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11 Jun 2007
Appeal Status

Trinity litigants lose appeal based on Trinity settlements

2007 case note - Court of Appeal dismissed the appeal and upheld the High Court's refusal to recall the judgment – settlements.

Accent Management Ltd, Ben Nevis Forestry Ventures Ltd, Bristol Forestry Ventures Ltd, Clive Bradbury, Greenmass Ltd, Gregory Peebles, Kenneth Laird Estate, Lexington Resources Ltd and Redcliffe Forestry Ventures Ltd v The Commissioner of Inland Revenue


The Court of Appeal dismissed the appeal and upheld the High Court's refusal to recall the judgment


The basic background facts are those relating to the "Trinity" forestry investment scheme.

Immediately prior to the High Court hearing, documents relating to the instigation and management of the investment scheme and the accompanying insurance were produced by the Serious Fraud Office and given to the Commissioner. As a result of the contents of the documents and the circumstances surrounding their production, some taxpayers settled with the Commissioner immediately prior to commencement of the trial.

The remaining test case litigants were unsuccessful in the High Court. These taxpayers then applied to recall the High Court judgment, essentially relying on inconsistency between the Commissioner's stance at trial and the terms on which he had settled with other taxpayers.

The application failed and the taxpayers appealed to the Court of Appeal.


The Commissioner is entitled to settle tax cases commercially given his care and management responsibilities under the principles in section 6 and section 6A Tax Administration Act 1994 (TAA) and authority of cases such as Auckland Gas Co v The Commissioner of Inland Revenue [1999] 2 NZLR 409 (CA). Settlements entered into do not need to reflect the Commissioner's view of the correct tax position. The settlements concluded were properly given effect to under section 89C(d) of the TAA.

It is not appropriate for the Court to review the litigation strategy adopted by the Commissioner in relation to the taxpayers who settled.

It is not appropriate to allow these taxpayers to achieve a judicial review of the Commissioner's decisions to settle on differing terms.

Tax Administration Act 1994