Taxpayers refused leave to appeal to the Supreme Court

Summary

The Supreme Court refused the taxpayers' application for leave to appeal. The proposed appeal did not raise any matter of general or public importance.

Facts

The applicants were the trustees of the Church of Jesus Christ of Latter-day Saints ("the Church") Deseret Benefit Plan ("the Plan"). The Plan is a defined benefit and contributory superannuation scheme providing retirement income to employees of the Church. The applicants claimed the Plan was a "trust for charitable purposes" and therefore exempt from income tax in the 2001 year. The Commissioner disagreed.

Both the High Court (Hester & Ors v CIR (2004) 21 NZTC 18,421) and the Court of Appeal (Hester & Ors v CIR (2005) 22 NZTC 19,007) found for the Commissioner. The applicants sought leave from the Supreme Court to appeal the Court of Appeal's decision.

The Supreme Court can only hear an appeal if it considers that "it is necessary in the interests of justice for the Court to hear and determine the proposed appeal" (section 13 Supreme Court Act 2003). In this case it would be necessary for the Court to hear the appeal if the appeal involved "a matter of general or public importance".

The applicants argued that an appeal would involve a matter of general or public importance while the Commissioner argued that it would not.

Decision

The Supreme Court's decision was given by Elias CJ. Her Honour briefly set out some background to the application and noted that to be ultimately successful the applicants would have to show that the income of the Plan was held by the trustees for charitable purposes.

Elias CJ noted that though the Court of Appeal had doubted the correctness of a case the applicants were relying on (Presbyterian Church of New Zealand Beneficiary Fund v CIR [1994] 3 NZLR 363) all Judges were content to apply it to the present facts and that on the present facts the wide scope of the beneficiaries of the Plan exceeded any charitable purpose. At paragraph [5] Elias CJ stated:

[I]n concurrent findings of fact in the cases below it has been held that the scope of the trust was so broad that, whether or not some members of the fund would have fallen within the Presbyterian Church principles, some clearly would not.

Elias CJ concluded that it was well open for the lower courts to make the findings they did and that the proposed appeal did not raise any point of general importance. Leave to appeal was not granted.