Judicial review granted for delay
2008 case note - taxpayers granted application for judicial review due to total time taken in the prosecution and undue delay.
Act Income Tax Act 1994
The taxpayers were granted application for judicial review, holding that, considering the total time taken in the prosecution, there had been undue delay, and that in the circumstances, the District Court Judge should have exercised his inherent power to prevent an abuse of process and to direct a stay of the proceedings.
On 8 November 2004, Notices under section 17 of the Tax Administration Act 1994 (TAA) were sent requesting information in support of certain returns filed by Mr Harris personally and on behalf of three companies. This resulted in a box of documents being supplied by Mr Harris to the Department; however, much of the information requested was allegedly not supplied.
From 30 November 2004 to 9 February 2005, further correspondence was issued to Mr Harris and/or his companies giving notice of intention to prosecute unless the default was remedied, which led to four informations under section 143A(1)(b) of the TAA being sworn on 25 July 2005. Those informations were replaced by fresh informations on 25 November 2005, which also alleged offences under section 143A (1) (b) of the TAA.
After various procedural steps, on 12 February 2007, the informations were ruled to be nullities as not coming within section 150A TAA and not laid within time.
Shortly after, on 16 February 2007, fresh informations were sworn in terms of section 143 (1)(b) of the TAA. After various procedural steps, the accused applied to have the informations dismissed at the 3 April 2008 fixture. Judge Burns ruled against Mr Harris, which led to these judicial review proceedings.
Application for review granted.
Order of staying prosecutions granted.
- The informations were not out of time, as contrary to the applicant's arguments section150A of the TAA did apply.
The effect of section 150A (2) was to restrict the extension of time to offences against the TAA that relate to:
- a tax law that is a provision of the Income Tax Act 2004, or
- a tax law that is a provision of the Goods and Services Tax Act 1985, or
- an obligation that exists in relation to either of those Acts, ie either the Income Tax Act or the Goods and Services Tax Act.
The Crown submission that the obligation to provide information under section 17 of the TAA in this matter was for the purpose of administration of the Income Tax Act was accepted, which was supported by the obligation in section AA 2 of the Income Tax Act 1994 to satisfy the obligations imposed by the TAA.
- His Honour considered that it would be premature to comment on the submissions that the informations were a nullity in any event as the District Court had not yet ruled on the issue of whether apparent defects in the dates of the alleged offending in the informations ought to be amended pursuant to section 43 of the Summary Proceedings Act 1957.
- His Honour reviewed the leading case in relation to the application of the right under section 25(b) of the New Zealand Bill of Rights Act 1990, Martin v District Court at Tauranga (1995) 12 CRNZ 509 (CA), and considered that the total delay from the laying of the informations in Februrary 2007 to the hearing on 3 April 2008 was 14 months, which was not an extraordinarily long or excessive period, and could not be construed as undue. His Honour concluded that the Judge was right to find that the delay from the current prosecutions to 3 April 2008 was not such as to constitute a breach of Mr Harris' rights under section 25(b) of the NewZealand Bill of Rights Act.
- His Honour then considered the applicant's alternative submission on delay: that the overall delay in the prosecution was such that the District Court Judge should have exercised his inherent power to prevent an abuse of process. After considering the factors to take into account when considering whether to dismiss for an abuse of process as recently summarised by Randerson J in W v R (1998) 16 CRNZ 33, his Honour considered that in the particular circumstances of this case, including the principal reason for the delay being the issuing of informations under section 143A(1)(b) of the TAA out of time (to which section 150A of the TAA did not apply), and the seriousness of the offending alleged, that the delay overall was so long and unjustified that it would be an abuse of process to put Mr Harris on trial for these informations now.
- His Honour declined to disturb the Judge's discretion to deal with the issue of disclosure by adjourning the matter to allow disclosure issues to be remedied, particularly as the District Court Judge had the advantage of seeing the witness give evidence on that matter and had accepted the explanation that the disclosure issue was as a consequence of an inadvertent, accidental omission and that it was not done deliberately.