NIWA v THE COMMISSIONER OF INLAND REVENUE [2019] NZHC 853

NIWA v THE COMMISSIONER OF INLAND REVENUE [2019] NZHC 853 [17 April 2019]IN THE HIGH COURT OF NEW ZEALANDNEW PLYMOUTH REGISTRYI TE KŌTI MATUA O AOTEAROANGĀMOTU ROHECIV 2019-443-9[2019] NZHC 853BETWEEN DONALD JAMES NIWAApplicantAND THE COMMISSIONER OF INLANDREVENUERespondentHearing: On the papersCounsel: Applicant in PersonJudgment: 17 April 2019JUDGMENT OF ELLIS J[1] On 3 April 2019 the Registry accepted for filing a "statement of claim" fromMr Niwa. It did not, however, release the notice of proceeding and attachedmemorandum for service. Rather, the claim was referred to me as Duty Judge underr 5.35A of the High Court Rules 2016 (HCR) on the basis of the Registry's belief that,on the face of the proceeding, it is "plainly an abuse of the process of the court".[2] If I agree with the Registry's assessment, then r 5.35B confers on me the power(amongst others) to strike the proceeding out.Mr Niwa's claim[3] Mr Niwa's claim is stated to be an application for judicial review. It clearlyrelates to a decision in the District Court in relation to debt proceedings brought bythe Commissioner of Inland Revenue (the Commissioner) for outstanding income taxand GST, late payment penalties and use of money interest.1 Judge Hinton struck outMr Niwa's counterclaim and defence to that claim and ordered judgment for theCommissioner. He did so essentially on the basis that:(a) Mr Niwa's counterclaim and defence were predicated on whatJudge Hinton described as challenges to the sovereignty of Parliamentand to the jurisdiction of the courts;2(b) Mr Niwa was, in any event, unable to challenge the validity orcorrectness of the assessments forming the basis of the Commissioner'sclaim because the Tax Administration Act 1994 makes it clear that taxassessments issued by the Commissioner may only be challengedthrough the statutory disputes procedures, which have not been utilisedby Mr Niwa; and so(c) Mr Niwa had no defence to the claim.[4] For reasons that will become apparent it is pertinent to note that, like alljudgments of the District Court and the senior courts, the entituling capitalisesMr Niwa's name.[5] For ease of reference I annex a copy of the substantive part of Mr Niwa'scurrent pleading to this judgment. It will be observed that the ways in which Mr Niwauses his name is unusual, including in particular:1 Commissioner of Inland Revenue v Niwa [2016] NZDC 14075.2 It seems that Mr Niwa also sought to argue that the Bills of Exchange Act 1908 precluded theCommissioner's claim.(a) his variable (but deliberate) use of capitals and small case;(b) the distinction he apparently seeks to draw between "Donald-James: ofthe family Niwa" and DONALD NIWA™;(c) the use of Latin (ens legis)3 and, relatedly, the attempt to suggest thatDONALD NIWA™ is not a "natural person";(d) the use of the thumb print by Donald-James' signature;(e) the allegation in paragraph 2 that the District Court Judge: proceeded after the belief I the living IndividualDonald-James was the "Defendant"(f) the allegation in paragraph 3 that the Judge: failed to call the Individual Donald-James to ask if hewould accept role as 'Defendant', and used "Statutory Power"to proceed.[6] The distinction apparently sought to be drawn here was also reflected inMr Niwa's appearance in the District Court where Judge Hinton recorded that hewished to be referred to as "Donald James".4Discussion[7] Practices of the kind now employed by Mr Niwa in his pleading come beforethe Courts not infrequently. They are generally given short shrift. Interestingly,however, they have also been the subject of jurisprudence and academic writingoverseas. The most comprehensive analysis is undoubtedly that which is contained inthe 188 page Canadian judgment in Meads v Meads.53 Which means "a creature of the law" or a legal, rather than a natural, person.4 Judge Hinton recorded (at [3]) that he had eventually acceded to that request.5 Meads v Meads 2012 ABQB 571.[8] In Meads the Albertan Associate Chief Justice begins his judgment by givingthose who engage in such practices a name: "Organized Pseudolegal CommercialArgument litigants" or "OPCA litigants". He said:[1] This Court has developed a new awareness and understanding of acategory of vexatious litigant. As we shall see, while there is often a lack ofhomogeneity, and some individuals or groups have no name or specialidentity, they (by their own admission or by descriptions given by others) oftenfall into the following descriptions: Detaxers; Freemen or Freemen-on-the-Land; Sovereign Men or Sovereign Citizens; Church of the EcumenicalRedemption International (CERI); Moorish Law; and other labels - there is noclosed list. In the absence of a better moniker, I have collectively labelledthem as Organized Pseudolegal Commercial Argument litigants [OPCAlitigants], to functionally define them collectively for what they literally are.These persons employ a collection of techniques and arguments promoted andsold by "gurus" (as hereafter defined) to disrupt court operations and toattempt to frustrate the legal rights of governments, corporations, andindividuals.[2] Over a decade of reported cases have proven that the individualconcepts advanced by OPCA litigants are invalid. What remains is tocategorize these schemes and concepts, identify global defects to simplifyfuture response to variations of identified and invalid OPCA themes, anddevelop court procedures and sanctions for persons who adopt and advancethese vexatious litigation strategies.[3] One of the purposes of these Reasons is, through this litigant, touncover, expose, collate, and publish the tactics employed by the OPCAcommunity, as a part of a process to eradicate the growing abuse that theselitigants direct towards the justice and legal system we otherwise enjoy inAlberta and across Canada. [4] OPCA litigants do not express any stereotypic beliefs other than ageneral rejection of court and state authority; nor do they fall into any commonsocial or professional association. Arguments and claims of this nature emergein all kinds of legal proceedings and all levels of Courts and tribunals. Thisgroup is unified by:1. a characteristic set of strategies (somewhat different by group)that they employ,2. specific but irrelevant formalities and language which theyappear to believe are (or portray as) significant, and3. the commercial sources from which their ideas and materialsoriginate.This category of litigant shares one other critical characteristic: they will onlyhonour state, regulatory, contract, family, fiduciary, equitable, and criminalobligations if they feel like it. And typically, they don't.[9] The Judge then specifically refers to the "names" issue, saying:6OPCA litigants frequently adopt unusual variations on personal names, forexample adding irrelevant punctuation, or using unusual capital and lowercase character combinations. While OPCA litigants and their gurus put specialsignificance on these alternative nomenclature forms, these are ineffectual inlaw and are meaningless paper masks. Therefore, in these Reasons, I will omitspurious name forms, titles, punctuation and the like.[10] The Judge notes the historical origins of OPCA claims (which he traces backto the 1990s in Canada, but earlier in the United States)7 and the fact that their basictenets are often devised and then sold to apparently unwitting litigants by "gurus".The purchasers appear to represent individuals from all parts of society, including therich and famous.8 Then, he says:[75] These claims are, of course, pseudolegal nonsense. A judge whoencounters and reviews OPCA concepts will find their errors are obvious andmanifest, once one strips away the layers of peculiar language, irrelevantreferences, and deciphers the often bizarre documentation which accompaniesan OPCA scheme. When reduced to their conceptual core, most OPCAconcepts are contemptibly stupid. Mr. Meads, for example, has presented theCourt with documents that appear to be a contract between himself, andhimself. One Mr. Meads promises to pay for any liability of the otherMr. Meads. One owns all property, the other all debts. What is the differencebetween these entities? One spells his name with upper case letters. The otheradds spurious and meaningless punctuation to his name. Mr. Meads (withpunctuation) is the Mr. Meads who appeared in court. He says the Mr. Meads(all capitals) is the one who should pay child and spousal support.6 At [7].7 Indeed, the United States the Inland Revenue Service has issued a specific Ruling (Rev Ruling2005-21) dealing with "Straw Man" claims, which it describes as claims "premised on theerroneous theory that most government documents do not actually refer to individuals." TheRuling goes on to state:Users of the "straw man" theory falsely claim that only documents using anindividual's name with "standard" capitalization, i.e., lower-case with only thebeginning letters of each name capitalized, are legitimate. These individualserroneously argue that the use of the individual's name in all upper-case letters, whichis common in some government documents, refers to a separate legal entity, called a"straw man." These individuals also erroneously argue that, as a result of the creationof a "straw man," they are not liable for the debts, including the tax debts, of their"straw man," that taxing the "straw man" is illegal because the "straw man" is a debtinstrument based upon the labor of a real person and is, therefore, a form of slavery,or that no tax is owed by the real individual because it can be satisfied, or offset, bymoney in a "Treasury Direct Account" held in the name of the "straw man."8 At [68] referring in particular to United States v Wesley Trent Snipes 2008 No 5:06-cr-22-Oc-10GRJ US Dist (MD Fl, Feb 1 2008) . The Judge noted that Mr Snipes was at that time serving athree year prison sentence for income tax evasion.[11] The Judge divides the different types of OPCA concepts and arguments into aseries of categories (and sub-categories). The broad categories or argument are asfollows:9(a) the litigant is not subject to court authority;(b) obligation requires agreement;(c) double/split persons;(d) unilateral agreements; and(e) money for nothing schemes.[12] It is the third of these categories that is in play in the present case. In hisdiscussion under that heading, the Judge said:10[417] A strange but common OPCA concept is that an individual cansomehow exist in two separate but related states. This confusing concept isexpressed in many different ways. The 'physical person' is one aspect of theduality, the other is a non-corporeal aspect that has many names, such as a"strawman", a "corporation", a "corporate entity", a "corporate fiction", a"dead corporation", a "dead person", an "estate", a "legal person", a "legalfiction", an "artificial entity", a "procedural phantom", "abandoned paperwork", a "slave name" or "slave person", or a "juristic person".[418] Many OPCA nomenclature schemes relate to this duality. Forexample, the 'lower case' vs. 'upper case' name pairs indicates the 'physicalperson' and 'non-corporeal aspect', respectively. When ": Dennis-Larry:Meads::" says he acts "on behalf of DENNIS LARRY MEADS (juristicperson)", he appears to indicate he believes he has two separate aspects, andthat the man in the courtroom ("::Dennis-Larry: Meads::") is representing hisother half ("DENNIS LARRY MEADS (juristic person)"). Other times OPCAlitigants say they are "agents", "trustees", "owners", "representatives" or"secured party" for their other aspect: [419] A particularly surreal variation on this theme is where the 'physicallitigants' purported to intervene in the action against their 'non-corporealaspects'. 9 I omit from this summary OPCA arguments that are peculiar to the Canadian legal system andstructure.10 (citations omitted).[420] The 'dash colon' and 'family/clan/house of' motifs uniformly indicatethe 'physical person' half of these double/split individuals. Other times the'physical person' is called a "natural person" or is described as being "fleshand blood" . Mr. Meads adopts the latter kind of language, he (the physicallitigant) is "the living flesh and blood sentient-man".[421] There are different explanations for the non-corporeal similarity.Some OPCA gurus promote the idea that this aspect is created by the state,burdened with legal obligations, then 'shackled' to the physical person. OtherOPCA gurus present the non-corporeal aspect as a part of a person that can besplit away, and then burdened with obligations and debts.[422] Of course, either approach is legally ineffectual. Canadian law doesnot provide for a person to have two aspects - this entire concept is yet another'magic hat'. [423] The answer is that, as Justice Gauthier observed, no matter whatevernomenclature the OPCA litigant wants to adopt to describe his 'other self', itis the person before the Court who is subject to its order.[13] The Judge goes on to speak about the particular manifestation of the splitpersona in the case before him and then makes some more general observations abouthow such "divided persons" behave in Court. In that respect he notes:11[440] The in-court conduct of OPCA litigants who advance a double/splitperson approach can be confusing. They may ask to whom the court is talking.Or, like Mr. Meads, they may conclude that the court is addressing the"person" rather than the "soul".[441] Detaxer cases provide some examples of this kind of conduct.R v Turnnir, reports how the defendant referred to himself both as "thetaxpayer" and "the legal representative of the taxpayer". Duringcross-examination when he was asked who signed a document; Turnnirreplied: "Who are you talking to?"[442] In Porisky Trial Decision at paras 60-61, Judge Myers related thiskind of dialogue:[60] ... Mr. Porisky said he could not make that decision unless heunderstood whether he was to give evidence in his "inherentpersonality as a natural person with no intent to profit". He wanted totell the truth in the stand but the capacity he was to testify in wouldmake a difference to his evidence. A few minutes later in the dialoguehe said:I need to know if I make the decision to get into the stand,from which perspective can I speak? Like therefore I need toknow, in the eyes of the law, if one man is two persons, thenatural or the legal, okay, which one can I speak as, or does itmatter - am I have the liberty to speak the truth and qualify itso I can speak to everything? Because what it - they have11 (citations omitted).commingled a lot of stuff, and for me to properly address it,I'm going to have to be able to speak to everything to properlyaddress it.And later:Again, I feel like I'm being railroaded because I'm asking forclear answers. I came here with a full intention on defendingmy - my rights and - and not having things being convertedinto something they're not, and I don't know how to do that ifnobody's going to give me a straight answer. I thought Crownhad a duty -- I read their web page and they talk about honourand integrity, and now I'm been led one thing -- and for me tospeak to everything, I'm going to need to be able to speak toit from my starting point of my existence.I didn't make it up. Sir John Salmond I think is a highlyrespected man. The Supreme Court relies on him. I didn'tmake it up that one man's two persons in the eyes of the law.And so from that perspective, I need -- that's why I tried to beas honourable and as open in the development of this, so thatI could speak the truth and the whole truth from the properperspective, so it does not get misconstrued or mislabelled orpresumed to be something it's not. And that's what I need toknow. If I make the decision and I go in that box, whichperson, in the eyes of the law am I?THE COURT: You are Mr. Porisky.THE ACCUSED PORISKY: Am I Russell Anthony Poriskyin my inherent personality as a natural person, or am I asovereign-granted personality?THE COURT: You're Russell Porisky.THE ACCUSED PORISKY: That's fairly misleading becausethat's not clear enough for me, Your Honour....THE COURT: Let's assume you get into the stand and theCrown asks you, "What did you have for breakfast today?"Would it make a difference as to what capacity you were in?THE ACCUSED PORISKY: For me, it would, Your Honour,yes.[14] In the Meads case, the Judge went on to conclude:[445] 'Double/split person' schemes have no legal effect. These schemeshave no basis in law. There is only one legal identity that attaches to a person.If a person wishes to add a legal 'layer' to themselves, then a corporation isthe proper approach. The interrelationship between corporation and owner,and the legal effect of that 'layer' is clearly established in common law andstatute.[446] The 'double/split' person' strategies all have a common underlyingkernel; that the OPCA litigant is not the person before the court, or is notsubject to the court's jurisdiction. That allegedly falls on the other, non-corporeal (but otherwise similar) person. In other words, a litigant whoadvances a variation of this scheme says to the court 'you have no jurisdictionover me - the person you want is someone else.' That allegedly denies thisCourt's authority, but of course fails in effect.Conclusion[15] As noted earlier, Mr Niwa's pleading and his conduct in the District Court(recorded in part in Judge Hinton's decision) have all the hallmarks of one of these"split person" or "straw man" OPCA claims.[16] At a general level, it seems to me that it will inevitably be an abuse of processfor a litigant to attempt to employ OPCA concepts in seeking to avoid or defeat anystate, regulatory, contract, family or other obligations recognised by law. But morespecifically it is an abuse of process to employ such concepts in an attempt to avoidjudgment for a tax liability which is imposed and deemed correct by statute or to delaythe Commissioner from enforcing such liability. Mr Niwa's claim is struck outaccordingly.[17] I have issued this judgment without hearing from Mr Niwa, as r 5.35B of theHCR permits me to do. But in accordance with that rule I also record that he has aright of appeal against this decision.[18] The Commissioner is to be served with a copy of this decision in accordancewith r 5.35B(4)._____________________________Rebecca Ellis J