No contempt of Court by Commissioner
2009 case note – CIR's use of section 17 notices, while unwise in the circumstances, was not a contempt of Court.
Tax Administration Act 1994
The Commissioner's use of section 17 notices, while unwise in the circumstances, was not a contempt of Court. Contempt of Court does not protect private rights but is to protect the administration of justice.
Impact of decision
The particular facts and allegations - that the Commissioner was in contempt of a specific order of the High Court not to use section 17 - means this judgment is confined to circumstances similar to those facts.
The plaintiffs and Commissioner have been involved in lengthy litigation.
In the course of that litigation the plaintiffs alleged the Commissioner had used section 17 in breach of an order by Justice Fogarty prohibiting the use of section 17 and that the use of section 17 was a contempt of Court. The Commissioner denied that any such an order had been made. But if such an order had been made (or had been intended) by the Court then he apologised for inadvertently breaching the order but denied there had been a deliberate contempt of the Court.
The matter was referred to another High Court Judge (Justice Chisholm) to determine if a formal hearing on the matter was necessary.
Justice Chisholm concluded that, on the facts, there was no clear order of the court warning the Commissioner against the use of section 17 thus there was no factual basis to find a contempt of court. The matter was dismissed. However the Court did note the Commissioner had - in the circumstances - been exceedingly unwise to use section 17 without getting a direction from the Court first.
The Judge outlined the points to be satisfied before a contempt of Court could be established:
-  Before the Court could find that the Commissioner, or any of his officers, had committed a contempt it would need to be satisfied that:
- the Court had directed that section17 notices were not to be issued;
- such direction was clear and unambiguous: Wilson v Davis (High Court, Rotorua Registry, CIV 2006 463 000921, 12 June 2007, Fogarty J) at ; and
- the direction was wilfully disobeyed in the sense that the section17 notices were issued deliberately: Siemer v Stiassny  1 NZLR 150 (CA) at .
- Notwithstanding the civil context, each of these elements would have to be proved beyond reasonable doubt: Siemer v Stiassny at .
The Judge determined that, on the facts, steps (a) and (b) above could not be satisfied. He did not address point (c). He also reminded the plaintiffs that
- It needs to be kept in mind that the underlying purpose of contempt is not to protect the private rights of parties to litigation, but to prevent interference with the administration of justice. (at paragraph )
As such Justice Chisholm doubted, if contempt could be established (which he also doubted), that any penalty would be imposed.
As a consequence, to proceed with the contempt matter would serve no useful purpose.
The plaintiffs' contempt matter is at an end.