High Court lacks jurisdiction to review where there is no exercise of a statutory power of decision

Summary

The Applicant ("Dr Muir") brought proceedings in the High Court seeking to judicially review the Taxation Review Authority's ("TRA") refusal to accept for filing his "Second Amended Notice of Claim". This proceeding concerned the Commissioner of Inland Revenue's ("the Commissioner") application to dismiss Dr Muir's judicial review application.

Impact

This decision confirms that where a tax challenge has been struck out in its entirety, there is no jurisdiction to judicially review a refusal to accept an amended notice of claim for filing in the struck out challenge.

Facts

The background to the proceeding involves the Trinity tax scheme designed by Dr Muir. The High Court determined that the dominant purpose of the scheme was tax avoidance (Accent Management Ltd v Commissioner of Inland Revenue (2005) 22 NZTC 19,027 (HC)), which decision was affirmed by the Court of Appeal (Accent Management Ltd v Commissioner of Inland Revenue [2007] NZCA 230) and Supreme Court (Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115).

Dr Muir's challenges to the 1997 to 2010 income years, which had been stayed pending the outcome of the Supreme Court's decision, were subsequently struck out in the TRA and High Court. This was affirmed on appeal by the Court of Appeal (Muir v Commissioner of Inland Revenue [2015] NZCA 792) and by the Supreme Court (Muir v Commissioner of Inland Revenue [2016] NZSC 113) which determined that Dr Muir's proceedings remained struck out in their entirety. Dr Muir then tendered 'amended statements of claim' in the TRA and the High Court. The TRA refused to accept the amended pleading for filing while the High Court inadvertently accepted the amended pleading for filing.

The High Court, in separate proceedings on the inadvertent acceptance for filing, had declared the tendering of the amended statement of claim in High Court was an abuse of process and a nullity, directing that the document be removed from the file (Muir and Hillvale Holdings Ltd v Commissioner of Inland Revenue [2017] NZHC 2082). Dr Muir brought these proceedings seeking to judicially review the TRA's refusal to accept the amended pleading for filing and the Commissioner applied for these proceedings to be dismissed.

Decision

The High Court was satisfied it did not have jurisdiction to review the TRA's refusal to accept Dr Muir's "Second Amended Notice of Claim" for filing and dismissed the application pursuant to r 5.49(6)(a) of the High Court Rules.

The Court found, citing the earlier High Court decisions (Commissioner of Inland Revenue v Muir [2017] NZHC 1413, (2017) 28 NZTC 23-029 at [44] and Muir v Commissioner of Inland Revenue [2017] NZHC 2082, (2017) 28 NZTC 23-029 at [12]), that as the proceeding in the TRA is at an end, there is nothing in which any 'amended' pleading may be filed. As the TRA did not exercise any power in refusing to accept such a pleading for filing, the High Court was satisfied that it did not have jurisdiction to review such a refusal.

Given the Court's finding, it did not need to decide the Commissioner's alternative application to strike out the judicial review as an abuse of process. However, the Court noted that had it been required to, it would have granted it.

The Court's preliminary view was the Commissioner should be entitled to 2B costs for all steps before 23 June 2017 and indemnity costs from 23 June 2017 when summary judgment was ordered against Dr Muir (Commissioner of Inland Revenue v Muir [2017] NZHC 1413) but reserved leave for memoranda on costs to be filed if required.