Issued
2015
Decision
10 Feb 2015
Appeal Status
Not appealed

New Zealand Bill of Rights application by Trinity investors struck out by High Court

2015 case note - New Zealand Bill of Rights application by Trinity investors struck out by High Court - presumptive bias, tax avoidance, collateral attack.

Case
Ben Nevis Forestry Ventures Ltd v Attorney-General
Legal terms
Presumptive bias, Trinity, tax avoidance, collateral attack

Summary

This proceeding concerned an application for orders seeking, amongst other things, to set aside the initial High Court judgment of Venning J in Accent Management Ltd v Commissioner of Inland Revenue (2005) 22 NZTC 19,027 (HC) ("Accent 2004"). The plaintiffs claimed the judgment was in breach of the Bill of Rights Act 1990 on the basis that Venning J was biased towards the Commissioner, having become beholden to her following non-payment of $4,250 of stamp duty in 1992. Asher J found the High Court did not have jurisdiction to hear the plaintiffs' claim on the basis it was an abuse of process, that the Court did not have jurisdiction and that there was no reasonably arguable case.

Impact of decision

The judgment confirms the position in Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 ("Redcliffe 2012") and Bradbury v Commissioner of Inland Revenue [2014] NZSC 174, (2014) 26 NZTC 21-112 ("Bradbury 2014") which found a challenge to a concluded judgment that has been the subject of an appellate judgment should not be mounted in the trial court except in the case of a judgment obtained by fraud.

Facts

This proceeding is one in a line of collateral proceedings brought by investors in the Trinity scheme against the judgments of the High Court, Court of Appeal and Supreme Court that the scheme constituted tax avoidance. (The Supreme Court's decision was reported as Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115, [2009] 2 NZLR 289 ("Ben Nevis 2008").)

This particular proceeding concerned an application by Ben Nevis Forestry Ventures Ltd ("Ben Nevis"), Bristol Forestry Venture Ltd ("Bristol"), Clive Bradbury and Gregory Peebles for orders setting aside the initial High Court judgment of Venning J in Accent 2004. The plaintiffs claimed the judgment was in breach of the Bill of Rights Act 1990 on the basis that Venning J was biased towards the Commissioner, having become beholden to her following non-payment of $4,250 of stamp duty in 1992.

The defendants applied to strike out the proceeding on the basis it was an abuse of process, that the Court did not have jurisdiction and that there was no reasonably arguable case.

Decision

Asher J found the High Court did not have jurisdiction to hear the plaintiffs' claim.

His Honour placed the claim in the general context of the Trinity litigation. He recognised the proceeding had its genesis in that hearing and was struck out by Katz J in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue ([2013] NZHC 2361, (2013) 26 NZTC 21-032)where the same factual allegations had been made.

Asher J noted that at the time of the hearing in this matter, Katz J's decision was under appeal, but was subsequently upheld by the Court of Appeal (Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2014] NZCA 350, (2014) 26 NZTC 21,086) with the Supreme Court later declining leave to appeal in Bradbury 2014. In that proceeding, the Court of Appeal had determined that the appropriate forum for remedying claims relating to Accent 2004 was the Supreme Court, relying on Redcliffe 2012. The effect of Redcliffe 2012 was that a challenge to a concluded judgment that had been the subject of an appellate judgment should not be mounted in the trial court except in the case of a judgment obtained by fraud.

Asher J also referred to the Supreme Court's comments in Bradbury 2014, that the proceeding was a collateral attack on Ben Nevis 2008; that Redcliffe 2012 was against the plaintiffs; and that, except in the special case of judgments obtained by fraud, there was no authority supporting their position.

His Honour considered he was bound by those decisions. In the absence of fraud, a challenge to Accent 2004 could only be heard in the Supreme Court and, accordingly, there was no jurisdiction to determine an application filed in the High Court. The Court had no jurisdiction to hear the claim and so the proceeding was struck out.

Tax Administration Act 1994, Bill of Rights Act 1990