Application for leave to appeal to the Supreme Court
Garry Albert Muir sought leave from the Supreme Court to appeal a decision a decision of Associate Judge Bell in which he entered summary judgment in favour of the Commissioner of Inland Revenue
Tax Administration Act 1994 ss 3, 142F and Part 8A
Garry Albert Muir sought leave from the Supreme Court to appeal a decision a decision of Associate Judge Bell in which he entered summary judgment in favour of the Commissioner of Inland Revenue (“the Commissioner”) against Dr Muir for unpaid taxes, interest and penalties for the 1997–2010 tax years. At issue was whether previous leave and revocation decisions of the Court determined the challenges that were then before the Court.
The Court found in favour of the Commissioner and did not grant leave.
When a proceeding is struck out, the proceeding (not just the pleadings) are struck out.
Where a Court enters summary judgment, it creates a res judicata (even if susceptible to appeal) that the tax debt is owing.
The Commissioner made assessments against Dr Muir for unpaid taxes, interest and penalties for the 1997–2010 tax years. He challenged all of these assessments under the Tax Administration Act 1994 (“the TAA”).
Mr Muir filed the challenges for the 1998–2006 assessments with the Taxation Review Authority (“the Authority”). The other assessments were challenged in the High Court.
The Authority struck out the challenges against the 1998–2006 assessments on 1 February 2011.
Faire J in the High Court struck out the challenges to the 1997 and 2007–2010 assessments and dismissed Mr Muir’s appeal from the Authority’s 2011 decision.
The Court of Appeal dismissed an appeal against Faire J’s judgment on 8 December 2015 (“the 8 December 2015 decision”).
Mr Muir applied for leave to appeal to the Supreme Court. This was dismissed in relation the 1997 and 1998 tax years but leave was granted in relation to the 1999 – 2010 tax years on 20 July 2016 (“July 2016 decision”).
This grant of leave was revoked on 26 August 2016 (“August 2016 decision”) meaning, as the Court noted in the August 2016 decision,“[t]he consequence is that the decision of the Court of Appeal will stand, and the appellant’s proceedings will remain struck out in their entirety”.
The Commissioner subsequently obtained summary judgment against Dr Muir and, having unsuccessfully appealed to the Court of Appeal, Dr Muir sought leave to appeal to the Supreme Court.
Dr Muir argued that as he had extant appeals in the Court of Appeal (against decisions to not accept amended statements of claim for filing):
Associate Judge Bell entering summary judgment, in substance, determined the challenge proceedings and such a collateral determination is inconsistent with Part 8A of the TAA;
the Court of Appeal’s recognition that the extant appeals might be resolve in favour of Dr Muir (and thus he would have tax challenges before the hearing authority) is inconsistent with upholding the summary judgment.
The Court requested further submissions on two matters:
- Whether challenge proceedings remained on foot after the July 2016 and August 2016 decisions; and
- the possible application on res judicata to the extant appeals (i.e. did Associate Judge Bell’s entry of summary judgment preclude the extant appeals being determined in favour of Dr Muir).
Dr Muir filed further submissions claiming that the first matter involved “relevant contested facts” in respect of an issue still sub judice and likely to come before this Court and that Ben Nevis did not give rise to an estoppel or res judicata preventing Dr Muir from advancing amended statements of claim. On the second matter, Dr Muir asserted that a judgment susceptible to appeal (as Associate Judge Bell’s summary judgment was) does not give rise to a res judicata.
The Court found that Associate Judge Bell was entitled to determine the question whether the challenge proceedings had been finally determined. His judgment (unless successfully challenged) created a res judicata and controls the results in the other litigation stream.
Although it is possible to find authority that a judgment susceptible to appeal does not create a res judicata, there is substantial authority that a judgment is relevantly final for the purposes of res judicata even if susceptible to appeal. In this case though, Dr Muir’s argument that Associate Bell’s judgment does not create a res judicata completely fails if this current application for leave is dismissed at it is no longer susceptible to appeal.
The grant of the summary judgment turns on the conclusion that the challenge proceedings have been finally determined, which in turn is premised on the July 2016 and August 2016 decisions resulting in the challenge proceedings, not just the pleadings, being struck out. This does not rest on res judicata but on the simple proposition that striking out a proceeding means the proceeding has been determined and cannot be revived by filing a further statement of claim.
Given the way that the judgments, particularly the Court’s revocation judgment were expressed “the conclusion that the proceedings were at an end might thought to be reasonably clear”. In any event, the appeal does not give rise to a question of public or general importance, nor does the Court see any appearance of a miscarriage of justice.
The application for leave to appeal was dismissed.