Skip to main content
03 Mar 2008
Appeal Status

Tax advisor's statutory non-disclosure right narrower than legal professional privilege

2008 case note – Protection afforded by s 20 B of the Tax Administration Act is narrower than legal professional privilege, list of clients' names is not protected.

Iain Wilson Blakeley v The Commissioner of Inland Revenue

Sections 17, 17A and 20B - G of the Tax Administration Act 1994


The protection afforded by section 20 B is much more confined than legal professional privilege. A list of clients' names is not protected thereby.


In the course of an investigation a taxpayer gave the Commissioner four tax opinions prepared by the plaintiff, a chartered accountant. The Commissioner considered that the "lease prepayment arrangements"and "lease assignment arrangements"referred to in the opinions were tax avoidance arrangements.

In an attempt to identify other taxpayers that had entered into similar arrangements the Commissioner issued a section 17 notice to the plaintiff requiring him to provide the names and IRD numbers of persons that he had provided advice to for similar arrangements.

The plaintiff declined to comply with the notice arguing that, as the Commissioner already had the content of the advice, the plaintiff would unavoidably be providing the content of the advice to his clients in breach of their non-disclosure right contained in section 20B of the Tax Administration Act (TAA) if he provided the information sought. He asserted further that it was in any event impossible to provide the information sought.

The Commissioner successfully applied to the District Court for an order that the information sought was not a classified document for the purposes of section 20B and for an order requiring production of the information in terms of section 17A. The District Court found that there had in any event been a waiver of the non-disclosure right.

The plaintiff appealed that decision.


The plaintiff relied on the principle, accepted in cases involving legal professional privilege, that a client's identity would be protected if disclosure risked revealing confidential communications. The Commissioner argued that the statutory non-disclosure right was not the same as legal professional privilege and that the information sought was not protected on a plain reading of the words of the section.

Rodney Hansen J, accepting the Commissioner's argument, held that the protection afforded by section 20B was much more confined than legal professional privilege. It was a limited statutory right and there was no reason why it should be construed as if it were an extension to legal professional privilege. In accordance with the established principles of statutory interpretation, words should bear their plain and ordinary meaning but with reference to the context in which they appear and to the purpose of the legislation. CIR v Alcan New Zealand Limited [1994] 3 NZLR 439 (CA) followed.

Dismissing the appeal the Court held that the statutory protection was not available as the names and IRD numbers were not tax advice documents for the purposes of section 20B.

Although it did not affect the outcome of the case his Honour overturned the finding of waiver by the District Court. He held that waiver did not arise under sections 20B - G as the right to non-disclosure did not arise automatically but must should be claimed following the detailed procedure set out in section 20D.

Finally, the fact that the plaintiff asserted that compliance with section 17 was impossible was no bar to the relief claimed. The practical difficulties of complying with the section 17 notice did not render the exercise of the power unlawful.