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12 Mar 2014
Appeal Status

Indemnity costs awarded to Commissioner

2014 case note - CIR awarded indemnity costs on the basis that the taxpayer's claim fell within the 'hopeless case' category - presumptive bias.

Ben Nevis Forestry Venture Ltd v Commissioner of Inland Revenue


The Commissioner of Inland Revenue ("the Commissioner") was awarded indemnity costs on the basis that the taxpayer's claim fell within the "hopeless case" category and the Commissioner should not have been put to the expense of defending such a case.

Impact of decision

The decision confirms that the Court may award indemnity costs when a claim is clearly hopeless.


This is a costs judgment in respect of Ben Nevis v Commissioner of Inland Revenue [2013] NZHC 2361; [2013] 26 NZTC 21,032 which was heard on 5 June 2013. In that hearing, Ben Nevis submitted that the original Trinity judgment from 2004 (Accent Management v Commissioner of Inland Revenue [2005] BCL 196; (2005) 22 NZTC 19,027) ("the 2004 judgment") was a nullity because the judge, Venning J, was presumptively biased due to an alleged tax obligation which resulted in him being "beholden to the Commissioner".

The Commissioner filed a protest to the jurisdiction of the High Court to hear this issue. The 2004 judgment was appealed to both the Court of Appeal and the Supreme Court, therefore, any challenge to the 2004 judgment could now only be heard by an appellate court.

In her judgment, Katz J agreed that the High Court no longer had jurisdiction over the 2004 judgment.

The Commissioner applied for indemnity costs to be awarded on the basis that Ben Nevis's claim was:

  1. a misconduct that caused loss of time to the Court and the Commissioner;
  2. commenced for an ulterior motive;
  3. in wilful disregard of known facts and clearly established law, and
  4. a hopeless case.

The Commissioner submitted that this should be viewed in light of the taxpayer's litigation history and the fact that indemnity costs had frequently been awarded against Ben Nevis.

The taxpayer submitted that indemnity costs would be inappropriate because the Commissioner won on a point not submitted in her original submissions and that comments in R v Smith [2003] 3 NZLR 617 (CA) suggested that presumptive bias on the part of judges could lead to the relevant judgment being set aside.


The Court awarded indemnity costs to the Commissioner.

Justice Katz found that it was not necessary to consider each ground relied on by the Commissioner because the taxpayer's claim was clearly hopeless. Her Honour stated that it was not even remotely arguable that the High Court had jurisdiction to set aside one of its own decisions.

It was also noted that this proceeding had the potential to require the High Court to declare Court of Appeal and Supreme Court judgments nullities and re open aspects of the Court of Appeal's recusal decision. This is beyond the power of the High Court. Her Honour rejected all of the taxpayer's claims and upheld the Commissioner's quantum of costs.

High Court Rules