Taxpayer's failure to pursue appeal results in dismissal for want of prosecution
2005 case note – case on appeal - dismissal of appeal for want of prosecution.
The taxpayer sought to appeal a TRA decision but failed to pursue its appeal in a businesslike manner, resulting in the dismissal of the appeal for want of prosecution.
The taxpayer was unsuccessful before the TRA in Case M83 (1990) 12 NZTC 2,498. The taxpayer wished to appeal from the TRA and requested a transcript of the evidence. However there was debate as to who pays for such a transcript until 1993 when the TRA advised the tapes of the evidence had been lost (thus no transcript would be available).
The taxpayer did prepare a draft case on appeal from the TRA but its form was so unacceptable to the TRA (which had to sign the case as it originates from the TRA) that it requested the CIR to prepare the case on appeal. It was this compromise document that was eventually filed with the High Court in 1996.
Thereafter no steps were taken to process the appeal by the taxpayer until 2004 when the taxpayer, through its agent, wrote to the TRA asking for the transcript again. The Commissioner then requested the appeal be dismissed for want of prosecution. The taxpayer opposed this and sought a re-hearing of the case at the TRA (with new witnesses).
Courtney J concluded that there were three tests the CIR had to satisfy to get the appeal dismissed for want of prosecution (then r 718B now r 478 High Court Rules):
- There is inordinate delay in progressing the appeal. On these facts the Court considered the delay from 1996 (when the appeal was filed) to present was inordinate;
- The delay was inexcusable. The Court concluded there was no reasonable excuse for the delay (indeed that no excuse at all had been offered by the taxpayer);
- There is serious prejudice to the respondent. The Court considered the Commissioner as respondent had been seriously prejudiced as there was no payment of the debt and interest was not accruing to it (given the original decision predated the interest regime).
The appeal was dismissed for want of prosecution.
Courtney J also dismissed the taxpayer's application for the matter to be remitted back to the TRA on the basis that the delay seriously prejudiced the Commissioner (in getting evidence from witness some 20 to 30 years after the events) and that to allow a new witness to be called by the taxpayer was "grossly unfair" to the Commissioner. It was considered "highly relevant" that it was the taxpayer's own dilatory behaviour that put the parties into this position.
Income Tax Act 1976, High Court Rules