appeals against conviction and sentence were dismissed. The Court should defer the start date of S's sentence of imprisonment s on humanitarian grounds under s100(1) SA. S was 70 years old and had not previously been incarcerated. Further, it seemed that home detention would have been imposed had it not been for S's determination to decline it as a matter of principle.

  • A The appeals against conviction and sentence are dismissed.

  • B The commencement of Mr Suckling's sentence of imprisonment is to be deferred until the earlier of:

    • (a) the determination of any application under s 80I of the Sentencing Act 2002 to the District Court for cancellation of that sentence and substitution of a sentence of home detention; or

    • (b) two months from the date of this judgment.

  • C Mr Suckling is granted bail on the following conditions:

    • (a) he is to reside at 2 Grand Oaks Drive, Palmerston North; and

    • (b) on the date that either:

      • (i) his application under s 80I of the Sentencing Act is declined; or

      • (ii) if no such application is made or remains undetermined, at the expiry of the two month period —

      he is to surrender himself to the prison manager at Manawatu Prison.


(Given by Ellis J)


Following a trial before Judge Atkins QC and a jury in the Palmerston North District Court, Mr Morris Suckling was found guilty of five charges of knowingly providing misleading income tax returns and 10 charges of evading the assessment or payment of GST. He was sentenced by Judge Lynch to one year's imprisonment, with leave to apply for home detention. 1 He now appeals against both conviction and sentence.


In one form or another, Mr Suckling has operated a seed-treating business from the late 1990s onwards. Initially, he did so through a company, Top Crop Seed Treating Ltd (TCSTL), which was registered for income tax and GST. TCSTL was wholly owned by Mr Suckling and his wife, Christine Suckling.


In 2006, Mr Suckling and TCSTL were audited by Inland Revenue (IR). IR found TCSTL had been invoiced for services provided by Mr Suckling to the company. The invoices were issued by Mr Suckling on behalf of an entity called the Bamen Trust. TCSTL paid the amounts invoiced into a bank account operated by Mr Suckling and his wife, and claimed those amounts (which were described as “subcontractor payments”) as deductions for income tax purposes.


The Bamen Trust was not registered with IR and did not account for the income it received from TCSTL, which, between 2002 and 2006, totalled $283,880. The Commissioner of IR issued default assessments in relation to this income. Mr and Mrs Suckling disputed those assessments on behalf of the Trust. During the ensuing disputes process, Mr Suckling maintained the amounts received represented “the reward for Morris's labour” and were not taxable. IR's position was that the “rewards” received constituted taxable income.


The outcome of the disputes process was that Mr Suckling was found liable for the tax on the amounts received. The resulting tax debt led to his bankruptcy; he was so adjudicated on 21 September 2011.


According to advice provided to IR by Mr Suckling in May 2009, TCSTL ceased to operate from April 2007, due to his health problems. 2 But Mr Suckling nonetheless continued to operate a seed-treating business on his own account under the name Top Crop Seed Treating (TCST).


IR again formed the view that Mr Suckling received income from the TCST business he did not declare and that he also failed to file GST returns as required. In May 2013 the Commissioner registered Mr Suckling for GST and issued assessment notices for income tax and GST to Mr Suckling personally in relation to TCST's business activities between 2007 and 2012. The GST owing for the period 1 April 2007 to 31 March 2012 was assessed at $29,631.38 and the income tax owing for the period 1 April 2006 to 31 March 2011 was assessed at $76,587.13.


On 26 June 2013 Mr Suckling initiated the statutory disputes process under pt 8A of the Tax Administration Act 1994 (TAA) by issuing a notice of proposed adjustment (NOPA). In it, he maintained the Commissioner's assessments were based on transaction records from bank accounts with which he had no connection. He said: 3

The funds in question were given in consideration of the labour of a man, and not for any activity of the above Estate, yet none of the alleged “income” has been attributed to the man.

The bank accounts in question were opened in the name of trusts, yet none of the alleged “income” has been attributed to any trust.


He also disputed the Commissioner's power to register “the Estate” for GST without consent.


Criminal charges against Mr Suckling were laid in August 2013.


On 22 August 2013 the Commissioner issued a notice of response (NOR) rejecting Mr Suckling's NOPA. On 21 October 2013 Mr Suckling responded to this by letter in which he said TCST...

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