MAWHINNEY V COMMISSIONER OF INLAND REVENUE HC AK CIV-2012-404-3985

MAWHINNEY V COMMISSIONER OF INLAND REVENUE HC AK CIV-2012-404-3985 [4 April 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-3985[2013] NZHC 667UNDER the Goods and Services Act 1985 and theTax Administration Act 1984IN THE MATTER OF an application for summary judgment underHigh Court Rules Part 12BETWEEN PETER WILLIAM MAWHINNEYPlaintiffAND COMMISSIONER OF INLANDREVENUEDefendantHearing: 13 December 2012Counsel: Plaintiff in personP Courtney and T Gillbanks for DefendantJudgment: 4 April 2013JUDGMENT OF ASSOCIATE JUDGE R M BELLThis judgment was delivered by me on 4 April 2013 at 1:00pmpursuant to Rule 11.5 of the High Court Rules....................................Registrar/Deputy RegistrarSolicitors:Crown Law Office (P Courtney) P O Box 2858 Wellington 6140Email: Pauline.courtney@crownlaw.govt.nz / trina.gillbanks@ird.govt.nzCopy for:P W Mawhinney, c/o Swanson Superette, P O Box 95-157 709 Swanson Road, SwansonEmail: pwmh@xtra.co.nz[1] Mr Mawhinney, the trustee of the Forest Trust, applies for summary judgment for $594,210.48. He says that the Commissioner of Inland Revenue owes this sum to the trust as excess tax under ss 20(5), 45 and 46 of the Goods and Services Tax Act 1985. The claim arises primarily out of a GST return the trust made in October 2011. The Commissioner has withheld payment under s 46 of the GST Act while the return is investigated. Mr Mawhinney says that the Commissioner is relevantly satisfied that the return is in order; and alternatively that the refund is payable because the Commissioner did not initiate an investigation within fifteen working days of receiving information requested under s 46(4).Preliminary mattersMr Mawhinney's bankruptcy[2] Mr Mawhinney is an undischarged bankrupt. However, in this proceeding he sues as the trustee of the Forest Trust. The assets of the trust have not vested in the Official Assignee.1 The Commissioner does not dispute that a trustee retains his trustee powers after adjudication. It is not suggested that those powers have now vested in the Official Assignee under s 101 of the Insolvency Act.Resignation of other trustees[3] When the case was called on 21 August 2012, Mr Mawhinney said that he was one of three trustees. I held that if there were three trustees, they all had to be parties to the proceeding. Mr Mawhinney said that he had the power to appoint and dismiss trustees. I gave directions that if he was to be the only plaintiff, the other trustees were to be removed. Mr Mawhinney has filed a late affidavit saying that the other trustees have retired. I accept that evidence.Mr Mawhinney's affidavit of 4 December 20121 Insolvency Act 2006, s 104.[4] The Commissioner objected to another late affidavit of Mr Mawhinney sworn on 4 December 2012. The affidavit refers to a GST return for the period ending 31 October 2011 which includes input tax for the purchase of a property at 131 Anzac Valley Road, Waitakere. The affidavit is aimed at showing that a taxable activity, forestry, is being carried out on the property. That is not a matter I have to decide in this application. The affidavit is therefore not relevant for this decision. It may however be relevant in later hearings.Summary judgment application[5] It is possible to apply for summary judgment application against the Commissioner of Inland Revenue for tax matters: Paul Finance Ltd v Commissioner of Inland Revenue.2[6] Mr Mawhinney's statement of claim seeks more extensive relief than hisapplication for summary judgment. He accepts that other parts of his claim may be open to argument. I do not have to consider those other parts. He has limited his summary judgment application to those matters that he considers are indisputable.[7] For the summary judgment application, Mr Mawhinney has made some concessions. They are not necessarily admissions that can be used against him at a substantive hearing.[8] He has accepted that certain matters of fact asserted by the Commissioner are arguable, and he does not ask the court to find against the Commissioner on those points. So he does not contest that the Commissioner has issued an amended assessment for the GST period ending 31 July 2009 showing the sum as nil, and that the Commissioner was arguably entitled to do so under s 89C(eb) of the Tax Administration Act 1994 because the Commissioner considered that she had reasonable grounds to believe that Mr Mawhinney had been involved in fraudulent activity.2 Paul Finance Ltd v Commissioner of Inland Revenue (1995) 17 NZTC 12,379 (CA).[9] Similarly, the evidence shows that there are differences as to: the dates the trust submitted returns to the Commissioner; the dates the Commissioner gave notice under s 46 to the trust that payments would be withheld pending investigations; and the dates when the trust received those notifications. Sensibly, Mr Mawhinney accepts that the Commissioner has an arguable case for her version of the relevant dates and that these are trial issues.Statutory entitlement as basis for claim[10] Mr Mawhinney's statement of claim refers to causes of action for breach ofstatutory duty, money had and received and breach of duty of care. In pleading the case that way he has perhaps made his job more difficult for himself than he needs to. I propose to consider whether he can show that the trust has a statutory entitlement to a refund, without going further into questions of breach of statutory duty in tort or claims in restitution. If the Commissioner is under a statutory duty to pay a refund to the trust but has not done so, then judgment can be given in favour of the trust.The Commissioner's additional submission[11] At the hearing the Commissioner asked for the opportunity to file a supplementary submission addressing a question that had arisen in argument – what remedies were available to the taxpayer if the Commissioner delayed in investigating a return under s 46 of the Goods and Services Tax Act 1985? In a minute I directed the Commissioner to file and serve the submission by 21 December 2012 and Mr Mawhinney to file and serve his response by 18 January 2013. The Commissioner prepared her submission in time and served it on Mr Mawhinney, but filed it in the Wellington registry of the court. It was later refiled in Auckland but it did not reach me until 11 March 2013. Mr Mawhinney has not filed a response. The time for him to reply has expired.[12] The Commissioner's additional submission set out some factual matters,which did not appear to be the subject of evidence. I was only interested in the legal matters. I have disregarded the factual elements.GST returns[13] The Forest Trust was registered for GST on 20 May 2009. Its taxable activity is said to be property development. The Forest Trust made GST returns to the Commissioner of Inland Revenue for the following periods:GST period ended GST ($) Cumulative Position (- = refund) ($) (- = refund)31 May 09 -319.26 -319.2630 Jun 09 -1,917.42 -2,236.6831 Jul 09 -67,011.65 -69,248.3331 Aug 09 -1,478.18 -70,726.5130 Sep 09 -2,214.95 -72,941.4631 Oct 09 -575.10 -73,516.5630 Nov 09 -2,398.77 -75,915.3331 Dec 09 -1,300.38 -77,215.7131 Jan 10 -249.39 -77,465.1028 Feb 10 -1,028.45 -78,493.5531 Mar 10 -207.83 -78,701.3831 Apr 10 -1,609.76 -80,311.1431 May 10 -58.47 -80,369.6130 Jun 10 -305.53 -80,675.1431 Jul 10 -38.41 -80,713.5531 Aug 10 -322.99 -81,036.5430 Sep 10 64,806.89 -16,229.6531 Oct 10 -177.62 -16,407.2730 Nov 10 -149.14 -16,556.4131 Dec 10 -175.68 -16,732.0931 Jan 11 -263.07 -16,995.1628 Feb 11 -74.12 -17,069.2831 Mar 11 -61.08 -17,130.3630 Apr 11 -77.74 -17,208.131 May 11 -592.45 -17,800.5530 Jun 11 879.73 -16,920.8231 Jul 11 -285.84 -17,206.6631 Aug 11 -120.69 -17,327.3530 Sep 11 -135.67 -17,463.0231 Oct 11 -660,060.93 -677,523.9530 Nov 11 -62.61 -677,586.5631 Dec 11 -88.56 -677,675.12Mr Mawhinney's two arguments[14] Mr Mawhinney's case relies on two broad arguments. The first is that theCommissioner had determined that the refund was payable. He relies on two sets of documents the Commissioner sent to the trust on 2 May 2012 and 20 June 2012. He says that these documents are notices of assessment and that they bind the Commissioner. Further they gave notice of decisions by the Commissioner. He says that these documents show that the trust is entitled to refunds of $604,786.72 as follows:GST periods ended GST balances shown onnotices of assessment ($)(- = refund)31 May 09 and 30 June 2009 031 July 2009 031 August 2009 to 31 August 2010 030 September 2010 55,543.4331 October 2010 to 31 May 2011 031 June 2011 [sic] 433.8631 July 2011 to 30 September 2011 031 October 2011 -660,612.8430 November 2011 -62.6131 December 2011 -88.56TOTAL -604,786.72[15] Mr Mawhinney says that the Commissioner has paid the trust $5,288.24 forexcesses due under s 45 and 46 and for interest. In a "baker's dozen" approach, hehas taken off a further $5,000 to allow for any further deductions that the Commissioner might claim for interest or similar adjustments. He claims $594,210.48 as the minimum amount with which the Commissioner cannot take issue.[16] For his second argument, Mr Mawhinney says that under s 46 of the Goods and Services Tax Act the trust is entitled to refunds because the Commissioner did not initiate an investigation within fifteen working days of receiving information requested under s 46(4).[17] The Commissioner's position is:(a) She has lawfully retained refunds for 7 GST periods because she gave valid notices to withhold payments under s 46. In particular, for the period ending 31 October 2011 (the claimed refund of $660,060.93) timely notice was given to the trust of investigation of the return under s 46(5).(b) She has paid out refunds and interest3 for 10 periods ($5,288.24);(c) She has offset refunds due for 13 periods against tax the trust had self-assessed as being payable for the periods 30 June 2010 and 30 September 2010;(d) For the GST period ended 31 July 2009, the Commissioner validly amended the assessment from $67,011.65 to nil under s 89C(eb) of the Tax Administration Act;3 Under the Tax Administration Act 1994, s 120D(3).(e) The two sets of documents that the trust relies on and that were enclosed in the letters of 2 May 2012 and 20 June 2012 are not assessments or notices of assessment and are not admissions binding the Commissioner. The documents had another purpose.(f) She has not made any assessments, except for the period ending 31 July 2009.(g) Section 46 does not allow a taxpayer to claim payment of excess tax if the Commissioner takes no action for more than fifteen working days after receiving requested information.Some relevant tax provisions[18] GST works by a system of self-assessment: s 92B Tax Administration Act1994 and s 16(6) GST Act. A taxpayer's GST return contains a notice of assessment.[19] Section 20 of the GST Act provides for the calculation of GST by deducting input tax from output tax in each GST period. If the output tax is more than the input tax, the taxpayer pays the Commissioner the difference. If the input tax is more than the output tax, the Commissioner pays the taxpayer the difference. Section 20(5) says:If, in relation to any taxable period and any registered person, the total amount that may be deducted under subsection (3) exceeds the aggregate amount of the output tax of that registered person attributable to that taxable period, the amount of the excess shall, subject to this Act, be refunded to that registered person by the Commissioner pursuant to section 46 of this Act.[20] Section 45 provides for refund of excess tax:45 Refund of excess tax(1) Subject to this Part, and to Part 11 of the Tax Administration Act 1994, the Commissioner must refund an amount that a person has paid as tax if—(a) the Commissioner is satisfied that the amount represents an excess over the amount properly payable for a taxable period; and(b) the 4-year period referred to in section 108A of the Tax Administration Act 1994 has not ended....[21] Section 46 gives the Commissioner the right to withhold payments:(1) Subject to this section, if the Commissioner is required to refund an amount to a registered person under section 19C(8) or section 20(5) of this Act, the Commissioner shall refund the amount—(a) except when paragraph (b) applies, not later than 15 workingdays following the day on which the registered person'sreturn was received by the Commissioner; or(b) the day after the working day on which the Commissioner—(i) determines the amount is refundable, after first having—(A) investigated the circumstances of the return in accordance with subsection (2); or(B) reviewed the information requested in accordance with subsection; and(ii) is satisfied that the registered person has complied with the person's tax obligations.(2) If the Commissioner is not satisfied with a return made by a registered person, the Commissioner—(a) may investigate the circumstances of the return:(b) may request the registered person to provide further information concerning the return.(3) If a registered person fails to provide a return for any taxable period as required by this Act, the Commissioner may withhold payment—(a) of any tax otherwise refundable under this Act or the Tax Administration Act 1994; or(b) of any interest payable under Part 7 of the Tax Administration Act 1994—until the registered person complies with the requirement.(4) The Commissioner must give a request for information concerning a return under subsection (2)—(a) within a period of 15 working days following the day on which the return is received by the Commissioner (in the case of an initial request for information); and(b) within a period of 15 working days following the date of receipt of any information previously requested by the Commissioner (for subsequent requests for information).(5) The Commissioner must notify the registered person—(a) of the Commissioner's intention to investigate the circumstances of the return under subsection (2); and(b) of the Commissioner's intention to withhold payment under subsection (3)—within 15 working days following the day on which the return is received by the Commissioner.(6) If, but for this subsection, a registered person would be entitled to an amount as a refund under section 19C(8) or 20(5) or45 or 78B(5)(c) or under the Tax Administration Act 1994, or as a payment of interest under Part 7 of the Tax Administration Act 1994, the Commissioner may apply the amount, in accordance with a request under section 173T of the Tax Administration Act 1994 or in the absence of a request in such order or manner as the Commissioner may determine, in payment of—(a) tax that is payable by the person:(b) an amount that is payable by the person under another Inland Revenue Act.(7) If, but for this subsection, a person who is a specified agent of an incapacitated person, as those terms are defined in section 58(1), would be allowed an amount as a deduction under section 20(3) by virtue of section 58(1C), the Commissioner may apply the amount in payment of—(a) tax that is payable by the incapacitated person:(b) an amount that is payable by the incapacitated person under another Inland Revenue Act.[22] In Contract Pacific Ltd v Commissioner of Inland Revenue4 the Supreme Court explained the purpose of s 46:The scheme and purpose of s 46[22] Section 46 is addressed solely to timing of payments rather than ultimate liability. Thus:4 Contract Pacific Ltd v Commissioner of Inland Revenue [2010' NZSC 136; [2011] 1 NZLR 302at [22]-[23].(a) If the Commissioner can make a prompt determination that the return is not accurate, he may issue an assessment denying any refund or approving only a smaller refund.12 If such an assessment is made within 15 working days of receipt of the return, the refund claimed is not payable under s 46(1)(a). Counsel on both sides accepted that this was so even though this particular situation is not expressly provided for in s 46.(b) Payment by the Commissioner of a refund in response to a GST return does not curtail his powers of investigation and assessment. If it later transpires that the taxpayer was not entitled to the refund, the Commissioner may recover the overpayment by the exercise of his powers of assessment and recovery.This is not to downplay the significance of the timing issues which are addressed by s 46. The way in which the GST system works is that after each taxable period a taxpayer makes a return bringing toaccount that person's outputs and inputs during that period, and then either pays a debit balance to the Inland Revenue Department or claims from it a credit balance. Confidence in the GST system would be lost and great inconvenience potentially caused to businesses if the Department were routinely to delay making refunds of credit balances appearing in GST returns. Therefore Parliament has put inplace a control on the Commissioner's right to withhold a GSTrefund pending the conclusion of his review of a GST return. That is the function of s 46. Its policy is to require the Commissioner to act promptly in processing returns and paying refunds. But although there are good policy reasons why the Commissioner should refund GST promptly, the tax system would be subject to abuse if the Commissioner were required in all cases to pay first and investigate later.[23] Section 46 seeks to balance the two policy considerations just referred to. It does this by providing a 15-day time limit within which the Commissioner must act under s 46(4) and (5), in default of which the Commissioner must make the refund sought. Under subs (1) the Commissioner must make a refund within 15 working days of receipt of the GST return unless para (b) of that subsection applies. It does not apply unless he adheres to the time limit(s) stipulated in subss (4) or (5). Where the time limits have not been adhered to, the fact that the Commissioner is not relevantly satisfied does not displace the obligation to make a refund. If the Commissioner does not act within the relevant time limits, he has put it beyond his power to rely on s 46(1)(b) to withhold payment. That was the conclusion reached in Commissioner of Inland Revenue v Sea Hunter Fishing Ltd which both parties to the present appeal accepted as a correct statement of the law in circumstances where the Commissioner had not complied with any of the time limits.[23] It also confirmed when refunds become payable, after refunds have been validly withheld under the section:When does the refund become payable where a request has been made under s 46(4) or notice has been given under s 46(5)?[30] On the clear wording of the section, we see no escape from the conclusions that:(a) where a timely request has been made under either s 46(4) or a timely notice has been given under s 46(5), the governing provision is s 46(1)(b); and(b) the refund does not become payable until the point in time stipulated in s 46(1)(b) which is when the Commissioner is relevantly satisfied.[24] By "relevantly satisfied" the Court meant that under s 46(1)(b) the Commissioner had both determined that the amount is refundable and that the taxpayer had complied with tax obligations.5Mr Mawhinney's first argument[25] For this case, the Commissioner accepts that where she has not given a request under s 46(4) or a notice under s 46(5), the taxpayer is entitled to a refund, but the Commissioner also draws attention to the power under s 46(6) to apply refunds to other taxes payable. She has used that power in this case. She has also given requests under s 46(4) and notices under s 46(5). Apart from the amended assessment for 30 June 2009, the refunds given for those months where the Commissioner did not effectively use the provisions under s 46 to withhold payment and transfers under s 46(6), the Commissioner says that she has not been relevantly satisfied under s 46(1)(b) and the obligation to refund under that provision has not arisen.[26] Mr Mawhinney's case is that the Commissioner is so satisfied. For that herelies on the two sets of documents in the letters of 2 May 2012 and 20 June 2012 respectively.[27] On 2 May 2012 Mr Strang, team leader (Investigations) in the Manukau office of Inland Revenue, sent a letter to the Forest Trust. In that letter were5 Same at [14].documents called "Notice of Assessment for the Forest Trust". Each notice ofassessment was for a GST period, beginning 31 May 2009 and ending 29 February 2012. Each notice sets out how GST for each period has been treated. Mr Mawhinney says that the second table in paragraph [9] above summarises the effects of these notices.[28] Mr Strang wrote another letter to the Forest Trust on 20 June 2012. With this letter he also enclosed a series of documents covering GST periods beginning at 31 May 2009 up to 29 February 2012. These documents were not called assessmentsbut "acknowledgment of return for the Forest Trust". Apart from the change of title,they are similar to the documents sent with the letter of 2 May 2012.[29] Mr Mawhinney says that both sets of documents are assessments under the Tax Administration Act and also represent decisions made by the Commissionerunder s 46(1)(b) that she is "relevantly satisfied" in terms of the decision of theSupreme Court in Contract Pacific Ltd v Commissioner of Inland Revenue.6[30] Mr Mawhinney also says that these assessments must be treated as correct. He points out that an assessment is a disputable decision under s 3 of the Tax Administration Act. He also invokes ss 105 and 109 of the Tax Administration Act 1994:105 Assessments and determinations made by electronic meansAn assessment or determination made by the Commissioner for the purposes of any of the Inland Revenue Acts that is made automatically by a computer or other electronic means in response to or as a result of information entered or held in the computer or other electronic medium shall be treated as an assessment or determination made by or under the properly delegated authority of the Commissioner....109 Disputable decisions deemed correct except in proceedingsExcept in objection proceedings under Part 8 or a challenge under Part 8A,—(a) No disputable decision may be disputed in a court or in any proceedings on any ground whatsoever; and6 At n 4.(b) Every disputable decision and, where relevant, all of its particulars are deemed to be, and are to be taken as being, correct in all respects.[31] Mr Mawhinney says that the notices sent with the letters of 2 May 2012 and 20 June 2012 are records of assessments or determinations by the Commissioner. That is shown both by their title and content. He says they record decisions by the respondent to transfer excess tax to pay purportedly outstanding tax obligations, tocharge interest and to pay interest. These elements had not appeared in the trust'sGST returns or any other communication from the trust. He says that theCommissioner had investigated the trust's tax position. In the first set the documents are headed "Notice of Assessment for the Forest Trust" because they are notices of the respondent's assessment of the trust's tax position after the Commissioner hadinvestigated. He says that the notices show the amounts of GST found to be refundable. Mr Mawhinney also points out that the Commissioner also had credited the taxpayer with interest. He says the interest is only payable on refundable amounts, as under s 120E of the Tax Administration Act. He says that if the Commissioner had not assessed the amounts as refundable, she would not have credited the interest to the trust. He also notes an email from the Complaints Management Service of the office of the Commissioner of Inland Revenue whichrefers to Mr Strang's letter of 2 May 2012 as accompanied by 37 pages of notices ofassessments.[32] Mr Mawhinney acknowledges that the second set of notices issued with Mr Strang's letter of 20 June 2012 are called "Acknowledgment of a Return for the Forest Trust" rather than "Notice of Assessment", but he says that these are not just an acknowledgment of receipt of the taxpayer's GST returns. That is shown by theircontent. Mr Mawhinney says that whatever may be the position with the second set of documents of 20 June 2012, he is in any event entitled to rely on the notices of 2 May 2012. He says that these are the assessments which entitle the trust to the refunds which are the subject of the summary judgment application.[33] He also says that the Commissioner cannot run a defence of non est factum to disavow the effect of the documents the trust relies on. This argument is not necessary because the Commissioner disavows relying on non est factum.[34] Mr Mawhinney also submits that the documents cannot be machine- generated. That is because they show the results of human decisions, as opposed to adjustments made electronically. Whereas interest adjustments may be made as a matter of law and could therefore be made by computers, the transfers to other taxes are the results of human decision under s 46(6). When the Commissioner is relevantly satisfied under s 46(1)(b), there is a human decision. The two sets of documents show that human decisions have been made and have been communicated.[35] In response, the Commissioner draws a distinction between an "assessment" and a "notice of assessment". She refers to the decision in Hyslop v Commissioner of Inland Revenue7 where the Court of Appeal stated the distinction between the Commissioner coming to a decision (assessment) and communicating that decision (notice of assessment). She notes that this distinction is recognised in s 111(6) of the Tax Administration Act, which provides that omitting to give a notice under s 111 does not invalidate the assessment or in any manner affect the operation of the assessment. Similarly, the Commissioner invokes s 114 of the Tax Administration Act as to validity of assessments.[36] The Commissioner refers to the self-assessment system for GST. When taxpayers lodge tax returns they self-assess their tax liability. The self-assessments stand, unless the Commissioner amends those assessments. The Commissioner submits that the only period where the Commissioner has amended assessments sofar is for the period ending 31 July 2009. The Commissioner's case is that for allother GST periods the Commissioner has not made an amended assessment. The Commissioner admits that it is confusing that the documents attached to the 2 May2012 letter are called "notices of assessment". But the Commissioner says they werenot in fact actual assessments.[37] The Commissioner also says that the documents must be put in context. In her case, Mr Mawhinney's use of the documents has been opportunistic.7 Hyslop v Commissioner of Inland Revenue [2001] 2 NZLR 329 (CA).Mr McDonald, an investigator in the Inland Revenue, gives evidence providing acontext for the Commissioner's submission. The trust had made complaints to the Inland Revenue's Complaints Management Service. On 16 April 2012 it sent a letter setting out its complaints. A team leader in Complaints Management had advised Mr Strang and Mr McDonald, investigators, that the trust had requested statements for the GST periods from 31 May 2009 onwards. The email of 19 April 2012 from the Complaints Management Services says:"Milton (referring to Milton Mawhinney, a former trustee) asked forstatements for GST May 09 onwards and inc. 09 onwards. He also wanted the statements to show where any transfers had gone. Is this ok to include inthe statements? I imagine this to be a big job to put together ... "[38] Mr McDonald explains that spreadsheets headed "Notices of Assessment for the Forest Trust" were issued with the letter of 2 May 2012. These notices were designed to be a reflection of the returns filed by the trust, except for the GST period ended 31 July 2009 which is meant to reflect the amended assessment that Mr Strang had made. He says that it was later identified that the manual notices contained minor errors, and GST periods ended 31 July 09, 28 February 09, and 30 April 2010 had been missed. So a second letter of 20 June 2012 was sent. With that letter the plaintiff was notified of the errors in the documents that had been issued and amended versions covering three periods were issued. The notices were re-named"Acknowledgments of Returns for the Forest Trust".[39] The Commissioner submits on the basis of that evidence that the sets of documents of 2 May 2012 and 20 June 2012 were no more than responses to thetaxpayer's request for information about GST returns that the taxpayer had made.These documents provided information, but they did not give notice of an assessment, notwithstanding the confusing terminology. The label put on the documents was not decisive. The Commissioner cites Marac Life Assurance Ltd v CIR and Challenge Realty Ltd v CIR.8 In Street v Mountford,9 Lord Templeman made a similar point when he said:8 Marac Life Assurance Ltd v CIR [1986] 1 NZLR 694 at 706 (per Richardson J) and Challenge Realty Ltd v CIR [1990] 3 NZLR 42.9 Street v Mountford [1985] AC 809 (HL) at 819.But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement. If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.[40] The Commissioner submits that because there were not any assessments by the Commissioner, then ss 105, 109 and 111 do not apply.[41] Mr Mawhinney's argument does not just turn on whether there wereassessments. His claim is that the Commissioner was relevantly satisfied under s 46 (1)(b) of the GST Act. For this decision, I assume that the Commissioner may be relevantly satisfied under that section and communicate his satisfaction without making an assessment or giving a notice of assessment as those terms are used in the tax legislation. Mr Mawhinney's reliance on the assessment provisions of the TaxAdministration Act is not essential to his argument.[42] Even so, the case law shows that on occasions claim the court may look past the face of documents issued by the Commissioner to the underlying tax position. InPaul Finance Ltd v Commissioner of Inland Revenue,10 the Commissioner had issued a notice of assessment to the taxpayer and a cheque for $417,994.12. These were mailed to the taxpayer. The taxpayer presented the cheque, which wasdishonoured. The Commissioner refused the taxpayer's demand for payment. Whenthe taxpayer sued and claimed summary judgment, the Commissioner was held to have an arguable defence. The Commissioner put forward evidence that the cheque and the notice of assessment were generated by mistake. There was evidence that no officer of the Inland Revenue had turned their mind to the quantification or entitlement to the refund. Matters had not been clarified. There was an ongoing investigation. There was no intention to make an assessment and the process was not complete. The Court of Appeal accepted that evidence of this sort was enough to give rise to a tenable defence. Summary judgment was refused. It rejected a submission that the notice of assessment was the product of an actual assessment.10 At n 2.[43] Something similar happened in Contract Pacific Ltd v Commissioner of Inland Revenue.11 The taxpayer had claimed a GST refund of $7,542,295.51. TheDepartment's computer system generated and issued Contract Pacific with a notice of assessment and a refund cheque for that sum. The Commissioner stopped payment on the cheque. The taxpayer sued the Commissioner on the cheque. The Supreme Court held that to establish consideration for the cheque the taxpayer had to show that the amount of the cheque was refundable under ss 20(5) and 46 of the GST Act. That showed that the Commissioner could defend the case on the basis that it was not bound by its notice of assessment and could require the court to look at the underlying tax position.[44] These cases go towards the Commissioner's defence that the documents of2 May 2012 and 20 June 2012 are not evidence that the Commissioner had made assessments under the Tax Administration Act as to refunds due or that the Commissioner was relevantly satisfied under s 46(1)(b) of the GST Act that refunds should be paid to the trust. The Commissioner has an arguable defence that the documents had another purpose – they did no more than provide information in response to a request by the trust. For this summary judgment application, I cannot say that that defence is hopeless.Mr Mawhinney's second argument[45] This argument focuses on the GST return for the period ending 31 October 2011 - the one that claimed a refund of 660,612.84. The Commissioner requested information under s 46(4) on 19 December 2011. The trust supplied some information to the Commissioner on 13 January 2012. Fifteen working days from the receipt of that information expired on 3 March 2012. During that period the Commissioner did not communicate any decision to the trust about the return. But on 28 March 2012, outside that fifteen working day period, the Commissioner gave notice of an investigation for the periods May 2009 to December 2011.11 At n 4.[46] Mr Mawhinney's argument is that that was too late. He says that theCommissioner had to act within fifteen working days of receiving the information. In support he cites Simon France J in Riccarton Construction Ltd v Commissioner of Inland Revenue:12If the Commissioner is right that once there is a request for information the other timeframes are suspended, there is then no express time by which the decision to investigate must be made. The Act provides that further information must be requested within 15 days of receiving the originally requested information (s 46(4)(b)), but no adjusted timeframe for deciding to investigate is named. It would not be a stretch to read the Act as requiring that, once all information is received, the investigation decision under s 46(2) must be made within 15 days just as a decision to require more information must be. That could be argued to be a reasonable time given the statutory scheme and its obvious intent of keeping the process moving, but it is not necessary to determine the issue....[47] While s 46 is directed at timing of payments, as the Supreme Court held inContract Pacific, it requires the Commissioner to pay on only two occasions: under s 46(1)(a) not later than 15 working days after receipt of a return, but that is subject to s 46(1)(b); and under s 46(1)(b), the day after the working day on which the Commissioner is relevantly satisfied. S 46(1) is disjunctive. It allows for no other times when the Commissioner must refund. The obligation to refund under s 46(1)(a) is suspended once the Commissioner gives a request in time under s 46(4) or notifies an investigation in time under s 46(5). The section does not say so expressly, but it follows as a matter of necessary implication. Mr Mawhinney accepts that there is an initial suspension, but he says that that suspension may expire at a point ahead of the Commissioner being relevantly satisfied under s 46(1)(b). For this case he says that one of those points is when fifteen working days after receiving information under s 46(4) expires without the Commissioner initiating an investigation under s 46(5). However, s 46(1)(b) states the only time when a suspension under s 46(1)(a) ceases to have effect. There is no basis for reading into s 46 another time when a suspension comes to an end.[48] Blanchard J considered the possibility in Contract Pacific:13At the hearing I was inclined to think that the position might arguably be different if the Commissioner had made a timely request for information and later, outside the 15-day working period, invoked for the first time his12 Riccarton Construction Ltd v Commissioner of Inland Revenue [2010] NZHC 813 at [34].13 At n 4.broader investigative power. But, having reflected further, I am of the view that such an argument must also be rejected. In providing for the lesser investigative step of a request for information the legislature cannot sensibly be taken to have contemplated that if the response to a request revealed, perhaps unexpectedly, that a fuller investigation were needed, the Commissioner could embark upon it only at the cost of having to make a refund. If that were so, there would be little point in providing under s 46(2) for any step other than an investigation since the Commissioner would be at significant risk if he merely made a request and would be foolish to do so.[49] I respectfully follow his guidance. In Riccarton Construction Ltd v Commissioner of Inland Revenue,14 Simon France J decided the case on other grounds, so his statement is obiter.[50] At the hearing I inquired as to the remedies available to a taxpayer vexed at delays by the Commissioner in carrying out an investigation while a refund is withheld under s 46. The absence of other remedies might be an indication that Parliament intended that refunds should be paid within a set time. TheCommissioner's additional submissions showed these potential remedies:a) Informal resolution by correspondence with the investigator, and if that isnot successful, making a complaint through the Inland Revenue'sComplaints Management Service;b) Judicial review under the Judicature Amendment Act 1972. The potential for judicial review arises because the normal ways to challenge a disputable decision of the Commissioner, by the disputes procedures under Part 4A and by challenge under Part 8A of the Tax Administration Act, are not available. Delay by the Commissioner in coming to a decision is not a disputable decision under s 3 of Tax Administration Act, because it cannot be challenged under Part 8A. Section 138E sets out matters that cannot be the subject of challenge under Part 8A. One of those is a matter under Part 7 of the Goods and Services Tax Act (which includes s 46) which is left to the discretion, judgment, opinion, approval, consent or determination of the Commissioner – s 138E(1)(c)(v). The14 At n 12 at [37].Commissioner cited Tannadyce Investments Ltd v CIR15 as authority that judicial review might lie where a matter falls outside the statutory scheme of dispute and challenge. The Commissioner did not elaborate on what a taxpayer would have to establish to obtain judicial review when there was delay in an investigation.c) As a corollary, the Commissioner submitted that the disputes and challenge procedures under the Tax Administration Act were not available, in the absence of any disputable decision by the Commissioner.d) The Commissioner doubted that mandamus would ordinarily be available when there was an equally convenient remedy by judicial review. Mandamus is given for a refusal to act, not for delay.[51] Faced with a leisurely investigation by the Commissioner, a taxpayer might not take much heart from being advised that he or she can follow the matter up by complaining to the department or by trying judicial review. The taxpayer might complain that one remedy is only informal and that the other is expensive and unwieldy. All the same, even if the tax legislation does not contain express provisions to address delays by the Commissioner, it is not for the courts to engraft new provisions. That is for Parliament. I am not persuaded that s 46 can be read to impose a duty on the Commissioner to make a refund outside s 46(1)(a) and (b).Accordingly, the Commissioner has an arguable defence to Mr Mawhinney's secondargument.Outcome[52] The Commissioner has arguable defences to both of Mr Mawhinney'sarguments. Accordingly, he has not made out a summary judgment case to be entitled to the refunds he claims. In the absence of proof of statutory entitlement to a refund, he cannot make out a case for breach of statutory duty or for money had and received.15 Tannadyce Investments Ltd v CIR [2012] 2 NZLR 153 (SC) at [58]-[60].[53] I make these orders:a) I dismiss the application for summary judgment;b) I reserve costs, following NZI Bank v Philpott;16c) The Commissioner is to file and serve a statement of defence to the statement of claim within fifteen working days of this decision;d) The registrar is to fix a time and date for a telephone case management conference for further directions to be given; ande) Leave is reserved to apply for further directions.________________________Associate Judge R M Bell16 NZI Bank v Philpott [1990] 2 NZLR 403 (CA).