COMMISSIONER OF INLAND REVENUE v LINDSAY [2022] NZCA 585

COMMISSIONER OF INLAND REVENUE v LINDSAY [2022] NZCA 585 [30 November 2022]NOTE: HIGH COURT ORDER PROHIBITING PUBLICATION OF THEIDENTITY OF THE PERSONS SPECIFIED AT FOOTNOTE 1 REMAINS INFORCE.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA277/2021[2022] NZCA 585BETWEEN COMMISSIONER OF INLANDREVENUEAppellantAND LINDSAYRespondentHearing: 21 June 2022Court: Gilbert, Collins and Katz JJCounsel: M Deligiannis and SJL Townsend for AppellantJ W Maassen and M S Dobson for RespondentJudgment: 30 November 2022 at 10:00 amJUDGMENT OF THE COURTA The Commissioner's substantive appeal is dismissed.B The Commissioner's costs appeal is allowed. The 10 per cent costs upliftawarded in the High Court is set aside and substituted for an order that theCommissioner must pay the respondent's costs in the High Court on a2B basis. If the parties are unable to agree the quantum of 2B scale costs thatissue is to be determined in the High Court.C The respondent's cross-appeal on costs is dismissed.D The Commissioner must pay Mr Lindsay eighty per cent of costs for astandard appeal on a band A basis.____________________________________________________________________REASONS OF THE COURT(Given by Katz J)Introduction[1] Mr Lindsay and Ms Jones1 were involved in a casual, non-exclusiverelationship which began in approximately 2000 and continued until December 2002.Ms Jones had two children at the time, and Mr Lindsay had one child. Ms Jones rangMr Lindsay in early 2003 to tell him that she was pregnant and that he was the fatherof the child. Mr Lindsay did not accept this, however, as he understood that Ms Joneshad also been involved in other relationships at the time. The child was born inSeptember 2003.[2] Mr Lindsay only saw Ms Jones once after their relationship ended, whenhe visited her briefly in September 2003, shortly after the child was born. Mr Lindsayhad no further communication or interactions with Ms Jones or the child until 2016,when he was served with paternity proceedings. Mr Lindsay agreed to undertake aDNA test. When the results indicated that he was the child's father, Mr Lindsayconsented to the Family Court making a paternity order. The order was made on26 October 2017.[3] On 20 November 2017, Ms Jones filed an application with Inland Revenue fora formula assessment for child support from Mr Lindsay, pursuant to the Child SupportAct 1991 (the 2017 application). Although Mr Lindsay had not been aware of it at thetime, Ms Jones had previously filed a similar application 14 years previously, on10 October 2003 (the 2003 application). The Commissioner of Inland Revenue haddeclined the 2003 application, however, as it was not accompanied by any proof ofpaternity or proof of birth. Ms Jones took no steps to establish paternity until 2016.[4] When considering the 2017 application, Inland Revenue officials took the viewthat s 19 of the Act required that Mr Lindsay's child support liability be backdated to1 These are not the parties' real names. Orders were made in the High Court prohibiting thepublication of the identity of Mr Lindsay, Ms Jones and their child: see Lindsay v Commissionerof Inland Revenue [2021] NZHC 830, [2021] NZFLR 351 [Judgment under appeal] at [1], n 1.Those orders remain in force. In this judgment, we use the pseudonyms for the parties that wereused in the High Court.the date of the 2003 application. Accordingly, in November 2017, the Commissionernotified Mr Lindsay that he had been assessed as owing almost $90,000 in backdatedchild support. This was a considerable shock to Mr Lindsay, given that he had notbeen informed of the 2003 application, a paternity order had only been made in 2017,and he was not in a financial position to pay such a large debt.[5] A belated objection by Mr Lindsay to the Commissioner's assessment wasrejected on the basis that it was out of time, although the Commissioner's view wasthat the objection had no merit in any event, based on her understanding of the Act.[6] Mr Lindsay subsequently filed judicial review proceedings in the High Court.Cooke J found that the Commissioner had misinterpreted the Act and set aside thebackdated component of the Commissioner's child support assessment.2The Commissioner now appeals that decision.[7] The Judge ordered the Commissioner to pay 2B scale costs to Mr Lindsay, witha 10 per cent uplift.3 The Commissioner appeals the imposition of the uplift.Mr Lindsay, on the other hand, cross-appeals the costs decision on the basis that theuplift should have been greater, or that indemnity costs should have been awarded.The statutory framework[8] Significant amendments were made to the Child Support Act 1991 by theChild Support Amendment Act 2013 (the CSAA), which came into force on1 April 2015. However, transitional provisions in the CSAA provided, in effect, thatthe changes made to pt 1 of the Act (which relates to the formula assessment of childsupport) would not apply in relation to child support years prior to 1 April 2015, savefor certain specifically excluded sections (none of which are relevant here). Anyreferences in this judgment to provisions of pt 1 of the Child Support Act (ss 5–27)accordingly refer to the law as it existed prior to 1 April 2015, unless otherwiseindicated. References to any other sections of the Act are to the current version of theAct, unless otherwise indicated.2 Judgment under appeal, above n 1.3 At [72].The purposes and objects of the Child Support Act[9] The objects or purposes of the Act are set out in s 4. Prior to the CSAA (whichmade some relatively minor changes to s 4) the objects and purposes included:(a) to affirm the right of children to be maintained by their parents;4(b) to affirm the obligation of parents to maintain their children.5(c) to provide that the level of financial support to be provided by parentsfor their children is to be determined according to their capacity toprovide financial support;6(d) to provide legislatively fixed standards for determining the level offinancial support to be provided by parents for their children;7(e) to ensure that equity exists between custodial and non-custodial parentsin respect of the costs of supporting children;8(f) to ensure that obligations to birth and adopted children are notextinguished by obligations to stepchildren;9 and(g) to ensure that the costs to the state of providing an adequate level offinancial support for children and their custodians are offset by thecollection of a fair contribution from non-custodial parents.104 Child Support Act 1991, s 4(a).5 Section 4(b).6 Section 4(d).7 Section 4(f).8 Section 4(h).9 Section 4(i).10 Section 4(j).Applying for a formula assessment[10] Pursuant to s 8 of the Act, an eligible custodian (as defined in s 8(2)) can applyfor a formula assessment of child support for a qualifying child. A child is a"qualifying child" if they meet the criteria set out in s 5 of the Act.11[11] Section 14 sets out the requirements that must be met for such an applicationto be "properly made". Amongst other things, the application must relate to aqualifying child,12 the applicant must be an "eligible applicant" under ss 8 or 10 ofthe Act,13 the application must be made in the approved form, verified supportingdocuments must be provided, and the application must contain proof that the personfrom whom child support is sought is a parent of the child. "Parent" is defined in s 7and includes a person who is named on the Register of Births as a parent of the child,or a person that a New Zealand Court has found to be a parent of the child.[12] Section 17 of the Act relevantly provides that the Commissioner:(a) shall accept an application for formula assessment if satisfied that theapplication is properly made (s 17(1)); and(b) may refuse to accept the application if not satisfied that it is properlymade (s 17(2)).[13] A refusal to accept an application is not final. Following refusal, an applicantmay provide further information to the Commissioner to remedy any deficiencies inthe original application, to enable the application to be accepted on the basis that it isproperly made. Subject to the exception discussed below, in such circumstancesliability will not commence until all of the required information has been provided.11 The applicable version of s 5 sets out four criteria for a "qualifying child": the child must be under19 years of age; the child must not be living with another person in a marriage, civil union orde facto relationship; the child must not be financially independent; and the child must be aNew Zealand citizen or ordinarily resident in New Zealand.12 Sections 14(1)(a) and 5.13 Section 14(1)(b). The term "eligible applicant" is defined in s 2 to mean "a person who is entitledto apply for a formula assessment of child support under section 8 or section 10". Section 8provides that a person may apply for child support if they are either the sole or principal providerof ongoing daily care for the child, or they share ongoing daily care of the child substantiallyequally with another person. Section 10 entitles a parent who wishes to pay child support to applyfor a formula assessment if they are not living with the custodian of the child.Specifically, s 18(d) provides that if the Commissioner accepts an application forformula assessment of child support, child support commences to be payable fromwhichever is the later of:14(i) the day on which the application is received by the Commissioner; or(ii) if the application is refused under section 17(2) , the day on whichthe application is properly made.[14] Section 19 provides for an exception to this general rule. The application ofs 19 is the key issue in this case. The section provides as follows:19 Commencement of liability of person declared to be parent afterapplication madeNotwithstanding section 18 of this Act, where the Commissioner isunable to accept an application for formula assessment ofchild support in respect of a child because at the time the applicationwas made the Commissioner was not satisfied that the person fromwhom payment of child support is sought is a parent of the child, andsubsequently—(a) a court declares the person to be a parent of the child; or(b) the person is declared to be a parent of the child by an ordermade by a court or a public authority in an overseasjurisdiction,—child support is payable by the person in respect of the child from theday on which the application was received by the Commissioner.[15] Section 19 therefore provides a narrow exception to the general rule thatliability for child support will only commence when an application is properly madein terms of s 14. The exception only applies where the reason that the originalapplication was not properly made is that the applicant had not established to thesatisfaction of the Commissioner that the person from whom child support is soughtis a parent of the child.[16] If the Commissioner refuses to accept an application for child support, s 21requires the Commissioner to immediately notify the applicant. Section 21 does not,however, impose a corresponding obligation to notify the person from whom child14 Section 18(d).support is sought. In contrast, if the Commissioner accepts an application, theCommissioner must immediately notify both the applicant and the person from whomchild support is sought.15Assessing the quantum of child support[17] If the Commissioner accepts an application, the Commissioner must thenassess the quantum of child support in accordance with the formula set out in the Act.Objections to an assessment[18] Parts 6 and 6A of the Act set out the procedures for objecting to an assessmentor seeking a departure from it. Additionally, pt 7 of the Act sets out the appealpathways from decisions on objections under pts 6 and 6A.[19] Decisions to make a formula assessment, or to refuse to make a formulaassessment, are "appealable decisions".16 Any person affected by an appealabledecision may make an objection to it within 28 days,17 although the Commissioner hasa discretion to consider late objections.18 The Act provides a right of appeal to theFamily Court if the Commissioner disallows an objection.19[20] The Act also allows a liable parent to apply for a child support review (alsoknown as an administrative review) if they consider the formula assessment made bythe Commissioner should be departed from because it does not take into account theirspecial circumstances.20 The grounds on which such an application can be made areset out in the Act.2115 Sections 22 and 23.16 Section 90(1)(a).17 Sections 90(2) and 92(1).18 Section 92(2).19 Section 102.20 See generally pt 6A.21 Sections 96C and 105(2).The High Court decision[21] The Judge identified the key issue as being whether the 2017 applicationreactivated the 2003 application, such that liability could be backdated to that date.22He concluded that this was not the case, on two alternative bases:(a) The phrase "unable to accept" in s 19 has a different meaning to thephrase "refuse to accept" which is used in s 17 and cross-referenced ins 18.23 Here, the Commissioner had not been "unable to accept" the2003 application. Rather, the Commissioner had declined or refused toaccept it, because Ms Jones had stated in her application that she wasnot pursuing paternity proceedings. Section 19 therefore did notapply.24(b) Alternatively, interpreted purposively, s 19 only applies where theoriginal application is still live at the time that proof of parentage isprovided. Here, the 2003 application did not remain live beyond 2006,when Ms Jones advised the Commissioner that she was no longerreceiving social welfare for the child and was not pursuing any childsupport application.25 The Judge noted that one of the objects ofthe Act is to ensure that the costs to the state of providing an adequatelevel of financial support for children and their custodians is offset bythe collection of a fair contribution from non-custodial parents, butfound that that object had no application in this case. There had beenlimited cost to the state, as Ms Jones was only on a benefit forthree years out of 14. In the Judge's view:26The State is demanding that Mr Lindsay contribute tofinancial support that has largely not been provided. That isa strong reason against the Commissioner's interpretationprevailing.22 Judgment under appeal, above n 1, at [31].23 This interpretation is developed at [33]–[40].24 At [31(a)].25 At [31(b)]. The Judge elaborated his analysis at [45]–[53].26 At [51].[22] It is worth noting at this stage that the Judge appears to have been under themisapprehension that the entirety of the backdated child support that had been assessedwould go to the state. That is not the case, however. The state would only be entitledto retain that portion of the child support debt relating to the three years whenMs Jones received a benefit, in accordance with the regime for deductions set out ins 142. Ms Jones would be entitled to receive the balance of the funds.27[23] The Judge rejected the Commissioner's submission that judicial review reliefshould not be granted in any event, because Mr Lindsay had not properly exercisedhis rights of objection under the Act and there were other factors militating againstrelief.28[24] The Judge ultimately declared that the child support assessment was invalid tothe extent that it backdated Mr Lindsay's liability.29 Mr Lindsay was awarded scalecosts on a 2B basis, with a 10 per cent uplift.30Issues on appeal[25] The following issues arise on appeal:(a) Did the Judge err in his interpretation of s 19? Specifically:(i) Was the Judge correct to find that s 19, interpreted purposively,only applied to a live child support application, and thatthe 2003 application was no longer live as at 2017, when theCommissioner backdated child support liability to 2003?(ii) Was the Judge correct to find that s 19 did not apply because thephrase "unable to accept" in s 19 differs in meaning to thephrase "refuse to accept" used elsewhere in pt 1 of the Act?27 Child Support Act, ss 141–142.28 Judgment under appeal, above n 1, at [67].29 At [68]. Leave was reserved as to the precise formulation of the declaration.30 At [72].(b) Should the Judge have exercised his discretion not to grant relief on thebasis that Mr Lindsay had not properly exercised his rights of objectionunder the Act?(c) Was the costs award appropriate in all the circumstances?Was the 2003 application still live as at 2017?[26] We first consider the factual issue of whether the 2003 application was still liveas at 2017, before turning to consider whether, correctly interpreted, s 19 only appliesto live child support applications.Further relevant facts[27] At the time of the child's birth, Ms Jones (who had two older children) was inreceipt of a sole parent benefit. Section 9 of the Child Support Act accordinglyrequired Ms Jones to "apply for a formula assessment of child support in relation toany person who is a liable parent of the child". At the relevant time, s 70A of theSocial Security Act 1964 directed a mandatory reduction in the domestic purposesbenefit (since replaced by the sole parent support benefit) for any beneficiary whofailed to make the required application for formula assessment of child support. Giventhat Ms Jones took no steps to pursue obtaining child support from Mr Lindsay afterfiling the application, it seems that her motivation for making the application may wellhave been to attempt to comply with her obligations under s 9 of theChild Support Act, and thereby minimise the risk of her benefit being reduced.[28] Inland Revenue's application form for a formula assessment included thefollowing question:If the birth father is not registered as the parent, is paternity action beingtaken?Ms Jones responded "no" to this question.[29] Inland Revenue's computer system records that the Commissioner "declined"the 2003 application on 15 October 2003, on the basis that no proof of paternity orproof of birth had been provided.31 Both Ms Jones and Work and IncomeNew Zealand (WINZ) were promptly notified of this decision. Ms Rountree, acustomer service officer at Inland Revenue who provided evidence on behalf of theCommissioner, explained that notification to WINZ was required when an applicantfor child support was in receipt of a social welfare benefit. Presumably this was linkedto the statutory requirement that a sole parent's social welfare benefit be reduced whensuch an application had not been made.[30] Matters rested there for almost three years, until 20 September 2006, whenMs Jones telephoned Inland Revenue to advise that she had recently cancelled hersole parent benefit and wished to inquire about child support going forwards.The significance of this change in circumstances was that for the period whenMs Jones was receiving a benefit, any child support payments would be retained byInland Revenue in accordance with s 142 of the Child Support Act and used to offsetthe financial support being provided by the state. However, once Ms Jones stoppedreceiving a benefit, any child support payments received by Inland Revenue from theliable parent would be passed on to her directly.[31] Inland Revenue's file note of the 2006 phone conversation with Ms Jonesstates that Ms Jones was advised (amongst other things) that if the non-custodialparent did not pay child support, then she would not be paid child support. Thefile note records that she was "OK with this".[32] Ms Jones did not contact Inland Revenue in relation to the child for almost10 more years. However, on 5 April 2016, when the child was 12 years old, Ms Jonescontacted Inland Revenue and queried how to apply for child support for the child.Inland Revenue's file note of that conversation records that Ms Jones was advised thatshe would need to fill out an application form and provide proof of parentage. Shewas informed that child support would be payable from the day that any suchapplication was received.31 Ms Rountree, a customer service officer at Inland Revenue, deposed that the failure to provideproof of birth was subsequently remedied when Ms Jones provided the Commissioner with a birthcertificate for the child in late November 2003 as part of a separate application forFamily Assistance. The High Court Judge considered that this did not prevent s 19 from operating:see [26]–[28] of the Judgment under appeal, above n 1.[33] Ms Jones then commenced paternity proceedings against Mr Lindsay.Although he initially opposed the application, as he did not accept that he was thechild's father, he did agree to undertake a DNA test. When this established thatMr Lindsay was the child's father, he agreed to the Family Court making a paternityorder, by consent, on 26 October 2017.[34] On 20 November 2017, Ms Jones filed the 2017 application, accompanied bythe paternity order. Inland Revenue's view was that s 19 of the Act requiredMr Lindsay's child support liability to be backdated to the date of the2003 application. Ms Jones was advised of this decision on 22 November 2017.Mr Lindsay was advised of the decision, and the fact that he owed almost $90,000 inbackdated child support, shortly afterwards.Was the 2003 application still live in 2017?[35] The Commissioner challenges the Judge's finding that the 2003 applicationwas no longer live beyond 2006 (at the latest). In our view, however, that conclusionis well supported by the evidence.[36] As noted at [27] above, it appears likely that the 2003 application wasprompted by s 9 of the Act, which required Ms Jones to apply for a formula assessmentfor child support, as she was receiving social welfare assistance at that time.The 2003 application, therefore, appears to have been largely pro forma in nature.There was little or no incentive for Ms Jones to pursue the 2003 application at the timeit was made, as any child support payments made by Mr Lindsay would be retainedby the state to offset the cost of Ms Jones' benefit.[37] After September 2006, however, Ms Jones was no longer in receipt of asole parent benefit. This change in circumstances provided Ms Jones with a strongincentive to pursue an application for child support, as it meant that going forwardsMs Jones, rather than Inland Revenue, would receive any child support payments thatwere made.32 Ms Jones was aware from 2003 onwards that Mr Lindsay would not beliable to pay child support unless she established that he was the child's father, as her32 Child Support Act, s 141.2003 application had been declined on the basis that proof of paternity had not beenprovided. Ms Jones was further advised in 2006 that if the non-custodial parent didnot pay child support, then she would not be paid child support. She toldInland Revenue in 2006, however, that she was "OK with this". The truth of thatstatement is borne out by the fact that Ms Jones did not take any further steps to obtainchild support from Mr Lindsay for almost 10 years.[38] In April 2016 Ms Jones contacted Inland Revenue again, following which shetook paternity action against Mr Lindsay. The available records indicate neitherMs Jones nor the Inland Revenue staff member she spoke to considered the 2003application to still be live. Instead, Ms Jones was advised to file a new application,which she did.[39] Based on this evidence it seems likely that the 2003 application was filedsimply to comply with statutory requirements at the time, and Ms Jones did not intendto pursue it from the outset. However, even if there is room for any doubt regardingMs Jones' intentions as at 2003, there can be no doubt that the 2003 application wasno longer live (and had been abandoned by Ms Jones) after 2006. Despite having astrong financial incentive to pursue an application for child support from Mr Lindsayat that time, Ms Jones clearly made a conscious decision not to do so. The Judge wasaccordingly correct, in our view, to find that the 2003 application was no longer liveafter 2006 (at the latest).33Does section 19 only apply to "live" child support applications?[40] Having found that the 2003 application was no longer live as a matter of fact,it is necessary for us to consider whether, correctly interpreted, s 19 only applies tolive child support applications.[41] The Commissioner's position is that backdating of child support is requiredwhenever there has been a prior application for a formula assessment, no matter howlong ago that application was made, and regardless of whether it was pursued orsubsequently abandoned. On the other hand Mr Maassen, counsel for Mr Lindsay,33 Judgment under appeal, above n 1, at [45]–[48].supported the Judge's conclusion that s 19, interpreted purposively, can only apply toa prior application that is still "live".Relevant principles of statutory interpretation[42] The meaning of an enactment must be ascertained from its text and in light ofits purpose and context.34 Where an enactment can be given a meaning that isconsistent with the rights and freedoms in the New Zealand Bill of Rights Act 1990,that meaning is to be preferred.35 As the Judge observed, the adoption of a purposiveapproach to statutory interpretation means that provisions should be interpreted tomake them work as Parliament must have intended, particularly when they form partof an overall scheme.36Text of s 19[43] Section 19 provides that, when the Commissioner is unable to accept anapplication for formula assessment due to lack of proof of parentage, and proof ofparentage is subsequently provided, child support "is payable by the person in respectof the child from the day on which the application was received by the Commissioner".The provision does not set out any time limit within which the custodial parent musttake steps to obtain proof of parentage. However, as noted above, the wording of theprovision is not of itself determinative. For the reasons set out below, it is our viewthat when the section is considered purposively and in light of the statutory context, itmust be limited to applications which are still live.The purpose of the s 19 exception[44] Before turning to consider the scheme of the Act more broadly, it is helpful toconsider the purpose of the s 19 exception. As explained above, the default positionwhen an application has been refused under s 17(2) is that liability for child supportwill only commence when an application is "properly made" (in other words, all of34 Legislation Act 2019, s 10(1). References to the provisions of the Child Support Act at [40]–[65]of this judgment are to the pre-2015 legislation unless otherwise specified.35 New Zealand Bill of Rights Act 1990, s 6.36 Judgment under appeal, above n 1, at [15] citing Northland Milk Vendors Association v NorthlandMilk Ltd [1988] 1 NZLR 530 (CA) at 537–538, and Douglas White "A Personal Perspective onLegislation: Northern Milk Revisited – Soured or Still Fresh?" (2016) 47 VUWLR 699.the information and supporting documentation required by s 14 has been provided).37Section 19 provides an exception to this general rule. Where the deficiency in anapplication is that the applicant has failed to provide proof of parentage, and parentageis later established, liability will commence on the date the application was filed, ratherthan the date on which the application is "properly made".[45] We accept the submission made by Ms Deligiannis, counsel for theCommissioner, that the s 19 exception reflects a recognition by Parliament that it canbe difficult to obtain proof of parentage and the process can be, as Ms Deligiannisdescribed it, "long fought out and often laborious". In the absence of s 19, potentiallyliable parents would be incentivised to delay and frustrate any attempt to establishproof of parentage, as this would defer the commencement of their obligation to paychild support.[46] Apart from proof of parentage, all of the other information required for anapplication to be "properly made" under s 14 is within the control of the applicant.It therefore makes sense that the applicant should bear the consequences of any delayin providing such information to the Commissioner. Establishing proof of parentage,however, is not a matter that is within the sole control of the applicant — rather, itrequires the involvement of the other parent, who may be unwilling to cooperate inattempts to establish parenthood. Accordingly, if the person the applicant names asthe liable parent is eventually proved to be the liable parent, it is reasonable for theirliability be backdated to the date of the application.[47] The facts of this case, however, do not fall within the scope of the purpose forwhich the s 19 exception was enacted. The delays here were not due to the liableparent, but to the custodial parent who, in 2003 (and subsequently) elected not to takesteps to obtain proof of paternity. As Mr Maassen observed, the 2003 application didnot become defunct by error or oversight, but as a result of Ms Jones' intentionaldecision not to take steps to prove the essential statutory requirement for a formulaassessment, for most of the child's childhood.37 Child Support Act, s 18(d)(ii).The objects and overall scheme of the Act[48] As noted above, the objects of the Act at the relevant time included ensuringthat the level of financial support to be provided by parents for their children is to bedetermined according to their capacity to provide financial support38 and, further, toprovide legislatively fixed standards for determining the level of financial support tobe provided by parents for their children.39[49] The scheme of the Act does not envisage the custodial parent or carer seekinga lump sum backdated payment of child support many years after the costs wereincurred. Rather, the parents' capacity to provide financial support is assessedannually, on the basis of the liable parent's taxable income for the immediatelypreceding tax year.40 The due date for initial payment by the liable parent willgenerally be 30 days after the issue of a notice of assessment,41 and on the 20th day ofthe month for every month after that.42 Subsequent child support years are similarlyassessed. A close temporal connection between the carer's ongoing daily care of thechild, and the liable parent's obligation to pay child support, is apparent throughoutthe Act.[50] The scheme of the Act therefore enables carers to receive ongoing financialsupport for a child's maintenance as and when it is needed. It also enablesliable parents to manage their financial affairs in real time, with knowledge of theextent of their child support obligations. For the liable parent, child supportobligations may impact on numerous financial decisions throughout their period ofliability including decisions regarding discretionary expenditure, appropriate debtlevels and financial risk, whether to provide financial support to other family members(including elderly parents, siblings or adult children) and so on.[51] The Act's emphasis on timeliness is apparent in the duties imposed on theCommissioner to make and notify decisions, or to take other steps under the Act, either38 Section 4(d).39 Section 4(f).40 See s 29.41 Section 133(1)(b).42 Section 132(1)."immediately" or "as soon as practicable".43 Similarly, the liable parent is required toexercise their rights under the Act (including in relation to objections, appeals,departure applications, notifying changed circumstances and so on) in accordancewith strict timeframes.44 Where a person was not aware of their potential child supportliability, however, and subsequently receives an assessment backdated for many years,their ability to challenge such an assessment may well be compromised due to relevantinformation and documentation no longer being available.[52] As the Judge noted, when viewed holistically the assessment, notification andobjection provisions demonstrate that there is "an emphasis on procedural fairness" inthe Act, including in relation to the liable parent.45 The Judge considered this wasconsistent with the presumption of interpretation that Parliament does not legislate ina manner inconsistent with fundamental rights.46 Fundamental rights include, ofcourse, the right to procedural fairness, or natural justice, as enshrined in s 27(1) ofthe New Zealand Bill of Rights Act.[53] We agree with the Judge's analysis. In our view there is considerable force inMr Maassen's submission that it would cut across Mr Lindsay's right to proceduralfairness to backdate his child support liability for 14 years in reliance on an applicationmade in 2003 that he was not notified of and which was effectively abandoned by2006 (at the latest).[54] The penalties regime included in the Child Support Act furnishes an exampleof the potentially severe consequences which may arise if child support liability isbackdated many years, as occurred in this case. At the time the Commissionerassessed Mr Lindsay's liability in 2017, the penalties regime under the Act wasdraconian47 (although the severity of the regime has since been reduced somewhat).43 See for example the following provisions in the pre-2015 legislation: ss 21, 22, 23, 24(1)(a) and24(1)(b), 38A(3), 39(3), 41(4), 43(3), 60(1), 61, 66A, 69(1)(a) and 69(1)(b), 86, 88, 89, 89I, 89J,89Z, 89ZB, 93, 96V, 96Y(4), 99(6), 100(5), 101(5), 102(5), 103(5), 103E, 107(1), 109(5), 111(1),113(5), 114, 116, 151, 264(3), and 267(3).44 See generally pts 6 and 6A.45 Judgment under appeal, above n 1, at [37].46 At [37] and [17], citing New Health New Zealand Inc v South Taranaki District Council [2018]NZSC 59, [2018] 1 NZLR 948 at [292]–[293] per Elias CJ; and R v Secretary of State for theHome Department, ex parte Simms [2000] 2 AC 115 (HL) at 131 per Lord Hoffmann.47 Prior to 1 April 2021, s 134 of the Child Support Act imposed penalties for late payments on liableparents if they did not meet their initial child support obligations. Penalties within the first monthViewed purposively, the intent of the penalties regime is obviously to keep fundsflowing for the child's maintenance by putting pressure on the liable parent to meettheir child support obligations in a timely fashion. This makes sense where childsupport is assessed annually in accordance with a formula designed to calibrate childsupport payments at a level that is affordable for the liable parent. Here, however,Mr Lindsay was assessed at the end of November 2017 as owing almost $90,000 inbackdated child support for a period of 14 years. He was informed that $4,965.70 ofthat debt was due on 22 December 2017, and the remaining $84,736.55 was due thefollowing day, 23 December 2017. He had no ability to pay such a large debt withinthat timeframe. Failure to pay, however, exposed Mr Lindsay to liability for verysignificant penalties, which would continue to accumulate incrementally until the debtwas paid. Indeed, that is what occurred in this case: by 18 May 2018, within sixmonths of the initial assessment of Mr Lindsay's liability, his debt (including penalties)had increased to $106,116.05. Although it is not clear what Mr Lindsay's net incomefor the 2018 financial year was, he deposed that in 2019 it was only $20,000. Relieffrom his ballooning child support debt, however, was entirely dependent on theexercise of the Commissioner's discretion.48[55] As the Judge noted, "the more surprising or unreasonable the implications of aparticular interpretation are the less likely it will be considered to be what Parliamentintended".49 Expressed another way, courts are entitled to act on a presumption thatwhatever Parliament may have intended, it could not have meant to produce an absurdof failure to pay were called initial penalties and were charged in two stages. The first stage wasthe greater of two per cent of the outstanding amount or $5, and became payable the day after thedue date (s 134(2)). The second stage was the addition of another eight per cent of the outstandingamount (excluding penalties) eight days after the due date (s 134(3)). If the initial penalties werenot paid, incremental penalties were then added to the outstanding balance (including penalties)for each month the amount remained outstanding. Beginning one month after the due date, andcontinuing for the following 11 months, the incremental penalties were two per cent of theoutstanding amount, including penalties (s 134(4) and 134(5)). Subsequently, the penalty wasone per cent of the outstanding amount including penalties each month (s 134(6)).48 Sections 135FA and 135A of the Act (as at the date of Mr Lindsay's assessment) gave theCommissioner discretion to provide relief from the payment of these incremental penalties bywriting off all or part of a penalty, or refunding penalties which had been fully or partially paid,but this was dependent on the liable parent entering into a child support debt payment arrangement.The Commissioner could exercise this discretion if satisfied that recovery of the penalties wouldplace the liable person in serious hardship, or that it would be fair and reasonable to grant relief.Mr Lindsay eventually entered into such an arrangement and the Commissioner then exercisedher discretion to progressively write off the incremental penalties provided Mr Lindsay adheredto the payment plan in place.49 Judgment under appeal, above n 1, at [18].or unjust result brought about by an overly literalistic application of its words.50 Here,the draconian (and unjust) penalty consequences of the Commissioner's interpretationof s 19 provide further support for the view that Parliament cannot have intended aliteral application of the section in this case.Conclusion[56] The Judge was correct, in our view, to find that the s 19 exception only applieswhere the original application is still live, not where an applicant has elected not topursue it and thereby abandoned it. This interpretation is supported by an analysis ofthe purpose of the s 19 exception, the objects of the Act, and the scheme of the Act asa whole. The 2017 application was therefore the relevant application for the purposesof assessing Mr Lindsay's liability, and the Commissioner was not entitled to backdateMr Lindsay's child support liability to the date of the 2003 application.Was the Judge correct to find that the term "unable to accept" in s 19 differed inmeaning to the term "refuse to accept" used elsewhere in pt 1 of theChild Support Act?[57] Given our conclusion that the Judge was correct to find that s 19 only appliesto live applications, and that the 2003 application was no longer live after 2006, it isnot strictly necessary for us to consider the other basis on which the Judge concludedthat Mr Lindsay's child support liability could not be backdated. Given that the matterwas fully argued before us, however, we will make some brief observations on thisaspect of the appeal.[58] Section 19 refers to the Commissioner being "unable to accept" an application,in contrast to s 17, which uses the phrase "refuse to accept", and s 18, which uses thephrase "refused" and cross-references s 17(2). The Judge considered that there was alinkage between the wording of s 17(2), which provided that the Commissioner "mayrefuse" to accept an application, and the wording of "unable to accept" in s 19.51 Takentogether, the Judge considered that those provisions indicated the existence of a third50 See generally Ross Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis,Wellington, 2021) at 260–261 and 442–446; and Thomas Joseph Statutory Interpretation(online ed, Thomson Reuters) at [LE10.01]–[LE10.02], [LE10.05]–[LE10.06] and [10.08]–[10.09].51 Judgment under appeal, above n 1, at [35] and [38].category of applications which are neither accepted nor refused; rather the decisionwhether to accept or refuse the application is deferred to allow the applicant to rectifythe deficiency in the original application. Section 19, in the Judge's view, was onlyintended to apply to applications which fell into this third category, that is, they hadnot yet been accepted or rejected by the Commissioner.52[59] As noted above, Inland Revenue's application form for a formula assessmentincluded the following question:If the birth father is not registered as the parent, is paternity action beingtaken?Ms Jones responded "No" to this question. The Judge considered this statement to beadvice to the Commissioner by Ms Jones that she did not intend to pursue anyprocesses to identify Mr Lindsay as the liable parent.53 As a consequence, the Judgefound that the Commissioner had refused the application under s 17(2) (because therewas no prospect of paternity being proved) rather than treating the application as onewhich the Commissioner was unable to accept. Only the latter course, on the Judge'sanalysis, would have resulted in the application being held open pending proof ofpaternity.54[60] We accept Ms Deligiannis' submission that the Judge erred in finding thatMs Jones' negative response to the question "is paternity action being taken?" can betaken as a definitive statement that Ms Jones had no future intention of pursuing suchaction, given that the child was only 14 days old at the time the application was made.Rather, Ms Jones was simply confirming that paternity action had not (yet) been takenas at the date of making the application. She was not asked about her future intentions.Accordingly, even if (contrary to our view) a distinction can be drawn betweenapplications the Commissioner refuses to accept, and those she is unable to accept,nothing would turn on that distinction here. That is because the evidence does notsupport the conclusion that the Commissioner refused the application on the basis that52 At [39]–[40].53 At [44].54 At [39], [41] and [44].Ms Jones had categorically advised that she did not intend to pursue paternityproceedings.[61] In any event the statutory framework, in our view, does not support theconclusion that the phrase "unable to accept" in s 19 was intended to create a thirdcategory of applications that are neither accepted, nor refused, but simply put on holdto enable the applicant to provide more information. Rather, the statutory scheme isbinary — it envisages only two outcomes of the application process: acceptance orrefusal. The Commissioner must accept an application if satisfied it is properly made(s 17(1)) or may refuse to accept an application if not satisfied that it is properly made(s 17(2)). The latter decision is discretionary, hence (for example) if the deficiency inan application is immaterial, the Commissioner may elect to overlook it and accept theapplication. For example, if one of the supporting documents was not properlyverified, the Commissioner could choose to accept it regardless.[62] The binary nature of the two options available to the Commissioner is reflectedin the overall scheme of the Act, including ss 18 (liability arises on acceptance ofapplication), 19 (commencement of liability of person declared to be parent afterapplication made), and 21–23 (which are included under the heading "Procedure afteracceptance or refusal of application for formula assessment").[63] Decisions to accept an application, or refuse to accept an application, are"appealable decisions" in terms of s 90 of the Act, giving rise to rights of objection.55Similarly, the further appeal rights that are provided to the Family Court are linkedback to the decision by the Commissioner to either accept or refuse to accept anapplication.56 There are no rights of objection (or subsequent appeal) in the event thatthe Commissioner determines that she is "unable to accept" an application (if this isinterpreted as being something different to "refuse to accept"). This would obviouslypose a problem if, for example, the Commissioner determined that she was unable toaccept an application on the ground it was not properly made, and the applicant wishedto challenge that decision.55 Section 90(1)(a) and 90(1)(b).56 Sections 100 and 101.[64] Further, the scheme of the Act does not require that the Commissioner have anintermediate "unable to accept" option in order to put an application on hold pendingthe provision of further information. This is already provided for within the Act'sbinary decision-making framework. Section 18(d) clearly envisages that a "refusal toaccept" an application under s 17(2) on the basis that it has not been properly made isnot necessarily final. If the missing information or documents are subsequentlyprovided, an application can then be accepted. In our view the words "unable toaccept" in s 19 simply refer to the situation where the reason an application is unableto be accepted (and must therefore be refused) is that no proof of parentage has beenprovided.[65] We accordingly differ from the Judge on this aspect of his reasoning. Nothingturns on the issue, however, given that we agree with the other basis on which theJudge found for Mr Lindsay, namely that s 19 only applies to live applications, andthe 2003 application was no longer live after 2006.Should the High Court have declined to grant relief?[66] Ms Deligiannis submitted that, irrespective of its conclusions on thesubstantive issues, the High Court should have declined to grant relief, becauseMr Lindsay had not properly or fully exercised his objection and appeal rights underthe Act.Further relevant facts[67] When Mr Lindsay was issued with child support assessment notices inNovember 2017 he was notified of his right to object within 28 days,57 or apply for anadministrative review, or both. He was also advised that he could apply to theFamily Court under pt 7 of the Act for a departure order if he was not satisfied withthe Commissioner's decision on the administrative review.[68] Mr Lindsay promptly sought legal advice. His lawyer wrote to Inland Revenuein February 2018 seeking to understand why Mr Lindsay's liability had been57 Sections 91 and 92(1).backdated and asking when the relevant application for child support had been made.A copy of the 2003 application was provided in response, on 13 March 2018.Telephone discussions then took place between Inland Revenue officials, Mr Lindsay,and his lawyer. Following this, Mr Lindsay's lawyer requested further documentsfrom Inland Revenue in April 2018.[69] A further discussion took place between Mr Lindsay's lawyer andInland Revenue on 30 May 2018 regarding the backdating of liability. Mr Lindsay'slawyer raised various queries regarding the 2003 application and expressed concernthat Mr Lindsay had not been notified of it. Inland Revenue officials explained that atthat time there had been no requirement to notify a potential liable parent of such anapplication, but acknowledged that it was "highly unusual to receive a paternity orderdating back so far, in most cases it was received within 2–3 years".[70] On 12 September 2018, Mr Lindsay's lawyer wrote to Inland Revenue settingout the factual background from Mr Lindsay's perspective. Inland Revenue wasrequested to "review the exercise of the discretion to accept the application as'properly made' and or adjust the assessment under s 87". The letter further assertedthat:The approach taken by the Department to date has resulted in substantialinjustice to [Mr Lindsay] and in our view is unlawful as it is beingunreasonable and is in breach of the principles of natural justice and fairness.In conclusion, Inland Revenue was asked to advise if there were any other processesavailable to Mr Lindsay "to challenge or review the imposition of this child supportliability".[71] The Commissioner responded by letter dated 3 October 2018, stating thatInland Revenue was required by law to backdate the liability. Advice was given as tothe option of making a late objection to the assessment on the basis that the period ofliability was incorrect under s 91(1) of the Act. The letter stated that if the lateobjection was not accepted, Mr Lindsay could apply to the High Court for judicialreview. On the other hand, if the objection was accepted but disallowed, he couldappeal to the Family Court.[72] On 4 March 2019, Mr Lindsay signed a notice of objection under s 91(1) of theAct. For reasons that are not entirely clear, his lawyers did not forward this toInland Revenue until Thursday 16 May 2019. The following Tuesday, 21 May 2019,the Commissioner declined Mr Lindsay's objection on the basis it had been receivedwell outside the 28-day timeframe for raising objections. As noted above, the letteradvising Mr Lindsay that his objection had been declined also recorded that even ifthe objection had been filed within time, it would have been disallowed as s 19operated to backdate Mr Lindsay's child support liability to the date of the2003 application and the Commissioner had no discretion in the matter. Mr Lindsaywas informed that there were no further appeal or objection rights in respect of thematter under the Act. He was advised to seek legal advice as to any other options thatcould be available to him.[73] On 27 August 2019 Mr Lindsay's lawyer wrote to the Commissionerexpressing concern at the decision to reject Mr Lindsay's objection on the ground oflateness. Inland Revenue responded on 24 September 2019 advising that its view wasthat the legislation had been correctly interpreted and that it was unable to review thematter any further. Judicial review proceedings were subsequently filed in theHigh Court.The High Court decision[74] In the High Court Ms Deligiannis accepted that the Supreme Court decision ofTannadyce Investments v Commissioner of Inland Revenue58 did not directly apply asthere was no ouster clause in the present case. She submitted, however, that there wasgood reason why judicial review should not be permitted. Ms Deligiannis referred tothe judgment of Brown J in Lay v Commissioner of Inland Revenue, where the Judgefound that a liable parent could not defend enforcement proceedings by challengingthe assessments, as the correct procedure to challenge them was through the appealprocess set out in ss 91–95 of the Child Support Act.5958 Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR153.59 Lay v Commissioner of Inland Revenue [2015] NZHC 2962, [2016] NZFLR 603 at [15]–[17].[75] Cooke J found that there was "no substance in the Commissioner's argument"on the relief issue. Rather, the Judge observed that:60The right to challenge decisions by way of judicial review is a fundamentalright. It is affirmed by s 27 of the New Zealand Bill of Rights Act 1990.That right exists irrespective of whether there is a right of appeal – that isexpressly confirmed by s 16(3)(a) of the Judicial Review Procedure Act 2016.[76] The Judge acknowledged that there will be some cases where "the appeal routewould provide the obvious way in which decisions could be challenged, and thepursuit of judicial review could be seen as an abuse of process".61 He concluded,however, that that was not the case here. Indeed, he saw the case as one that was bestsuited for judicial review, given that it turns on questions of statutory interpretation.The statutory regime for objections and appeals was "not best equipped to deal withthe present issue".62 As for the decision in Lay v Commissioner of Inland Revenue,the Judge observed that it was directed to a different question:63It concerns the question of collateral challenge. It is not appropriate for aperson to challenge the legality of an assessment by resisting enforcement.An assessment is valid and effective unless and until it is set aside. The appealprocedure or judicial review proceedings are the appropriate avenues toaddress such challenges, not collateral challenges during enforcementproceedings.Should relief have been declined?[77] On appeal, the Commissioner advanced broadly the same arguments as wereadvanced in the High Court. While accepting that s 109 of the Tax Administration Act1994 (TAA), which was at issue in Tannadyce, did not apply to the child supportregime, Ms Deligiannis drew an analogy between that section and ss 83 and 84 of theChild Support Act.[78] Section 109 of the TAA is an ouster clause. It provides in subs (a) that exceptin objection proceedings under pt 8 or a challenge under pt 8A of the TAA, nodisputable decision may be disputed in a court or in any proceedings on any groundwhatsoever. It further provides in subs (b) that every disputable decision (and where60 Judgment under appeal, above n 1, at [57].61 At [59].62 At [59].63 At [61], citing Lay v Commissioner of Inland Revenue, above n 59.relevant all of its particulars) are deemed to be, and are to be taken as being, correctin all respects. Section 83 of the Child Support Act (headed "Evidence relatingto assessments") does not include an ouster clause similar to s 109(a) of the TAA, butis similar to s 109(b) in that it provides that the production of certain documents bythe Commissioner (including a notice of assessment) is conclusive evidence of theproper making of an assessment and, except in proceedings under ss 91–95 of the Act,that all particulars of the notice of assessment are correct.[79] Section 84 provides that except in an objection under ss 91–95 of the Act, thevalidity of an assessment is not affected by reason of the fact that any of the provisionsof the Act have not been complied with. This section does not appear to be directlyrelevant here, as Mr Lindsay does not allege that a particular provision (for example anotification requirement) of the Act has not been complied with.[80] In our view the following observations of the Supreme Court in H v Refugeeand Protection Officer (cited by Cooke J in the decision under appeal)64 are apt.Considering the availability of judicial review in the context of an ouster clause in theImmigration Act 2009, the Court stated:[63] Given the constitutional importance of judicial review, reinforced asit is by s 27(2) of the Bill of Rights Act, the courts approach privative clausescautiously and in particular will give anxious consideration to theirinterpretation and application. As noted in the reasons of the majority inTannadyce Investments Ltd v Commissioner of Inland Revenue, judges shouldbe slow to conclude that an ouster provision precludes applications to theHigh Court for judicial review alleging unlawfulness of any kind.65That caution is appropriate in this case. What is required is a construction ofs 249 that recognises Parliament's intention to prevent duplicativeproceedings but also preserves the ability of the Court to supervise the exerciseof public power and prevent injustice occurring when a statutory process failsbecause the decision-maker acts unlawfully and an injustice results.64 Judgment under appeal, above n 1, at [57]–[58], citing H v Refugee and Protection Officer[2019] NZSC 13, [2019] 1 NZLR 433 at [63] and [78].65 Tannadyce Investments Ltd v Commissioner of Inland Revenue, above n 58, at [56] per Blanchard,Tipping and Gault JJ, citing Bulk Gas Users Group v Attorney-General [1983] NZLR 129 (CA)at 133. The majority in Tannadyce held there was no need to strain to reconcile the ousterprovision in the Tax Administration Act 1994, s 109, with the general availability of judicial reviewbecause the challenge procedure in the Tax Administration Act had a built-in right for the taxpayerto take the matter to the High Court: at [57].[78] the privative clause [in this case] does not prevent the Court fromexercising its supervisory jurisdiction to ensure that the requirements ofthe Act are met and the applicant's claim is considered lawfully. Sincethe decision of the Court of Appeal in Bulk Gas Users Group vAttorney-General, it has been settled law that a privative provision does notnecessarily prevent scrutiny of a decision based on an error of law on the partof the decision-maker that is otherwise reviewable.66 The Court may strikeout review proceedings where the Court is satisfied that the available appealrights provide a more appropriate pathway to a remedy than might otherwisehave been sought in the review proceedings.67 But for the reasons given, thedeprivation of first instance determination as required by the statute could notbe remedied by the alternative pathway of appeal in the present case.[81] In our view Cooke J was correct to find that Mr Lindsay's resort to judicialreview was not an abuse of process.68 Mr Lindsay received assessments for 14 yearsof backdated child support on 24 November 2017 and 27 November 2017, in relationto a child whose paternity had only been formally established the previous month.Mr Lindsay was provided with little or no explanation as to why the assessment hadbeen backdated to 2003. He was told he had to lodge an objection by22 December 2017 in respect of the first notices he received, and by25 December 2017 in respect of the remainder.[82] The prospect of Mr Lindsay being able to obtain legal advice on a matter ofsuch factual and legal complexity and lodging a properly informed objection withinthe statutory timeframe was negligible. By the end of December, however,Mr Lindsay had lost the ability to object to the notices of assessment as of right. Hewas entirely dependent on the Commissioner exercising her discretion to allow a lateobjection under s 92(2) of the Child Support Act.[83] Although there were significant delays in eventually filing an objection, thisappears in to have been due in large part to the difficulties Mr Lindsay's lawyers hadin gaining an understanding of the Commissioner's reasons for backdating theassessment. Further, as noted above, on 3 October 2018 Inland Revenue expressly66 Bulk Gas Users Group v Attorney-General, above n 65.67 As occurred in Tannadyce Investments Ltd v Commissioner of Inland Revenue, above n 58. Seealso Love v Porirua City Council [1984] 2 NZLR 308 (CA) where an application for judicialreview of a decision of the Council was struck out, the Court having concluded that a claim ofdefect in the decision was appealable and capable of satisfactory resolution on appeal.68 Judgment under appeal, above n 1, at [59]–[61].advised Mr Lindsay that if he made a late objection that was not accepted, he couldapply to the High Court for judicial review.69[84] At the time his objection was rejected for lateness, Mr Lindsay was informedby Inland Revenue officials that there were no further appeal or objection rights underthe Act and that he should "seek legal advice as to any other options that may beavailable to [him]". Mr Lindsay did so, following which the judicial reviewproceeding was filed. Mr Lindsay and his lawyers understood judicial review to bethe only realistic option still available to Mr Lindsay. Further, as the Judge pointedout,70 the issues raised are eminently suitable for judicial review. We also note thatthe Commissioner appears to have previously accepted that there is not an absolutebar to judicial review proceedings in relation to decisions under the Act. For example,in P (CA85/2019) v Commissioner of Inland Revenue Ms P initially sought tochallenge a decision of the Commissioner under the Act by way of judicial review.71Subsequently, Ms P also sought to exercise her statutory right of appeal to theFamily Court. The Commissioner applied to strike out Ms P's appeal to theFamily Court as an abuse of process. The judicial review application was determinedon its merits, without any apparent objection to that course by the Commissioner.72[85] For the reasons outlined, it is our view that the Judge was correct to rejectthe Commissioner's submission that the High Court should have declined to grantrelief.Was the costs award appropriate?[86] The Judge declined Mr Lindsay's request for an award of indemnity costs,finding that the high threshold for such an award had not been met.7369 Ms Deligiannis submitted that the correct interpretation of the relevant letter is that Mr Lindsaywas being advised that he could apply to the High Court to judicially review any decision by theCommissioner not to accept the objection due to its lateness — not that he could apply to theHigh Court for a judicial review of the Commissioner's substantive decision regarding theapplication of s 19. However, the letter is ambiguous and that is not how either Mr Lindsay or hislawyers understood it.70 At [59].71 See P v Commissioner of Inland Revenue [2019] NZHC 98, [2018] NZFLR 956; andP (CA85/2019) v Commissioner of Inland Revenue [2019] NZCA 531, [2019] NZFLR 322.72 P (CA85/2019) v Commissioner of Inland Revenue, above n 71, at [18], n 28.73 Judgment under appeal, above n 1, at [69].[87] Mr Lindsay was instead awarded costs on a 2B scale basis, with an uplift of10 per cent pursuant to r 14.6(3)(c) of the High Court Rules 2016.74 That rule providesthat increased costs can be awarded if a proceeding is of general importance to personsother than the parties, and it was reasonably necessary for the party claiming costs tobring the proceeding in the interests of those affected. The Judge found that this ruleapplied because the Commissioner had argued the case as a matter of principle, on thebasis that she had no discretion. Further, she had provided very little evidenceconcerning Mr Lindsay's individual circumstances.75 Mr Lindsay had therefore beenrequired to bring the proceedings to challenge an interpretation by the Commissionerrelevant to the question of backdated child support generally.[88] Mr Maassen submitted that the Judge should have awarded Mr Lindsay eitherindemnity costs or an uplift of at least 75 per cent on the basis that the Commissioner'sclaim was unsustainable; it was pursued as a point of principle; the issues werecomplex; the Commissioner made unmeritorious arguments; and there was a need toensure access to justice as there was a power disparity between the parties.[89] There is no evidence of any conduct on the part of the Commissioner whichwould meet the high threshold for an award of indemnity costs.76 For example, thereis nothing to suggest that the Commissioner acted other than in good faith in exercisingher statutory role according to the law. She interpreted the relevant legislation andapplied her interpretation of the law to the facts before her when making the relevantassessments. The issue is therefore whether increased costs are appropriate and, if so,what the appropriate uplift should be.[90] As noted above, the Judge relied on r 14.6(3)(c) of the High Court Rules asjustifying increased costs. That category generally applies where proceedings arebrought in the public interest or to determine an issue of public importance.7774 At [72].75 At [70]–[72].76 As set out in Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400.77 Robert Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at[HR14.6.02(3)(b)], citing New Zealand Maori Council v Attorney-General HC WellingtonCP942/88, 28 April 1995 at 4; Auckland Council for Civil Liberties v Attorney-GeneralHC Auckland CP452/93, 10 November 1993; and Whangamata Marina Society Inc vAttorney-General (2006) 18 PRNZ 565 (HC).Here, there is nothing to suggest that Mr Lindsay was motivated to bring hisproceeding in the public interest, or to determine an issue of public importance.He was solely concerned (and appropriately so) with challenging his own childsupport liability. As for the Commissioner, we accept Ms Deligiannis' submission thatthis case was not run as a matter of principle. Rather, the Commissioner defended theproceeding on the basis that she had correctly applied the law to Mr Lindsay'sassessment, and that those assessments are valid.[91] This proceeding largely turns on the interpretation of the Child Support Act asit stood prior to the 2015 amendments. The relevant provisions have since beenrepealed or significantly amended. This appeal is therefore likely to have limitedprecedential effect. In our view neither of the requirements of r 14.6(3)(c) are met.Other than the usual importance to the public of judicial decisions on theCommissioner's interpretation of the Inland Revenue Acts, there is no evidence thatthis proceeding is of importance to persons other than the parties involved, or that itwas reasonably necessary for Mr Lindsay to bring the proceeding in the interests ofthose affected. As for the lack of evidence regarding Mr Lindsay's individualcircumstances, as Ms Deligiannis pointed out, the Commissioner provided all of theevidence that was still available, given the lapse of time.[92] It follows, in our view, that the Judge erred in uplifting the 2B scale costsaward by 10 per cent.Costs on the appeal and the cross-appeal[93] Both parties have had some success on appeal: Mr Lindsay has succeeded onthe substantive statutory interpretation issues, and the Commissioner has succeededon the costs appeal.[94] Overall, however, we consider that Mr Lindsay has been the substantiallysuccessful party. Further, most of the preparation time would have been focussed onsubstantive issues rather than costs issues. This was also reflected at the appealhearing, where the key focus was on the substantive appeal rather than the costs appealand cross-appeal.[95] Taking these matters into account we determine that it would not be in theinterests of justice for both parties to receive an equal award of costs in respect of theirsuccessful appeals. Rather, the appropriate course is for Mr Lindsay's costs award tobe reduced by twenty per cent to reflect the fact that the Commissioner was successfulon the costs appeal.[96] Ordinarily each party would be entitled to disbursements in respect of theirsuccessful appeal. In practical terms these are likely to cancel each other out, however,and we accordingly make no order as to disbursements.Result[97] The Commissioner's substantive appeal is dismissed.[98] The Commissioner's costs appeal is allowed. The 10 per cent costs upliftawarded in the High Court is set aside and substituted for an order that theCommissioner must pay Mr Lindsay's costs in the High Court on a 2B basis. If theparties are unable to agree the quantum of 2B scale costs that issue is to be determinedin the High Court.[99] Mr Lindsay's cross-appeal on costs is dismissed.[100] The Commissioner must pay Mr Lindsay eighty per cent of costs for a standardappeal on a band A basis.Solicitors:Crown Law Office, Wellington for AppellantWadham Partners, Palmerston North for Respondent