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12 Dec 2008
Appeal Status

Supreme Court upholds common law position on proof of amount in PAYE and GST offending

2008 case note – application for leave to appeal declined - specific amount, evasion, prosecution, element of offence.

Smith v R

Tax Administration Act 1994, section 109, 143B (1)(b) and (f), and 143A(1)(d).


The Supreme Court declined Mr Smith's application for leave to appeal on three questions of law. The overall effect of this case, together with the Court of Appeal decision, is that the general position at common law that value is not an element of an offence, unless the essence of the offence is to continue to apply to a section 143A(1)(d) offence.

It is only necessary for the Crown to prove that an amount of the PAYE deduction has been misapplied; it does not have to prove the precise amount of the deduction that has been misapplied.

The Courts also found that the Crown did not have to prove that a particular amount of GST, or even some, was payable to prove the evasion part of a charge. The intention of evading assessment was sufficient: R v Fepuleai [2008] NZCA 339 applied and endorsed by the Court of Appeal.

Impact of decision

These decisions preserve the status quo.


Following trial before Judge Maze and a jury in the Hamilton District Court, the appellant and his wife were found guilty on 94 counts alleging offending between 2001 and 2006 against the Tax Administration Act 1994. The appellant was sentenced to two and a half years imprisonment and his wife was sentenced to nine months home detention.

Mr Smith unsuccessfully appealed to the Court of Appeal against both his conviction and sentence (R v Geoffrey Martin Smith CA CA275/2008 [2008] NZCA 371). The appellant then sought leave to appeal to the Supreme Court.


The Court considered the three propositions, and answered the first two on the basis that there was no requirement or basis to read into the relevant provisions proof of a specific amount; and describing the third argument as "equally hopeless", saw no justification for giving the words in section 109 anything other than their plain meaning.

As the three propositions of law advanced were untenable, and there was no appearance of a miscarriage of justice, the Court dismissed the application for leave.