Unsuccessful application by Trinity investors to the Supreme Court for leave to appeal three previous decisions
2014 case note – unsuccessful leave to appeal application by investors in Trinity Scheme to Supreme Court - presumptive bias, tax avoidance.
All the applications for leave involved proceedings which, in one way or another, were sequels to the judgment of the Supreme Court in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue  NZSC 115,  2 NZLR 289. The Supreme Court dismissed all three leave applications finding no points of public and general importance in the proposed appeals and no appearance of any miscarriage of justice.
Impact of decision
The Supreme Court reiterated that for leave to be granted, a matter of public and general importance or an appearance of a miscarriage of justice must be found in any proposed appeals.
These Supreme Court decisions should signal the end of the bias and subpart EH arguments that have been advanced by Trinity investors in multiple proceedings over a number of years.
This judgment addressed three related applications for leave to appeal to the Supreme Court:
- Bradbury v Commissioner of Inland Revenue (SC 87/2014);
- Accent Management Ltd v Attorney-General (SC 90/2014); and
- Bradbury v Judicial Conduct Commissioner (SC 103/2014).
All the applications for leave involved proceedings which, in one way or another, are sequels to the judgment of the Supreme Court in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue  NZSC 115,  2 NZLR 289 ("Ben Nevis SC"), which addressed the Trinity tax avoidance scheme.
In SC 87/2014, the applicants in the High Court sought an order setting aside the Ben Nevis High Court judgment in the Trinity litigation on the basis that the first instance Judge was biased (Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue  NZHC 2361, (2013) 26 NZTC 21-032). A protest to jurisdiction by the Commissioner was upheld by Katz J and the applicants' appeal to the Court of Appeal was dismissed (Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue  NZCA 350, (2014) NZTC 21-086). Both courts concluded the High Court does not have jurisdiction to set aside for bias an earlier High Court judgment that has been upheld on appeal.
In SC 90/2014, the applicant asserted that when the High Court heard the original Trinity case, it wrongly analysed the Trinity scheme under subpart EG of the Income Tax Act 1994 rather than (the purported mandatory) subpart EH. The applicant's contention is that implementation of the judgment would therefore involve the collection of tax otherwise than as authorised by Parliament and that the judgment should be set aside as unlawful.
In SC 103/2014, the applicants sought leave to appeal decisions of the High Court and Court of Appeal (Muir v Commissioner of Inland Revenue  NZCA 334,  3 NZLR 495) dismissing an application to judicially review the Judicial Conduct Commissioner's findings that the first instance Judge was not biased.
The Supreme Court dismissed all three leave applications finding no points of public and general importance in the proposed appeals and no appearance of any miscarriage of justice and found:
- In SC 87/2014, that the position of the applicants being if the High Court judgment is set aside, the judgments of the Court of Appeal and Supreme Court would fall away as nullities had no supporting authority aside from the special case of judgments obtained by fraud. However, fraud was not one of the grounds in this leave application.
- In SC 90/2014, that the argument raised by the applicants was either the same as, or at best only inconsequentially different from, that already addressed in the Supreme Court's previous Redcliffe judgment (Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd  NZSC 94,  1 NZLR 804).
- In SC 103/2014, that although the subject matter of the proposed appeal was undoubtedly of public importance - as it involves complaints against a Judge - the case primarily involved the application of the Judicial Conduct Commissioner and Judicial Conduct Panel Act 2004 to the very particular facts of the present case. The underlying arguments as to the merits of this did not raise any issue of public or general importance and no appearance of a miscarriage of justice.
Further, the Supreme Court found the various applications for leave to appeal the various awards of indemnity costs held no arguments that would warrant the granting of leave.
Supreme Court Act 2003, Tax Administration Act 1994