LINDSAY v COMMISSIONER OF INLAND REVENUE [2021] NZHC 830

LINDSAY v COMMISSIONER OF INLAND REVENUE [2021] NZHC 830 [20 April 2021]ORDERS UNDER THE INHERENT JURISDICTION SUPPRESSING THEIDENTITY OF THE PLAINTIFF AND OTHER PARTIES AS SPECIFIED INFOOTNOTE 1.IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2020-485-311[2021] NZHC 830UNDER the Judicial Review Procedure Act 2016IN THE MATTER OF an application for Judicial ReviewBETWEEN LINDSAYPlaintiffAND COMMISSIONER OF INLANDREVENUEDefendantHearing: 15 March 2021Appearances: J W Maassen and M S Dobson for PlaintiffM Deligiannis and E Venter for RespondentJudgment: 20 April 2021JUDGMENT OF COOKE J[1] Between approximately 2000 and 2002 Mr Lindsay had a sexual relationshipwith Ms Jones.1 Ms Jones became pregnant and she gave birth to their son in 2003.Although Mr Lindsay knew that Ms Jones had had a child, he did not have furthercommunication with her and got on with his own life. Some 16 years later Ms Jonesmade contact and commenced paternity proceedings against Mr Lindsay. After DNAtests were undertaken it was established that he was the father and a paternity orderwas made by the Family Court on 26 October 2017.1 These are not the parties true names. Under the inherent jurisdiction there are orders prohibitingthe publication of the identity of Mr Lindsay, Ms Jones and their child.[2] Ms Jones also applied for child support at this time. On 27 November 2017 theCommissioner of Inland Revenue determined that Mr Lindsay was obliged to providechild support. That assessment not only required Mr Lindsay to provide child supportprospectively, but it also assessed Mr Lindsay as liable for child support backdated to2003. The backdated amount said to be owing by him was some $89,000.[3] In these judicial review proceedings Mr Lindsay challenges the Commissioner'sdecision requiring him to pay child support dating back to 2003. He accepts theobligation to pay child support prospectively, but challenges the backdatedassessment. The Commissioner's stance is that she has no discretion in relation to thebackdated assessment and that it arises automatically as a consequence of theapplication of s 19 of the Child Support Act 1991.Background facts[4] There is limited factual information before the Court. The key facts arerevealed by the documentary record put in evidence by Ms Kylie Roundtree, acustomer services officer with Inland Revenue. They are also before the Court in theform of an agreed bundle of documents. Mr Lindsay has also provided an affidavitdescribing the background.[5] Mr Lindsay says he met Ms Jones in around 1994 and they began a sexualrelationship in 1999 or 2000 when Mr Lindsay was a single parent. He explains thattheir relationship was an open one, and that he understood Ms Jones had other sexualpartners. He also says that it was agreed that they would use contraception and thathe made it clear that he did not want to have a child with her.[6] He says that the sexual relationship ended in December 2002, and that hemoved to a new city in 2003. He says that Ms Jones rang him in March 2003 to tellhim that she was pregnant and that he was the father. He says he was not certain thathe was the father as he knew Ms Jones had other sexual partners.[7] He says that he received a message that the child was born and he then went tosee Ms Jones and the baby. He did not see Ms Jones or the child thereafter. Hecontinued his life as a parent to his son, and he also then met a new partner.[8] In 2016 he says he was surprised to be served with paternity proceedings byMs Jones. He defended the proceedings on the basis that he could not be sure that hewas the father, but agreed to do DNA testing. This established he was the father anda paternity order was made by the Family Court.[9] He indicates that he understood that he would be liable for child support forhis son, but was shocked and upset to find out that when an assessment was made on27 September 2017 it backdated child support to 2003. He says that he is strugglingto meet the substantial arrears as well as the child support requirements, and this iscausing him and his partner ongoing anxiety. He says:If [Ms Jones] had pursued paternity proceedings against me in 2003 then Iwould have had an opportunity to arrange my life to reflect my status as [myson's] father. This includes my role in his life. I would have also arrangedmy affairs to reflect my responsibility to [my son]. This would have affectedmy child support liability, and as such the total amount of child support Iwould have had to pay over those 14 years.[10] The Commissioner has not disputed Mr Lindsay's account in the evidencefiled, although the documentary record has been put before the Court.[11] One issue of significance is that the Commissioner has not put before the Courtany evidence of what social welfare payments were made to Ms Jones in relation tothe child in question. During the course of the argument, however, the Commissionerhas accepted that there was only limited social welfare payments made to Ms Jones. Iwill explain this in greater detail below.The stance taken by the parties[12] Mr Maassen for Mr Lindsay contends that the Commissioner's stance cannotbe justified. Mr Lindsay can fairly be assessed for child support as from the date whenthe successful application was made for that support in 2017, but it is unfair andunjustified for Mr Lindsay to be liable for backdated child support for some 14 years.Mr Lindsay was not told that any application for child support had been made in 2003and neither was any process followed to identify that he had any obligation to providechild support. The Commissioner's interpretation of the legislation suggesting he hadbackdated liability for this period of time was unrealistic.[13] For the Commissioner, Ms Deligiannis contended that the Commissioner hadno discretion on this matter as the statute operated automatically to backdate childsupport to when an application was first made, and that an application had been filedby Ms Jones in 2003 as was required. She emphasised that the statutory regimeinvolved the state providing financial support to parents who have had the day to dayresponsibility for bringing up a child, and people in the position of Mr Lindsay weresimply being asked to pay their share of the support provided to the child whenparenthood was subsequently established. She explained that no penalties wereimposed on the amount sought from Mr Lindsay, and that the backdated amountreflected what the statute determined was his liability in accordance with his taxableincome.Approach to interpretation[14] Before addressing the statutory interpretation issues that arise, I first brieflyaddress the approach to interpretation.[15] In Terminals (NZ) Ltd v Controller of Customs the Supreme Court explainedthat taxation statutes should be interpreted in the same way as any other statutes, andthat there is no presumption in favour of either party.2 The same can be said of thepresent legislation, which is also administered by the Commissioner. Under s 5(1) ofthe Interpretation Act 1999 this means that the text of an enactment is to be interpretedin light of its purpose. The adoption of a purposive approach means that provisionsshould be interpreted to make them work as Parliament must have intended,particularly when they form part of an overall scheme.3[16] For the plaintiff, Mr Maassen argued that the presumption against statuteshaving retrospective effect applied and that Parliament would have more clearlyexpressed itself if that had been its intention.4 But I do not accept that theCommissioner is seeking that legislation have retrospective effect. Rather she isarguing that Mr Lindsay's obligation dates back to an earlier point in time, even though2 Terminals (NZ) Ltd v Comptroller of Customs [2013] NZSC 139; [2014] 1 NZLR 121 at [39].3 Northland Milk Vendors Association v Northland Milk Ltd [1988] 1 NZLR 530 (CA) at 537–538.See Douglas White "A personal perspective of legislation, Northern Milk revisited – soured or stillfresh?" (2016) 47 VUWLR 699.4 Houghton v Saunders [2016] NZCA 483, [2017] 2 NZLR 189 at [293].he did not know that an application potentially creating that obligation had been filed.That does not involve a statute having retrospective operation.[17] There are nevertheless two other related interpretation concepts that may berelevant. First, Mr Lindsay complains that the interpretation adopted by theCommissioner involves procedural unfairness. He says that it is not fair that he beheld liable in relation to an application made in 2003 that he was not told about. Theright to procedural fairness, or natural justice, is a fundamental right. It is referred toin s 27(1) of the New Zealand Bill of Rights Act 1990. There is a presumption ofinterpretation that Parliament does not legislate in a manner inconsistent withfundamental rights.5 That presumption may have some relevance here.[18] Secondly, the more surprising or unreasonable the implications of a particularinterpretation are the less likely it will be considered to be what Parliament intended.This does not involve a license to depart from the plain meaning of a statute, but assistsin understanding what the meaning is. Whether the interpretation is surprising orunreasonable focuses on the scheme and purpose of the legislation, and not moreabstracted concepts of what is fair or reasonable.What are the applicable provisions?[19] There is an initial question concerning the version of the relevant provisionsthat apply. Section 19 of the Child Support Act regulates the issue of backdated childsupport. But that section has been amended and its amended version is materiallydifferent from that which prevailed in 2003. So there is an issue as to whether it is theversion of s 19 in 2003 that applies, or the version that applied when the Commissionermade the assessment in 2017.[20] Changes were made to s 19 by the Child Support Amendment Act 2013 (the2013 Amendment Act). Ms Deligiannis argued, however, that transitional provisionsin that amending legislation made it clear that the old legislation still applies. Theposition is more complicated because the transitional provisions in the 20135 New Health New Zealand Inc v South Taranaki District Council [2018] NZSC 59, [2018] 1 NZLR948 at [292]–[293]; R v Secretary of State for the Home Department, ex parte Simms [2000] 2 AC115 (HL) at 131.Amendment Act were themselves later amended.6 The relevant transitional provisionprovides:71A Application of Act to financial support for child support yearsending before 1 April 2015(1) This Act applies on and after 1 April 2015 in relation to financialsupport in respect of a child support year ending before that date as ifthe amendments made by the enactments listed in subclause (2) hadnot been made.(2) The enactments are:(a) Part 1 of the Child Support Amendment Act 2013, exceptsections 6, 18, 19, 19A, 31, and 32:[21] The new s 19 was inserted by a provision in Part 1 of the 2013 AmendmentAct, and it is not within the exceptions referred to in cl 1A(2)(a). Ms Deligiannissubmitted, therefore, that decisions concerning child support for the years before1 April 2015 were made as if the amendments had not been passed.[22] Mr Maassen argued that the transitional provision did not apply because thecurrent matter did not relate to "financial support in respect of a child." I do not acceptthat. It appears clear to me that Parliament has provided that child support for thefinancial years before the amended legislation came into effect were to be assessedunder the legislation prior to amendment. The words "financial support" are clearlyreferring to "child support" and that includes backdated child support given that s 19is part of the child support regime.8[23] This analysis presumes, however, that there is financial support in respect of achild support year before 1 April 2015 properly to be considered. Whether that is sois the substantive issue addressed below. But to the extent that the Commissionercontends that Mr Lindsay is liable for child support for years before 1 April 2015 theformer legislation applies.6 By s 55(7) of the Taxation (Annual Rates for 2015-2016 Research and Development, andRemedial Matters) Act 2016.7 Child Support Act 1991, sch 1 pt 1 cl 1A.8 Contrary to Mr Maassen's submission, the provisions concerning applications are also withincl 1A(1).[24] On that basis the relevant provision to be considered is s 19 as originally setout in the Child Support Act. That provided: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 of childsupport in respect of a child because at the time the application wasmade the Commissioner was not satisfied that the person from whompayment 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 a specified overseasjurisdiction to which section 7(5) of this Act applies,—child support is payable by the person in respect of the child from theday on which the application was received by the Commissioner.Other reasons why application was rejected[25] Mr Maassen first argued that s 19 did not apply to create backdated liabilitybecause there were other reasons why Ms Jones' application was not accepted in 2003.In particular, in addition to the application being rejected because there was noevidence furnished that Mr Lindsay was the father, Ms Jones also did not provide abirth certificate for the child, or the child's IRD number. He argued that s 19 appliedonly when the sole reason why the application was rejected was related to the lack ofproof of parenthood.[26] Ms Deligiannis argued that this was not the correct interpretation of s 19, andthat in any event the additional matters were either not requirements, or weresatisfactorily addressed. In particular a birth certificate could not be provided so soonafter the child's birth, and an IRD number was not yet issued for that child, and wassubsequently duly created and available from the Commissioner's files.[27] I agree with Ms Deligiannis' submission that the two additional mattersreferred to do not prevent s 19 from operating. Both were routine matters that wouldbe expected to be addressed had the application for child support been pursued. Bothmay have been matters which may have led the Commissioner not to accept theapplication at that time pending provision of this further information. But the keyissue was the lack of any evidence of parenthood. It is unrealistic to interpret s 19 asnot applying simply if there were other matters that needed to be provided before theapplication was accepted. There is nothing in s 19 providing that proof of parenthoodmust be the sole reason why the application had not been accepted. The critical pointis that an application that was not able to be accepted is later accepted when proof ofparenthood is provided.[28] For these reasons I do not accept Mr Maassen's submission.Did s 19 apply to the 2003 application?[29] Mr Maassen's second argument is that s 19 did not apply because there was afresh application for child support made in 2017, and that this was not a case wherethe application made in 2003 applied.[30] As a matter of fact it is clear that when Ms Jones contacted the Commissioner'srepresentatives in 2016 she was told she needed to file a new application, and that sheduly did so. I accept, however, that this is not determinative. The advice given toMs Jones, and steps taken by the Commissioner's staff may simply have beenincorrect.[31] The ultimate question is whether at the time when the Commissioner receivedthe application in 2017, the application first made in 2003 was reactivated as a matterof law, and that it had now been made complete by the new information provided. Forthe reasons set out below I do not accept that. In my view the application in 2017 wascorrectly treated as a new application rather than a continuation of the one made 14years earlier. In particular I accept Mr Maassen's argument that the application filedin 2003 was refused, and Ms Jones subsequently confirmed it was not pursued. In myview that means that s 19 had no application. That is for two reasons:(a) First, this was not a situation where the Commissioner was "unable toaccept" Ms Jones' 2003 application for lack of evidence of parenthood.Rather Ms Jones' application was declined at that time. This wasbecause Ms Jones had advised that she was not pursuing the proceduresreferred to in s 19 to establish parenthood, and she received reducedsocial welfare as a consequence.(b) In any event, in 2006 Ms Jones then advised the Commissioner that shewas no longer receiving any social welfare for this child, or pursuingany child support application. From at that point her application wasclearly no longer alive, including for the purpose of s 19.[32] I address each of those points in turn.The application was declined[33] Ms Jones made it clear in the 2003 application that no procedures were beinginitiated to establish that Mr Lindsay was the father. For this reason her applicationwas declined. This was not a situation where the Commissioner advised that he wasunable to accept the application because evidence of parenthood had not been providedas is required for s 19 to apply.[34] There are two features of s 19 that are of significance. In particular:(a) The section refers to the Commissioner being "unable to accept" theapplication. This potentially contemplates a deficiency that can beremedied and accordingly that steps will be followed in relation to thedeficiency. That is further emphasised by the reference to "at the time"and the Commissioner "was not satisfied" which again suggests theposition can be remedied.(b) The section then refers to the steps that would take place"subsequently", being one of two Court processes referred to in s 19(a)or (b). That also contemplates that Court proceedings involvingMr Lindsay would be initiated to address the deficiency referred to inthe first part of s 19.[35] As Mr Maassen submitted the distinction between the Commissioner refusingan application, and the Commissioner advising that he or she is unable to accept it isimportant. Sections 17, 18 and 21 refer to the Commissioner refusing the applicationon the basis that it is not "properly made". Section 14 specifies what criteria must besatisfied for an application to be properly made. Importantly, if the s 14 criteria aremet, the Commissioner is given a discretion — s 17(2) provides that the Commissioner" may refuse to accept the application if not satisfied that it is properly made"(emphasis added). The Commissioner is not obliged to refuse. An explanation forgiving the Commissioner a discretion in this respect is that the Commissioner canadvise the applicant that she is unable to accept the application at that time, and therebyprovide an opportunity to the applicant to satisfy the criteria that are not satisfiedbefore deciding to decline or accept it. The Commissioner is empowered to do thisrather than simply refusing the application.[36] It is a notable factor of the legislation that there are separate statutory decisionswith different procedural requirements for accepting an application, and then makinga decision on that application. This deliberate framework is also understood in lightof other provisions. Section 17(3) contemplates that the Commissioner can (but is notobliged to) conduct further inquiries to determine whether the application is properlymade. Section 24 only obliges the Commissioner to make an assessment as soon aspracticable "after acceptance of a properly made application".9[37] The provisions also generally place a degree of emphasis on procedural fairness.There is a duty to immediately inform the custodial parent if the Commissioner refusesto accept the application,10 and there is also a duty to give notice if the application isaccepted.11 There is also a duty to give notice to the liable parent if the application isaccepted.12 The Commissioner has a duty to then make the assessment as soon aspracticable under s 24, with a series of other obligations then arising, including anobligation under s 89 to give notice to the liable parent after making the assessment.There are then rights of objection and appeal under ss 90 and 91. These provisions asa whole suggest there is an emphasis on procedural fairness, including in relation tothe liable parent. That is consistent with the presumption that Parliament legislates9 Child Support Act 1991, s 24(1)(a).10 Section 21.11 Section 22.12 Section 23.consistently with fundamental rights such as the right to natural justice.13 It would beinconsistent with that overall intent to say that an application could be received, andremain unprocessed for 14 years while the liable amount accumulated without theaffected person knowing of it.[38] Section 19 only applies when the Commissioner "is unable to accept" theapplication "at the time" it was made. The fact that it does not refer to the decision torefuse the application under s 17 is important. It partly explains why theCommissioner is given a discretion under s 17(2) not to refuse an application even ifit is not properly made. The Commissioner can advise the applicant that he or she isunable to accept it at that time, giving the applicant the opportunity to meet thedeficiency before the acceptance/refusal decision is made. So the acceptance/refusaldecision under s 17(2) is deferred. Most significantly the Commissioner could allowthe applicant the opportunity to follow Court procedures to establish proof ofparenthood. The Commissioner can also provide the opportunity to address othermatters, such as the provision of an IRD number or birth certificate for the child.[39] On that view of the provisions s 19 is not intended to apply when an applicationis refused. It only applies when the Commissioner has advised that the applicationcannot be accepted without proof of parenthood, and procedures are then followed toestablish this. It applies to address the period of time before a decision under s 17(2)is made to accept or reject the application, and appropriately recovers child supportcontributions for that period when the application is accepted.[40] That seems to me to correspond with what Parliament would have intended.Section 19 has a more modest reach than the Commissioner contends for. It exists tocover the period between the application being received and the completion ofproceedings which determine that a parent is liable for child support. If there are nosuch proceedings, and the application is accordingly declined, it has no operation.13 See [17] above.The application here[41] As indicated the Commissioner has provided limited evidence explaining whathappened with the application in the present case. That is not surprising because ithappened over 17 years ago. But based on the evidence that is available Ms Jones'sapplication was refused under s 17(2) rather than the Commissioner advising her thatit could not be accepted. The contemporaneous documents record that a decline letterwas sent to Ms Jones and copied to WINZ. In other words, her application was notheld by the Commissioner pending the provision of further information, or pendingCourt proceedings to determine paternity.[42] That is not surprising. In the application form Ms Jones indicted that no actionwas being taken to establish that Ms Lindsay was the father. No child support was thenprovided. It may be that Ms Jones sought social welfare assistance in relation to thechild, but if she did Ms Deligiannis accepted Mr Maassen's submission that s 70A ofthe Social Security Act 1964 (or a legislative equivalent) would have applied. Itprovides:70A Rates of benefits for sole parents may be reduced(2) The rate of benefit payable to any beneficiary to whom this sectionapplies shall be reduced in respect of each dependent child in the careof the beneficiary—(a) whose other parent has not been identified in law; or(b) whose other parent has not been named in an application forformula assessment of child support under the Child SupportAct 1991 as a liable parent from whom child support is sought;or(c) whose other parent the beneficiary has failed or refused totestify against as required under section 122 of the ChildSupport Act 1991,—by an amount equal to $22.[43] Ms Jones did not pursue an application for child support after it was declined,and then elected to receive reduced social welfare assistance in relation to this childbecause she was not pursuing any process to identify Mr Lindsay as the father.[44] On the evidence available Ms Jones' election not to pursue any processes toidentify Mr Lindsay as a liable parent, and her advice to the Commissioner in theapplication form that she did not intend to do so, led to the application for child supportbeing refused. In my view this means that s 19 does not apply.Application withdrawn in any event[45] In any event there is an alternative reason why s 19 does not apply. In September2006 Ms Jones again made contact with the Commissioner. She explained that shehad stopped taking social welfare, and confirmed that no child support application wasbeing pursued in relation to this child. There is a contemporaneous note of a telephonecommunication between Ms Jones and the Commissioner's staff. That note recordsthat she rang and advised that she had cancelled the social welfare benefits in August2006. The note records that the staff member confirmed this from other information.It also records that the Commissioner's representative explained to Ms Jones "that ifnon-custodial parent doesn't pay, she won't be paid" and it says that Ms Jones was"okay with this".[46] There is no evidence from the Commissioner identifying what social welfarebenefits Ms Jones received. Ms Roundtree's affidavit refers to the record of thistelephone discussion in ambiguous terms, and the note itself has some ambiguities. Iwas informed from the bar that Ms Jones had other children, and that the liable parentprovisions were operating in relation to those other children. Ms Deligiannis acceptedhowever, that from August 2006 Ms Jones not only received no child support inrelation to Mr Lindsay's son, but that she received no social welfare support in relationto him either. This means that for approximately 11 of the 14 years for whichMr Lindsay has been assessed as liable to pay child support there were no socialwelfare payments being made for this child at all, and for the remaining period ofapproximately three years the social welfare was only paid at reduced levels applicablewhen no liable parent has been identified.[47] The obligation for the custodial parent to make an application for child supportunder s 9 of the Act is in the following terms:9 Custodian in receipt of social security benefit must apply forformula assessment(1) Any person—(a) who is an eligible custodian in relation to a qualifying child; and(b) who is in receipt of a social security benefit,—must apply for a formula assessment of child support in relation to anyperson who is a liable parent of the child.(1A) Where a person is in receipt of an unsupported child's benefit inrespect of a child, but is not in receipt of any other social securitybenefit, subsection (1) shall require the person to apply for a formulaassessment of child support only in relation to the child or children inrespect of whom the unsupported child's benefit is paid.(2) Where 2 or more parents are liable to pay child support in respect ofthe child, and subsection (1) applies to the custodian in relation to eachparent, the custodian must apply for formula assessment of childsupport in relation to each liable parent of the child.(3) Every application required by this section shall be made at the sametime as an application for the social security benefit is made and atany other time when the Commissioner notifies the eligible custodianof the qualifying child that an application under this section is requiredin relation to the qualifying child.(4) Section 70A of the Social Security Act 1964 applies to any person whofails to comply with this section.[48] Significantly, from August 2006 the precondition under s 9(1)(b) no longerapplied. At the very least it seems to me that from this point of time the applicationfirst made in 2003 must be treated as being no longer alive. This is the consequenceof Ms Jones advising the Commissioner that she was no longer receiving socialwelfare, and arising from the fact that she was not receiving any child support for thischild because she had not taken the next steps to prove the identity of the father. It isclear at this point that an application for child support was no longer either mandatedor pursued.[49] The limited evidence filed by the Commissioner ultimately means that she haselected to argue this proceeding as a matter of principle. Ultimately her stance is thata person in Mr Lindsay's position is obliged to pay backdated child support from thedate when an application is first filed, even in circumstances where limited socialwelfare payments have been made in relation to that child. With respect, that is anunrealistic interpretation of the provisions. There may have been some social welfarepayments made for this child, but only for a period, and at the reduced rate that ispayable in relation to all children when the liable parent cannot be, or has not beenidentified. For most of the period where the Commissioner claims that Mr Lindsay isliable for backdated child support there has been no State assistance provided inrelation for the child at all.[50] The text of an enactment must be interpreted in light of its purpose. Here therelevant purpose has been set out by Parliament itself in s 4 where the objects of theAct are specified. This includes the following object:(j) To ensure that the costs to the State of providing an adequate level offinancial support for children and their custodians is offset by thecollection of a fair contribution from non-custodial parents:[51] That object does not arise here. There has been limited cost to the State, andthere is no need to have that cost offset by Mr Lindsay providing any contribution, letalone a fair one for most of this period. The State is demanding that Mr Lindsaycontribute to financial support that has largely not been provided. That is a strongreason against the Commissioner's interpretation prevailing.[52] Turning back to s 19, this is no longer a situation where the Commissioner was"unable to accept" an application for child support. It was a situation where theCommissioner first declined the application, and then was later advised that theapplicant no longer sought child support, and was no longer receiving social welfaresuch that the mandatory precondition requiring the application to be filed no longerapplied. In my view by that stage the application could no longer be treated as alivefor the purposes of s 19.[53] For these reasons, and subject to the discretion in relation to relief that I nextaddress, Mr Lindsay is entitled to the declarations concerning backdated liabilitysought in his statement of claim.Discretion in relation to relief[54] On behalf of the Commissioner, Ms Deligiannis argued that even if Mr Lindsaypersuaded the Court that the Commissioner had misinterpreted the legislation, theCourt should nevertheless decline relief. She did so for two inter-related reasons:(a) That Mr Lindsay had a right of appeal which he had not exercised, suchthat judicial review relief should not be made available.(b) That in all the circumstances of the case relief should be declined.Mr Lindsay should have pursued appeal rights[55] When the Commissioner made the assessment in 2017 requiring Mr Lindsayto pay prospective child support, and also backdated child support to 2003, Mr Lindsayhad a right to object to the assessment within 28 days and also had a right to appeal tothe Family Court. He did not exercise those rights. Ms Deligiannis argued that it wasinappropriate to allow Mr Lindsay to effectively avoid the time limits by now bringingthese judicial review proceedings.[56] Although Ms Deligiannis accepted that there was no ouster clause applicablein the present case such that the Supreme Court's approach in Tannadyce Investmentsv Commissioner of Inland Revenue would apply, 14 she argued there was good reasonwhy judicial review should not be permitted. She referred to the judgment of Brown Jin Lay v Commissioner of Inland Revenue where the Court found that a liable parentcould not defend enforcement proceedings by challenging the assessments, as thecorrect procedure for him to challenge them was through the appeal process.15[57] I see no substance in the Commissioner's argument. The right to challengedecisions by way of judicial review is a fundamental right. It is affirmed by s 27 ofthe New Zealand Bill of Rights Act 1990. That right exists irrespective of whetherthere is a right of appeal – that is expressly confirmed by s 16(3)(a) of the Judicial14 Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR153.15 Lay v Commissioner of Inland Revenue [2015] NZHC 2962, (2015) 27 NZTC 22–033.Review Procedure Act 2016. In H v Refugee and Protection Officer the SupremeCourt referred to the right in the context of an ouster clause. The Court held:16[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 the HighCourt for judicial review alleging unlawfulness of any kind. That caution isappropriate in this case. What is required is a construction of s 249 thatrecognises Parliament's intention to prevent duplicative proceedings but alsopreserves the ability of the Court to supervise the exercise of public power andprevent injustice occurring when a statutory process fails because thedecision-maker acts unlawfully and an injustice results.[58] And when finding that the clause did not preclude judicial review in that casethe Court went on to say:[78] the privative clause does not prevent the Court from exercising itssupervisory jurisdiction to ensure that the requirements of the Act are met andthe applicant's claim is considered lawfully. Since the decision of the Courtof Appeal in Bulk Gas Users Group v Attorney-General, it has been settledlaw that a privative provision does not necessarily prevent scrutiny of adecision based on an error of law on the part of the decision-maker that isotherwise reviewable.17 The Court may strike out review proceedings wherethe Court is satisfied that the available appeal rights provide a moreappropriate pathway to a remedy than might otherwise have been sought inthe review proceedings.18 But for the reasons given, the deprivation of firstinstance determination as required by the statute could not be remedied by thealternative pathway of appeal in the present case.[59] There will accordingly be some cases where the appeal route would providethe obvious way in which decisions could be challenged, and the pursuit of judicialreview could be seen as an abuse of process. But that is not the case here. Whilst itis conceivable that Mr Lindsay could have pursued objection or appeal rights,including before the Family Court, this would not have been the most appropriateavenue. The present case is one best suited for judicial review. It turns on questionsof statutory interpretation. The High Court has the authority to make declarations inrelation to the true meaning of statutes. A decision of the Family Court might address16 H v Refugee and Protection Officer [2019] NZSC 13, [2019] 1 NZLR 433 (footnote omitted).17 Bulk Gas Users Group v Attorney-General [1983] NZLR 129 (CA) at 133.18 As occurred in Tannadyce, See also Love v Porirua City Council [1984] 2 NZLR 308 (CA)where an application for judicial review of a decision of the Council was struck out, the Courthaving concluded that a claim of defect in the decision was appealable and capable of satisfactoryresolution on appeal.Mr Lindsay's case, but not the interpretation of the statute more generally. TheCommissioner has advanced the argument here on the basis of a point of principle thatwould potentially apply to other cases, and not just the case of Mr Lindsay. Thestatutory regime for objections and appeals is not best equipped to deal with thepresent issue.[60] Whilst there has been some delay in the present case in the sense that the timeperiods provided for the rights of appeal have been exceeded, the delay is not suchthat would warrant the Court declining relief in its discretion for that reason.[61] The decision in Lay v Commissioner of Inland Revenue is directed to a differentquestion.19 It concerns the question of collateral challenge. It is not appropriate for aperson to challenge the legality of an assessment by resisting enforcement. Anassessment is valid and effective unless and until it is set aside. The appeal procedureor judicial review proceedings are the appropriate avenues to address such challenges,not collateral challenges during enforcement proceedings.Other discretionary factors[62] Ms Deligiannis argued that, in addition to the alternative remedies availableunder the objection and appeal processes, there were other factors that meant reliefshould be declined, including:(a) That Mr Lindsay did not bring the proceedings with "clean hands". Heknew Ms Jones had said he was the father in 2003, but took no steps toestablish whether he was before undertaking a paternity test in 2016.(b) That there was prejudice to third parties if judicial review was granted,including the fairness to liable parents who do meet their child supportobligations, and also Ms Jones. She submitted:[Ms Jones] becomes solely responsible for the upbringing andfinancial support of [her son] and misses out on any financialsupport from [Mr Lindsay] as a liable parent. In addition, forthose periods [Ms Jones] was receiving Social Welfare19 Lay v Commissioner of Inland Revenue, above n 15.benefit, the financial tab falls on the taxpayer to support herand [her son]. As per the objects of the Act, it is theresponsibility of parents to provide for their children, not thetaxpayers or third parties.(c) That there was no substantial public benefit in the proceedings as theChild Support Amendment Bill 2020 remedied any wider issues,including by providing a timeframe of 60 days for backdating of childsupport.[63] I have little hesitation in also rejecting these arguments. First, there is realdifficulty with the proposition that the Court should, in its discretion, decline to setaside a determination that someone is liable to pay the Crown approximately $90,000notwithstanding concluding that that amount is not lawfully due. That would seem tobe inconsistent with the very function of the Court, and the rule of law. There wouldhave to be extremely powerful reasons before the Court would adopt that approach.[64] In any event I do not agree with the Commissioner's submissions on the merits.As I have already indicated, this is not a case where the State has stepped in and metMr Lindsay's obligations as a parent. Whilst some social welfare payments wereinitially made to Ms Jones, that was only for a comparatively short period, and thepayments she received were at the reduced rates when no liable parent is identified.In any event the Commissioner argues this case as a matter of principle — that is onthe basis that a person in Mr Lindsay's position is liable even if there has been little orno relevant social welfare payments at all.[65] As for the position of other liable parents, if there are other parents in the sameposition as Mr Lindsay it may be that they have been required to make paymentsunlawfully. It would be wrong for the Court not to declare the law, and apply theresults of that declaration in this case because of the potential for this to be the case.[66] Finally, to the extent that it is appropriate to consider what is before Parliamentby way of a Bill, it is noteworthy that the Bill recognises the unfairness in long periodsof backdating, but the proposals do not remedy the more extreme circumstances suchas the present case. So I struggle to see why that would be a reason why the Courtwould exercise its discretion in favour of the Commissioner.[67] For these reasons I do not accept the Commissioner's arguments that reliefshould be declined in the Court's discretion.Result and Costs[68] Mr Lindsay's judicial review challenge is upheld. There will be a declarationthat the child support assessment of the Commissioner dated 23 November 2017 isinvalid to the extent that it imposed backdated liability to 2003. Leave is reserved asto the precise formulation of that declaration.[69] Mr Lindsay sought indemnity costs under r 14.6(4) of the High Court Rules2016 on the basis that the Commissioner had acted unreasonably in the conduct ofthese proceedings. I accept Ms Deligiannis's submissions that the high thresholdrequired for an indemnity award is not met in this case, however.20[70] There is nevertheless a related concept. Under r 14.6(3)(c) increased costs canbe awarded if a proceeding is of importance to persons other than the parties, and it isreasonably necessary for the party claiming costs to bring the proceedings in theinterests of those affected.[71] As indicated, the Commissioner has argued this case as a matter of principle,and on the basis that she had no discretion. Very little evidence was put before theCourt concerning the individual circumstances relevant to Mr Lindsay's child supportobligations. Mr Lindsay has been required to bring these proceedings to challenge aninterpretation adopted by the Commissioner relevant to the question of backdatedchild support generally. The individual circumstances concerning Mr Lindsay onlybecame relevant on the Commissioner's case on the question of the discretion inrelation to relief. For the reasons I have addressed above, the matters advanced by theCommissioner on that issue had no substance. It emerged during the hearing that, onthe facts of Mr Lindsay's case, no social welfare payments were being made in relationto the child for approximately 11 of the 14 years, and at much reduced rates for theother three. It seems to me that in those circumstances Mr Lindsay has been required20 See Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400; PaperReclaim Limited v Aotea International Limited [2007] 3 NZLR 188 (CA).to address an issue on behalf of those affected by this interpretation more broadly, andit was reasonably necessary for him to do so given the Commissioner's stance.[72] For these reasons it seems to me that an uplift of scale costs is appropriateunder r 14.6(3)(c). In my view uplift of 10 per cent of the costs otherwise awardable(but not the disbursements) is appropriate. The parties have previously agreed this isa category two proceeding, and costs should accordingly be awarded on a 2B basiswith that uplift. If the parties are unable to resolve the final quantification, leave isreserved to file memoranda.Cooke JSolicitors:Wadham Partners, Palmerston North for the PlaintiffCrown Law, Wellington for the Defendant