COLEMAN v THE COMMISSIONER OF INLAND REVENUE [2021] NZHC 1324

COLEMAN v THE COMMISSIONER OF INLAND REVENUE [2021] NZHC 1324 [8 June 2021]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECRI-2020-404-000007[2021] NZHC 1324BETWEEN PETER COLEMANAppellantAND THE COMMISSIONER OF INLANDREVENUERespondentHearing: 18 May 2021Appearances: M Jenkins for AppellantS McMullan for RespondentJudgment: 8 June 2021JUDGMENT OF WYLIE JThis judgment was delivered by Justice WylieOn 8 June 2021 at 11.00 amRegistrar/Deputy RegistrarDate:Solicitors/counsel:Meredith Connell, AucklandM E Jenkins, PukekoheIntroduction[1] On 6 September 2019, Judge Dawson in the District Court at Auckland foundthe appellant, Peter Coleman, guilty of 42 tax related offences committed between2011 and 2016.1[2] The Judge found that Mr Coleman:(a) charge 1 – used a forged document;2(b) charges 2 – 34 – knowingly provided false information to the InlandRevenue Department (the IRD) with intent to obtain goods and servicestax (GST) refunds for various companies in which he was involved, incircumstances where he knew they were not entitled to them;3(c) charge 35 – evaded the assessment or payment of tax by a trust throughwhich Mr Coleman's home was held;4(d) charges 36-41 – failed to provide information to the IRD (income taxreturns), with intent to evade the assessment and payment of incometax;5 and(e) charge 42 – dishonestly used a document.6[3] On 25 November 2019, Judge Dawson sentenced Mr Coleman to four yearsand nine months' imprisonment.71 Inland Revenue Department v Coleman [2019] NZDC 16685.2 Crimes Act 1961, 257(1)(b). Maximum penalty 10 years' imprisonment.3 Tax Administration Act 1994, s 143B(1)(c) and (h). Maximum penalty five years' imprisonmentand/or a fine not exceeding $50,000.4 Tax Administration Act 1994, s 143B(3) (as amended – Inland Revenue Department v Coleman,above n 1, at [87]-[88]).5 Tax Administration Act 1994, s 143B(1)(b) and (f). Maximum penalty five years' imprisonmentand/or a fine not exceeding $50,000.6 Crimes Act 1961, s 228(1)(b). Maximum penalty seven years' imprisonment.7 Inland Revenue Department v Coleman [2019] NZDC 23779.[4] Mr Coleman appealed both his convictions and his sentence. He asserted thathis trial counsel – Jeremy Bioletti –failed to competently discharge duties owed tohim, that the Judge erred in his assessment of the evidence and made errors of fact andlaw and that the sentence imposed was inappropriate and/or manifestly excessive.[5] This matter has passed through the hands of seven lawyers, all of whom havesought and been given leave to withdraw. However, helpfully, on 26 February 2021,the lawyers then acting for Mr Coleman filed a memorandum particularising thegrounds of appeal. Further, Mr Coleman, while between lawyers, filed a voluminousaffidavit together with two ring binders of documents, all of which were in existenceand available at the time of the hearing in the District Court.[6] By the time that the appeal came before me, Ms Jenkins was acting forMr Coleman. She had only recently been assigned. She filed written submissions inadvance of the hearing but they dealt only with the counsel competence issue. I soughtto clarify the extent of the appeal with her. After discussing matters with Mr Coleman,Ms Jenkins confirmed that trial counsel competence remained in issue and that thealleged errors by the Judge, while not abandoned, were subsidiary to the counselcompetence issue. The sentence appeal was abandoned.Factual background[7] Mr Coleman is an accountant. He also has some 25 years' experience inmanaging companies. He has been a director of a number of companies and he hasworked as an insolvency practitioner. He claims expertise in various aspects of thetax system.[8] From mid-2014, Mr Coleman and various entities associated with him wereinvestigated by the IRD. Mr Coleman provided only minimal information toinvestigators. He ultimately failed to respond to formal information requests or to co-operate with the investigation at all.[9] A search under s 16 of the Tax Administration Act 1994 (the Act) ofMr Coleman's residence was undertaken. Mr Coleman worked from that address. Thesearch unearthed some 6,000 pages of documents relating to Mr Coleman's tax affairsand to the tax affairs of various entities he controlled. A compulsory enquiry unders 19 of the Act was carried out on 4 November 2015. Further information was alsoobtained from third parties, including banking records.[10] Broadly, Mr Coleman managed a number of failing businesses. Those entitieswere Hagfish NZ Ltd, BJ Fishing Ltd, Kiwi Fishing Ltd, NZ Marine Seafoods Ltd(also known as Southern Hagfish Ltd) and SPH Fishing Ltd. The companies were allinvolved in fishing ventures. Mr Coleman also had a further company, WakaManagement Holdings Ltd, which he claimed provided management services to thefishing companies in return for the payment of fees.[11] Mr Coleman also controlled a trust – Hunua Holdings Trust. It ownedMr Coleman's home.[12] The charge of using a forged document (charge 1) arose out of a request thatthe IRD made to Mr Coleman for information to support a GST return filed by HagfishNZ Ltd on 14 February 2014. The return showed nil sales but recorded expenses of$189,926.82. Hagfish NZ Ltd sought a GST refund of $24,773.06. Mr Colemanprovided a tax invoice from Nelson Slipway for repairs to a fishing vessel. During thesearch of Mr Coleman's home, the IRD found various reprinted versions of theinvoice. The principal investigator for the IRD, Angela Curtis, gave evidence that thereprinted versions of the invoice showed that multiple attempts had been made tomatch, line up, copy and paste into the invoice a higher GST inclusive figure than wasactually charged. The principal issue at trial was whether the invoice said to supportthe GST refund claim was false, or as Mr Coleman put it, whether there was "a claimof right".[13] The 33 charges (charges 2-34) of knowingly providing false information to theIRD related to various GST refund claims made by the fishing companies.Mr Coleman had provided information to support their returns to the IRD. In part, theclaims for GST refunds were based on management fees said to have been paid by thefishing companies to Waka Management Holdings Ltd. What was at issue waswhether the information provided by Mr Coleman to the IRD to support the GSTrefund claims was false, incomplete or misleading. Mr Coleman also asserted thecompanies were entitled to the GST refunds claimed given the definition of the words"taxable activity" in the relevant tax provisions.[14] The charge (charge 35) of evading the assessment and payment of tax by a trustrelated to Mr Coleman's home. The Hunua Holdings Trust owned the property. Whenit purchased the property in 2001, it sought and obtained a GST refund. Mr Coleman,when requested, provided a copy of the agreement for sale and purchase and a deed oflease recording that the property had been leased to another company controlled byMr Coleman for use as a farm stay. However, the farm stay company did not trade;rather it was used to fund Mr Coleman's personal expenses. Ultimately, it was struckoff the Companies Register. The IRD determined there had been a change of use – i.e.that Mr Coleman was using the property as his personal residence – and that this hadnot been declared. This triggered a liability to return the GST refund to the IRD. Itwas not paid back. Ultimately, the property was sold by the mortgagee and it did notaccount for the GST refund either because it held a declaration from Mr Colemanasserting that the property was not used for a taxable activity. Mr Coleman had alsowritten to the mortgagee's solicitors asserting that the Trust had not claimed a GSTrefund. At trial, Mr Coleman denied that a GST input claim had ever been filed. Itwas his argument that he did not intend to evade the payment of the GST.[15] The six charges (charges 36-41) of failing to provide information to theCommissioner related to Mr Coleman's personal tax returns. It was the IRD's casethat Mr Coleman had failed to file tax returns for the tax years 2011 to 2016(inclusive), that Mr Coleman was receiving significant self-employed income overthose years and that he had failed to account for the same or to pay tax on that income.Mr Coleman challenged the assessments and denied that he intended to evade his taxobligations.[16] The charge of falsely using a document (charge 42) related to a documentknown as an AR590. An AR590 is a formal financial declaration. Mr Colemancompleted the form seeking relief from his tax obligations. The issue at trial waswhether Mr Coleman dishonestly represented his financial position when he appliedfor financial relief.[17] It was the IRD's case that the offending overall was significant and that it hadresulted in unpaid taxes of approximately $1.1 million.[18] The IRD charged Mr Coleman in November 2016 and he was tried by JudgeDawson, sitting alone, between 29 July 2019 and 2 August 2019. On 6 September2019, the Judge released his decision convicting Mr Coleman of each of the offences.District Court decision[19] The Judge outlined the charges, the facts and the relevant provisions in the Actand in the Crimes Act 1961. He recorded that the prosecution evidence was primarilygiven orally through the brief of evidence of Ms Curtis.[20] The Judge then turned to each charge and identified the elements and theevidence relevant to those elements.(a) He found that the evidence for the charge of using a forged documentwas "strong" and proved the charge beyond reasonable doubt.8(b) On the charges of filing false GST returns, the Judge canvassed theevidence relating to the returns filed on behalf of each of Mr Coleman'sfishing companies. He found that the "extensive evidence" proved eachof the 33 charges beyond reasonable doubt.9(c) On the charge relating to Hunua Holdings Trust, the Judge held thatMr Coleman lacked credibility and that a strong inference could bedrawn that he had intended to evade the payment of tax. He found thecharge proved.10(d) In relation to the charges relating to Mr Coleman's personal income taxreturns, the Judge found that the IRD had proved all necessary elements8 Inland Revenue Department v Coleman [2019] NZDC 16685 at [23]-[36].9 At [37]-[85].10 At [86]-[103].of the offences beyond reasonable doubt. He rejected Mr Coleman'sexplanations.11(e) In relation to the charge of dishonestly using a document, the Judgeobserved that some of the elements of the offence were not in dispute.On the disputed element, he preferred the evidence of the IRD overMr Coleman's explanations. Again, he found the charge proved.12[21] The Judge commented overall that Mr Coleman's "credibility and reliabilitydeteriorated the longer he gave evidence" and that Mr Coleman:13 refused to accept undeniable facts and continued to revert to his own spinon what he says was the position which was not based upon reality. Hisversion of events went well beyond mere muddlement and was factually andintellectually dishonest.[22] The Judge convicted Mr Coleman on all charges, having regard to the"overwhelming evidence against him" and his "complete lack of credibility".14Sentencing[23] Judge Dawson noted that Mr Coleman was 59 years old and that he hasprevious convictions, although they did not affect the sentencing. The Judge recordedthat he had had regard to the submissions and the pre-sentence report and that heneeded to impose a sentence that would hold Mr Coleman accountable for the harmdone to the community; "for the money and property obtained from the public purse"and "for the money that ought to have been paid into the public purse".15 He statedthat Mr Coleman needed to take responsibility for his actions. He recorded that he hadconsidered ordering reparation but that Mr Coleman was then bankrupt. He held thatthe sentence imposed needed to denounce Mr Coleman's conduct.[24] The Judge assessed Mr Coleman's culpability and the gravity of his offendingas high. He identified the aggravating features as being the extent of the loss to the11 At [104]-[116].12 At [117]-[126].13 At [127].14 At [130].15 Inland Revenue Department v Coleman [2019] NZDC 23779 at [4].Revenue caused by the offending and the abuse of trust in relation to the New Zealandtax system which relies on the honesty of taxpayers. He considered that there was ahigh level of premeditation to the offending and that Mr Coleman had used hisknowledge of the tax system to offend over a span of five years. The Judge commentedthat the offending was wilful and deliberate.[25] The Judge noted as a mitigating factor that Mr Coleman was an active andcontributing member of his community. However, he noted that the pre-sentencereport described Mr Coleman as someone unwilling to accept wrongdoing who wasfocused on remedying what he considered were inaccuracies.[26] The Judge took the charge of using a forged document as the lead offence. Headopted a starting point sentence of three years' imprisonment. He then applied anuplift of two years for all of the remaining charges. He deduced three months forMr Coleman's contribution to the community. The final sentence imposed was one offour years and nine months' imprisonment on each charge, to be served concurrently.The appeal[27] The appeal against conviction is brought pursuant to s 229 of the CriminalProcedure Act 2011. Where an appellant appeals against conviction in a Judge-alonetrial, he or she must show either that the Judge erred in his or her assessment of theevidence to such an extent that a miscarriage of justice has occurred (s 232(2)(b)), orthat a miscarriage of justice has occurred for any reason (s 232(2)(c)). A miscarriageof justice means any error, irregularity or occurrence in or in relation to or affectingthe trial that has created a real risk that the outcome of the trial was affected or hasresulted in an unfair trial or a trial that was a nullity.16[28] Ms Jenkins did not distinguish between the two grounds of appeal set out ins 232(2)(b) and (c).(a) She primarily argued that a miscarriage of justice had occurred becauseof Mr Bioletti's incompetence. This draws on s 232(2)(c). This16 Section 232(4).subsection is concerned with whether something material has gonewrong with the trial beyond the sufficiency of evidence.17 Central tothe subsection is the concept of a miscarriage of justice. There is a twostep process. First, the Court on appeal must determine that there hasbeen an error, irregularity or occurrence in or in relation to or affectingthe trial. Secondly, the error, irregularity or occurrence must haveeither created a real risk that the outcome of the trial was affected orresulted in an unfair trial or a trial that was a nullity.(b) She did not abandon Mr Coleman's heads of appeal asserting that theJudge erred in his assessment of the evidence and that a miscarriage ofjustice occurred. This raises s 232(2)(b). The correct approach to thisground of appeal was clarified by the Supreme Court in Sena v R.18Such appeals proceed by way of rehearing. The appellate Court isrequired to form its own view of the facts and determine the appealaccordingly. If it comes to a different view than the trial Judge, the trialJudge will have erred and the appeal must be allowed. The appeal isnot however approached de novo and it is for an appellant to show thatan error has been made.Submissions[29] Ms Jenkins submitted that trial counsel failed to competently discharge hisduties, arguing that he gave insufficient attention to the case and failed to prepareadequately for it. She submitted that the evidence established that Mr Bioletti failedto meet Mr Coleman before trial, failed to forward to him in a timely fashion the briefsof evidence disclosed by the IRD and the exhibits, failed to prepare a brief of evidencefor him and failed to put the case for the defence to IRD witnesses. She submitted thatMr Bioletti's "brief submissions" (as they were referred to by the Judge19) wereinsufficient considering the raft of charges against Mr Coleman. She also submittedthat Mr Bioletti did not consult Mr Coleman about them despite Mr Coleman's requestthat he should do so. She argued that, as a result, there was a miscarriage of justice.17 Wiley v R [2016] NZCA 28, [2016] 3 NZLR 1 at [25]; Misa v R [2019] NZSC 134 at [45].18 Sena v R [2019] NZSC 55.19 Inland Revenue Department v Coleman, above n 1, at [48].[30] Mr McMullan, for the IRD, submitted that there was no trial counsel error. Heargued that Mr Bioletti competently discharged his duties and that it was Mr Colemanwho failed to engage with Mr Bioletti in the preparation of his defence. He noted thatMr Coleman had earlier engaged another lawyer who was granted leave to withdrawfrom the case and that, since the appeal was filed, he has engaged seven further lawyerswho have all withdrawn from the case. He submitted that there is a pattern. He arguedin any event, there is no real risk that the outcome of the trial was affected by sucherrors as can be attributed to Mr Bioletti. He submitted that Judge Dawson's findingswere available on the evidence, noting that the IRD's case was chiefly based onuncontested documents. He noted that Mr Coleman gave evidence over the course ofsome two days before the Judge, and put forward his explanation for what occurred.He submitted that it was open to the Judge to reject Mr Coleman's evidence as beingdishonest and unreliable.AnalysisTrial counsel competence[31] A defendant is entitled to a fair trial.20 A defendant also has a right to presenta defence at trial.21 A key aspect of the right to a fair trial is the right to be representedby competent counsel who meets relevant standards and complies with relevantstatutory, regulatory and common law obligations imposed on trial counsel.22[32] The leading authority on the issue of trial counsel competence is the decisionof the Supreme Court in Sungsuwan v R.23 The Court there emphasised the need foran appellate court, considering any appeal based on trial counsel competence, to retainits focus on the question of whether or not a miscarriage of justice has occurred, ratherthan focusing on whether there were shortcomings in counsel's performance and howthose shortcomings might be characterised. Gault J, delivering the majority judgment(for himself and for Keith & Blanchard JJ), noted as follows:20 New Zealand Bill of Rights Act 1990, s 25(a).21 Section 25(e).22 Hall v R [2015] NZCA 403 at [3].23 Sungsuwan v R [2005] NZSC 57, [2006] 1 NZLR 370; R v Scurrah CA159/06, 12 September2016.[70] In summary, while the ultimate question is whether justice hasmiscarried, consideration of whether there was in fact an error or irregularityon the part of counsel, and whether there is a real risk it affected the outcome,generally will be an appropriate approach. If the matter could not have affectedthe outcome any further scrutiny of counsel's conduct will be unnecessary. Butwhatever approach is taken, it must remain open for an appellate court toensure justice where there is real concern for the safety of a verdict as a resultof the conduct of counsel even though, in the circumstances at the time, thatconduct may have met the objectively reasonable standard of competence.Tipping J observed as follows:[115] when counsel's conduct is said to have given rise to a miscarriageof justice, the Court must ask itself first, whether something can fairly be saidto have gone wrong with the process of justice in the way the appellant wasrepresented at the trial. If that is so, the Court must then ask itself whetherwhat has gone wrong has deprived the appellant of the reasonable possibilityof a not guilty or more favourable verdict. If the answer is no, there will be noreal risk of an unsafe verdict and thus no miscarriage of justice. If the answeris yes, there will have been a miscarriage of justice, irrespective of whetherwhat has gone wrong amounts to negligence on counsel's part. [33] The Court of Appeal has observed that allegations of trial counsel error shouldbe treated sceptically where an appellant has been convicted, as the appellant may seekto blame counsel for his or her situation rather than him or herself.24The evidence[34] In the present case, I heard evidence from both Mr Bioletti and Mr Coleman.Broadly, they were in agreement with what occurred.[35] As already noted, Mr Coleman was charged in November 2016. His trial wasscheduled for 3 September 2018. He was initially advised by another lawyer whosought leave to withdraw on 9 October 2017. Leave was granted. Mr Coleman thencontacted Mr Bioletti. They spoke by phone in February 2018. An email exchangefollowed in the course of which Mr Bioletti's proposed fees were discussed.Mr Coleman was unable to pay the fees requested and no retainer eventuated at thispoint.24 R v Pointon [1985] 1 NZLR 109 (CA) at 114.[36] Mr Coleman and Mr Bioletti spoke again by phone in August 2018.Mr Coleman had by this stage been adjudicated bankrupt and he was eligible for legalaid. Mr Bioletti was prepared to act for him and Mr Coleman completed the legal aiddocumentation and sent it, together with the IRD summons, the charging documentsand detail of the charges, to Mr Bioletti on 23 August 2018. Mr Bioletti then askedMr Coleman for the IRD summary of the alleged facts. The legal aid authoritiesgranted funding for Mr Coleman to defend the charges, but at a low level. Mr Biolettiwas not prepared to represent Mr Coleman at this level and he and Mr Colemandiscussed reviewing the level of funding direct with legal aid services. In the event,the legal aid authorities approved a higher level of funding and Mr Bioletti then agreedto act for Mr Coleman. This occurred on 25 August 2018.[37] On 28 August 2018, Mr Coleman emailed the various materials he had receivedfrom the IRD to Mr Bioletti. The materials provided included the email chain ofcorrespondence between Mr Coleman, the IRD and the Court. Mr Coleman also handdelivered to Mr Bioletti's chambers and, at Mr Bioletti's request, a disc containing thedisclosure which had then been provided by the IRD.[38] Mr Bioletti did not make an arrangement to meet with Mr Coleman at this stagenotwithstanding that the trial was then scheduled to commence on 3 September 2018.He said in cross-examination: these projects are long-term projects and there's never any huge panic aboutthem, plus it was obvious that I would need to get the fixture adjourned onthe basis that I needed time to deal with the case.[39] Mr Coleman told me that he had not been able to read the materials on the discprovided to him by the IRD because he did not have the necessary software on hiscomputer to enable him to do so. Mr Bioletti said that he read the materials on thedisc and concluded that Mr Coleman would have to provide him with detailedinstructions. There is however nothing to suggest that Mr Bioletti then sought detailedinstructions from Mr Coleman. Rather, Mr Bioletti applied to adjourn the trial in thecourse of a telephone conference with the Judge on 29 August 2018. I do not knowwhether this was done on Mr Coleman's instructions but nothing turns on this point.It was common ground that the trial was tentatively adjourned to February 2019 andthat Mr Bioletti sent a text message to Mr Coleman advising him of this.[40] On 18 September 2018, the IRD sent an email to Mr Bioletti enclosing anupdated and signed brief of evidence for the IRD investigator, Angela Curtis, andbriefs of evidence for two other IRD witnesses, John Rowling and Angela Martin. TheIRD also enclosed a notice under the Evidence Act 2006 which had been served inJuly 2017, an updated disclosure index and a further disclosure file comprising some400 pages. Mr Bioletti did not promptly forward this material on to Mr Coleman.[41] On 17 October 2018, Mr Bioletti sent another text to Mr Coleman telling himthat the trial had been further adjourned to July 2019. Mr Bioletti said that he toldMr Coleman the new date – 29 July 2019 at 9.30 am. Mr Coleman said thatMr Bioletti simply told him that the trial had been adjourned to July 2019.[42] Neither of the parties had retained the text message. The firm fixture date of29 July 2019, commencing at 9.30 am, was not noted on the Court file until 19 October2018 – two days after Mr Bioletti's email to Mr Coleman. Mr Bioletti was not surewhether he had received an email from the Court advising of the new date prior to 19October 2018. I suspect that Mr Coleman's recollection is likely to be correct and that,on 17 October 2018, Mr Bioletti simply told Mr Coleman in the text that the trial hadbeen adjourned to July 2019. In any event, it is common ground that Mr Coleman senta text back to Mr Bioletti, confirming that he had received the text. It is also commonground that, apart from the text of 17 October 2018, Mr Bioletti did not provideMr Coleman with any other advice about the date and time of the fixture.[43] Mr Bioletti had overlooked forwarding a letter of engagement to Mr Coleman.The letter of engagement was eventually forwarded to Mr Coleman on 30 April 2019.It was signed by Mr Coleman and returned to Mr Bioletti on 21 May 2019.[44] On 9 July 2019 – 20 days before trial – Mr Bioletti sent an email toMr Coleman, saying that he had had no response to his email of 11 June 2019 inrelation to the main prosecution brief from Ms Curtis. He asked when Mr Coleman'sresponse would be available. Mr Coleman responded on 10 July 2019 advisingMr Bioletti that he had not received the email of 11 June 2019 and asking him to resendit.25 He said that he would then respond promptly. On 15 July 2019, Mr Bioletti senta copy of Ms Curtis's brief of evidence to Mr Coleman and he again requested aresponse. This was 14 days prior to the trial commencing. It was put to Mr Biolettiin cross-examination that asking for instructions on a comprehensive brief of evidencefrom the IRD's main witness only two weeks before the trial was "too late".Mr Bioletti's response was "not necessarily".[45] Mr Bioletti was not sure whether he then sent the balance of the materialsdisclosed to him by the IRD on 18 September 2018 to Mr Coleman. There is no recordthat he did so.[46] Mr Bioletti said that he had looked at the disc provided to him by Mr Colemanin August 2018. He also said that it was a complicated case with very manydocuments, running to very many pages. When I asked him how he was intending todefend the charges on Mr Coleman's behalf when he had not met him and had notfound out what his version of events was, Mr Bioletti's answer was:Because he could provide me by email his position. I needed some rawmaterial from his point of view.When I asked Mr Bioletti whether it had occurred to him that he should have activelysought out Mr Coleman, he replied:I probably should have but he's a professional accountant which may haveaffected the way I dealt with him.[47] Mr Coleman read the brief sent to him on 15 July 2019 and prepared somenotes in relation to it. He did not however contact Mr Bioletti. He said that he did notappreciate that the trial was fast approaching and that he did not consider there wasany great urgency to the task.[48] The trial was called at 9.30 am on Monday 29 July 2019. Mr Bioletti waspresent; Mr Coleman was not. The matter was stood down. Mr Bioletti sent25 Mr Bioletti gave evidence as follows: "I think what happened was that I tried to send [the 11 June2019 email] to him but I may not have attached it from memory".Mr Coleman a text message at 9.33 am telling him that his trial was proceeding incourtroom 16. Mr Coleman called Mr Bioletti and Mr Bioletti told Mr Coleman thathe had to attend Court immediately. Mr Coleman arrived in Court at approximately10.25 am. Mr Bioletti met him at the door of the Court. This was the first time thatMr Coleman and Mr Bioletti had met.[49] At some stage one of the charges was amended. It is unclear whetherMr Coleman was in Court when this occurred. There is nothing to suggest thatMr Bioletti discussed this issue with Mr Coleman.[50] The Judge gave Mr Bioletti some 20 minutes to discuss matters withMr Coleman. Mr Bioletti told Mr Coleman that that the Judge had made it clear thathe was not prepared to adjourn the trial. During the course of their discussions,Mr Coleman was presented with a document by Mr Bioletti which he was asked tosign. The document recorded that Mr Coleman had not provided any instructions toMr Bioletti. Mr Coleman signed the document; he told me that he signed it because itwas true. In cross-examination, Mr Bioletti accepted that he was not ready to proceedwith the trial and that it would have been much better if he had had input fromMr Coleman. Nevertheless, Mr Bioletti did not apply for an adjournment. Nor did heseek leave to withdraw. The trial commenced at approximately 10.45 am. The IRDopened its case and then called its first witness, Ms Curtis. Her brief of evidence was115 pages long and it was accompanied by six comprehensive schedules. Mr Biolettiproceeded to cross-examine Ms Curtis at the end of her evidence-in-chief, albeitrelatively briefly.[51] On the evening of 29 July 2019, Mr Bioletti sent additional IRD briefs ofevidence to Mr Coleman. He had received those briefs from the IRD on 26 July 2019.[52] In cross-examination, Mr Bioletti accepted that he had not discussed variousaspects of the IRD's case with Mr Coleman. Mr Bioletti said: not having had instructions from him prior to the trial meant that the wholesituation was washed up in terms of time for any individual issue.He went on to explain this answer as follows:What I am saying is that because there were no instructions before the trial, itmade it difficult to focus on the number of issues during the trial. So I'mtrying to do my own analysis and work within the trial actually happening.Mr Bioletti accepted that he did not cross-examine IRD witnesses in relation to someof the issues and one of the charges.[53] The trial was scheduled for seven days. It took five days. The Court sat forhalf a day only on the Tuesday and started late on the Wednesday. However,Mr Bioletti did not sit down with Mr Coleman on either the Tuesday afternoon or theWednesday morning to discuss the case with him. Nor did Mr Bioletti prepareMr Coleman for giving evidence, although he did advise Mr Coleman that he shouldgive evidence. Mr Coleman did so over the course of some two days.[54] The Judge asked for written submissions at the end of the trial. The IRDthrough its counsel filed comprehensive written submissions. Mr Bioletti'ssubmissions ran only to a "couple of pages". He did not consult Mr Coleman overtheir preparation. It was Mr Coleman's evidence that, at the conclusion of the trial, hespecifically asked Mr Bioletti about the preparation of closing submissions and askedto review them before they were filed. He said that Mr Bioletti told him he wouldcontact him once he had received the IRD submissions. Mr Bioletti did not do so.Mr Coleman followed the matter up with Mr Bioletti. Mr Coleman was told byMr Bioletti that he had filed the submissions and that it was all straightforward. Hesaid that when he asked Mr Bioletti what the IRD had filed, Mr Bioletti responded,"the usual stuff".26Conclusion – counsel competence[55] On the evidence, I have no hesitation in concluding that Mr Bioletti's conductof the defence was well below the standard expected of trial counsel and that hebreached various obligations that he owed to Mr Coleman. Mr Bioletti failed toproperly consult with Mr Coleman prior to trial. While Mr Coleman provided thedisclosure disc he had received from the IRD to Mr Bioletti, there is nothing to suggest26 These allegations were not put to Mr Bioletti, who gave his evidence first. I indicated to counselthat I was prepared to consider an application for Mr Bioletti to be recalled but counsel did notmake such an application.that Mr Bioletti ever asked Mr Coleman whether or not he had read the materials onthe disc. Mr Bioletti did not go through the IRD's evidence and disclosure in advancewith Mr Coleman. Mr Bioletti did not obtain in advance Mr Coleman's instructionson any aspect of the matter. This was in breach of the Conduct and Client Care Rulesput in place by the New Zealand Law Society.27 There is no prescribed standard forobtaining instructions.28 Nevertheless, in the relatively complicated circumstances ofthis case, Mr Bioletti's preparation for the trial was plainly inadequate. Mr Biolettihad no effective instructions at all. He belatedly asked Mr Coleman for his commentson the evidence from the IRD's principal investigator, but when those comments werenot forthcoming, he did not chase Mr Coleman up. Indeed, Mr Bioletti did not meetwith Mr Coleman until the trial was underway. Further, he did not make other IRDbriefs available to Mr Coleman until after the trial had commenced and he failed toprepare a brief of evidence for Mr Coleman, but nevertheless advised him to giveevidence at the trial.[56] Mr Coleman is not blameless in what occurred. Even on his own evidence, heknew that the trial was scheduled for some time in July 2019. He took no steps to tryand pre-empt Mr Bioletti into action. His response to perusing Ms Curtis's brief ofevidence, when it was belatedly provided in mid-July 2019, was at best casual – atworst dismissive. He took no steps to try and protect his own position or to ensurethat Mr Bioletti was properly briefed.A miscarriage of justice?[57] The more difficult question is whether or not Mr Bioletti's incompetence hascaused a miscarriage of justice and whether there is a real risk that the outcome of thetrial was affected.[58] As I have noted, there were 42 charges. Some were stand-alone charges whileothers fell into groups. Charge 1 stood alone; charges 2-34 fell into a group; charge35 stood alone; charges 36-41 were another group; charge 42 also stood alone. I haveconsidered each charge or group of charges. Before doing so, I record that I agree27 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 13.3.28 Morris v R [2014] NZCA 383 at [47].with the conclusion reached by Mr Bioletti that Mr Coleman had to give evidence.Given the charges and the IRD's case, and given that the IRD's case was in very largepart based on documents seized from Mr Coleman's office during the search, he hadno alternative but to do so. Accordingly, I have taken the evidence given byMr Coleman at trial into account.[59] The first charge alleged that Mr Coleman used a forged document. I have setout the background to this charge above at [12]. It was the IRD's case that, when itasked Mr Coleman to provide information to support Hagfish NZ Ltd's GST returnand in particular the refund claimed, Mr Coleman supplied a Nelson Slipway taxinvoice totalling $76,095.50. Ms Curtis said in evidence that she spoke to themanaging director of Nelson Slipway and that he had advised that the company'sinvoice had been for $57,680.34.[60] Nelson Slipway had originally proposed invoicing Hagfish NZ Ltd for$76,095.50 but, after negotiations with Mr Coleman, the invoice had been reduced to$57,680.34. When Mr Coleman's home was searched, various reprinted versions ofthe Nelson Slipway invoice were discovered. It was Ms Curtis's evidence that variouscopies of the invoice showed that multiple attempts had been made to match, line up,copy and paste into the invoice the higher GST inclusive figure of $76,095.50. Theeffect of this change was to raise the GST inclusive value of the tax invoice from$57,680.34 to $76,095.50, and thus to increase the refund claim.[61] It was Mr Coleman's argument that, while the original invoice seeking$76,095.50 from Nelson Slipway has been discounted to $57,680.34, this discountwas subject to a condition which had not been met. Therefore, he argued Hagfish NZLtd remained liable to Nelson Slipway for the full amount. At trial, he claimed thathe had lost the original invoice and that he had therefore created "a buyer's invoice".He accepted that he had overclaimed but said that he had amended the claim in asubsequent Hagfish NZ GST return. The IRD said that no amended return had beenfiled.[62] Mr Bioletti, in his affidavit filed in respect of the appeal, asserted that thedefence was communicated to him by Mr Coleman and that he advancedMr Coleman's explanation in his defence at the trial. He was not challenged on thisassertion in cross-examination.[63] I have checked the transcript of the evidence given at the trial. Mr Bioletti didnot cross-examine Ms Curtis about the IRD's allegations. However, Mr Rowling, themanaging director of Nelson Slipway, was also called by the IRD. He was cross-examined by Mr Bioletti and Mr Coleman's version of events was put to him. It wasthe Mr Rowling's evidence that the only document that Nelson Slipway createdreferring to the higher figure was a "job cost report" and that this amount wassubsequently negotiated down to the lower figure which was contained in the invoice.[64] Mr Bioletti also called Mr Coleman and Mr Coleman advanced his defence inrelation to the issue. He asserted that it was appropriate for him to generate a "buyercreated" invoice for the higher figure. Mr Coleman was in turn cross-examined by theIRD's lawyer as to his assertions.[65] I am satisfied that Mr Coleman's version of events was fully advanced beforethe Judge. The Judge made various factual findings in relation to the charge. Herejected Mr Coleman's evidence and accepted the evidence of Mr Rowling andMs Curtis. Mr Coleman in his affidavit filed in support of the appeal has not pointedto any error in the Judge's analysis. Nor is there anything in the memorandum of 26February 2021 detailing the grounds of appeal which demonstrate to me that the Judgeerred. I am not persuaded that a miscarriage of justice has occurred in relation tocharge 1 or that there is a real risk that the outcome of the trial in relation to this chargewas affected.[66] I now turn to the 33 charges which alleged that Mr Coleman knowinglyprovided false information to the IRD with intent to obtain GST refunds, incircumstances where he knew that the companies on whose behalf the refunds werebeing sought were not entitled to them.[67] At trial, the primary issue was whether the expenses claimed in each returnwere false. Mr Coleman on appeal asserted that the Judge erred when he found that:(a) the expenses were false; and(b) various fishing companies did not undertake any taxable activity.[68] Many but not all of the refunds sought relied on management fees said to havebeen charged to the fishing companies by Waka Management Holdings Ltd, one ofMr Coleman's entities. Mr Bioletti did cross-examine Ms Curtis about the WakaManagement fees, albeit relatively briefly. He did not cross-examine her about any ofthe other invoices relied on. Mr Coleman now says that there was documentationavailable to support the refunds sought in the GST returns. He asserts in thememorandum of 26 February 2021 that this documentation would have been putbefore the Court if Mr Bioletti had prepared properly for the trial. Copies of thedocumentation said to support the invoices are annexed to his affidavit. Mr Biolettisays that Mr Coleman did not make these documents available to him and that, as aresult, he did not advance these matters in Mr Coleman's defence. Mr Bioletti saysthat this was due to the "lack of instructions" he received from Mr Coleman prior totrial.[69] As to whether or not the fishing companies were undertaking a taxable activity,Mr Coleman said that there were various export sales invoices and other documentsshowing that the fishing companies – or at least some of them – were undertakingtaxable activities. Mr Bioletti said that Mr Coleman did not give him instructions inrelation to this issue prior to trial.[70] Mr Coleman also claims that he was not given copies of some of the exhibitsrelied on by the IRD to review prior to trial. Mr Bioletti's answer is that Mr Colemanhad the disclosure prior to it being given to him. With respect to Mr Bioletti, hisassertion assumes that Mr Coleman was able to look at the disclosure. As I have notedabove, it was Mr Coleman's evidence that he could not read the electronic disclosurebecause he did not have the appropriate software on his computer. There is nothing tosuggest that Mr Bioletti checked whether or not Mr Coleman had read the IRDdisclosure. He did not discuss it at all with Mr Coleman prior to trial.[71] In these circumstances, I am concerned that there could have been amiscarriage of justice as a result of Mr Bioletti's incompetence. Mr Coleman'sdefence to charges 2 – 34 does not seem to have been put, certainly not adequately, tothe Judge, perhaps because Mr Bioletti did not fully appreciate what the defence was.The IRD's principal investigator was not cross-examined on many of the underlyinginvoices. While Mr Coleman gave evidence, he did so largely without reference tothe documentation (perhaps because he had not seen it). Further, a number of thequestions asked by Mr Bioletti in Mr Coleman's evidence-in-chief were cursory. Withsome of the charges, Mr Coleman was simply referred to the relevant GST return andasked whether it was an accurate record of expenses and sales for the period. Othercharges were put globally to Mr Coleman. For example, one of the questions askedby Mr Bioletti was as follows:Now charges 28, 29, 30, 31, 32, 33, 34 all related to GST returns for SPHFishing Ltd. Are those returns accurate?A: Well I – they're accurately filed. They're prepared and filed as I saidThere was some very limited follow up discussion in relation to charge 30 but nothingin relation to the other charges. Other charges – for example, charges 18 and 19 –were not mentioned at all.[72] In my view, there is a real risk that the outcome of the trial was affected byMr Bioletti's failure to put the IRD to proof, by his failure to brief Mr Coleman andobtain instructions from him, and by his resulting failure to put the defence throughMr Coleman in the course of his evidence-in-chief. Accordingly, I set aside theconvictions in respect of charges 2 to 34 (inclusive) relating to the GST refunds and Ivacate the sentences imposed in respect of these charges.[73] I now turn to charge 35 – the Hunua Road GST charge. The IRD asserted thatMr Coleman evaded the refund of GST which he knew was payable on the forced saleof his residential property. Ms Curtis gave evidence that the mortgagee of the propertydid not return GST on the sale first, because it held a declaration from Mr Colemanstating that Hunua Holdings Trust had not filed a GST return because it did notundertake any taxable activity and secondly, because its solicitors had received writtenadvice from Mr Coleman in 2015 asserting that a GST refund had never been claimedon the property. The IRD said in evidence through Ms Curtis that Hunua HoldingsTrust was registered for GST, that it had filed a GST return in November 2001 andthat it received a refund of GST of $36,510.97 because it asserted that the propertywas going to be used for a taxable activity. Mr Coleman provided documents tosupport the claimed refund. GST was required to be returned on the sale of theproperty because the use of the property had changed in the interim, and it was insteadbeing used by Mr Coleman as his personal residence.[74] At trial, the only question put by Mr Bioletti to Ms Curtis in relation to HunuaHoldings Trust in cross-examination was to seek confirmation that the Trust had beenderegistered for GST purposes. When Mr Coleman gave his evidence-in-chief,Mr Bioletti did ask him about the Trust. Mr Coleman accepted that, in 2001, an inputclaim was made when the Trust purchased the property and that it had received a GSTrefund from the IRD of $36,510.97. He also accepted that the Trust should have beenderegistered for GST purposes in 2014, and that this would have required a "privateuse adjustment" given that a GST refund had been received when the property waspurchased. He also accepted that the GST refund should have been returned to theIRD by the Trust. When he was cross-examined by counsel for the IRD, he wasreferred to the letter which he had sent to the mortgagee in 2015. He accepted that hehad prepared the letter and that it asserted that Hunua Holdings Trust had not claimeda GST input tax credit on the purchase of the property. He attempted to explain theletter away. He denied any intent to evade payment of the GST refund.[75] In my view, the position in relation to this charge was straightforward.Mr Coleman in his affidavit takes the issue no further – he asserts that the letter to themortgagee's solicitors was correct but there is nothing to support the assertion and itis directly contrary to the IRD's position and the documentation provided by it. In thememorandum of 26 February 2021, it is alleged that the Judge was wrong to find"evasive intent". The Judge was clearly entitled to reject Mr Coleman's version ofevents. No error by the Judge has been made out. There has been no miscarriage ofjustice in relation to this charge.[76] I now turn to charges 36 – 41, all of which relate to Mr Coleman's personalincome tax liability.[77] It was the IRD's case that Mr Coleman had not filed income tax returns sincethe end of the tax year ending 31 March 2011. Mr Coleman accepted at trial that hewas required to file returns and that he had not done so. He said that the reason he hadnot done so was because his personal tax affairs were caught up with the tax affairs ofthe various companies he owned and controlled and that he had simply not got "to thepoint" of being able to take care of his own personal tax situation. He accepted thathe was self-employed from March 2011 onwards.[78] The IRD asked the Judge to infer that Mr Coleman intended to evade theassessment of tax payable by him personally. The Judge accepted that this was theinference which should be drawn, noting Mr Coleman's knowledge and experience oftax related matters. The Judge commented that Mr Coleman "deliberately did not filetax returns for a long period of time".29[79] In his affidavit, Mr Coleman asserts that the IRD relied solely on theoutstanding returns and on the fact that no payments were made by him after defaultincome tax assessments were issued. He claimed that he did not know that the defaultassessments had been issued.[80] The Judge considered relevant law and found on the facts that Mr Coleman hadintended to evade the assessment of payment of tax. He noted the long period ofunfiled returns – 2011 to 2015 – the lack of a credible explanation for the failure byMr Coleman and the fact that Mr Coleman had made no attempts to pay any of the taxonce default assessments issued, despite requests by the IRD for payment, albeitcollection proceedings in the District Court and eventually bankruptcy proceedings.There is nothing in Mr Coleman's affidavit or in the 26 February 2021 memorandumwhich persuades me that the Judge erred in his finding.29 Inland Revenue Department v Coleman, above n 1, at [114].[81] Mr Coleman also disagreed with the IRD's assessment of his tax liability. Thathowever is not a defence to the charges. Such charges do not require proof of theamount of tax evaded.30[82] I am satisfied that Mr Coleman's explanations were before the Judge and thatthe Judge was entitled to dismiss them. No error by the Judge has been made out.There is no possibility of a miscarriage of justice in relation to this charge.[83] The final charge – charge 42 – related to Mr Coleman's provision of a AR590form. An AR590 form is used when a person declares his or her financial position tothe Revenue. It is required where a person is seeking relief from tax arrears.[84] The only issues at trial were whether the document which Mr Colemansupplied to the IRD was an honest representation of his financial position, and if it wasnot, whether Mr Coleman knew that it was inaccurate.[85] The IRD, through Ms Curtis, said that Mr Coleman declared in the AR590 formthat he had earned $6,000 (net) per month, or $94,000 before tax per year. He alsodeclared that he could not repay his tax debt to the IRD. The IRD asserted that theform was inaccurate because the evidence disclosed that Mr Coleman earnt otherincome, and/or used other accounts to fund personal expenses. By way of example,the IRD said that the AR590 omitted reference to Waka Management Holdings Ltd'sbank accounts, which Mr Coleman used to make personal purchases for his ownbenefit.[86] All of the assertions/explanations now advanced by Mr Coleman in hisaffidavit were given by him at trial. He was cross-examined extensively in relation tothem. His explanations were before the Judge and they were rejected by him. Thereis force in the IRD's submission before me that the answers Mr Coleman gave whenhe was cross-examined by IRD's counsel at trial showed a degree of evasion. Again,I am not persuaded that the Judge erred or that there has been any miscarriage of justicein regard to this charge.30 Smith v R [2008] NZSC 110 (2009) 24 NZTC 23,176 at [2].Result[87] For the reasons I have set out, I allow the appeal and set aside the verdicts, theconvictions entered and the sentences imposed in relation to charges 2 – 34 (inclusive).The convictions entered on all other charges stand and the appeal is dismissed inrelation to those charges.[88] Mr Coleman was sentenced by the Judge to four years and nine months'imprisonment on each charge, with the terms of imprisonment to be servedconcurrently. The sentence appeal was abandoned. It follows that there is no alterationrequired to the sentence that Mr Coleman is currently serving.[89] Charges 2 – 34 (inclusive) are remitted to the District Court at Auckland forretrial.____________________________Wylie J