TAYLOR v COMMISSIONER OF INLAND REVENUE [2023] NZHC 460

TAYLOR v COMMISSIONER OF INLAND REVENUE [2023] NZHC 460 [9 March 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-000949[2023] NZHC 460BETWEEN GRAHAM HERBERT TAYLORAppellantAND COMMISSIONER OF INLANDREVENUERespondentHearing: (on the papers)Judgment: 9 March 2023JUDGMENT OF VENNING JThis judgment was delivered by me on 9 March 2023 at 3.30 pm, pursuant to Rule 11.5 of the HighCourt Rules.Registrar/Deputy RegistrarDateSolicitors: Crown Law, WellingtonCopy to: Appellant[1] This file has been referred to me as duty Judge to be dealt with on the papers.The appellant, Graham Herbert Taylor, seeks to appeal a decision of Judge G MHarrison delivered in the District Court on 24 February 2022.1 The appeal was filedout of time. Leave of the Court is required for Mr Taylor to pursue the appeal.Procedural background[2] The Inland Revenue Department obtained a judgment against Mr Taylor on 11March 2020 for $496,948.87. The judgment was obtained by default. Mr Taylorsubsequently applied to the District Court to set aside the judgment. He argued he hadnot been served with the proceedings and was unaware of them. He relied on his poorstate of health and as the Judge categorised it "a general concern about the operationof the Inland Revenue Department".[3] In his decision the Judge noted that the proceedings had been served on MrTaylor by way of substituted service in September 2019. He considered Mr Taylorhad adequate time before the judgment was entered in March 2020 to have filed anydefence he may have had. The Judge also considered himself to be bound by s 109 ofthe Tax Administration Act 1994 (TAA), so that there was no jurisdiction for him todeal with Mr Taylor's challenge.[4] Following the delivery of Judge Harrison's decision on 24 February 2022(which on its face appears to be an oral judgment at which Mr Taylor appeared), MrTaylor filed papers with this Court purporting to appeal that decision. Although someof the papers were dated 7 March 2022 by Mr Taylor the notice of appeal document isnoted as not being received by the High Court until 29 April 2022. Mr Taylor requiresleave to bring the appeal out of time.[5] A number of procedural appearances have followed in this Court relating to MrTaylor's application for leave. On 10 February 2023, Moore J issued a minute inwhich he confirmed that Mr Taylor's application for leave would be dealt with on the1 Commissioner of Inland Revenue v Taylor DC Auckland CIV-2016-404-002079, 24 February2022.papers and in accordance with Mr Taylor's submissions dated 27 October 2022. MrTaylor represents himself and apparently resides in Australia.Principles[6] The principles to apply on an application for leave were set out by the Court ofAppeal in My Noodle Ltd v Queenstown Lakes District Council.2 They were morerecently discussed by the Supreme Court in Almond v Read.3 In Almond v Read theSupreme Court noted the principles and approach as:[38] The ultimate question when considering the exercise of the discretionto extend time under r 29A is what the interests of justice require. Thatnecessitates an assessment of the particular circumstances of the case. Factorswhich are likely to require consideration include:(a) The length of the delay. Clearly, the time period between theexpiry of the appeal date and the filing of the application toextend time is relevant. But in a case where there has been aslip-up and the appeal date has been inadvertently missed,how quickly the applicant sought to rectify the mistake afterlearning of it will also be relevant. Obviously, the longer thedelay, the more the applicant will be seeking an "indulgence"from the court and the stronger the case for an extension willneed to be.(b) The reasons for the delay. It will be particularly relevant toknow whether the delay resulted from a deliberate decisionnot to proceed followed by a change of mind, from indecision,or from error or inadvertence. If from a change of mind orfrom indecision, there is less justification for an extensionthan where the delay results from error or inadvertence,particularly if understandable.(c) The conduct of the parties, particularly of the applicant. Forexample, a history of non-cooperation and/or delay by anapplicant may be relevant.(d) Any prejudice or hardship to the respondent or to others witha legitimate interest in the outcome. Again, the greater theprejudice, the stronger the case will have to be to justify thegrant of an extension of time. Where there is significant delaycoupled with significant prejudice, then it may well beappropriate to refuse leave even though the appeal appears tobe strongly arguable.(e) The significance of the issues raised by the proposed appeal,both to the parties and more generally. If there is a public2 My Noodle Ltd v Queenstown Lakes District Council [2009] NZCA 224.3 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 (footnotes omitted).interest in the issues, the case for an extension is likely to bestronger than if there is no such interest.[39] We accept that the merits of a proposed appeal may, in principle, berelevant to the exercise of the discretion to extend time. This is because therewill be occasions on which the court will risk facilitating unjustifiabledelaying tactics on the part of dilatory or recalcitrant litigants if it does notconsider the merits. There are three qualifications to this principle, however:(a) There will be some instances in which the merits or otherwiseof a proposed appeal will be overwhelmed by other factors(such as the length of the delay and the extent of the prejudiceto the respondent or others) and so will not requireconsideration.(b) As we have already indicated, the merits will not generally berelevant in a case such as the present where there has been aninsignificant delay as a result of a legal adviser's error and theproposed respondents have suffered no prejudice (beyond thefact of an appeal). As we noted above, r 29A differentiatesbetween cases where the respondent consents to the extensionand those where it does not, giving the Court broader powersin the former case. In cases of this type, respondents aregenerally best advised to consent to an extension to enable theappeal to be determined promptly. The delay which hasoccurred in final determination of this case could have beenavoided had the respondents given their consent and has beento no one's benefit. A respondent who does not consent in sucha case runs the risk of an adverse costs award.(c) Consideration of the merits of an appeal in the context of anapplication to extend time must necessarily be relativelysuperficial. In this connection, we agree with the observationsof the Court of Appeal of England and Wales in R (Hysaj), tothe effect that the court should firmly discourage muchargument on the merits and should reach a view about themonly where they are obviously very strong or very weak.Moreover, any assessment of the merits must take placeagainst the background of this Court's description of thenature of a general appeal in Austin, Nichols. Accordingly, adecision to refuse an extension of time based substantially onthe lack of merit of a proposed appeal should be made onlywhere the appeal is clearly hopeless. An appeal would behopeless, for example, where, on facts to which there is nochallenge, it could not possibly succeed, where the court lacksjurisdiction, where there is an abuse of process (such as acollateral attack on issues finally determined in otherproceedings) or where the appeal is frivolous or vexatious.The lack of merit must be readily apparent. The power to grantor refuse an extension of time should not be used as amechanism to dismiss apparently weak appeals summarily.Analysis[7] I consider the factors discussed by the Supreme Court.Length of the delay[8] The time for Mr Taylor to appeal as of right expired within 20 working days ofthe decision being given, which was 24 March 2022. Mr Taylor's appeal was 23working days out of time. It is not a particularly long delay.The reasons for the delay[9] The delay was not due to any slipup or inadvertence on Mr Taylor's part. MrTaylor appears to rely on his medical issues to explain the delay. Mr Taylor's referenceto his health issues is general. The Court notes that one of the documents he preparedwas dated 7 March, so he was apparently able to work on the appeal shortly after hereceived the decision. There is not an adequate explanation for Mr Taylor's failure tofile a notice of appeal in time. However, I accept that Mr Taylor intended to pursuean appeal.Conduct of the parties, particularly of the appellant[10] Mr Taylor had to be served by substituted service in the District Court. Hisdocuments in this Court are rambling, discursive and unfocused.Prejudicial hardship to the respondent[11] There is no particular prejudice to the Commissioner in this case, other thanthe additional cost associated with the ongoing proceedings before this Court. Anygrant of leave will further delay the Commissioner in enforcing the judgment. TheCommissioner has a statutory obligation to recover tax.Significance of the issues raised[12] There are no significant issues raised in Mr Taylor's papers.Merits[13] In Almond v Read4 the Supreme Court expressly confirmed that a decision torefuse an extension of time based substantially on the lack of merit of a proposedappeal should be made only where the appeal is clearly hopeless. The Courtconsidered an appeal would be hopeless where, on the facts to which there is nochallenge, it could not possibly succeed, where the Court lacks jurisdiction or wherethere is an abuse of process, or where the appeal is frivolous, or vexatious. The lackof merit must be readily apparent.[14] The present case meets those criteria. Section 109 of the TAA provides:Disputable decisions deemed correct except in proceedingsExcept in objection proceedings under Part 8 or a challenge under Part 8A,—(a) no disputable decision may be disputed in a court or in anyproceedings on any ground whatsoever; and(b) every disputable decision and, where relevant, all of its particulars aredeemed to be, and are to be taken as being, correct in all respects.[15] In Golden Bay Cement Company Ltd v Commissioner of Inland Revenue5 theCourt of Appeal confirmed that once an assessment has been made its correctness canonly be challenged in proceedings under the TAA. A disputant subject to variousrequirements is entitled to challenge an assessment by commencing proceedings in thehearing authority.6 A hearing authority is defined in s 3 of the TAA as a TaxationReview Authority or the High Court. Judge Harrison was correct to find in his decisionthat s 109 of the TAA applied and as a result there was no defence to the claim by theCommissioner.[16] In Maqbool v Commissioner of Inland Revenue7 this Court confirmed that ithas no jurisdiction to entertain an argument as to the validity of the assessment whichwas subject to a judgment in the District Court. Section 109 applies to the Court onappeal as much as it does to the District Court.4 Almond v Read, above n 3.5 Golden Bay Cement Company Ltd v Commissioner of Inland Revenue [1996] 2 NZLR 665.6 Tax Administration Act 1994, s 138B.7 Maqbool v Commissioner of Inland Revenue (2007) 23 NZTC 21,561.[17] The short point is that this is a case where the Court lacks jurisdiction. TheDistrict Court was quite correct to find Mr Taylor cannot succeed on the merits becauseof s 109 of the TAA. The purported appeal is properly described as hopeless.Result[18] The appeal is dismissed with costs to the Commissioner on a 2B basis.__________________________Venning J