THE COMMISSIONER OF INLAND REVENUE & ORS V CHESTERFIELDS PRESCHOOLS LIMITED & ORS COA CA556/2012

THE COMMISSIONER OF INLAND REVENUE & ORS V CHESTERFIELDS PRESCHOOLS LIMITED & ORS COA CA556/2012 [18 March 2013]IN THE COURT OF APPEAL OF NEW ZEALANDCA556/2012[2013] NZCA 53BETWEEN THE COMMISSIONER OF INLANDREVENUE & ORSAppellantsAND CHESTERFIELDS PRESCHOOLSLIMITED & ORSRespondentsHearing: 24 October 2012Court: Randerson, Stevens and Wild JJCounsel: J C Pike and S M Kinsler for AppellantsD J Hampton appearing for himself (as Second Respondent) and byleave for the corporate and other RespondentsJudgment: 18 March 2013 at 11.30 amJUDGMENT OF THE COURTA The appeal is allowed in part.B The claims against the Commissioner of Inland Revenue and Philip John Shamy are struck out.C The proceeding against the Attorney-General and the remaining 20 named officers of the Department of Inland Revenue (remaining defendants) is stayed on terms described in D below.D The proceeding against the Attorney-General and the remaining defendants may only proceed with the leave of a High Court Judge. Such leave shall not be granted except upon application by the respondents for leave and subject to compliance with the directions set out in [119] below.E The respondent must pay the appellants one set of costs for a complex appeal on a band A basis and usual disbursements. We certify for two counsel.____________________________________________________________________REASONS OF THE COURT(Given by Stevens J)Table of ContentsPara NoA strike out application [1]Issues on appeal [7]Factual background [8]The second amended statement of claim [15]Decision under appeal [18]Issue 1: representation by Mr Hampton [20]The law [25]Application of law to this case [35]Issue 2: Should the claims against the Commissioner be struck out? [37]Policy considerations [38]Elements of the tort of misfeasance in public office [40]Liability of the Commissioner [45]The pleading in context: the liability of Crown servants [49]Application to this case [63]Issue 3: Should the claim against Mr Shamy be struck out? [70]Issue 4: Should the claims against any other defendants be struck out? [83]Contents of the statement of claim [84]Abuse of process [87]What is wrong with the second amended statement of claim? [90]Basis for liability against individual officers [97]An order striking out the entire claim? [113]Issue 5: A stay? And if so, on what terms? [116]Result and costs [120]Appendix 1: Summary of first amended statement of claimAppendix 2: Outline of contents of the second amended statement of claimAppendix 3: Summary of second amended statement of claimA strike out application[1] This appeal relates to a claim for misfeasance in public office brought by the first to fifth respondents against the Commissioner of Inland Revenue (the Commissioner), the Attorney-General, 20 officers of the Department of Inland Revenue (the Department) and a solicitor, Mr Philip Shamy, who has acted for theDepartment (collectively "the appellants"). An application to strike out the claimfiled by the appellants came before Associate Judge Osborne in the High Court in Christchurch.1 It was unsuccessful. The appellants sought a review by Fogarty J.2That too was unsuccessful. The appellants now appeal contending that Fogarty J erred in finding that the appellants may be liable for the tort of misfeasance in public office on a corporate basis and by concluding that a private legal practitioner acting in a solicitor/client relationship for a public office holder may thereby hold public office himself.[2] The respondents are a group of related tax-paying entities that have been contesting their tax liability with the Department since the early 1990s. The person at the centre of these entities is Mr David Hampton, who has in the past represented himself and all of these entities personally.3 The factual background (which we will describe below) emerges from two judicial review proceedings brought by the respondents against the Commissioner. In the first judicial review proceeding, the High Court Judge described the factual background thus:4[1] This is a difficult case. The events are spread over a long period oftime. There are numerous taxpayers' accounts. The "taxpayers" have beentrying to take full advantage of every strategy possible to reduce tax. The"taxpayers" accounts have now got quite out of hand. Against coreassessments in excess of $900,000, there is now a total liability on paper of about $4 million, the additional $3 million being made up of late payment penalties and interest.1 Chesterfields Preschools Ltd v Commissioner of Inland Revenue (2011) 25 NZTC ¶20-092 (HC).2 Chesterfields Preschools Ltd v Commissioner of Inland Revenue [2012] NZHC 1302, (2012)25 NZTC ¶20-128 [review judgment]. Fogarty J granted leave to appeal: ChesterfieldsPreschools Ltd v Commissioner of Inland Revenue [2012] NZHC 1986, (2012) 25 NZTC¶20-144.3 For example, by leave granted in CA607/2008, CA800/2008 and CA271/2009: Commissionerof Inland Revenue v Chesterfields Preschools Ltd [2009] NZCA 334, (2009) 24 NZTC 23,721[Court of Appeal Mannix judgment].4 Chesterfields Preschools Ltd v Commissioner of Inland Revenue (2007) 23 NZTC 21,125 (HC).[3] The judicial review proceedings alleged inter alia that the Commissioner had not honoured compromise arrangements made with regard to payment of tax and that there should have been earlier recognition of refunds of Goods and Services Tax (GST), which would have led to the remission of penalties on the accounts which were to benefit from the refunds. While the respondents had some success in the judicial review proceedings, they now seek to bring claims in tort for alleged misfeasance in public office against various parties.[4] In the strike out review hearing Fogarty J was asked to consider pleadings that alleged seven causes of action including a claim for breach of the New Zealand Bill of Rights Act 1990 (NZBORA). A summary of this first amended statement of claim is set out in Appendix 1.5[5] In the course of the strike out review, the respondents filed a second amended statement of claim.6 It was in respect of this pleading (which we will summarise later) that the review judgment was given. Its contents are central to this appeal. To say that the second amended statement of claim is extraordinary is an understatement. It was drafted by Mr Hampton. It is 139 pages in length, it runs to 419 pleaded paragraphs, has no causes of action, contains no prayers for relief and is non-compliant with the High Court Rules (HCR) in many respects. Although it is exceptionally complex and difficult to understand, we have concluded that there is a possibility that it might contain the germ of a tort claim (of some nature) against one or more officers of the Department. It is for that reason that we do not propose toaccede to the appellants' request to strike it out in its entirety.[6] However, for the reasons given below we agree with the appellants that the claims against the Commissioner and Mr Shamy must be struck out. In terms of any repleading, the time has come for Chesterfield Preschools Ltd and Anolbe Enterprises Ltd (the only corporate respondents) to be represented by counsel. For that reason, and others we shall give, we will be ordering that the proceeding be stayed and may only be continued by leave of a High Court Judge upon proof of compliance with the detailed directions set out in this judgment.5 This document has 100 pleaded paragraphs and is 70 pages in length.6 Dated 17 October 2011.Issues on appeal[7] The appeal raises the following issues for determination:(a) Should Mr Hampton be permitted to continue to represent the two corporate respondents both in respect of bringing or carrying on proceedings in court (including preparation and filing of a further amended statement of claim) and in relation to future Court appearances? This issue involves the scope and application of what is commonly known as the Mannix rule.7(b) Should the claims against the Commissioner be struck out? This will require consideration of s 7 of the Tax Administration Act 1994 (TAA) and s 6 of the Crown Proceedings Act 1950, as well as the decision of this Court in Commissioner of Inland Revenue v Reid.8(c) Should the claims against Mr Shamy be struck out? This issue raises the question whether the law is as stated by this Court in New Zealand Defence Force v Berryman,9 or in a more recent decision of the New South Wales Court of Appeal in Leerdam v Noori.10(d) Should the claims for alleged misfeasance in public office against any of the individual officers of the Department be struck out?(e) If the proceeding is not to be struck out in its entirety, should the proceeding be stayed and if so on what terms?Factual background[8] Mr Hampton and the entities under his control (the taxpayers) have been engaged in taxation disputes with the Commissioner for around 20 years. At its7 Re G J Mannix Ltd [1984] 1 NZLR 309 (CA).8 Commissioner of Inland Revenue v Reid [2007] NZCA 576, (2008) 23 NZTC 21,783.9 New Zealand Defence Force v Berryman [2008] NZCA 392.10 Leerdam v Noori [2009] NSWCA 90, (2009) 255 ALR 553.basic level, the taxpayers have sought to reduce their tax payments substantially and, as a consequence, now face a large tax liability. It seems that the amount of tax payable following assessments may be around $900,000. Accumulating latepayment penalties has resulted in the taxpayers' total liability rising to in excess of$4 million. Much of the dispute with the Commissioner has concerned the quantum of such tax liability and how it should be settled.[9] There has already been an extensive history of litigation concerning this tax dispute, including the two judicial review hearings in the High Court. The first proceeding in 2006 concerned a number of decisions made by officers of the Department whilst dealing with the taxpayers, including a decision by theCommissioner to refuse the taxpayers' application for remission of penalties unders 183A of the TAA.11 The first judicial review proceeding was partly successful and the Commissioner was ordered to reconsider a number of matters. There was no appeal by the Commissioner and the Commissioner has accepted that he was bound by the decision in terms of legal and factual findings. This Court has previously observed that such concession was "well made".12[10] A second judicial review took place in 2008. Broadly the issue was whether the Commissioner, through his officials, had given full effect to the orders Fogarty J had made in his first judicial review judgment.13[11] The Commissioner appealed the second judicial review judgment to this Court. Apart from certain limited matters, the appeal was dismissed.14[12] The claims for misfeasance in public office arise largely out of the same set of facts as emerged in the judicial review proceedings. The misfeasance proceeding had been filed before the first judicial review judgment was delivered but Fogarty J, as the Judge in control of the proceedings in the High Court at the time, refused to11 Chesterfields Preschools Ltd v Commissioner of Inland Revenue, above n 4.12 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400; (2010)24 NZTC 24, 500 at [4].13 Chesterfields Preschools Ltd v Commissioner of Inland Revenue (No 2) (2009) 24 NZTC 23,148(HC).14 Chesterfields Preschools Ltd v Commissioner of Inland Revenue, above n 12, at [178].allow the misfeasance proceeding to be advanced before the disposal of the judicial review proceedings.15[13] The essence of the conduct in dispute is conveniently summarised by Fogarty J in the review judgment as follows:[8] The Commissioner then and now has statutory powers to group and offset tax liabilities and credits against both income tax and GST. Against some core (undisputed) income tax liabilities, some of the Hampton controlled entities sought substantial GST credits. Officers of the Inland Revenue thought that those credits may well have arisen out of sham transactions. Those transactions were sent to be examined by theCommissioner's audit office. By the law at the time an officer of theCommissioner had 15 days from receipt of a GST claim to decide whether or not to send it for audit. But once it was sent to the audit office there is no statutory time limit for its return. Mr Hampton had confidence in the GST claims and equally confidence that upon them being recognised as legitimate, credits would be passed and existing core tax liabilities would be largely extinguished and penalties against those liabilities would be remitted.[9] While awaiting the audit office evaluation of the GST claims, Mr Hampton argued he had reached arrangements with officers of the Commissioner. He was substantially successful in judicial review, in both decisions, in establishing that there were two in-substance arrangements, tolerating non-payment of tax arrears pending the processing of the GST claims. He obtained judgements requiring reconsideration by the Commissioner of the application of credits and remission of penalties.[10] The plaintiffs succeeded in the judicial review proceedings largely on the basis of file notes which were discovered by the Commissioner. These file notes corroborated Mr Hampton's evidence that he had received assurances from officers, particularly Ms Thornley and Mr Aronsen. A set ofthese notes, known as the "Aronsen" notes, were discovered late. They were taken into account, to the plaintiffs' advantage, in the judicial reviewproceedings. But in the judicial review proceedings I refused to examine the merit and consequences of the argument that they ought to have been discovered earlier.[14] In summary, the respondents seem to be seeking to argue that the officers of the Department were in bad faith taking advantage of the absence of any time limit on the completion of examination of transactions by way of audit for improper purposes.15 Review judgment, above n 2, at [7].The second amended statement of claim[15] As a pleading the second amended statement of claim is close to incomprehensible. We have already referred to its length and complexity. Part of the difficulty in understanding what the pleader (Mr Hampton) is trying to say is attributable to the way in which the claims are described. The review judgment makes it clear, and we agree, that the respondents face considerable difficulties in pleading a claim for misfeasance in public office against any of the appellants. Such difficulty resulted in Fogarty J adjourning the review hearing part heard and giving the respondents a further opportunity to plead the case properly, in order to endeavour to meet arguments raised by counsel for the Commissioner and other defendants.16 But unfortunately the next attempt at pleading the claims by Mr Hampton was less successful than the first and certainly less compliant with the Rules.[16] The second amended statement of claim refers to various strategies, decisions, recommendations and acts or omissions of misfeasance by named officers of the Department and Mr Shamy in the parts dealing with the background facts and circumstances and the chronology. Later there is an attempt to plead particulars of the same allegations in a completely different context. In order to seek to identify some of the recurring topics pleaded, we have prepared an outline of the contents and sought to group allegations against individual officers in a logical sequence. This outline is attached as Appendix 2.[17] We have also prepared a summary of what it appears to us are the main allegations the respondents are seeking to advance in the second amended statement of claim. This summary is annexed as Appendix 3.16 Review judgment, above n 2, at [19]–[20]. An important reason for repleading was to give Mr Hampton another opportunity to plead particulars necessary to sheet home the tort of misfeasance against Mr Shamy: at [20].Decision under appeal[18] The conclusions of Fogarty J in the review judgment may be shortly stated. First he upheld the conclusion of Associate Judge Osborne that it is arguable that the Commissioner can be directly liable for the tort of misfeasance even though there is no evidence the Commissioner made any of the relevant decisions.17 Second, he refused to strike out the claim against the solicitor Mr Shamy.18 Third, the claims against the officers of the Department were allowed to continue. The essence of theJudge's reasoning was that:19 several Officers of the Commissioner realised that there was a problem emerging with the accounts of Mr Hampton and the family entities. On any view of tax liability the accrued penalties and interest is extraordinary and raises a question as to whether or not enforcing a debt of that size would be carrying out the purpose of the statute. To the extent that a judgment as to an abuse of statutory powers is objective, rather than subjective, there is room to argue for a development of the tort of misfeasance to encompass a failure to act by a class, which may be indeterminate, of officials acting on behalf of the Commissioner. It is far too early at this stage to decide the action must fail, before the facts are proved. These additional reasons only extend and amplify the reasons of Associate Judge Osborne. I think his decision to leave these proceedings in place was correct.[19] In the light of these conclusions, the review was dismissed. All "claims" inthe second amended statement of claim were allowed to continue. The Judge gave no consideration to other deficiencies in the second amended statement of claim.Issue 1: representation by Mr Hampton[20] Shortly before the hearing of the appeal, Mr Hampton filed an application to represent the first and fifth respondents at the hearing. Mr Hampton relied on the exception to the rule described in the decision of this Court in Mannix and some observations, also of this Court, on an earlier application by him to represent the same parties in appeals relating to the judicial review proceedings.20 Mr Hampton contended that, as he was the sole director and shareholder of the first and fifth17 Such conclusion was based on the premise that this Court had left that open in Commissioner ofInland Revenue v Reid, above n 8; review judgment, above n 2, at [12] and [58].18 At [59].19 At [57].20 Court of Appeal Mannix judgment, above n 3.named respondents and there was a commonality of interests between all five respondents, the exception should once again be applied. He argued that the factors referred to in the previous Court of Appeal judgment continued to apply, namely that:21 [he] has the right to represent himself as second respondent, and in respect of his partnership interests in the third and fourth respondents. Inshort, he is already "in court" as it were, and will continue to be so. Further,there is a linkage between him and the companies and he has some legal training.[21] The application by Mr Hampton to represent all five respondents was opposed by the appellants on the basis that there were no exceptional circumstances which would bring into play the exception to the Mannix rule. Counsel for the appellants was concerned that, as with the previous application, Mr Hampton'spersonal involvement had grossly over-complicated the already complex proceeding. Further, this was a stronger case for the application of the exclusionary rule than the previous case. Counsel for the appellants relied on the observation in the earlierjudgment that permission to appear was granted "although not without somehesitation".22[22] Having heard from Mr Hampton and counsel for the appellants prior to the hearing proper, we decided, very reluctantly, to grant the application.23 To have declined it would have resulted in the fixture being adjourned. We indicated that our reasons would be given in the judgment.[23] Mr Hampton has legal qualifications including an LLM from Canterbury University and some years ago was accepted into a doctoral programme in law at the University of Glasgow, Scotland. He was admitted to the Bar in 1991 and held a practising certificate for two years. He told us that he is not now practising as a lawyer. During the course of argument we raised the complex nature of the proceeding with Mr Hampton and he accepted that conducting the proceeding wasbeyond his legal skillset and that he was "out of his depth". When some of the21 Ibid, at [16].22 At [18].23 We also granted leave for Mr Hampton to represent the first to fifth respondents in the costsappeal, CA582/2012, heard at the same time as the substantive appeal.deficiencies in the second amended statement of claim were put to Mr Hampton, he agreed that he was unable to address these himself.[24] Our reasons for allowing Mr Hampton to argue the present appeal, and the related costs appeal, were essentially the same as those given by Hammond J in the previous Court of Appeal decision. However, there is a difference between the matters that were before the Court then (relating to the judicial review applications) and the present proceeding. This case is both factually and legally of far greater complexity than the earlier cases. Despite having decided to allow Mr Hampton to appear for all five respondents (contrary to the plain requirements of the Mannixrule) and having decided the issues in the appeal in the manner set out in this judgment, we are concerned about the future conduct of the litigation and whether Mr Hampton should be permitted to represent himself and the two corporate respondents (the first and fifth respondents) as well as the two partnerships (the third and fourth respondents). Determination of this question requires us to consider the scope of the Mannix rule.The law[25] This Court in Mannix held that it is "well settled" that "a company has noright to be represented in the conduct of a case in Court except by a barrister; or by asolicitor in Courts or proceedings where solicitors have the right of audience ".24Cooke J continued:25The rule may have originated in early seventeenth century metaphysical reasoning that a corporation has no soul, is invisible and cannot do homage. But the modern rationale is simply that a corporation is not a natural person and so cannot appear in person; and that, apart from statutory exceptions, no one has a right to present a case in any Court unless in person or by a qualified lawyer.There is a cognate rule that, apart from statutory exceptions, a corporation has no right to bring or carry on proceedings in a Court except by a solicitor. This refers to the filing of documents – writs, statements of defence, notices of appeal, etc. It is this rule which is now contained in England in RSC Ord 5, r 6(2). There is no express New Zealand equivalent in the Code of Civil Procedure in the High Court, but the general understanding is that the24 Re GJ Mannix Ltd, above n 7, at 310.25 At 311.English rule embodies the former practice and that the New Zealand practice is the same. Arguably there might perhaps be more ground for relaxing this practice at the present day; but the present case does not involve that question and no opinion on it is called for. What this case is concerned with is the conduct of the case at hearings in Court or Chambers.[26] The recognised exception to this rule was described by Cooke J as follows:26In general, and without attempting to work out hard-and-fast rules, discretionary audience should be regarded, in my opinion, as a reserve or occasional expedient, for use primarily in emergency situations when counsel is not available or in straightforward matters where the assistance of counsel is not needed by the Court or where it would be unduly technical or burdensome to insist on counsel. Especially in minor matters, cost-savingcould also be a relevant factor. A "one-man" company might be allowed tobe represented by its owner if the Judge saw fit in a particular case. But it could not be right, for instance, to issue some sort of tacit continuing or general licence to an unqualified agent to appear in winding up or any other class of proceedings.[27] We have no doubt that the rule remains in operation and to the extent described by Cooke J in the passage outlined at [25] above.27 The rule provides an important mechanism by which judges may ensure that the bringing or carrying on of proceedings achieves justice and the appearance of justice for the parties. Here an important aspect in the application of the Mannix rule involves the continuation of the misfeasance proceeding subsequent to the delivery of this judgment.[28] In terms of the necessity for representation of the corporate and other defendants in this case, there are legal and procedural rules that prescribe the form and content of a statement of claim.28 Such rules are designed to assist both the party bringing the proceeding and the defendant in the conduct of the litigation. Preliminary and interlocutory stages may be critical in determining the outcome of the litigation. Often the early stages following the bringing of proceedings may be determinative. The filing of a statement of claim compliant with the rules assists this process.26 At 314.27 See, for example, Honda New Zealand Ltd v New Zealand Boilermakers', etc Union [1991]1 NZLR 392 (CA) at 397 and Black v Taylor [1993] 3 NZLR 403 (CA) at 406. This Court haspreviously declined an invitation to review whether the Mannix rule should be maintained:Court of Appeal Mannix decision, above n 3, at [15].28 Many but not all of these are controlled by the High Court Rules (HCR).[29] Rule 6(2) of the English Rules of the Supreme Court discussed in Mannix, has been replaced in England by r 39.6 of the Civil Procedure Rules:A company or other corporation may be represented at trial by an employee if –(a) the employee has been authorised by the company or corporation to appear at trial on its behalf; and(b) the court gives permission.The general rule remains that a corporation does not have a right comparable to a litigant in person to represent itself. However a duly authorised employee may be given permission by the court to represent the corporation. It seems r 39.6 is narrower than the old r 6(2). Rule 39.6 refers only to a company being "represented at trial"; by contrast r 6(2) provided that corporations had no right to "bring or carry on" proceedings, extending, as Cooke J recognised, beyond rights of audience to the filing of documents. This point does not appear to have been considered by the English courts. Rule 39.6 was intended to implement the recommendations of Lord Woolf in his 1996 report "Access to Justice" where he suggested that the rulesof court should no longer require a company to act by a solicitor and that, subject to the court's discretion, a duly authorised employee should normally be permitted totake any steps on behalf of the company which a litigant in person could take.29Importantly the courts have been given a discretion to relax this rule and allow a duly authorised employee of the corporation to represent the corporation at trial, as sometimes occurred under the earlier rule.30[30] Practice Direction 39A states that r 39.6 is intended to enable a corporation"to represent itself as a litigant in person". The Direction states that permissionshould be given under r 39.6(b) unless there is some "particular and sufficient reason" why it should be withheld. Matters to be taken into account include the complexity of the issues, and the experience and position in the corporation of the proposed representative. Despite Practice Direction 39A, the Admiralty and Commercial Courts Guide states:29 Lord Woolf Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System inEngland and Wales (HMSO, July 1996) at Ch 12, [61]–[72].30 See, for example, Arbuthnot Leasing International Ltd v Havelet Leasing Ltd [1992] 1 WLR 455(Ch).Although rule 39.6 allows a company or other corporation with the permission of the court to be represented at trial by an employee, the complexity of most cases in the Commercial Court makes that unsuitable. Accordingly, in practice permission has been given only in unusual circumstances.31Case law on the application of r 36.9 is limited.32[31] In Australia, the Mannix rule is set out in r 4.01(2) of the Federal Court Rules2011, which provides that "a corporation must not proceed in the Court other than bya lawyer".33 This requirement can be dispensed with at the discretion of the Court under r 1.34. The rule that a corporation has no right to bring or carry on proceedings without leave appears in the Court Rules of most of the state and territory jurisdictions.34[32] The rule that companies must be represented by a solicitor is also found in r 120 of the Canadian Federal Courts Rules.35 Similarly, companies do not enjoy a right of audience in the Irish courts. Indeed, the Irish High Court has approved and applied this Court's decision in Mannix.3631 Admiralty and Commercial Courts Guide (9th ed, 2011) at 78.32 See, for example, Watson v Bluemoor Properties Ltd [2002] EWCA Civ 1875, [2003] BCC 382.33 The previous Federal Court Rules provided at Order 9, r 1.3 that a "corporation may not withoutthe leave of the Court or a Judge enter an appearance or defend any proceeding except by asolicitor" and at Order 4, r 14(2) "a corporation may not, without the leave of the Court,commence or carry on any proceeding otherwise than by a solicitor". For application of thecurrent rule see Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12)[2012] FCA 289.34 Court Procedures Rules 2006 (ACT), r 30(4) (corporation may only "start and carry on"proceeding in the Supreme Court through solicitor, unless leave given to act through officer oremployee); Supreme Court Rules (NT), r 1.13 (corporation "shall not take a step in a proceedingexcept by a solicitor"); Supreme Court Rules 2000 (Tas), r 11 (corporation "not to take any stepin a proceeding otherwise than by a practitioner"); Supreme Court (General Civil Procedure)Rules 2005 (Vic), r 1.17 (corporation "shall not take any step in a proceeding save by asolicitor); Rules of Supreme Court 1971 (WA), Order 4, r 3(2) (corporation "may not bring orcarry on any such proceedings otherwise than by a solicitor"). See further Hubbard Associationof Scientologists International v Anderson [1972] VR 340 (VSC); Pacific Air Freighters (Qld)Ltd v Toller [2000] FCA 343, (2000) 171 ALR 519. The rule is not applied as strictly in NewSouth Wales where a defendant company may carry on proceedings through a director, and aplaintiff company can carry on proceedings through a director if that director is also a plaintiff:Uniform Civil Procedure Rules 2005 (NSW), r 7.1(2) and (3). The South Australian rules allowthe court to authorise "representation" of a company by a director: Supreme Court Civil Rules2006 (SA), r 27.35 Federal Courts Rules, r 120: "A corporation, partnership or unincorporated association shall berepresented by a solicitor in all proceedings, unless the Court in special circumstances grantsleave to it to be represented by an officer, partner or member, as the case may be." See furtherKobetek Systems Ltd v Canada [1998] 1 CTC 308 (FC).36 Coffey v Tara Mines Ltd [2007] IEHC 249, [2008] 1 IR 436, and see the cases cited therein. Theclassic Irish authority is Battle v Irish Art Promotion Centre Ltd [1968] IR 252. See alsoNO2GM Ltd v Environmental Protection Agency [2012] IEHC 369; Friends of the CurraghEnvironment Ltd [2006] IEHC 243.[33] In New Zealand, it is implicit rather than explicit in the HCR that a company must be represented by a solicitor at all stages of the proceeding. We are satisfied that the rule in New Zealand is that a solicitor must act for a company in commencing and carrying on a proceeding, subject to the discretion of the court.37[34] We consider that there are sound policy reasons why a solicitor, rather than a lay person such as an officer of a company, should act for the company in commencing and continuing civil litigation. A company is not a natural body and may have a number of officers, each with their own individual concerns and interests.38 A solicitor is ethically constrained to represent the company's interests,unlike an individual officer who seeks to represent it.39 Moreover, if a solicitor is involved, the court can generally be satisfied that careful attention has been given to the validity of the proceedings,40 and that the company's interests will be adequatelypresented and protected.41 Similarly, solicitors recognise the duties and responsibilities that are owed to the court and to the defendant in the conduct of litigation, and are less likely to require indulgences in the rules of procedure or to use court processes for vexatious purposes.42 The court must also have a solicitor on the record as it cannot exercise its disciplinary powers over a company.43 If a director or shareholder is representing the company there is a heightened risk that the representative will lack the objectivity that an independent solicitor can bring to the case. It is no doubt for these reasons that the current law is that the Mannix rule may be departed from only in exceptional circumstances.4437 We refer particularly to the rules (rr 5.36–5.43) in sub-part 7 of Part 5 of the High Court RulesAHCR discussed in McGechan on Procedure (looseleaf ed, Brookers) at [HR5.36.02].38 See Re G J Mannix, above n 7, at 315 per McMullin J.39 See rr 5.2 and 6 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care)Rules 2008.40 See Penrose Earthworks Ltd v Robert Cunningham Construction Ltd (1993) 7 PRNZ 35 (HC)at 40.41 G B & J Z Chambers Ltd v AEL Corp Ltd (1994) 7 PRNZ 635 (HC) at 640.42 Re G J Mannix at 315.43 Penrose Earthworks Ltd at 40; Time Ticket International Ltd v Broughton [1996] 2 NZLR 176(HC) at 179.44 McGechan on Procedure at [HR5.36.02]. For a comprehensive discussion of the reason why acompany should need a solicitor for representation, see G B & J Z Chambers Ltd v AEL CorpLtd at 640.Application of law to this case[35] We consider that the future conduct of this case requires us to apply theMannix rule. We see no basis for exercising the discretion to allow an exception to the rule: there are no exceptional circumstances to support its application. The reverse is the case.[36] As we have noted, this is a difficult and complex case. The legal and procedural rules governing the conduct of the case are such than an experienced solicitor, preferably senior counsel, should be engaged by the two corporate plaintiffs to assist those parties, as well as Mr Hampton personally and the two partnership plaintiffs. Mr Hampton has readily acknowledged that he is not capable of pleading and conducting a case of this nature, even in relation to his personal circumstances. He accepts that he needs legal help. In the case of the corporate and partnership plaintiffs we consider we should, in the interests of justice, require that they be represented by a solicitor and/or counsel. It is for that reason that we propose to give directions (which we describe below) concerning the future conduct of the case on behalf of these parties by a suitably qualified lawyer.Issue 2: Should the claims against the Commissioner be struck out?[37] This issue and those that follow arise in the context of the tort of misfeasance in public office. We therefore briefly address the policy behind, and elements of, the tort. Such observations may be of assistance in relation to any re-pleaded claims.Policy considerations[38] The policy behind the tort of misfeasance in public office is that, in a legal system based on the rule of law, executive or administrative power may be exercised only for the public good and not for ulterior or improper purposes.45 In Garrett v Attorney-General,46 this Court stated that the tort has at its heart conscious disregard45 Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003]2 AC 176 (HL) at 190, citing Jones v Swansea City Council [1990] 1 WLR 54 (CA) at 85.46 Garrett v Attorney-General [1997] 2 NZLR 332 (CA) at 349.for the interests of those who will be affected by official decision making. One of the key themes that emerges from case law discussing the elements of the tort ofmisfeasance is the necessity for "bad faith".47 Other phrases – such as malice or dishonesty – are also used. The tort is therefore intentional and Lord Millett, when discussing this in Three Rivers, said:48First, the tort cannot be committed negligently or inadvertently. Secondly, the core concept is abuse of power. This in turn involves other concepts, such as dishonesty, bad faith, and improper purpose. These expressions are often used interchangeably; in some contexts one will be more appropriate, in other contexts another. They are all subjective states of mind.[39] The need for intentional behaviour causing the infliction of damage was made clear by this Court in Garrett:49The purpose behind the imposition of this form of tortious liability is to prevent the deliberate injuring of members of the public by deliberate disregard of official duty. It is unnecessary, to obtain this objective, to extend the tort to catch an act which, though known to be wrongful, is done without a realisation of the consequences for the plaintiff. The common law has long set its face against any general principle that invalid administrative action by itself gives rise to a cause of action in damages by those who have suffered loss as a consequence of that action. There must be something more. And in the case of misfeasance of public office that something more, it seems to us, must be related to the individual who is bringing the action. While the cases have made it clear that the malice need not be targeted there must, as we have said, be a conscious disregard for the interests of those who will be affected by the making of the particular decision.Elements of the tort of misfeasance in public office[40] As the tort currently stands, there are two forms of liability: targeted malice and non-targeted malice.50 Under both forms, the act complained of must be done47 See, for example, the judgment of Lord Hutton in Three Rivers at 227–228 and that of LordHobhouse at 229–230.48 At 235. This statement was quoted by this Court in Hobson v Attorney-General [2007] 1 NZLR374 (CA) at [131] per William Young P.49 At 350 and 351.50 Three Rivers at 191 and Minister of Fisheries v Pranfield Holdings Ltd [2008] NZCA 216,[2008] 3 NZLR 649 at [105] (leave to appeal this decision was refused in Pranfield Holdings Ltdv Minister of Fisheries [2008] NZSC 86). See also B v Home Office [2012] EWHC 226, [2012]4 All ER 276 (QB) at [126].by a public officer and in the exercise of that officer's public functions.51 A further, fundamental element of the tort common to both forms is that there must be actual damage or loss suffered by the plaintiff caused by the public officer's conduct.52[41] The two forms of the tort have slightly different requirements concerning the mental element. Targeted malice requires the public officer to have specifically intended to injure a person or persons.53 This involves bad faith in the sense that the officer is exercising the public power for an improper or ulterior motive.54Non-targeted malice occurs when the public officer acts knowing that he or she has no power to do the act complained of and that the act will probably injure the plaintiff.55 This involves bad faith in that the public officer does not believe that his or her act is lawful.56 The plaintiff must therefore prove two aspects: first, that the officer acted with the knowledge of the illegality of the act, or with a state of mind of reckless indifference as to the illegality of the act.57 Secondly, that the public officer knew that his or her conduct would probably injure the plaintiff or a person of a class of which the plaintiff was a member, or was reckless as to the consequences of his or conduct in the sense of not caring whether the consequences happen or not.58Subjective – as opposed to objective – recklessness is necessary for both limbs.59[42] In Minister of Fisheries v Pranfield Holdings Ltd,60 this Court, while discussing recklessness concerning the illegality of the act, endorsed the formulation put forward by Blanchard J in Garrett v Attorney-General that:6151 Three Rivers at 191. In New Zealand Defence Force v Berryman, above n 9 at [64], this Court acknowledged that some courts have been inclined to accept the possibility of an action for misfeasance in public office in relation to non-public law functions. However, the actions of the public officer must have some public character before they can be the subject of a claim of misfeasance.52 See Hobson v Attorney-General at [94] and Stephen Todd "Abuse of Public Office" in StephenTodd (general ed) The Law of Torts in New Zealand (5th ed, Brookers, Wellington, 2009) at [19.2.04].53 Three Rivers at 191.54 An example is Roncarelli v Duplessis (1959) 16 DLR (2d) 689 (SCC). See Stephen Todd"Abuse of Public Office"at [19.2.03(1)].55 Three Rivers at 196.56 Ibid.57 Pranfield Holdings Ltd at [107(iii)].58 Three Rivers at 194–196 and Pranfield Holdings Ltd at [107(vi)].59 Three Rivers at 193 and 196. We record that we have concerns about the reference by Fogarty Jto an "objective judgment" in [57] of the review judgment, above n 2, discussed at [18] above.60 At [115]–[118].61 Garrett at 344. 'knowing' in relation to both the breach and its effect on the plaintiffincludes acting recklessly, in the sense of believing or suspecting the position and going ahead anyway without ascertaining the position as a reasonable and honest person would do.[43] In Pranfield, the legal issue involved whether uncertainty on the part of a public official as to the legality of his or her action amounted to recklessness. The Court held that it did not.62 It therefore read down Blanchard J's words in Garrett63to include only behaviour that exhibits the following characteristics (quoting fromBrennan J's judgment in Northern Territory of Australia v Mengel):64 the mental element is satisfied when the public officer engages in the impugned conduct with the intention of inflicting injury or with knowledge that there is no power to engage in that conduct and that that conduct is calculated to produce injury. These are states of mind which are inconsistent with an honest attempt by a public officer to perform the functions of the office. Another state of mind which is inconsistent with an honest attempt to perform the functions of a public office is reckless indifference as to the availability of power to support the impugned conduct and as to the injury which the impugned conduct is calculated to produce. The state of mind relates to the character of the conduct in which the public officer is engaged– whether it is within power and whether it is calculated (that is, naturally adapted in the circumstances) to produce injury.[44] Other requirements of misfeasance in public office include that the plaintiff must have standing to sue, and that the public officer's act must cause the plaintiff'sloss.65 Causation is a matter of fact.Liability of the Commissioner[45] The respondent taxpayers complain that officers of the Department were guilty of substantial delay in dealing with an audit of GST claims that were not resolved before the Department took recovery action against them for a substantial tax liability. The taxpayers allege that individual officers and the Commissioner are therefore liable for misfeasance in public office. The claim against the Commissioner is of a corporate nature, attempting to attribute to the holder of that office all the knowledge and actions of the officers. The Commissioner seeks to strike out this claim.62 At [113]–[114].63 At [118]–[119].64 Northern Territory of Australia v Mengel (1995) 185 CLR 307 at 357.65 Three Rivers at 193–194 and 246, and Pranfield Holdings Ltd at [107(iv)–(v)].[46] The Commissioner's contention gives rise to the following questions:(a) Whether it is arguable (as this Court accepted in Commissioner of Inland Revenue v Reid) that the knowledge and acts of officers acting under delegated powers are effectively the knowledge and acts of the Commissioner. Does the answer change if all the elements of the tort can be found in an individual officer, or can only be pooled from multiple officers?(b) Does the law of agency as to attribution have any relevance?(c) Does anything change if negligence is pleaded rather than misfeasance?[47] In summary our conclusions on these questions are:(a) It is not arguable that the knowledge and acts of officers acting under delegated powers can be attributed to the Commissioner. On this point we differ from the view of this Court in Reid which found that it was arguable that the knowledge and acts of officers acting under delegated powers can be attributed to the Commissioner. At common law the acts of a delegate are their own acts, and not those of the delegator. Therefore, it cannot be said that the knowledge and acts of officers acting under delegated authority are effectively the knowledge and acts of the Commissioner. Section 7 of the TAA does not indicate that Parliament intended to alter this general principle. This will be the case regardless of whether the elements of the tort of misfeasance can be found in a single or multiple officers.(b) The law of agency as to attribution does not have any relevance to the liability of the Commissioner. Senior public servants are not in an agency relationship with their subordinates. Therefore principles of agency cannot assist the taxpayers. The proper route is for thetaxpayers to sue the Attorney-General under the Crown Proceedings Act.(c) These conclusions do not change if negligence is pleaded rather than misfeasance. The principle that the acts of a delegate are not the acts of the delegator applies regardless of the wrong pleaded.[48] For the reasons expanded upon below, the claims against the Commissioner must therefore be struck out.The pleading in context: the liability of Crown servants[49] We agree with the submission of counsel for the appellants that senior Crown servants are not vicariously liable for the wrongful acts of their subordinates. There is no relationship of principal and agent between senior Crown officials and their subordinates. Therefore, the taxpayers must argue that the acts and knowledge of officers acting under delegated powers are actually the acts and knowledge of the Commissioner.[50] To set this matter in context, we refer to the principle in Halsbury's Laws ofEngland that Crown servants cannot be made liable for the wrongful acts of their subordinates:66... but Crown servants cannot be made liable for the wrongful acts of their subordinates, unless the acts can be proved to have been previously authorised or subsequently ratified by them, so that they are their own acts, for they and their subordinates are not in the position of employer and employee but are fellow servants of the Crown.[51] For New Zealand the principle was set out succinctly by Cooke P inCrispin v Registrar of the District Court as follows:67Claims in tort based on actions or omissions of Crown servants can be put forward in three ways. First, there can be an action against the Crown, commonly represented by the Attorney-General, under the Crown Proceedings Act 1950, alleging vicarious liability on the part of the Crown.66 Halsbury's Laws of England (4th ed, reissue, 1996) vol 8(2) Constitutional Law and HumanRights at [388] citing Bainbridge v Postmaster-General [1906] 1 KB 178 (CA).67 Crispin v Registrar of the District Court [1986] 2 NZLR 254 (CA) at 255.Secondly, there can be an action against the individual employee or employees alleged to have committed the tort: this would be against them personally, named as individuals, although it would often be the case that the Crown as a good employer would stand behind them financially. Thirdly, where a statute or subordinate legislation so permits, there may be an action against the holder of an office named simply as such holder: a class of case in which the legislation authorises the holder of the office for the time being to be sued eo nomine. What cannot be done, however, is to sue a senior Crown servant on the footing that at common law he is vicariously liable for the torts of his subordinates. For this well-settled principle, see for instanceBainbridge v Postmaster-General [1906] 1 KB 178.[52] Given the prohibition on imposing liability on Crown servants for the acts of their subordinates, the taxpayers seek to sheet home liability against theCommissioner by arguing that the acts of the officers are in law the Commissioner'sown acts. The taxpayers argue that the officers were exercising the delegated powers of the Commissioner and therefore can be said to be acting through the office of the Commissioner. Thus the Commissioner is directly liable as the acts and knowledgeof the officers in the Department are in law the Commissioner's own acts andknowledge. This is the same argument that was advanced in Commissioner of Inland Revenue v Reid.68[53] In Reid this Court considered that the acts of officers of the Department were"at least arguably acts of the Commissioner" and refused to strike out the claim.69The question for us is whether it is arguable that the knowledge and acts of officers acting under delegated authority from the Commissioner are effectively the knowledge and acts of the Commissioner. In terms of any delegation of powers, the acts of a delegate are their own acts, not the acts of the delegator. This principle can be modified by statute, but s 7 of the TAA does not modify this general principle. Therefore, the taxpayers cannot succeed on the argument that the acts and knowledge of the officers are effectively the acts and knowledge of the Commissioner.68 Commissioner of Inland Revenue v Reid, above n 8, at [32].69 At [33]. This Court also considered that it was arguable that the Commissioner was vicariouslyliable for the acts of his employees, which, with respect, must be wrong in light of the Crispinprinciple discussed above.[54] Section 6A of the TAA charges the Commissioner with the care and management of the taxes covered by the Inland Revenue Acts. Section 7 thenprovides for delegation of any or all of the Commissioner's powers in writing:7 Delegation of powers by Commissioner(1) The Commissioner may from time to time, either generally or particularly, by writing under the Commissioner's hand, delegate to such officer or officers of the department as the Commissioner thinks fit all or any of the powers of the Commissioner, except this power of delegation.(2) Subject to any general or special directions given or conditions imposed from time to time by the Commissioner, the officer to whom any powers are delegated under this section may exercise those powers in the same manner and with the same effect as if they had been conferred on the officer directly by this section and not by delegation.(3) Every officer purporting to act under any delegation under this section shall, in the absence of proof to the contrary, be presumed to be acting in accordance with the terms of the delegation.(4) Any delegation under this section may be made to any specified officer, or to officers of a specified class, or to the holder or holders for the time being of a specified office or class of offices.(5) Unless and until any delegation under this section is revoked, it shall continue in force according to its tenor. In the event of the Commissioner by whom any such delegation is made ceasing to hold office that delegation shall, subject to subsection (6), continue in force according to its tenor.(6) Every delegation under this section shall be revocable at will, and no such delegation shall prevent the exercise of any power by the Commissioner.[55] The taxpayers submit that the officers of the Department are acting under powers delegated to them under s 7 by the Commissioner. Therefore, the officers are acting through the power of the Commissioner, and the acts of the officers using theCommissioner's powers are really the acts of the Commissioner. Apart from theReid case, we were not shown any other case that discusses whether a delegator of a power can be held liable for the acts of a delegate on the ground that the acts of the delegate are really the act of the delegator. However, the general principles on delegation of powers suggest that the acts of a delegate should not be considered the acts of the delegator.[56] We refer briefly to the Carltona principle. At common law there is a general rule against the delegation of a power. Two of the main exceptions to this general rule are where a statute provides for delegation and the Carltona principle.70 The contrast between the treatment of acts done pursuant to a statutory delegation of power and acts done under the Carltona principle sheds light on whether the acts of a delegate should be treated as the acts of the delegator. The Carltona principle or alter ego doctrine provides that in some circumstances a person in whom power is vested can authorise another person to exercise that power on their behalf. Theperson exercising the power on behalf of the "power-holder" does so as the alter egoof that person. The act of the authorised person is legally the act of the power-holder.[57] The principle arose out of the Carltona case in which the English Court of Appeal considered the validity of a notice purporting to requisition a factory under the Defence (General) Regulations 1939 (UK). The notice had been issued by an assistant secretary. The regulation required the notice to be issued by the Commissioner of Works or the Minister of Works and Planning. The Court of Appeal held that the notice was valid. Lord Greene MR stated:71In the administration of government in this country the functions which are given to ministers ... are functions so multifarious that no minister could ever personally attend to them ... The duties imposed upon ministers and the powers given to ministers are normally exercised under the authority of the ministers by responsible officials of the department. Public businesses could not be carried on if that were not the case.Constitutionally, the decision of such an official is, of course, the decision of the minister. The minister is responsible. It is he who must answer before Parliament for anything that his officials have done under his authority, and, if for an important matter he selected an official of such junior standing that he could not be expected competently to perform the work, the minister would have to answer for that in Parliament.[58] The Court recognised that in some cases, as a matter of practical necessity, it will be necessary for a power-holder to authorise another person to act on their behalf. In Carltona a major limb of the Court's reasoning was based on ministerialresponsibility. But it seems that the principle will also apply to senior departmental70 Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 (CA).71 At 563.officials who authorise more junior employees to exercise powers on their behalf.72Hence where administrative necessity requires, a power-holder may authorise a subordinate to exercise their power on behalf of the power-holder. In such a case thesubordinate's acts are legally the acts of the power-holder.[59] However, it is critical to distinguish the operation of the Carltona principle from the exercise of a delegated power.73 The difference is important because the act of a delegate (as opposed to the act of a person authorised under the Carltonaprinciple) is legally the delegate's act, and not the act of the delegator.74 A good illustration of this distinction is the judgment of Brennan J in Re Reference under section 11 of Ombudsman Act 1976.75 An applicant for social service benefits sought a reconsideration of a refusal to grant benefits. In a letter to the applicant a senior officer of the Social Security Department, Mr Prowse, stated that he had reviewed the applicant's case and confirmed the decision not to pay benefits. Mr Prowsesigned the letter "L J Daniels" and placed his own initials next to the signature.L J Daniels was the Director-General of the Social Security Department. Sections 12 and 14 of the Social Services Act 1947 (Cth) allowed the Director-General to delegate his powers.[60] The Director-General had delegated to Mr Prowse his powers under s 14 of the Act. One of the questions for the Tribunal was whether the determination was a72 Bounty Oil & Gas NL v Attorney-General [2010] NZAR 120 (HC) at [26]; Webster v Taiaroa(1987) 7 NZAR 1 (HC) at 14. However, in Attorney-General v Cooper [1974] 2 NZLR 713(CA) Richmond J cited English cases suggesting the contrary at 722. The High Court ofAustralia has applied the Carltona principle to allow the Commissioner of Taxation to authoriseofficers to exercise his powers on his behalf: O'Reilly v Commissioners of the State Bank ofVictoria (1983) 153 CLR 1 per Gibbs CJ and Wilson J. Canada applies the principle to seniorofficials: Re Ahmad v Appeal Board established by the Public Service Commission (1974) 51DLR (3d) 470 (FCA).73 See Bounty Oil & Gas at [25]; Webster v Taiaroa at 10; Regina v Skinner [1968] 2 QB 700 (CA)at 707. Wilson J in the High Court of Australia has described the distinction as "between thedelegation of a power and the exercise of that power through servants or agents": O'Reilly at 30.See also HWR Wade and CF Forsyth Administrative Law (10th ed, Oxford University Press,Oxford, 2009) at 267.74 See, for example, the comments of Kitto J in Esmonds Motors Pty Ltd v Commonwealth (1970)120 CLR 463 at 473: "If reg 9 is valid the description was correct, for in that event [thedelegate], as well as the Minister administering the Ordinance and any other Minister acting forhim and any other person falling within the terms of the delegation, was the 'prescribedauthority': he was exercising a power of his own: he was not the agent of the Minister toexercise the power on the Minister's behalf." See also Henry L Molot "The Carltona Doctrineand the Recent Amendments to the Interpretation Act" (1994) 26 Ottawa L Rev 257 at 262.75 Re Reference under section 11 of Ombudsman Act 1976 (1979) 2 ALD 86 (AAT). Cited withapproval in by the High Court of Australia in O'Reilly and the NZHC in Webster v Taiarua.determination of the Director-General or a determination of his delegate, Mr Prowse. Brennan J held that in writing the letter, Mr Prowse was acting in his capacity as a delegate of the Director-General and he should therefore have exercised his power in his own name, and the letter constituted an invalid exercise of his delegated powers. Brennan J stated:76There is a confusing similarity between the exercise of an authority's power by the authorized acts of another, and the exercise by an authority's delegateof the power delegated to him. In either case the act — whether the act of the authorized person or the act of the delegate — is a valid exercise of power. Nonetheless, the sources of validity are different, though it must besaid that the term "delegation" has frequently been used to describe either case without distinguishing between them. For some purposes, a distinction must be made.Where an authority has not delegated his power but he has authorized another to act in exercise of his power, the act is to be done in the name of the authority: London County Council v Agricultural Food Products Ltd[1955] 2 QB 218 per Romer LJ at 224. But where a delegate is exercising the power delegated to him, he may validly exercise that power in his own name: Owendale Pty Ltd v Anthony (1967) 117 CLR 539 at 562, 611. May a departmental officer to whom the Director-General's powers and functionsare delegated under s 12 of the Social Services Act elect whether to act as a delegate of power (in his own name), or an officer exercising the power of the Director-General (in the name of the Director-General)? In principle, there seems to be no reason why an attempted exercise of power should not be supported on either of the bases which would give validity to this act ...but that approach assumes that the officer has a dual character — one who may exercise his own power and one who may exercise the like power vested in another....It follows that Mr Prowse must have acted in exercise of the powers delegated to him. ... [I]t would be fanciful to regard him as exercising Mr Daniels' powers rather than his own.[61] Once a delegate has been delegated a power they exercise that power as theirown. They do not exercise the delegator's power through the delegator; theyexercise their own delegated power under their own name. The delegate must exercise their own independent discretion in the exercise of their delegated power. In Australia the general principle that a delegate acts under their own power and76 At 94–95. See also Re Walker; ex parte Fremantle Islamic Association Inc [2003] WASC 252 at[23]–[25].must exercise their own discretion is now set out in s 34A of the Acts Interpretation Act 1901 (Cth), which provides:7734A Exercise of powers and performance of functions or duties that depend upon the opinion etc. of delegatesIf:(a) under an Act, a person's exercise of a power, or a person's performance of a function or duty, is dependent upon the person'sopinion, belief or state of mind in relation to a matter; and(b) that power, function or duty has been delegated under that or any other Act;the delegate may exercise that power, or may perform that function or duty,upon the delegate's opinion, belief or state of mind in relation to that matter.[62] Accordingly the general principle is that the acts of a delegate are thedelegate's own acts and cannot be viewed as the acts of the delegator. The acts and knowledge of delegates cannot be imputed to the delegator to create a form of corporate liability.Application to this case[63] At the outset we make two points. First, there is no suggestion in the pleadings, and neither did Mr Hampton so contend in argument, that the Commissioner was personally involved in any of the misconduct alleged. Second, it was not disputed by the Commissioner that the relevant officers of the Department were all acting under statutory powers delegated to them.[64] We are satisfied that the provisions of the TAA do not modify the general principle. Section 7 of the TAA does not indicate expressly whether Parliament intended to modify the general rule that the acts of a delegate are their own:(a) Subsection (2) states that the delegate may exercise their delegatedpowers in the same manner and effect as if they had been "conferred on the officer directly" by the section and not by delegation. This is a77 Where it is intended that the acts of the delegate should be considered to be the acts of thedelegator this is specifically set out in statute: see ss 78(10) and (11) of the Public Service Act1999 (Cth).strong indication that powers exercised by delegates should not be treated as an act done by the Commissioner, but as though the powerwas the officer's from the outset.(b) Subsection (5) indicates that the delegation extends beyond the term of the Commissioner who delegated the power. This suggests that the delegated power is not linked to the individual Commissioner who made the delegation. This could be taken to mean that the delegate acts independently of the Commissioner. Alternatively, this could be taken to support the contention that the delegate is acting through theoffice of the Commissioner.(c) The fact that subs (6) makes it clear that the delegation is revocable means that the Commissioner retains some level of control or supervision over the exercise of delegated powers. While this could suggest that delegated powers are exercised on behalf of the Commissioner, it is standard practice that the delegator can revoke the delegation of power. Hence this is not necessarily contrary to theprinciple that the delegate's acts are the delegate's own.[65] There is nothing in the wording of s 7 that lends any significant weight to the proposition that the general principle should be reversed. By contrast, generally when Parliament wants a delegator to remain responsible for the acts of their delegate it will provide for this in the statute.[66] We also mention s 41(7) of the State Sector Act 1988. Section 6A of the TAA provides that the chief executive of the Department is the Commissioner of Inland Revenue. Section 41 provides that chief executives of government departments may delegate their powers, but s 41(7) provides:... nor shall any such delegation affect the responsibility of the chief executive for the actions of any person acting under the delegation.[67] It was argued s 41(7) means that the Commissioner remains legally responsible for the exercise of any delegated power. While we do not need toexpress a concluded view on the meaning of s 41(7), we think it means thatdelegation does not affect the chief executive's responsibility for the actions of thedelegate if any would otherwise be imposed. Alternatively, in referring to the chiefexecutive's "responsibility", s 42(7) may simply be referring to the general responsibilities of a chief executive for the conduct of the relevant department that are referred to in s 32 of the State Sector Act. In any event, we do not think that s 41could influence the Commissioner's legal responsibility for powers delegated unders 7 of the TAA. Section 41(1) provides that the chief executive may delegate any of his or her functions or powers under the State Sector Act or "any other Act", and sos 41 could arguably influence the TAA. However, s 41(4) makes it clear that the power of delegation contained in s 41 will not limit any power of delegation conferred on the chief executive by any other Act. In addition, the more specific provision in s 7 of the TAA, which applies to "the powers of the Commissioner",does not state that the Commissioner retains responsibility for the actions of a delegate.[68] We prefer the view that neither s 41(7) of the State Sector Act, nor s 7 of the TAA means that the Commissioner remains legally responsible for the acts of delegates empowered under s 7. The general rule that the acts of delegates are thedelegates' own acts should apply to this case. Thus the Commissioner could not be liable for the acts of an officer holding delegated powers, regardless of whether all the elements of a tort can be found in one officer or on a corporate basis. This principle would apply regardless of whether the tort alleged was misfeasance or negligence. This aspect of the claim must therefore be struck out.[69] In addition, we are satisfied that the principles of agency are not relevant to the liability of the Commissioner. Accordingly the law of agency as to attribution has no relevance to this appeal so far as the liability of the Commissioner is concerned.78 The law as set out in Crispin and Bainbridge is clear: public officials and their subordinates are not in a relationship of principal and agent; rather they areall servants of the Crown. It is no doubt for this reason that the taxpayers'78 For general principles of attribution see the leading judgment of Meridian Global FundsManagement Asia Ltd v Securities Commission [1995] 3 NZLR 7 (PC). See also Bartle v GECustodians [2010] NZCA 174, [2010] 3 NZLR 601 at [235]–[251]; GE Custodians v Bartle[2010] NZSC 146, [2011] 2 NZLR 31; Hickman v Turner & Waverley Ltd [2012] NZSC 72.submissions are not based on vicarious liability or agency, but focus on the argument that the knowledge and acts of the officers are effectively the knowledge and acts of the Commissioner. Thus the proper route for the taxpayers is to pursue the Attorney-General based on vicarious liability or individual officers for direct liability.Issue 3: Should the claim against Mr Shamy be struck out?[70] The second amended statement of claim makes allegations against counsel acting for the Commissioner in the enforcement litigation on the basis that certainfile notes and other documents were not disclosed as part of "the Commissioner'scontinuing Non-Disclosure Strategy". The following paragraphs provide a flavour of the allegations made against Mr Shamy:337. From 1999 to 2006, Shamy was delegated, and assumed the responsibility of supervising, assisting in, advising on and making proper, full and frank disclosure of all files notes relevant to proceedings initiated by the Commissioner against the plaintiffs, in accordance with the principles of fairness, impartiality and the rule of law and protecting the integrity of the tax system in the public interest (the principles of disclosure), pursuant to:(a) s.6 of the TAA; and/or(b) the then Rules 295 to 298 and 304 of the High Court Rules.338. During the four liquidation proceedings initiated by the Commissioner against the plaintiffs from 1999 to 2000, and in judicial review proceedings from 2004 to 2006, Shamy did not disclose the Aronsen filenotes and claimed unnotified, undisclosed privilege of privileged critical filenotes, in breach of the principles of disclosure.ParticularsA. The privileged file note dated 18 July 1997, made by Thornley.B. The Aronsen filenotes, and the privileged Aronsen filenote dated 17 October 1995.342. The Commissioner and Shamy did not provide any explanation during the discovery process, or at any other time, as to why the Commissioner:(a) had not disclosed the Aronsen filenotes and privileged critical filenotes on any previous occasion; and(b) did not discover and list the Aronsen filenotes in the List of documents; and(c) privileged the privileged critical filenotes in the List of documents; and(d) had not listed the privileged critical filenotes as privileged in the List of documents [71] Such allegations, among many more,79 are related to Mr Shamy's role as alawyer. He is alleged to have advised the Department about the proceedings for the enforcement of tax liability against the taxpayers. The following paragraph captures the essence of the complaint Mr Hampton seems to be making:13. At all relevant times, Shamy:13.1 was contracted to the department;13.2 was appointed to discharge a public function, including to represent the Commissioner in the enforcement of the Revenue Acts;13.3 from time to time assumed responsibility for the control and supervision of, assisting in, advising on, and making proper, full and frank disclosure of all of the department's relevantfile note evidence, as required by the rule of law and the High Court Rules for discovery and the public interest;13.4 when so acting exercised the powers of the Commissioner in maintaining the integrity in the administration of the Revenue laws;13.5 received compensation for the discharge of his duties as an agent of the department.[72] Significantly all of the allegations relate to Mr Shamy's conduct as a lawyerin relation to the discovery and disclosure aspects of the litigation against the taxpayers. There appears to be no suggestion that Mr Shamy participated in, or was responsible for any exercise of the statutory powers of any officer of the Department.79 The allegations against Mr Shamy in the main are set out in the sections of the second amendedstatement of claim identified in Appendix 2.[73] In the review judgment, Fogarty J approached the joinder of Mr Shamy as follows:80Mr Hampton argues that Mr Shamy gave advice to the IRD on the question of whether the Aronsen notes should be released. If that advice was just a discovery opinion I see no basis for Mr Shamy having to defend an action in tort, whether his advice was right or wrong. But if Mr Shamy became engaged in the issue whether officials should or should not exercise a statutory power, there may be a basis for personal liability acting as a public officer, as left open by the Court of Appeal in Berryman vis-a-vis Mr McGuire, a territorial officer acting as counsel for the Army, see paragraph [76]. I agree with Osborne AJ's decision at [71] that given that decision it is not possible to strike Mr Shamy out of the proceedings at this stage. As Osborne AJ discussed, there is Australian case law to the contrary. But its application is a matter for the Court of Appeal, or the Supreme Court.[74] We do not agree with the Judge's suggestion that the pleading was open to theinterpretation that Mr Shamy "became engaged in the issue whether officials shouldor should not exercise a statutory power". We do not read the second amendedstatement of claim that way. Mr Hampton did not signal to us in argument any proposed amendment that would advance such an allegation. At their highest, the allegations against Mr Shamy are that, in the course of acting as a lawyer for the Department, somehow Mr Shamy owed the taxpayers a duty to ensure that the statutory powers of individual officers must be exercised lawfully. Further, in the course of fulfilling his legal role, Mr Shamy was fixed with knowledge of the escalating income tax debt (through the penalties) and the legal effect of the Aronsen arrangement. The suggestion is that Mr Shamy thereby held "public office" for thepurposes of the tort of misfeasance in public office.[75] The appellants submit that Mr Shamy did not hold public office. The question is whether the claims should survive in the light of the dicta of this Court inNew Zealand Defence Force v Berryman.81 There the Court was concerned with a question of whether a claim for misfeasance in public office was available in relation to evidence given or submissions made in a coronial inquest. Issues of immunity for witnesses and those who made submissions were discussed. But this Court having referred to two cases, Milgaard v Mackie82 and Noori v Leerdam83 concluded that80 Review judgment, above n 2, at [59].81 New Zealand Defence Force v Berryman, above n 9.82 Milgaard v Mackie (1994) 118 DLR (4th) 653 (SKCA).83 Noori v Leerdam [2008] NSWSC 515."were it not for immunity of suit principles we would regard the claim formisfeasance in public office focussing on the submissions made to the Coroner as sufficiently tenable to survive a summary judgment application."84[76] We are satisfied that the decision of the Saskatchewan Court of Appeal inMilgaard v Mackie is of little assistance in the present context. The case concerned the actions of a Crown prosecutor during the course of a criminal trial and subsequent appeal. When a murder conviction was later quashed and the proceedings stayed, the plaintiff brought a claim against the prosecutor and others alleging that conduct suppressing evidence tending to exculpate the plaintiff could give rise to liability for the torts of negligence, conspiracy or abuse of statutory power. The Court of Appeal found that there was a triable issue and allowed the pleadings to stand. The judgment focuses on the civil liability of prosecutors in criminal cases, and in particular on the limits of prosecutorial immunity.85 This case is different. The allegations against Mr Shamy arise from his role as a lawyer in civil proceedings acting on behalf of the Department.[77] Following this Court's decision in Berryman, the decision in Noori v Leerdam was appealed to the New South Wales Court of Appeal.86 Mr Leerdam was a solicitor from a private law firm contracted to provide legal services to the Ministry of Immigration. The claim alleged that the solicitor had failed to provide Mr Noori with particulars of materials relied on by the Minister in making an immigration decision. At first instance it was held that an application to dismiss or strike out the claims against Mr Leerdam should be dismissed. On appeal, the Court of Appeal unanimously held that a solicitor acting on behalf of the Minister in tribunal proceedings did not occupy a position within the scope of the tort of misfeasance in public office. Counsel for the appellants in the present appeal relied on the following passages in the lead judgment of Spigelman CJ:87There is no authoritive statement of a test for determining what constitutes a public officer for the purposes of the tort of misfeasance. Nor is one needed. In almost all cases the answer will be obvious. 84 At [76].85 At 661–664.86 Leerdam v Noori, above n 10.87 At [3]–[4] (citations omitted).Where there is any doubt about whether a particular person occupies a"public office" for the purpose of the tort, it will ordinarily be enough to approach the matter on the basis that the tort is "concerned with" the "misuse" or "abuse" of public power or that the tort is "concerned with performance of public duties". There is no relevant difference, as thesecitations from the joint judgment in [Sanders v Snell [1998] HCA 64, (1998) 196 CLR 329] indicate, between authorities which use the language of"duty" and those which use the language of "power".[78] With respect to the alleged conduct giving rise to the tort, the Chief Justice said:88In answering, or rather failing to adequately answer, the request for particulars, and in the other respects complained of, the appellants were not discharging a public duty, nor were they exercising a public power, nor in any other way did they occupy a public office.In the present case there is no "office" or governmental power of anycharacter. The concept of an "office", in the context of liability for abuse ofpower, connotes an official position to which continuing functions or dutiesare assigned. Those duties or functions must be of a "public" nature. It isnot sufficient merely to be employed by a public authority for public purposes [79] The Chief Justice concluded:89The conduct complained of in the present case is not capable of constituting either the exercise of a public power or the discharge of a public duty. Not only is the role entirely contractual, the function performed is not itself a public function. The fact that the function was performed in the context of the performance of a public function by the tribunal, or on behalf of a person who does perform such functions, does not infect the quite distinct role of a legal representative with the public character of either the tribunal or of theminister. [Mr Noori's] submissions emphasised that the legal representative wasthe agent of the Minister with respect to the performance of the duty to comply with the direction by the tribunal to provide particulars and, arguably, with the performance of a broader duty on the part of the Minister to assist the Tribunal, which existed even before such an obligation was inserted into the [Administrative Appeals Tribunal Act 1975]. Assuming there was such a duty, in my opinion, the legal representative held no "office" for purposes of the tort of misfeasance in public officebecause this role was not, of itself, the performance of a public function, that is, it involved neither the exercise of a public power, nor the discharge of a public duty. The position of the solicitors, or of his firm, could not becharacterised as a "public office".88 At [15]–[16].89 At [19]–[22].Smart AJ did not articulate in his judgment any basis for holding that therewas an office to which either the terminology of "discharge of a public duty" or of "exercise of a power" could apply. [80] The Chief Justice also explained:90 it is not sufficient to hold that the solicitor performed important functions that involved a matter of public interest. That does not, in my opinion, give rise to an arguable case that the solicitor or his firm exercised a public function or held a public office, whether determined on the basis of the discharge of a public duty or on the basis of the exercise of a public power.Arguably, by reason of his or her professional position, a solicitor appearing before a Tribunal can be said to have duties to the tribunal analogous to the duties to the court. However, that is not enough, as three members of the High Court observed when rejecting special leave in [Tahche v Cannon[2003] HCATrans 524]. it is not appropriate to describe the duties of a solicitor representing a party as "public duties" for the purpose of characterisation of the positionheld by the solicitor as a "public office". Similarly, the existence of a power,albeit not an express power but a power in the sense of a capacity to act, relevantly with respect to the answer for the particulars etc, does not involve a public power or capacity or authority of any character capable ofcharacterising the position of the person as a "public office".In my opinion, a solicitor acting in proceedings, albeit proceedings concerned with the exercise of a public power or the discharge of a public duty, does not occupy a position within the scope of the tort of misfeasance in public office.This conclusion is, in any event, covered by express authority in Cannon and by the Full Federal Court in [Tampion v Anderson [1973] VR 715 (VSC)], where the court said that the position of counsel assisting a governmentalinquiry was "obviously not a public office".[81] We respectfully adopt the reasoning of the Chief Justice. We are satisfied that on the pleadings Mr Shamy was acting as a private legal practitioner for the Department and acting on instructions in a solicitor/client relationship. On the basis of the reasoning in the judgment of Leerdam v Noori, we are satisfied that he did not thereby hold public office. Neither did he exercise any statutory power with which he was clothed by virtue of any public office.[82] The taxpayers have sought in the pleadings to overcome any legal impediments by the requirement for an abuse of a power attaching to a public office by a series of allegations to the effect that Mr Shamy:90 At [23]–[27].(a) was contracted to the Department;(b) was "appointed" to discharge a public function;(c) "controlled" departmental decisions;(d) exercised the powers of the Commissioner; and(e) made decisions as to disclosure.We are satisfied that none of the allegations are sustainable when the pleading is read as a whole. It is plain that Mr Shamy's conduct related to the discharge of hisprofessional responsibilities as a lawyer. Any concerns by the taxpayer about Mr Shamy's conduct as a lawyer can be dealt with in another forum. In our view they do not give rise to a claim for misfeasance in public office. Accordingly the claims against Mr Shamy must be struck out.Issue 4: Should the claims against any other defendants be struck out?[83] There are two parts to this issue. The first concerns the legal and procedural requirements for a statement of claim – and the consequences of any non-compliance. The second concerns the basis upon which the taxpayers seek to sheet home liability for the tort of misfeasance in public office to officers of the Department apart from the Commissioner.Contents of the statement of claim[84] The procedural requirements for statements of claim are spelled out in the HCR. For present purposes r 5.17 (distinct matter to be stated separately), r 5.26 (statement of claim to show nature of claim) and r 5.27 (statement of claim to specify relief sought) describe the key principles. In summary they are:The pleading must be accurate, clear and intelligible.Sufficient particulars must be given to enable the defendant to be fairly informed of the case to be met.While adequate particulars are required, the statement of claim must not stray into setting out the evidence relied upon.Separate causes of action must be separately stated.The pleading should set out all the elements of the cause of action (in this case misfeasance).The relief sought must be clearly pleaded in respect of each cause of action and, where there is more than one plaintiff and multiple defendants, the relief sought by each plaintiff against each defendant must be clearly stated.[85] This Court in Hopper Group Ltd v Parker put it as follows: 91One essential part of pleadings is to state precisely the basic facts on which the plaintiff relies so as to clearly define the issues which the defendant has to meet. If that is not done, it is difficult for a defendant to prepare for trial and questions such as payment into Court or offers of settlement can hardly be considered. Furthermore, if the case goes to trial without precise pleadings, much time can be wasted and a defendant might be taken by surprise when the real issue not previously stated clearly suddenly emerges.[86] On the question of pleading intent, recklessness or bad faith, r 5.17(2) provides that if a party alleges a state of mind of a person, the party pleading must give particulars of the facts relied on in alleging that statement of mind. In the context of the tort of misfeasance in public office Tugendhat J in Carter v Chief Constable of the Cumbria Police emphasised that an allegation of bad faith must be properly particularised.92 Lord Hutton in Three Rivers similarly highlighted that bad faith – being an essential element in cases of misfeasance – needs to be clearly pleaded.9391 Hopper Group Ltd v Parker (1987) 1 PRNZ 363 (CA) at 366.92 Carter v Chief Constable of the Cumbria Police [2008] EWHC 1072 (QB) at [68].93 Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003]2 AC 237 (HL) at [122].Abuse of process[87] If a statement of claim has been drafted in compliance with the above requirements, then both the court and the defendant parties should have a clear understanding of what is being alleged and against whom. However, verbose, ill-drafted pleadings may defeat the purpose of a statement of claim to such an extent that it is an abuse of process. This principle is intended, as Odgers suggests, to"prevent the improper use of [the court's] machinery".94 Pleading should not be permitted to be a means of oppressive conduct against opposing parties.[88] Under the HCR, a court may strike out a statement of claim if there has been such an abuse. Rule 15.1(1) provides:(1) The court may strike out all or part of a pleading if it—(a) discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or(b) is likely to cause prejudice or delay; or(c) is frivolous or vexatious; or(d) is otherwise an abuse of the process of the court.[89] The grounds of strike out listed in r 15.1(1)(b)–(d) concern the misuse of thecourt's processes. Rule 15.1(1)(b), which deals with pleadings that are likely to cause prejudice or delay, requires an element of impropriety and abuse of the court'sprocesses.95 Pleadings which can cause delay include those that are prolix; are scandalous and irrelevant; plead purely evidential matters; or are unintelligible. In regards to r 15.1(1)(c), a "frivolous" pleading is one which trifles with the court'sprocesses, while a vexatious one contains an element of impropriety.96 Rule 15.1(1)(d) – "otherwise an abuse of process of the court" – extends beyond the othergrounds and captures all other instances of misuse of the court's processes, such as aproceedings that has been brought with an improper motive or are an attempt to94 Simon Goulding, D B Casson and William Blake Odgers Odgers on Civil Court Actions (24thed, Sweet & Maxwell, London 1996) at [10.15].95 McGechan on Procedure at [HR15.1.03].96 Ibid at [HR15.1.04].obtain a collateral benefit.97 An important qualification to the grounds of strike out listed in r 15.1(1) is that the jurisdiction to dismiss the proceeding is only used sparingly. The powers of the court must be used properly and for bona fide purposes. If the defect in the pleadings can be cured, then the court would normally order an amendment of the statement of claim.98What is wrong with the second amended statement of claim?[90] The major issue with the statement of claim is that it is overwhelmingly prolix. It comprises 419 paragraphs. The narrative of facts presented by the statement is not straightforward but diffuse: there are large tracts of factual material and much of the material facts relating to an individual claim are dispersed throughout different parts of the document. This makes it difficult, if not impossible, to understand. It would be impossible for the defendants to give a targeted response to the claims of misfeasance. As Eichelbaum J said in Thomson v Westpac Banking Corporation (No 2):99 The object of obtaining crisp admissions or denials, and thus defining the points at issue, is entirely defeated by a lengthy diffuse narrative, which is likely to elicit only a generalised response.[91] Much of the factual material pleaded is irrelevant, provides excessive detail or is evidence rather than pleading. The large tracts of factual information pleaded do not identify the main issues but obfuscate them by adding to the prolix nature of the document and making it burdensome to read. A major concern is the excessive pleading of matters of evidence. For example, the document refers to certain evidence as particularly supporting a fact and then at other times it quotes directly from the evidence. There are even references to the law emerging from previousChesterfields litigation. This not necessary and only adds to the document'sprotracted nature. The statement of claim fails to comply with the HCR. One fundamental defect is that, contrary to r 5.27(2), the statement of claim does not specify separately the relief or remedy sought on each cause of action immediately97 Ibid at [HR15.1.05(1)].98 See Van der Kaap v Attorney-General (1996) 10 PRNZ 162 (HC) at 165, discussing r 186 of theformer High Court Rules and citing Marshall Futures Ltd (in liq) v Marshall [1992] 1 NZLR316 (HC).99 Thomson v Westpac Banking Corporation (No 2) (1986) 2 PRNZ 505 (HC) at 508.after the pleading of that cause of action. There is no prayer for relief at all in the document.[92] The statement of claim does not adequately plead relevant states of mind in respect of particular officers of the Department. A further omission in the statement of claim is that the pleadings do not show what acts caused what loss or damage and how; rather, a very generalised and non-specific allegation of loss is made. Confusion also arises in the statement of claim concerning the multiplicity of defendants. For example, the Doubleday/Kettley Misfeasance is claimed against about 20 Department officials as well as the Commissioner. This misfeasance claim suffers from a lack of certainty as to who are the exact defendants: see [161] and[169], where the pleadings state that the named individuals are liable on an "and/or"basis. This lack of precision is highlighted at [212] of the statement of claim. The Doubleday/Kettley Misfeasance is summarised thus:One or more of them, namely, Geerlofs, Winstanley, Hunt, Thornley, Miller, Newton, Consedine[,] Bond, Gillard-Glass, Wilson, Barry, Beswarwick, Sumner, Kettley, Doubleday, Messervy, Withers, Shamy and/or Lawlorcommitted the Doubleday/Kettley Misfeasance (Emphasis added.)[93] The failure to state the exact defendants with certainty makes it impossible for the individual defendants to respond to this particular claim. The same issue arises in regard to the six alternative claims set out at [213]: each of the alternativeclaims is prefaced by "one or more of [the defendants]". These claims therefore engage issues of whether the aggregate actions of a group of people can amount to misfeasance in public office.[94] Another unusual aspect to this method of pleading is that, when pressed at the hearing, Mr Hampton stated that he could prove all of the elements of misfeasance against three people individually: Messrs Barry, Kettley and Doubleday. However, no separate claims are made against Messrs Kettley and Doubleday. Rather, the Kettley/Doubleday Enforcement Decisions – which concern actions undertaken by both Messrs Kettley and Doubleday100 – are the subject of the Kettley/Doubleday100 See [77], which describes Mr Doubleday undertaking the "Off the Record Meeting", and [85],which sets out both men's involvement in the settlement negotiations. These actions come within the rubric of the "Doubleday/Kettley Enforcement Decisions", as defined at [135].Misfeasance, which has approximately 20 defendants. If Mr Hampton is able to identify alleged misfeasance against officers individually, he must plead separate claims against each. Whether each of the officers concerned needs to be named as a party is a different question which we address below.[95] We consider that the second amended statement of claim in its present form is an abuse of process and warrants an order striking it out under the HCR. It is prejudicial to the defendants and likely to cause delay. In summary we are satisfied that the document:is pleaded in a highly prolix and diffuse way in relation to the material facts which are spread throughout the pleadings in an incomprehensible manner;includes irrelevant material, including extensive evidential matter;does not plead all elements of the tort of misfeasance in public office against a particular officer or officers;does not adequately plead causation;lacks clarity and precision: it is difficult, if not impossible, to identify exactly the defendants for each cause of action;lacks any prayers for relief.[96] The question then is what relief do these defects attract? We will address this question after dealing with the second point.Basis for liability against individual officers[97] An important issue in this case is whether all of the elements of misfeasance have to be alleged against one individual, or whether the various elements can be alleged against different people, their actions and/or states of mind being aggregatedto form a single instance of misfeasance. The fact that the essence of the tort involves actions conducted in bad faith raises the question whether there can be any form of aggregate liability. While it is possible under general principles of agency to aggregate the knowledge of multiple agents, the nature of the tort of misfeasance means that the mental and physical elements of the tort ought to coalesce in one individual. The nature of the tort is such that the subjective mental element colours the act or omission complained of. The cases uniformly require that the mental and physical elements are intertwined: Pranfield uses the phrase "engages ... with intention";101 Garrett refers to "acting recklessly";102 Odhavji Estate v Woodhouserequires that the "unlawful conduct must have been deliberate".103 The mental element flavours the relevant act or omission. As a secondary reason for finding that there cannot be aggregate liability, the Court should also be cautious of applying general agency principles developed in the contract context in order to impose liability in the tortious context.[98] This issue arose in the decision of this Court in Garrett where Blanchard J held that the plaintiff must prove that the relevant official had an actual appreciation of the consequences, or was reckless as to this.104 Given that the tort of misfeasance in public office was directed at the deliberate injuring of members of the public by deliberate disregard for official duty, it was unnecessary to extend the tort to acts which, although known to be wrongful, were done without a realisation of the consequences.105[99] Garrett involved allegations of misconduct on the part of the police in failingto properly investigate Mrs Garrett's claim of rape by a policeman. The loss shepleaded included loss of her employment and the need to sell her home (due to gossip in the community). Relevantly, in regard to the second cause of action (concerning further investigation and those who had made a decision not to prosecute the alleged rapist), Blanchard J stated:106101 Pranfield Holdings Ltd, above n 50, at 675.102 Garrett, above n 46, at 344.103 Odhavji Estate v Woodhouse 2003 SCC 69, [2003] 3 SCR 263 at [25].104 At 349.105 At 350.106 At 352. there is no evidence that Detective Inspector McFadden and his superiorsshould have appreciated Mrs Garrett's losses. There is no evidence that they knew anything of what Mrs Garrett had said to Yates [the first policeman who investigated the allegation of rape] about her financial position nor were they shown to have any awareness of the spread of the damaging rumours after the formal complaint. It must be remembered in this connection that the abuse of power has to be alleged against a particular person or persons, not against the police generally. Here the decision [not to prosecute] was not made collectively by McFadden and his superiors. Even if it had been, it is not enough to lump a group of officials together and to attribute to them constructively the knowledge of one of their subordinates.(Emphasis added.)[100] This statement emphasises that only a particular person (or persons) who has knowledge of, or is subjectively reckless as to, the loss the plaintiff will probably suffer should be guilty of misfeasance. Thus a claim of misfeasance cannot be an aggregated one, where the state or states of mind of one or more persons is combined with the actions of another or others. All of the elements of the tort must coalesce in a single person, although there may of course be more than one person in whom all the elements coalesce.[101] The comments of May LJ in London Borough of Southwark v Dennett are instructive:107The whole thrust of the Three Rivers case was that knowledge of, or subjective recklessness as to, the lawfulness of the public officer's acts andthe consequences of them is necessary to establish the tort. Mere reckless indifference without the addition of subjective recklessness will not do. This element virtually requires the claimant to identify the person or people said to have acted with subjective recklessness and to establish their bad faith. An institution can only be reckless subjectively if one or more individuals acting on its behalf are subjectively reckless, and their subjective state of mind needs to be established. To that end, they need to be identified.[102] It is therefore necessary for the pleader to identify which individual public officer or officers within the entity had the relevant state of mind and for that to be linked to the actions of the same officer or officers.[103] Another helpful case is the Canadian decision of Powder Mountain Resorts Ltd v British Columbia.108 There, the plaintiff claimed misfeasance in public office107 London Borough of Southwark v Dennett [2007] EWCA Civ 1091 (CA) at [21].108 Powder Mountain Resorts Ltd v British Columbia 2001 BCCA 619, [2001] 11 WWR 488.against the province of British Columbia. Newbury J in the British Columbia Court of Appeal had the following to say:[9] Judicial caution is also indicated by the particular factual context of the case at bar. It involves the concurrent actions of several government functionaries, some elected and some not, operating in different spheres of the bureaucratic and executive authority, all with different responsibilities, levels of knowledge and constraints. Since the plaintiffs alleged vicarious liability on the part of the Province for the intentional wrongs of its agents [the Premier and the then Minister of Economic Development] and employees [the Deputy Minister of Lands and two other Ministry officials], it is important to consider the actions and motivations of each of the individual actors separately. One should not attribute, for example, the detailed knowledge of persons at one level of administration to persons at another level who have only general knowledge of the subject and are largely dependent on advice of others. It is also important to keep in mind the practical context in which the decision-makers were operating. Certainly at the level of Cabinet minister or Premier, it is likely the matter ofpreliminary approval of [the plaintiff's] proposal was only one of manydecisions required to be made by the government of the day, some of greater and lesser importance.(Emphasis added.)[104] The above passage highlights that attribution of knowledge held by one person to another in a different position is not appropriate for the purpose of the tort of misfeasance in public office. It also highlights (as does the quote from Garrett at[99]) the need to differentiate between the differing levels of administration occupied by people accused of misfeasance.[105] We refer finally to the Canadian Supreme Court case of Odhavji Estate v Woodhouse.109 There, Iacobucci J defined the limits of the tort of misfeasance in public office as follows:110 the ambit of the tort is limited not by the requirement that the defendant must have been engaged in a particular type of unlawful conduct, but by the requirement that the unlawful conduct must have been deliberate and the defendant must have been aware that the unlawful conduct was likely to harm the plaintiff.[106] The Judge then went on to state:[29] The requirement that the defendant must have been aware that his or her unlawful conduct would harm the plaintiff further restricts the ambit of109 Odhavji Estate, above n 103.110 At [25].the tort. Liability does not attach to each officer who blatantly disregards his or her official duty, but only to a public officer who, in addition, demonstrates a conscious disregard for the interests of those who will be affected by the misconduct in question. This requirement established the required nexus between the parties. Unlawful conduct in the exercise of public functions is a public wrong, but absent some awareness of harm there is no basis on which to conclude that the defendant has breached an obligation that she or he owes to the plaintiff, as an individual. And absent the breach of an obligation that the defendant owes to the plaintiff, there can be no liability in tort.(Emphasis added, apart from underlined words; that is the Judge's ownemphasis.)[107] This dictum emphasises that it is not merely wrongful conduct which attracts liability under the heading of misfeasance in public office, but wrongful conduct which the public officer knows is wrong and knows will probably harm the plaintiff. This element establishes the necessary nexus between the parties. It follows that a person who does not have the necessary state of mind may not be liable for misfeasance.[108] We have not overlooked the decision of the Supreme Court in Couch v Attorney-General (No 2).111 Discussion in that case arose in the context of a claim for exemplary damages in tort and concerned whether the Crown (represented by the Attorney-General) can be institutionally liable directly for the acts of individuals such as a probation officer in the Department of Corrections. This is important because if the Crown can only be vicariously liable then it is necessary for the plaintiff to show that an individual Crown servant has committed a tort.112 By contrast, if the acts and knowledge of servants can be attributed to the Crown and the Crown held directly liable then a form of institutional liability may be possible.[109] The starting point is that on its face the proviso to s 6(1) of the Crown Proceedings Act prevents the Crown from being held directly liable:111 Couch v Attorney-General (No 2) [2010] NZSC 27, [2010] 3 NZLR 149.112 Although it seems that the Crown can also be vicariously liable for the torts of unidentifiedCrown servants: see Peter W Hogg, Patrick J Monahan and Wade K Wright Liability of theCrown (4th ed, Carswell, Toronto, 2011) at 184.6 Liability of the Crown in tort(1) Subject to the provisions of this Act and any other Act, the Crown shall be subject to all those liabilities in tort to which, if it were a private person of full age and capacity, it would be subject—(a) in respect of torts committed by its servants or agents;(b) in respect of any breach of those duties which a person owes to his servants or agents at common law by reason of being their employer; and(c) in respect of any breach of the duties attaching at common law to the ownership, occupation, possession, or control of property:provided that no proceedings shall lie against the Crown by virtue of paragraph (a) in respect of any act or omission of a servant or agent of the Crown unless the act or omission would apart from the provisions of this Act have given rise to a cause of action in tort against that servant or agent or his estate.[110] Professor Anderson has stated that the proviso "says as clearly as it ispossible to say that the crown is liable for a tort only if one of its servants is alsoliable. Unlike everyone else, the crown is immune from institutional liability."113This position was also recognised by Tipping J114 and Blanchard J115 in Couch No 2, but both Judges refused to rule definitively that the Crown Proceedings Act prevented a finding of direct liability against the Crown, preferring to leave the question open. Thus, in Couch No 2 the Supreme Court left open the possibility that the Crown could be directly institutionally liable in tort, but did not determine the issue.[111] The decision in Couch No 2 leaves open the possibility of a finding of institutional liability where the alleged wrongdoing contains an element of subjective recklessness. Tipping J suggests there "is no doctrinal difficulty" in attributing thesubjective recklessness of one person to another person or body. 116 His Honour did, however, anticipate "jurisprudential difficulty" in combining more than one mind to113 Stuart Anderson "'Grave injustice', 'despotic privilege': the insecure foundations of crownliability for torts in New Zealand" (2009) 12 Otago LR 1 at 4. Anderson strongly criticises thisposition and advocates for legislative reform.114 At [173].115 At [71].116 At [160].construct institutional subjective recklessness, but did not rule out the possibility.117Indeed, Tipping J contemplated that institutional subjective recklessness was possible, through the aggregation of factors such as the knowledge and attitudes ofagents, the systems in operation within an organisation, the organisation's resourcingand its perception of priorities.[112] Thus, it appears that, despite s 6(1) of the Crown Proceedings Act, Couch No 2 leaves open the possibility of a claim against the Attorney-General for the institutional liability of the Crown or a government department. We observe thatCouch No 2 was decided in the negligence context, so it may be that after proper analysis the necessary mental element of misfeasance in public office cannot be constructed through attribution of multiple minds and attitudes to an organisation. However, both Blanchard and Tipping JJ refused to rule out that (a) the Crown could be directly institutionally liable, and (b) it may be possible to aggregate the minds of more than one person together to create a form of institutional subjective recklessness.An order striking out the entire claim?[113] We are cognisant of Mr Hampton's claim at the hearing that he and the other taxpayer parties are in possession of evidence that would enable the pleading of a compliant statement of claim against two or possibly three officers of the Department, whereby all elements of the tort of misfeasance in public office could be pleaded against each of these officers. If the taxpayers wish to pursue that question it will need to be reviewed and be the subject of legal advice to the taxpayers by a properly qualified lawyer.[114] Despite the many shortcomings of the second amended statement of claim (as summarised at [90] to [97] above) we do not accede to the submission by the appellants that the statement of claim should be struck out in its entirety. On the material before us we are not able to say whether a claim against individual officers for the tort of misfeasance is able to be properly pleaded. The taxpayers should not117 Ibid.be deprived of a final opportunity to do so. But they will need the benefit of legal advice to ensure that this opportunity is not lost.[115] Similarly with respect to a claim against the Attorney-General for possible institutional liability, we are unable to say whether evidence might exist to support a claim of that nature sufficient to survive a strike out application.Issue 5: A stay? And if so, on what terms?[116] We have found that the second amended statement of claim is non-compliant with the Rules and, in its present form, is an abuse of process. For the reasons given above it will require substantial amendment. It will also need to be amended to remove the claims against the Commissioner and Mr Shamy to reflect conclusions on Issues 2 and 3.[117] It is likely that the taxpayers will not be able to proceed against 20 named officers of the Department. Mr Hampton acknowledged that a claim against a small number of officers was more realistic. If, following legal advice, the respondents are able to allege that all the elements of the tort of misfeasance coalesced in individual officers, then the pleadings should clearly say so. However, if that is the case, then the respondents should consider whether it is necessary for any individual officers to be named as parties. If an individual officer commits the tort of misfeasance then the Crown will be liable under s 6(1) of the Crown Proceedings Act. Mr Pike accepted that the Attorney-General, representing the Crown, is usually named and would conduct the defence of the proceedings on behalf of the officers concerned.[118] The position of the partnership plaintiffs will also need to be considered. Mr Hampton, it seems, was a member of the two partnerships. At the hearing Mr Hampton informed us that the partnerships have now been dissolved. If it is desired to pursue a claim by one or more of the partnerships, their existence, status and ability to bring the claim should be the subject of legal advice.[119] In order to give effect to the outcome of the issues on appeal, we have concluded that it is appropriate to order a stay of the proceedings pending compliance by the taxpayer parties with the following directions:(a) The proceeding is to be case-managed by a High Court Judge.(b) No further amended statement of claim may be filed except pursuant to leave granted by the managing High Court Judge.(c) Any application for leave is to be served on the defendants, and is to be accompanied by a copy of the proposed amended statement of claim.(d) Leave is not to be granted unless the managing High Court Judge is satisfied that, at least in respect of any corporate or partnership plaintiffs, the proposed amended statement of claim has been settled by a lawyer holding a current practising certificate, who has reviewed the available evidence. (Although we cannot direct Mr Hampton personally to obtain legal advice, we note his acceptance that he would do so, in conjunction with the advice to be obtained by any corporate or partnership plaintiffs.)(e) Leave is reserved to the taxpayers to apply to the managing High Court Judge for any further necessary directions.Result and costs[120] The appeal is allowed in part. The claims against the Commissioner of Inland Revenue and Philip John Shamy are struck out.[121] The proceeding against the Attorney-General and the remaining twenty named officers of the Department of Inland Revenue (remaining defendants) is stayed on terms described in the next paragraph.[122] The proceeding against the Attorney-General and the remaining defendants may only proceed with the leave of a High Court Judge. Such leave shall not be granted except upon application by the respondents for leave and subject to compliance with the directions set out in [119] above.[123] Although the appellants have not succeeded entirely, they have had substantial success on the issues raised on appeal. For that reason we consider the appellants are entitled to costs. The respondent must pay the appellants one set of costs for a complex appeal on a band A basis and usual disbursements. We certify for two counsel.Solicitors:Crown Law Office, Wellington for AppellantAPPENDIX 1Summary of first amended statement of claimPlaintiff partiesChesterfields Preschools Ltd: an incorporated company set up by the trustees of the Anolbe Family Trust and incorporated in 1993, carrying on business in Christchurch as a property holding company. From 1993 until 2001 the company owned and operated preschools previously owned by the Chesterfields Partnership.David Hampton: the director (at all material times) of Chesterfields Preschools Ltd and Anolbe Enterprises Ltd.Chesterfields Partnership: formed in 1990, trading briefly as an owner of preschools in Christchurch.118 The partnership dissolved in 1993 and sold its assets to Chesterfields Preschools Ltd.Chesterfields Preschools Partnership: the trading name of Mr Hampton, who from 2002 to 2004 owned and operated the preschools previously owned by Chesterfields Preschools Ltd.Anolbe Enterprises Ltd: an incorporated company set up by the trustees of the Anolbe Family Trust and incorporated in 1993, carrying on business as a property holding company.Defendant partiesThe Commissioner of Inland Revenue.118 The names and details of the partners are not particularised in the pleading. We were informedby Mr Hampton during the hearing that one of the partners was his former wife, Ms Sissons. Ifso, the question of Mr Hampton's authority to act for Ms Sissons and any other partner will needto be addressed.Mr Phillip Shamy, a partner at Raymond Donnolly, who was legal representative of the first defendant.The Attorney-General.The amended statement of claim suggests that there are a number of other defendants. These are not named and are most likely officers of the Department of Inland Revenue.Causes of actionFirst cause of action – misfeasance in public officeThis was against the Commissioner. The statement of claim alleged that in the early 1990s the Commissioner elected to examine various GST refund claims made by the Chesterfields Preschools Ltd and Anolbe Enterprises Ltd and to withhold the payment of those refunds in the meantime. Yet the Commissioner failed to make decisions in respect of the claims and withheld the payment of those refundsindefinitely. This caused the defendants loss as decisions to settle the defendants'taxes could not be implemented.Second cause of action – misfeasance in public officeThis was also a claim against the Commissioner. The pleadings alleged that the Commissioner made three decisions for the purpose of settling the taxes of the plaintiffs; remitting penalties; and (with the consent of the plaintiffs) applying the GST refund claims referred to in the first cause of action in part payment of theCommissioner's settlement decisions, but subsequently failed to abide by thesedecisions.Third cause of action – misfeasance in public officeThis concerned the alleged failure of the Commissioner to remit the penalties of Chesterfields Preschools Ltd in October 1998 when enforcement action was taken bythe Commissioner in lieu of making decisions to finalise the GST refunds of the respondents.Fourth cause of action – misfeasance in public officeA further claim is pleaded against the Commissioner alleging that during the period 1996 to October 2004 the Commissioner failed to disclose to the defendants the file notes of Mr Aronsen, an Inland Revenue Officer, despite being requested to do so. Mr Aronsen's file notes allegedly contained critical evidence relevant to the overallresolution of the settlement of the respondents' tax liability.Fifth cause of action – misfeasance in public officeThis claim is against both the Commissioner and Mr Shamy. In essence the pleading is that there was a failure to disclose the Aronsen file notes during the exercise of the powers of enforcement by seizure from May 2004 to June 2006. This deprived the respondents of critical evidence in defending the enforcement action.Sixth cause of action – misfeasance in public officeThis claim is against both the Commissioner and Mr Shamy alleging that from 2004 to 2006 Mr Shamy failed to ensure that the Commissioner disclosed the Aronsen file notes during the discovery process in the High Court. It also claimed that Mr Shamy unlawfully claimed privilege of some of the Aronsen documents and failed to notify the defendants that Aronsen documents had been withheld as privileged. This is alleged to have deprived them of critical evidence necessary to defend unlawful decisions to enforce and collect penalties.After pleading the sixth cause of action, there is reference to damage allegedly suffered in respect of the first six causes of action, which included allowingly or recklessly allowing the penalty tax regime to "spiral out of control" between 1993 and 2006.Seventh cause of action – breach of NZBORAThe pleadings alleged that as the Attorney-General is the guarantor of the rights contained in the NZBORA and was to be sued in respect of breaches committed by the Commissioner and Mr Shamy, as well as the other 17 unnamed defendants. The breaches of NZBORA namely concern failures on the part of the Commissioner to observe the principles of natural justice under s 27 of NZBORA.ReliefIn respect of each of the seven causes of action there is an "application for relief".These purport to seek various forms of relief against some only of the twenty defendants.APPENDIX 2Outline of contents of the second amended statement of claimPack More Punch Strategy [52], [137]–[138]Non Disclosure Strategy [64], [139]–[140]Barry Enforcement Decisions [76], [152]–[160]Barry Misfeasance [160]Alternative Barry Misfeasance [215]–[225]Barry Recommendations [216]Barry Recommendations (Misfeasance) [224]Affirmation Decisions [68]Shamy Privilege Strategy [65], [141]–142]Shamy Privilege Decisions [121]–[127], [179]–[187]Shamy Misfeasance [187]Alternative Shamy Misfeasance [237]–[247]Shamy Recommendations [238]Shamy Recommendations Misfeasance [246]2004 Enforcement Proceedings [103]–[111]Doubleday/Kettley Enforcement Decisions [161]–[169]Doubleday/Kettley Misfeasance [169]McNeill s 183A Remission Application RefusalStrategy[115], [143]–[144]McNeill Remission Refusal Decision [116], [170]–[178]McNeill Misfeasance [178]Whitiskie Disclosure Strategy [130], [145]–[146]Whitiskie Non Disclosure Decision [131], [188]–[196]Whitiskie Misfeasance [196]Alternative Whitiskie Misfeasance [248]–[258]Whitiskie Recommendations [249]Whitiskie Recommendations Misfeasance [257]Budhia Investigation Strategy [133], [147]–[148]Budhia Investigation Decisions [134], [197]–[205]Budhia Misfeasance [205]Alternative Budhia Misfeasance [259]–[269]Budhia Recommendations [260]Budhia Recommendations Misfeasance [268]The Belief [149]Motivating Purposes [150]Vicarious Liability of Crown [270]–[271]Loss and Damage [272]Decisions and Assurances [273]–[289]Plaintiffs' Complaints [290]–[291]Discovery Non Disclosure [337]–[377]Additional Facts [378], [414]Damage Suffered by Plaintiffs [415]–[418]APPENDIX 3Summary of second amended statement of claimPlaintiff partiesThe plaintiffs are the same as set out in the first amended statement of claim (see Appendix 1 above).Defendant partiesThe defendants include the Commissioner of Inland Revenue, Mr Shamy and the Attorney-General – as in the first amended statement of claim – but also includes 20 named officers of the Department.Claims of misfeasance in public officeThe second amended statement of claim – unlike the first – does not set out, systematically, a number of causes of action, but rather describes numerous alleged actions and strategies pursued by Inland Revenue officers that are said to be aimed at bringing the plaintiffs into disrepute and preventing their tax liability from diminishing. Out of these the plaintiffs raised claims of misfeasance. The key strategies and actions were:The New Pack More Punch Strategy: adopted in 1997 by a number of the Inland Revenue officers. Features of this strategy included that the IRD would withhold from the plaintiffs various GST refunds indefinitely and would shift all old outstanding core tax balances that were to be paid by the various GST refunds into the period attracting the new punishing penalty regime commencing in 1997.The Non-Disclosure Strategy: adopted in 1999 by Mr Colin Barry, an Inland Revenue officer. A key feature of this strategy included the denial of the existence of any file notes corroborating the plaintiffs'assertions that decisions and assurances had been made by the IRD. This strategy was allegedly meant to expose the plaintiffs to exponential default penalty and interest accumulations in their tax accounts.Enforcement Actions: these encompass a number of decisions and actions undertaken by the various individuals. The actions include, for example, the Shamy Privilege Decisions – alleged decisions made by Mr Shamy to claim critical filenotes as privileged and not to disclose such privilege in discovery – and the McNeill Remission Refusal Decision, an alleged decision by Mr McNeill, an Inland Revenueofficer, to decline the plaintiffs' application for remission of penalties and interest.The statement pled the following motivating purposes on the part of the Inland Revenue officers in pursuing these strategies and actions:(a) to withhold the payment of the various GST refunds and other GST refunds indefinitely;(b) to injure the business interests of the plaintiffs by ensuring that penalties would accumulate out of control over time;(c) to expose the plaintiffs to punishing enforcement action and the exercise of the power of seizure aimed at collecting those extraordinary penalties;(d) to cripple the business interests of the plaintiffs by the exercise of the power to seizure;(e) to ensure that the plaintiffs did not have a proper opportunity to seek administrative and injunctive relief from the courts which would, or might, result in the revocation of the seizure notices and cancellation of the extraordinary penalty accumulation in the tax accounts of the plaintiffs;(f) to punish the plaintiffs for, or otherwise "make up for" redress, thematters which each of them believed had occurred as pleaded at paragraph 149 above.Following the description of the strategies and motivating purposes, the statement pled six explicit claims of misfeasance, mainly against individual Inland Revenueofficers. These decisions were all done allegedly pursuant to, in furtherance of, orfor the purpose of implementing the New "Pack More Punch" Strategy, the NonDisclosure Strategy and/or the Enforcement Actions. The claims were:The Barry Misfeasance: involving decisions made by Mr Colin Barry. Such decisions included failing to disclose how the tax payments andvarious GST refunds of the plaintiffs' had been applied from 1993 to1998; initiating liquidation proceedings against Chesterfields Preschools Ltd; and issuing a seizure notice.The Doubleday/Kettley Misfeasance: this alleges the elements ofmisfeasance against "each of Geerlofs, Winstanley, Hunt, Thornley, Miller, Bond, Gillard-Glass, Wilson, Consedine, Newton, Withers, Barry, Beswarwick, Sumner, Kettley, Doubleday, Messervy, Whitiskie,Shamy, Lawlor and/or the Commissioner". The actions at the centre of this claim included the issuing of enforcement proceedings against the plaintiffs.The McNeill Misfeasance: involving Mr Carson McNeill. This claim of misfeasance was based on Mr McNeill's 2004 decision to decline the plaintiffs' application for remission of penalties and interest.The Shamy Misfeasance: involving Mr Shamy. The claim was based on his alleged decision in 2004 to claim certain file notes as privileged from disclosure and discovery and not to identify those file notes asprivileged in the Commissioner's list of documents for discovery.The Whitiskie Misfeasance: involving Ms Karen Whitiskie. This claimevidently centred on Ms Whitiskie's decision in 2005 to deny the plaintiffs' allegations of non-disclosure.The Budhia Misfeasance: involving Mr Raju Budhia, who allegedly declined to apply the direction of the first judicial review judgment requiring the remission of penalties and interest.After setting out these claims, the statement then alleged that any one or more of the other Inland Revenue officers or Mr Shamy "aided, counselled, directed, or joined"in the Barry, Doubleday/Kettley, Shamy, Whitiskie and Budhia Misfeasance claims. This section of the statement of claim concluded by stating that all of the IRD officers and Mr Shamy were joint tortfeasors in regards to the claims of misfeasance so far.The statement then went on to allege further claims of misfeasance that were alternatives to the Barry, McNeill, Shamy, Whitiskie and Budhia Misfeasance claims. These five alternative claims alleged the elements of misfeasance against a large number of Inland Revenue officers and Mr Shamy, once again indicating that it is the collective actions of these people that constitute the tort. Following these alternative claims, the statement of claim set out the vicarious liability of the Attorney-General for the actions of the Inland Revenue officers.