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08 Apr 2009
Appeal Status

Scope of judicial review limited in tax cases

2009 case note - Supreme Court declined taxpayer's application to appeal judgment limiting the scope of judicial review against the CIR – assessments, inconsistency.

Westpac v Commissioner of Inland Revenue


The Supreme Court declined the taxpayer's application for appeal to appeal the Court of Appeal's judgment limiting the scope of judicial review against the Commissioner.

Impact of decision

The strict judgment by the Court of Appeal is the most recent statement of law on judicial review and the Commissioner. The approach taken by the Court of Appeal was considered not to be reasonably arguable to be wrong by the Supreme Court. This endorses the view taken at the Court of Appeal.


This was a part of the structured finance litigation.

The taxpayer had challenged the Commissioner's assessments based upon tax avoidance

One of the causes of action in the taxpayer's case was that the assessments were invalid because these were inconsistent with an earlier binding ruling (but not for the transactions upon which the assessments were based) and for other reasons. This cause of action was subject to a strike out application by the Commissioner on the basis it could never succeed.

The Commissioner was successful at the High Court (reported (2008) 23 NZTC 21,694) and the Court of Appeal (reported [2009] NZCA 24).

The taxpayer sought leave to appeal to the Supreme Court.


In a very short judgment the Supreme Court declined to grant leave to the taxpayer.

The Court considered "that it is not reasonably arguable that the Court of Appeal's approach to the law, including its view of the effect of the policy of the legislation, was wrong" (at par [4]).

The Supreme Court summarised the Court of Appeal's approach as:

  • "In its judgment, the Court of Appeal took the view that established principles in relation to applications for judicial review in tax cases should not be widened. Review was available for assessments that were not truly assessments at all and, in exceptional cases, which might have involved maladministration, the Court reached this decision notwithstanding provisions in tax administration legislation concerning functions and duties of the Commissioner, including protection of the integrity of the tax system on which the applicant relied." (at par [2])

The Supreme Court noted the fact there were different views within Inland Revenue in respect of the assessments made was not, in the circumstances, a basis for a reasonable prospect of success in judicial review (at par [5]).


Judicature Amendment Act 1972