Cullen v The Commissioner of Inland Revenue [2017] NZHC 578

Cullen v The Commissioner of Inland Revenue [2017] NZHC 578 [28 March 2017]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2016-404-2213[2017] NZHC 578IN THE MATTER of a self-assessment of Goods andServices Tax prepared by the applicantUNDER the Declaratory Judgments Act 1908andParts 18 and 19 of the High Court RulesBETWEEN RHYS MICHAEL CULLENApplicantAND THE COMMISSIONER OF INLANDREVENUERespondentHearing: 9 February 2017, further submissions 10 March 2017Counsel:Appearance:M Bryant for respondentRM Cullen, applicant in personJudgment: 28 March 2017JUDGMENT OF FITZGERALD JThis judgment was delivered by me on 28 March 2017 at 4 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Crown Law, WellingtonTo: RM Cullen, AucklandContentsIntroduction .......................................................................................................... [1]Factual background ............................................................................................. [4]An issue central to resolution of the strike out application ............................ [23]Threshold for striking out ................................................................................. [29]Incorporated and unincorporated bodies ........................................................ [30]The position under the GST Act/TAA .............................................................. [40]Disputes process under the TAA ....................................................................... [45]Is it tenable that Mr Cullen has standing to bring these proceedings? ......... [65]Is the Assessment deemed to be correct for the purpose of these proceedings? ............................................................................................. [72]Are these proceedings an abuse of process? .................................................... [73]Conclusion ........................................................................................................... [77]Costs .................................................................................................................... [78]Introduction[1] The Commissioner of Inland Revenue ("Commissioner") applies to strike out an originating application filed by Mr Cullen. Mr Cullen says he filed the originating application for and on behalf of the Tamaki Rugby League Club("Club"). He is a member and the Chairman of the Club. The application seeks adeclaration that a GST return Mr Cullen says he filed on behalf of the Club is valid, and a declaration that a subsequent assessment by the Commissioner is invalid.[2] The Commissioner applies to strike out the originating application, on three grounds:(a) First, that Mr Cullen has no standing to have filed the GST return or to have brought these proceedings on behalf of the Club. The Commissioner says that at all relevant times, the Club was in fact an incorporated society, was in liquidation and thus under the control of the Official Assignee. The Official Assignee did not consent to the filing of the GST return, and has not consented to the commencement of these proceedings.(b) Second, that the originating application discloses no reasonably arguable cause of action.(c) Third, that the originating application is otherwise an abuse of process, designed to circumvent the disputes process under the Tax Administration Act 1994 ("TAA").[3] I consider the Commissioner's application to strike out by addressing thefollowing matters in this judgment:(a) First, the factual background;(b) Second, the legal principles applicable to a strike out action (which are not in dispute);(c) Third, the legal principles applicable to incorporated and unincorporated bodies of persons;(d) Fourth, relevant aspects of the Goods and Services Tax Act 1985("GST Act") and the TAA (particularly in relation to the resolution oftax related disputes); and(e) Fifth, the application of the above to each of the grounds of theCommissioner's application to strike out.Factual background[4] There is no dispute, for the purposes of determining the Commissioner'sstrike-out application, that since at least 2006, a body of persons has operated under a set of rules in relation to the Club. On 24 July 2006, the Club was registered on theRegister of Incorporated Societies ("Register") as an incorporated society. Todistinguish the Club at various times in the chronology from when it was unincorporated and incorporated, I will refer to the Club in its incorporated form as"the Society", and in its unincorporated form as "the Club".[5] Having been incorporated, the Society continued to operate under the same rules and with the same members as the Club.[6] On 20 August 2010, the Society was placed into liquidation. The liquidators'final report was registered on 14 January 2011 and as a result, the liquidation came to an end. The Society was removed from the Register on 19 November 2012.[7] Again, it does not appear to be in dispute for the purposes of the present hearing that after being removed from the Register, the Club continued to operate, again under the same rules and with the same members.[8] Subsequently, in 2016, Mr Cullen applied to this Court for the Club to be restored to the Register. The reason for the application was that it had been determined that there were some taxation moneys owed to the Society. In order forthose moneys to be paid by the Commissioner to the Society, the Society needed to be restored to the Register.[9] Mr Cullen's application was heard by Associate Judge Bell on 17 June 2016. By minute dated 17 June 2016, Associate Judge Bell made an order restoring the Society to the Register. The order was stated to have effect as of 17 June 2016.[10] During the course of the hearing before Associate Judge Bell, an issue aroseas to whether or not a "relate-back" order should be made; in other words whetherthe existence of the Society, as an incorporated society, should be prospective only (i.e. as of 17 June 2016), or should have retrospective effect and be deemed to have taken effect from some earlier point in time. It appears that counsel for the Registrar of Societies had submitted that a relate-back order should not be made, as otherwiseit could give rise to complications. This was because since the Society's removalfrom the Register in 2012, the Club had continued to operate pursuant to its rules.1[11] The Society was accordingly restored to the Register as of 17 June 2016 and thus came back into existence as an incorporated society from that date forward. Associate Judge Bell made a further order setting aside the liquidators' final report,with the effect that the Society, existing again as of 17 June 2016, was back inliquidation and subject to the Official Assignee's control. Mr Cullen does not dispute that, in relation to the Society's activities from 17 June 2016, the OfficialAssignee's consent is required.[12] In the interim, it seems that Mr Cullen, as Chairman of the Club, had been taking steps to prepare and file various tax returns. This included a GST return for the period ended 31 May 2016 ("Return"). It seems that Mr Cullen completed the Return on 10 June 2016 (being the date showing on its face), but there is no dispute that it was received by the Commissioner on 22 June 2016.1 See [7] of Associate Judge Bell's minute of 17 June 2016, at exhibit MB-2 to the affidavit ofMark Bandara affirmed 20 September 2016, filed in support of the Commissioner's strike outapplication.[13] The Return was in the name of "Tamaki Rugby League Incorporated". The GST registration number referenced in the Return was the Society's, namely94878055. The Return sought a GST refund of approximately $14,000.[14] On 3 August 2016, and presumably in response to the filing of the Return, theCommissioner issued a notice of assessment ("Assessment"). The Assessment wasalso in the name of Tamaki Rugby League Incorporated and used the same GST registration number as above. The Assessment recorded that, rather than a refund of approximately $14,000, a refund of only approximately $100 was due.[15] Mr Cullen says that there was a data entry error when Inland Revenue Department staff processed the Return (in that a figure of 1150 was entered in a relevant field, rather than 115,000). Mr Cullen submits that an assessment is an intentional act made by a duly authorised officer of the Commissioner, and that a data entry mistake by processing centre staff is by its very nature unintentional. He further submits that the staff member did not intend to make an assessment of tax, but rather intended to record numbers on the form. But whether or not there was such a mistake is an issue of fact that I cannot determine on this application. Nor was there any evidence before me in respect of this issue in any event. At least for the purposes of this hearing, Mr Bryant for the Commissioner did not accept that such an error had been made.[16] On 26 August 2016, Mr Cullen issued a Notice of Proposed Adjustment("NOPA") in relation to the Assessment. Again, the NOPA was in the name of Tamaki Rugby League Incorporated, and it used the same GST registration number referred to above. In the NOPA, Mr Cullen challenged the validity of the Assessment, including on the basis of the data entry error discussed above. There is no dispute that the validity of an assessment (i.e. as well as its substantive correctness) can be challenged through the disputes process and then, if required, challenge proceedings under the TAA.22 See Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158, [2012] 2 NZLR 153 at [54].[17] Pursuant to ss 89G and 89AB(2) of the TAA, the Commissioner's Notice of Response ("NOR") was due on 26 October 2016.[18] On 5 September 2016, Mr Cullen commenced these proceedings seeking the declaratory relief outlined at [1] above. It will be apparent that these proceedings were commenced prior to the time by which the Commissioner's NOR was due. Iwill say more about this later in my judgment.[19] On 7 September 2016, Mr Bandara, a Specialist Investigator at the Inland Revenue Department, wrote to Mr Cullen acknowledging receipt of the NOPA and noting that the Commissioner intended to issue a NOR.[20] On 19 September 2016, the Commissioner filed her application to strike out the proceeding, on the grounds identified at [2] above.[21] On 14 October 2016, Mr Bandara wrote again to Mr Cullen, noting that the Commissioner had confirmed that the Society was in liquidation and that the Commissioner would be directing further communications to the Official Assignee. No NOR was issued by the Commissioner prior to 26 October 2016.[22] Mr Cullen submits that, as the Commissioner did not file her NOR within the requisite time period under the TAA, the deemed acceptance provisions (i.e. s 89J) apply and the Commissioner is obliged to issue an assessment which takes into account the changes proposed in the NOPA filed. I observe, however, that this is not the way in which the relief claimed in Mr Cullen's originating application ispresently framed.An issue central to resolution of the strike out application[23] As noted above, the Society was restored to the Register as of 17 June 2016. The Return relates to the period ended 31 May 2016, and was filed on 22 June 2016.[24] The Society did not exist (again) until 17 June 2016. While the Return was filed by Mr Cullen on 22 June 2016 (i.e. after the date upon which the Society had been restored to the Register), the Return related to activities carried out and GSTobligations arising before the Society came back into existence. TheCommissioner's Assessment also assessed the GST position for the period ended31 May 2016, again a time period during which the Society did not exist.[25] These facts give rise to an issue which I consider to be key in determining this application, namely, to whom do the Return and Assessment relate? To the extent that they assess the GST position for the period up to 31 May 2016, that must be an assessment of the relevant activities and obligations of someone during that period.[26] Ultimately, Mr Bryant, for the Commissioner, submitted at the hearing that each of the Return and the Assessment is in fact a nullity. Although not spelled out as such by Mr Bryant, this is presumably on the basis that the two documents are in the name of and with a GST registration number belonging to an entity that did not exist during the time period to which they relate. Mr Bryant for the Commissioner did not cite any statutory provisions or authorities for the proposition that the documents are nullities. The suggestion that the Assessment is a nullity is also quitedifferent to the Commissioner's position in her application to strike out, which is that the Assessment is valid, and that pursuant to s 109 of the TAA, must be taken to be as such by this Court.[27] Mr Cullen's position is that the Return and Assessment must relate to someone, and that "someone" is the unincorporated Club, which continued to operate (as an unincorporated body) during the time periods when the Society did not exist. Mr Cullen accordingly submits that, given the Return and Assessment cannot relate to the Society, they were not filed on behalf of the Society and so theOfficial Assignee's consent was not necessary.[28] Mr Cullen further submits that the Commissioner has a practice of permitting unincorporated bodies to continue to use the same GST registration number that was used by that body when it was incorporated, even once that body's incorporation haslapsed. He points to the fact that, in addition to the Return, there were in fact anumber of other tax documents filed by him in the name of "Tamaki Rugby League Incorporated", with the GST registration number 94878055, which were processedby the Commissioner in the normal way, but which also concerned tax periods prior to 17 June 2016.3 Mr Bryant accepted this as a matter of fact (though submitted that it was wrong for the Commissioner to have dealt with those documents in that way).Threshold for striking out[29] The legal principles applying to an application for strike out are not in dispute:4(a) Pleaded facts, whether or not admitted, are assumed to be true. This does not extend to pleaded allegations which are entirely speculative and without foundation;(b) The cause of action must be clearly untenable;(c) The jurisdiction is to be exercised sparingly, and only in clear cases;(d) The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument; and(e) The Court should be particularly slow to strike out a claim in any developing area of the law.Incorporated and unincorporated bodies[30] I turn to consider the respective legal positions of an unincorporated and incorporated body.[31] In Worthing Rugby Football Club Trustees v Inland Revenue CommissionersPeter Gibson J described an unincorporated body as follows:53 See the Commissioner's "Return Acknowledgement" for GST for the period ended 31 January2016 and "Statement of Account" for PAYE deductions, which includes deductions over theperiods to 31 January 2016 and 26 February 2016; exhibit D to affidavit of Rhys Michael Cullen sworn 1 February 2017.4 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33]; Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267.5 Worthing Rugby Football Club Trustees v Inland Revenue Commissioners [1985] 1WLR 409 at 413.There can be no doubt but that apart from statute an unincorporated association such as a club is not a legal entity however real its existence may seem to the club member and to the man in the street.[32] Similarly, in Campbell v Scott, Tipping J stated:6An unincorporated body is generally regarded as a nonentity in law. It is possible, however, that such a body may, by statute, be treated either expressly or implicitly as a legal entity distinct from its members.[33] Accordingly, and putting aside any statutory provisions that override the common law position, an unincorporated body is not a separate legal entity in its own right, distinct from its members.7 By contrast, a club or body of persons that is incorporated acquires a legal status separate from its individual officers and members.8[34] Two consequences flow from this:(a) First, prior to a society's incorporation, the society does not exist asthat legal entity.(b) Second, although a group of persons may operate as a club or other body of persons while being incorporated and unincorporated from time to time, once that club or body of persons is incorporated, that entity has a distinct and separate identity from the unincorporated club or body of persons that exists at all other times.[35] This "transitioning over time" is reflected in the Supreme Court's decision inWestfield (New Zealand) Ltd v North Shore City Council.9 In that case, "Northcote Mainstreet Incorporated" challenged the lawfulness of the North Shore City Council's decision not to notify an application by Discount Brands Ltd for resourceconsent. The Court considered whether Northcote Mainstreet ought to have been notified. One of the subsidiary issues was whether Northcote Mainstreet should be6 Campbell v Scott [1995] 2 NZLR 345 (HC) at 354–355.7 See also John v Rees [1969] 2 All ER 274 (Ch) at 306; Conservative and Unionist Central Office v Burrell (Inspector of Taxes) [1980] 3 All ER 42 (Ch) at 58, affirmed on appeal at [1982] 2 All ER 1 at 4 (CA).8 See, for example, Westfield (New Zealand) Limited v North Shore City Council [2005] NZSC 17, [2005] 2 NZLR 597 at [170].9 Above, n 8.regarded as "a person" capable of being adversely affected, given (unbeknown to themembers of Northcote Mainstreet at the relevant time) its incorporation had lapsed.[36] The Supreme Court rejected the Court of Appeal's earlier conclusion that Northcote Mainstreet's lapsed incorporation meant that it did not exist as a legalentity at the relevant time. In his judgment, Blanchard J noted that the Court ofAppeal's conclusion overlooked that the definition of "person" in s 2 of the ResourceManagement Act 1991 ("RMA") includes "the Crown, a corporation sole, and also a body of persons, whether corporate or unincorporated". Blanchard J observed that:10Northcote Mainstreet was undoubtedly an unincorporated body of persons during the interregnum between the lapsing of its incorporation and its restoration to the register under the Incorporated Societies Act.[37] Blanchard J (with whom the other members of the Court agreed on this issue)accordingly found that, given the definition of "person" in the RMA, andirrespective of whether Northcote Mainstreet was unincorporated or incorporated atany point in time, it was at all times a "person" for the purposes of the RMA.[38] But what the Court in Westfield did not need to decide, and did not decide, was whether Northcote Mainstreet, when incorporated and unincorporated, was nevertheless one and the same legal entity at all times. In light of those authorities cited above, it is plain to me that Northcote Mainstreet could not have had the samelegal identity when it was incorporated as it did when it was unincorporated. That would undermine one of the very purposes of incorporation, namely to create a separate legal entity distinct from the aggregate of the individual members. Accordingly, and subject to any statutory provisions, when unincorporated, Northcote Mainstreet was no more than the aggregation of the individuals who were its members.11 For the purposes of the RMA, however, that unincorporated body ofpersons was nevertheless a "person" under that statute.10 At [127].11 See the judgment of Tipping J at [170].[39] A similar distinction was also recognised in Hostick v The New Zealand Railway and Locomotive Society Waikato Branch Inc.12 In that case, a sale and purchase agreement had been entered into in relation to a steam railway locomotive.The contracting parties were New Zealand Railways and "The Waikato Branch of the New Zealand Railways and Locomotive Society Inc". Asher J noted that at the time the contract was entered into, the "Waikato Branch of the New Zealand Railway and Locomotive Society Inc" did not exist. It was therefore necessary to decide whothe contracting party was. In considering this issue, Asher J observed that "given that the Waikato Branch was unincorporated, its operation was akin to that of aclub". On this basis, Asher J concluded that the original contracting parties (those who were therefore liable in respect of the contract with New Zealand Railways) would have been those individual members of the Branch who gave authority (express or implied) to entry into the contract.The position under the GST Act/TAA[40] Like the RMA, the GST Act and TAA also alter the common law position in respect of unincorporated bodies.[41] Under s 51 of the GST Act, every "person" who carries out a taxable activity is liable to be registered for GST purposes.13 The GST Act defines "person" as including "a company, an unincorporated body of persons, a public authority, and a local authority". This is reflected s 57 of the GST Act, which states that, where an unincorporated body is registered under the GST Act, the members of the body are not themselves registered or liable to be registered. In this way, the unincorporated body proceeds as if it is a recognised legal entity for GST purposes.[42] A similar position exists under the TAA. Under that Act, a "taxpayer" is defined as, inter alia, a "person" who "is liable to perform or to comply with, a tax obligation" or "may take a tax position". Given the definition of "tax" and "tax position", this includes obligations and positions in relation to GST. "Person" is not12 Hostick v The New Zealand Railway and Locomotive Society Waikato Branch Inc [2006] 3 NZLR 842 (HC).13 Section 51(4)(b) also "deems" a person to be registered, when they are liable to be registered,but have failed to apply for registration.defined in the TAA. However, s 29 of the Interpretation Act 1999 provides that in any Act, the term "person" includes "a corporation sole, a body corporate and an unincorporated body". Accordingly, the Club could have a recognised status as a taxpayer (and disputant) for the purposes of the GST Act and the TAA.[43] As noted, Mr Cullen submits that the Commissioner has a practice of not requiring an unincorporated body to re-register and acquire a new GST registrationnumber when that body's incorporation has lapsed. Mr Bryant submits that theCommissioner's policy is that, upon an incorporated society's incorporation lapsing,the underlying group of members, now an unincorporated body, is required to re- register and acquire a new GST registration number. But whether or not there issuch a policy, and even so, what the Commissioner's practice is, was not in evidencebefore me.[44] I now turn to consider the relevant provisions of the TAA concerningdisputes, given Mr Cullen's challenge, said to be on behalf of the Club, of theAssessment.Disputes process under the TAA[45] Mr Cullen purported to issue the NOPA on 26 August 2016. He says that it was issued for and on behalf of the Club and not the Society, and as such, theOfficial Assignee's consent was not required.[46] After initially acknowledging the NOPA and signalling an intention to issue a NOR, the Commissioner did not do so within the requisite time period. What is the consequence? I gave the parties an opportunity to file further (brief) submissions on this point, including when the validity of the NOPA is in dispute, given in my view,this is relevant to the second and third grounds of the Commissioner's application tostrike out. Both parties took up that opportunity and filed further submissions.[47] In my view, and despite the Commissioner disputing the validity of the NOPA (on the basis that Mr Cullen did not have standing to issue it), it is arguable that the Commissioner ought to have issued a NOR. Two authorities support this conclusion.[48] The first is the Court of Appeal's decision in Commissioner of Inland Revenue v Alam.14 In that case, the Commissioner had issued a NOPA in relation to GST returns filed by the respondent taxpayers. The taxpayers' accountant had sent a document to the Commissioner headed "Notice of Response" within the requisitetwo-month time period. The Commissioner considered that the NOR did not meet the statutory requirements for such a document and purported to reject it. The Commissioner then applied the deemed acceptance provision (s 89H(1)) and issuedassessments incorporating the adjustments set out in the Commissioner's NOPA.The taxpayers did not commence challenge proceedings in respect of those assessments. Rather, some years later, they issued judicial review proceedings seeking various declarations.[49] In the course of the judicial review proceedings, the Court of Appeal held that the Commissioner does not have the statutory power to determine the validity of a NOR (by rejecting it on the ground that it is non-compliant and applying the deemed acceptance provisions). It held that a decision on the validity of the NOR could only be made by the Taxation Review Authority or the High Court (acting as a hearing authority) in the context of challenge proceedings under the TAA. As the Commissioner had issued assessments incorporating the adjustments set out in the NOPA, the appropriate course for the taxpayers in that case would have been to commence challenge proceedings (being entitled to do so under s 138B of the TAA). The Court of Appeal observed that the Commissioner could then have applied to strike out the challenge proceedings under s 138H, on the basis that the NOR was not in fact a valid NOR. The validity of the NOR would therefore have been determined via the appropriate procedural route. As the taxpayers had not commenced challenge proceedings within the requisite time period, the judicial review proceedings were struck out.[50] The second authority is the High Court's decision in Riccarton Construction Ltd v Commissioner of Inland Revenue.15 In that case, the taxpayer had filed a GST return and subsequently filed a NOPA in relation to the transaction that was the subject of the return. The Commissioner considered the NOPA to be invalid, on the14 Commissioner of Inland Revenue v Alam [2009] NZCA 273, (2009) 24 NZTC 23,564.15 Riccarton Construction Ltd v Commissioner of Inland Revenue (2010) 24 NZTA 24,191.basis that it failed to meet the relevant statutory criteria. The investigating officer at Inland Revenue was apparently not sure how to respond, and considered he could either send a letter rejecting that it was a valid NOPA, or issue a NOR. Ultimately, however, a NOR was not issued within the requisite period. That being so, the taxpayer submitted that the effect of not filing a NOR was that the Commissioner was obliged to pay out on the claim in accordance with the taxpayer's NOPA. TheCommissioner submitted that, given the NOPA was invalid, it had not triggered the deemed acceptance provisions of the TAA. The taxpayer commenced judicial review proceedings.[51] Simon France J rejected the Commissioner's position. He held that thevalidity or otherwise of a NOPA is a matter to be determined by the appropriate decision-maker (i.e. the Taxation Review Authority or the High Court, in cases of challenge proceedings), but in the interim, the form of the document governs the process.16 On that basis, given a NOPA had been issued, and despite its validity being disputed, the Commissioner ought to have issued a NOR. Had the Commissioner done so, the taxpayer would have been entitled to commence challenge proceedings in which the validity of the original NOPA could have been determined.[52] In Riccarton, the Commissioner accepted that, in the absence of the Commissioner issuing a NOR, it was not open to the taxpayer to commence challenge proceedings (given the requirements of s 138B of the TAA had not been met).17 The Commissioner accordingly accepted that the appropriate route was for the taxpayer to bring judicial review proceedings.[53] The validity of the NOPA was accordingly reviewed in the judicial review proceedings before Simon France J. While he concluded that the NOPA was valid, such that the deemed acceptance provisions came into force, he nevertheless declined to grant relief, given that the basis for the original GST return no longer existed (the contract to which it related having been cancelled in the interim).16 Riccarton, above n 15, at [64].17 Riccarton, above n 15, at [26], [62] and [63].[54] Applying these principles to this case, a NOPA challenging the Assessment was issued. While initially the Commissioner intended to issue a NOR in response, having made inquiries of the Official Assignee, it appears the Commissioner formed the view that the NOPA was invalid, on the basis that Mr Cullen had no standing to issue it (absent the Official Assignee's consent).[55] Nevertheless, in my view, and consistent with the two authorities discussed above, despite disputing validity of the NOPA (and thus that the disputes process had been initiated), the Commissioner ought to have filed a NOR. The Commissioner herself does not have the power to determine the validity of a NOPA. Had a NOR been issued, challenge proceedings could have been commenced, in the context of which the validity of the NOPA could have been determined.[56] Having not issued a NOR, the deemed acceptance provisions prima facie takeeffect. However, I do not accept Mr Cullen's submission that where the deemed acceptance provisions are said to take effect, the Court, in any subsequent judicial review proceedings, cannot consider the validity (or otherwise) of the relevant tax document, to determine whether the deemed acceptance provisions have indeed taken effect. This is because the deemed acceptance provisions are predicated on the NOPA being a valid NOPA (irrespective of its substantive content). In Riccarton Construction Ltd v Commissioner of Inland Revenue the Court considered this very point and concluded that the Court can consider the validity of the relevant tax document, despite the deemed acceptance provisions. I agree with that approach.[57] This is also consistent with the findings of the Taxation Review Authority, upheld by the High Court, in Jacobs-Maxwell v Commissioner of Inland Revenue.18In that case, there was no dispute that the taxpayer had issued a late NOPA (being issued some six years after the relevant tax returns had been filed). The Commissioner did not issue a NOR, and did not accept the late filing pursuant to s 89K of the TAA. Given a NOR had not been issued, the taxpayer submitted that the deemed acceptance provision (s 89H(2)) applied.18 Jacobs-Maxwell v Commissioner of Inland Revenue (2011) 25 NZTC 20-094 (HC).[58] The Authority (Judge Barber) found that a valid, timely NOPA was a prerequisite to deemed acceptance under s 89H(2). This was upheld by Heath J on appeal.19[59] Mr Cullen submits that such an approach could permit the Commissioner to"game" the disputes process, namely to simply ignore a NOPA that she considersinvalid, refuse to issue an assessment pursuant to s 89J, yet still challenge the validity of the NOPA in any taxpayer initiated proceedings. However, as noted, the deemed acceptance provisions are predicated on a valid NOPA being issued. Further, the Commissioner runs a significant risk in taking the approach outlined by Mr Cullen; if the NOPA is found to be valid, then irrespective of its substantive correctness, the Commissioner will be deemed to have accepted it.[60] I also agree that the taxpayer would be entitled to commence proceedings other than challenge proceedings in order to test these issues. The Commissioner accepts that the only course open to a taxpayer in such circumstances would be to commence judicial review or summary judgment proceedings, given the requirements of s 138B of the TAA will not have been met. As in Riccarton,20 the Commissioner in this case has not issued a NOPA, a NOR or a challenge notice, such that the requirements of s 138B are not met.[61] Nor do I consider that s 138C of the TAA would apply in this case. That section applies to challenges to disputable decisions other than assessments. While"disputable decision" is defined broadly in the TAA, the issue in this case is thevalidity of the NOPA and whether or not the deemed acceptance provisions apply.Those are not matters about which the Commissioner has made a "decision"; ratherthey are questions of law.2119 At [49].20 At [25].21 In the Commissioner's supplementary submissions, it is submitted that if s 89J(2) of the TAAapplies (the Commissioner considers that the disputant was fraudulent or wilfully misled the Commissioner in respect of the adjustment), it would be open to the taxpayer to commencechallenge proceedings, given the Commissioner's notice that s 89J(2) applies would be a "disputable decision" for the purposes of s 138C of the TAA. However, even if theCommissioner's view that s 89J(2) applies is a "disputable decision", there is no suggestion inthis case that s 89J(2) has been triggered, or that the Commissioner has given notice to that effect.[62] I consider the approach outlined is also consistent with the Supreme Court'sdecision in Tannadyce Investments Ltd v Commissioner of Inland Revenue.22 In that decision, the majority recognised that in some cases, it is not practically possible to challenge an assessment under Part 8A of the TAA.23 In this case, it would not be possible for the taxpayer to challenge the Assessment through challenge proceedings, as the taxpayer would not be entitled to commence challenge proceedings pursuant to either s 138B or s 138C of the TAA. For that reason, s 109 (which deems an assessment to be correct in any proceedings other than challenge proceedings) does not apply, given, as the majority in Tannadyce recognised, the premise on which that section is framed, namely the ability of hearing authorities to consider any challenge to an assessment, is not present.24[63] Mr Cullen submits that the decision in Riccarton is inconsistent with theSupreme Court's decision in Tannadyce. I disagree. Tannadyce confirms that both the validity and correctness of assessments and other disputable decisions (including on traditional administrative law grounds) can, and indeed should, be determined through the TAA disputes process. In this case, however, the validity of the NOPA and whether or not the deemed acceptance provisions apply, do not concern a challenge to the validity or correctness of an assessment or other disputable decision. And as noted, Tannadyce itself recognised that if a taxpayer cannot practically commence challenge proceedings (and in my view, that must include circumstances when a taxpayer is not entitled to commence challenge proceedings), the taxpayer will be able to bring proceedings outside the statutory process.[64] With this background in mind, I now turn to each of the three grounds set outin the Commissioner's strike out application.Is it tenable that Mr Cullen has standing to bring these proceedings?[65] I consider that it is tenable that Mr Cullen, as Chairman of the Club, could have standing to bring these proceedings. This is because I consider it is tenable that22 Tannadyce Investments Ltd v Commissioner of Inland Revenue, above n 2.23 At [58].24 At [58].the Return, the NOPA and these proceedings were issued and/or brought for and on behalf of the Club as an unincorporated body, rather than the Society.[66] There is no doubt that the Return was issued in the name of "Tamaki Rugby League Inc" and used the Society's GST registration number. However, that doesnot mean that the taxpayer to whom the Return actually relates cannot be the Club. I consider it tenable that the Return could not in fact relate to the Society, because the Society did not exist during the period to which the Return relates.[67] A similar conclusion is reached in relation to the Assessment. The Commissioner has taken the step of assessing the GST liability of a taxpayer for the period to 31 May 2016 and issuing a notice of assessment to that effect. TheCommissioner's Assessment must relate to a taxpayer. The Society, as a taxpayer, did not exist in the period to 31 May 2016. The tax activities that give rise to the Assessment cannot therefore be the tax activities of the Society. I therefore consider it is arguable that the Assessment is an assessment of the tax activities of the Club and not the Society. Mr Bryant did not refer me to any statutory provisions or authorities which would preclude the Return or the Assessment relating to the Club, despite being issued in the name of the Society.[68] A finding that it is arguable that the Return and the Assessment relate to the Club and not to the Society is consistent with the fact that other GST returns have been issued in the name of the Society, also for periods prior to 17 June 2016. The Commissioner had accepted those returns, processed them and refunds have been paid. Again, in carrying out those activities, the Commissioner must have been considering the activities of a taxpayer. That taxpayer cannot have been the Society.[69] In his supplementary submissions filed on behalf of the Commissioner, Mr Bryant submitted that s 89D of the TAA requires a NOPA to be issued by "the taxpayer", and that but for that provision, anyone could enter the statutory disputesprocess on behalf of any other taxpayer without their knowledge, and such aproposition is untenable. However, in this case, the very issue is, who is "the taxpayer" for the purposes of the Return, the Assessment and the NOPA?Mr Bryant's submission is predicated on the party commencing the disputes processnot being the taxpayer. I have found that it is at least arguable that "the taxpayer" towhom the Return, the NOPA and these proceedings relate is the Club and not the Society.[70] Mr Bryant also sought to distinguish Alam and Riccarton on the basis that in this case, the Commissioner is not challenging the validity of the form of the NOPA, but rather the standing of Mr Cullen to have issued it. No authorities have been advanced in support of such a distinction. In Alam and Riccarton, the Commissioner did not consider the NOR (in Alam) or the NOPA (in Riccarton) to meet the statutory requirements for those documents. I consider a similar position applies here. The Commissioner says that the NOPA does not meet the statutory requirement of s 89D that it is issued by "the taxpayer". Like in Alam and Riccarton, if the Commissioner considers that a NOPA does not meet the requirements of s 89D, or is otherwise invalid and has not triggered the statutory disputes process, the appropriate course is to issue a NOR to that effect, so that that issue can be resolved through the disputes process and challenge proceedings. This enables the question of validity to be determined through the correct procedural route.[71] Accordingly, for all of the above reasons, I consider it is arguable that Mr Cullen did not need the Official Assignee's consent to commence theseproceedings and, as Chairman of the Club,25 had the necessary standing to bring them.Is the Assessment deemed to be correct for the purpose of these proceedings?[72] In light of the discussion at [45] to [64], I consider it to be a tenable argument that s 109 is not applicable in the present case. This is because the premise underlying s 109, namely that the taxpayer could challenge the Assessment in challenge proceedings, does not exist.Are these proceedings an abuse of process?[73] As noted earlier, Mr Cullen commenced these proceedings prior to the time by which the Commissioner was required to issue her NOR. Having issued a NOPA25 The Commissioner has not challenged Mr Cullen's role in this regard.and thereby, on his own case, triggered the disputes process, it was an abuse of process for Mr Cullen to have commenced these proceedings prior to the disputes process running its course. At that point in time, I would have considered the proceedings to have been an abuse of process and struck them out accordingly.[74] However, the Commissioner did not continue to engage in the disputes process. As noted, a NOR was not issued, and on the basis of Mr Bandara's letter toMr Cullen of 14 October 2016, this appears to have been because of the Commissioner's view that the dispute process had not been properly triggered.There is no suggestion that the commencement of these proceedings somehow"distracted" the Commissioner from issuing a NOR. Accordingly, even if Mr Cullen had refrained from commencing these proceedings until after the time period for the NOR had passed (and after it became clear that the Commissioner did not propose to issue an assessment pursuant to s 89J of the TAA), either judicial review or summary judgment proceedings would have had to have been commenced in any event, to resolve the present dispute.[75] For this reason, I do not propose to exercise my discretion to strike out the proceedings as an abuse of process.[76] The fact that these proceedings were commenced prior to the disputes process having run its course does, however, need to be marked. I proposed to do so in the context of costs, as discussed below.Conclusion[77] For the above reasons, I decline the Commissioner's application to strike outthese proceedings. I observe that the declaratory relief sought in the underlying application may benefit from some amendment to reflect the matters raised in this judgment.Costs[78] Mr Cullen has represented himself to date, so legal costs are not recoverable in the ordinary way. Even if they had been, I may have ordered that costs lie wherethey fall, despite the Commissioner not succeeding on her application, given the circumstances in which these proceedings were commenced (see [73] above). For the same reason, I would be minded to order that disbursements lie where they fall on this application. If Mr Cullen objects to such an order being made, he is to file a memorandum within five working days of this judgment setting out the basis for that objection.____________________Fitzgerald J