PARORE v THE COMMISSIONER OF INLAND REVENUE [2021] NZCA 312

PARORE v THE COMMISSIONER OF INLAND REVENUE [2021] NZCA 312 [12 July 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA184/2021[2021] NZCA 312BETWEEN RICHARD ALLEN PAROREApplicantAND THE COMMISSIONER OF INLAND REVENUERespondentCourt: French, Thomas and Muir JJCounsel: D P Weaver and A F McClelland for Applicant J Mara for RespondentJudgment:(On the papers)12 July 2021 at 3 pmJUDGMENT OF THE COURTThe application for leave to bring a second appeal is declined.____________________________________________________________________REASONS OF THE COURT(Given by Muir J)Introduction[1] Mr Parore seeks leave to bring a second appeal on a question of law pursuant to s 303(1) of the Criminal Procedure Act 2011 (the CPA).[2] His application arises in the context of 13 tax evasion charges under s 143B(2) of the Tax Administration Act 1994 (the TAA). During the course of his judge-alonetrial in the District Court at Auckland, Mr Parore applied under s 147(4)(b) of the CPA to dismiss seven of the charges on the basis that there was no case to answer. He said that his status as a bankrupt meant that the Official Assignee (OA) was responsible for filing his GST returns and that, in not having paid over to the Inland Revenue Department GST collected by him during part of the adjudication period, he had not breached s 143B(2) of the TAA.[3] Judge Clarkson granted the application and dismissed the seven charges. 1 On appeal to the High Court, Jagose J found that the Judge had erroneously assessed evidential substance as opposed to evidential sufficiency as required by s 147(4)(b) of the CPA. 2 He accordingly directed a new trial of the dismissed charges in conjunction with the other charges faced by Mr Parore. 3[4] Mr Parore's application is opposed by the Commissioner of Inland Revenue (the Commissioner).Background[5] Prior to his adjudication on 2 April 2009, Mr Parore worked as a GST registered real estate agent. He remained employed in the industry subsequent to adjudication and, for the next two years, continued to file GST returns in the same way he had done previously. He did so under his original GST registration number, adapting old forms in his possession.[6] His statement of affairs was tardy, having not been filed until late 2011. At that point, the OA required him to apply for self-employment status. As part of his application, Mr Parore swore an affidavit that he would appoint a tax agent to file his tax returns and also submit his "trading statements" to the OA on a 12-monthly basis. He did not, however, complete the application. Nor did he file any further GST returns. Indeed, all contact with the OA stopped at that point.1 Commissioner of Inland Revenue v Parore [2020] NZDC 16363 [District Court decision] at [53].2 Commissioner of Inland Revenue v Parore [2021] NZHC 420 [High Court decision] at [16].3 At [23].[7] The seven charges which were dismissed by the District Court relate to the equivalent number of six-monthly GST periods from the time Mr Parore stopped filing returns (in October 2011) until his discharge from bankruptcy (in October 2014).[8] Mr Parore applied to dismiss these charges under s 147(4)(b) of the CPA. He submitted that he could not be convicted of evading GST during the period of his bankruptcy. He relied on s 58 of the Goods and Services Tax Act 1985 (the GST Act) which, he said, imposed on the OA responsibility to file GST returns and pay GST on his behalf.[9] Judge Clarkson granted the application and dismissed the charges. Although she made no determination under s 58 of the GST Act, she said that it was "impossible" to infer Mr Parore intended to evade his GST obligations.4[10] The Commissioner appealed that decision on the grounds that, despite the Judge's reference to "impossibility", she had in fact misapplied the test under s 147 of the CPA. Jagose J agreed. He directed a new trial of the dismissed charges be heard in conjunction with the conclusion of the trial on the other six charges which Mr Parore faced. 5 The trial is scheduled to resume on 29 July 2021.The test[11] In terms of s 303(2) of the CPA, this Court must not give leave for a second appeal unless the appeal involves a matter of general or public importance or a miscarriage of justice may have occurred or may occur unless the appeal is heard. In McAllister v R, this Court confirmed that the bar is a high one. 6DiscussionA matter of general or public importance?[12] Mr Parore submits that the proposed appeal raises issues with regard to the operation or application of s 147 of the CPA which are at the level of general or4 District Court decision, above n 1, at [45].5 High Court decision, above n 2, at [23].6 McAllister v R [2014] NZCA 175, [2014] 2 NZLR 764 at [36]–[38].public importance. He submits that, in the context of a jury trial, the circumstances where it is appropriate for a charge to be dismissed under s 147 are different from those in a judge-alone trial. He submits that the District Court Judge had the benefit of all the evidence and, in accordance with her role as finder of law and fact, found there was insufficient evidence to support the charges. He contrasts this with the position of the High Court Judge who, he says, did not have any such benefit.[13] He says that adopting the High Court's approach to s 147(4)(b) may lead to a situation where, although there is insufficient evidence to justify a conviction, an application under s 147(4)(b) will not succeed.[14] We are unpersuaded by these submissions. We consider it settled law that, in respect of s 147, the same principles apply whether the matter proceeds judge-alone or before a jury.[15] In the leading authority, Haw Tua Tau v Public Prosecutor, the Privy Council noted: 7In their Lordships' view the same principle applies to criminal trials where the combined roles of decider of law and decider of fact are vested in a single judge At the conclusion of the prosecution's case what has to be decided remains a question of law only. As decider of law, the judge must consider whether there is some evidence (not inherently incredible) which, if he were to accept it as accurate, would establish each essential element in the alleged offence. If such evidence as respects any of those essential elements is lacking, then, and then only, is he justified in finding "that no case against the accused has been made out " [16] Where the relatively low evidential bar of "some evidence" is satisfied and that evidence is not inherently incredible, a judge, whether sitting alone or with a jury "must let the case go on". 8 The requirement, therefore, is to take the prosecution evidence "at its highest". 97 Haw Tua Tau v Public Prosecutor [1982] AC 136 (PC) at 151, cited in S (CA58/2019) v Vector Ltd [2020] NZSC 97 at [125].8 Haw Tua Tau v Public Prosecutor, above n 7, at 151.9 R v Galbraith [1981] 1 WLR 1039 (CA) at 1042, cited by this Court in R v Flyger [2001] 2 NZLR 721 (CA) at [17].[17] We agree with the Commissioner that Jagose J applied the settled test in an orthodox manner. Nor do we see any basis to criticise the test. No matter of general or public importance is therefore engaged. In particular, we do not consider there to be any real risk that, on the accepted test, an application under s 147(4)(b) of the CPA will not succeed in circumstances where there is insufficient evidence to justify a conviction. 10A miscarriage of justice?[18] We see the miscarriage of justice argument as failing for essentially the same reasons. It cannot, in our view, be tenably suggested that Jagose J misapplied the test. He noted that although the District Court Judge had expressed herself in terms of it being "impossible" to infer the requisite intention to evade and that there was "insufficient evidence" in that respect, the process she embarked on in fact involved an assessment of substance and not sufficiency. 11 As he pointed out:[15] She expressly identified the materiality of the evidence as to Mr Parore's payment of income tax, his continued filing using old forms, his mailing and residential addresses, and his contact with the Official Assignee. She explained, for example, "[t]he delayed filing is more supportive of these documents not having been received by Mr Parore than of an inference that he was evading obligations in some way."[16] The Judge thus acknowledged the evidence was capable of supporting the Commissioner's contended inferences, even while she would weight it otherwise. She does not mean the evidence could not support the inferences. Her references to 'impossibility' are not literal.(Footnotes omitted.)[19] We are unable to identify any realistic argument to the contrary.[20] In that context, we do not consider it necessary to engage with the Commissioner's submissions about why Mr Parore is guilty of tax evasion, despite the fact that the legal obligation to file returns during the period of his adjudication may (arguably) have fallen on the OA. We note that the Commissioner's case is that there was ample evidence to suggest Mr Parore knew that he had charged and collected10 We use "insufficient" here in the context of the evidential substance/sufficiency dichotomy previously referred to at [3].11 High Court decision, above n 2, at [16].GST and also knew that he had failed to inform the Commissioner or the OA of his GST position. We simply observe that, on the inferences available, this is not, in our view, an "inherently incredible" position.[21] Nor are we persuaded that we should revisit the argument under s 58 of the GST Act. This was not the subject of any determination by Judge Clarkson and was not, therefore, addressed in the decision under appeal. Were leave to be granted on the point, then this Court would be in the position of having to address the issue without the benefit of prior consideration. We see no general or public importance in exploring the implication of a statutory provision that has had no bearing on the decision appealed from.[22] We also note the Commissioner's position that if the legal obligation to file GST returns during the period of adjudication fell on the OA (which is denied), Mr Parore could still be guilty of the offences charged by knowingly failing to provide the OA with the necessary information (and funding) to file and pay GST on his behalf. These are arguments appropriately pursued at trial.Result[23] The application for leave to bring a second appeal is declined.Solicitors:Holland Beckett Law, Tauranga for ApplicantCrown Law Office, Wellington for Respondent