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25 May 2018
Appeal Status

Court of Appeal Quashes Limited Order for Discovery

The Court of Appeal has quashed the limited order for discovery made in the High Court.

The Commissioner of Inland Revenue v Cullen Group Limited [2018] NZCA 166


The Court of Appeal has quashed the limited order for discovery made in the High Court after the Appellant and Respondent came to an agreed resolution that Woolford J’s decision in the High Court was wrong. Therefore the parties asked the Court of Appeal to make orders by consent allowing the appeal filed by the Commissioner of Inland Revenue (“the Commissioner”).


The decision provides a positive precedential ruling in quashing the High Court limited order for discovery.


Cullen Group Limited (“CGL”) filed proceedings in the High Court challenging tax assessments totalling $59.5 million. The assessments relate to non-resident withholding tax and transactions which the Commissioner alleges amounted to a tax avoidance arrangement.

The key issue in this proceeding relates to CGL’s application for discovery of documents that it considered were potentially relevant as extrinsic aids for the purposes of construing parliament’s intention at the time it created the “associated persons” rule under the “approved issuer levy” regime.

In the High Court, Woolford J held that a limited order for discovery was justified. The Commissioner was required to make discovery of three categories of documents relating to the relevant legislation key to the creation of the approved issuer levy regime, as well as documents relating to 20 other statutes.

Woolford J also ordered the Commissioner to pay costs.


The Court of Appeal agreed with the parties and found good reasons in law to overturn the High Court judgment.

Firstly, the Court agreed that CGL’s discovery order illustrated a discovery order that goes far beyond the orthodox categories of extrinsic aids that the courts are willing to consider. Secondly, the Court agreed with Burrows and Carter that for admission of extrinsic materials, the documents should be publicly available; therefore there should be no need for discovery of such documents. Thirdly, the order is disproportionate. Lastly, even if a document relating to the “associated persons” test were to be found within the three discovery categories, it is most unlikely to be admitted by the trial Judge.

The Court therefore allowed the appeal. The orders for discovery and inspection made in the High Court are quashed. The order for costs made in the High Court is also quashed. There will be no order for costs on the appeal.