Issued
2018
Decision
19 Feb 2018
Appeal Status
Not appealed

High Court confirms the use of the Mannix Rule

The Commissioner opposed Emborion’s applications. In the High Court, van Bohemen J dismissed all of Emborion’s applications.

Case
Emborion International Limited v Commissioner of Inland Revenue [2018] NZHC 178
Legal terms
Representation, Mannix, costs, heard on the papers

Summary

Emborion International Ltd (“Emborion”) applied to the High Court seeking orders regarding representation during the conduct of the proceeding and substantive hearing, that this matter be heard on the papers and that the Commissioner of Inland Revenue (“the Commissioner”) meet all of Emborion’s legal fees and court costs. The Commissioner opposed Emborion’s applications. In the High Court, van Bohemen J dismissed all of Emborion’s applications.

Impact

The decision confirms the application of the decision in Re G J Mannix [1984] 1 NZLR 309 (“Re G J Mannix”).

Facts

Emborion has challenged the Commissioner’s assessment in the Taxation Review Authority (“TRA”).

On 1 November 2016, Moore J granted the Commissioner’s application to transfer the matter to the High Court on the grounds, inter alia, that the proceedings are moderately complex, that they involve a tax arrangement orchestrated by John George Russell, and that three other proceedings involving similar issues with companies associated with Mr Russell have been transferred from the TRA to the High Court. By Minute dated 12 April 2017, Moore J refused Emborion’s subsequent application to recall his decision to transfer the dispute to the High Court.

On 31 January 2018, Emborion lodged an application signed by Glenda Frances Rogers (Emborion’s sole director) seeking orders that the dispute be heard on the papers and that the Commissioner meet all of Emborion’s legal fees and court costs, alongside a memorandum for the case management conference also signed by Mrs Rogers, which set out the issues involved in the dispute and proposed a timetable for the proceeding.

On 2 February 2018, the Commissioner filed a memorandum in response, stating that whether Mrs Rogers has standing to file documents on behalf of Emborion. Further, the Commissioner opposed Emborion’s application to have the dispute heard on the papers but largely agreed with the issues identified and the timetabling proposed.

On 13 February 2018, the Commissioner filed a further Notice of Opposition to Emborion’s application that the dispute be heard on the papers and that the Commissioner pay Emborion’s legal fees and court costs.

Decision

Representation of Emborion

The Court could see no reason to depart from the decision in Re G J Mannix, namely that a company must be represented by a barrister or solicitor and the New Zealand Bill of Rights Act 1990 and Interpretation Act 1999 do not make companies into natural persons. Accordingly the Court confirmed that Emborion may not be represented in this proceeding except by a barrister or solicitor.

Regarding Mrs Roger’s standing to file documents in the proceeding, the Court was prepared to grant Emborion some latitude as the agreed timetable requires some action in the coming weeks. Regardless, the Court stated that if Emborion intends to pursue its challenge, it should obtain professional legal advice as soon as possible.

Lastly, the Court made it very clear that even though Mr Russell’s participation in this conference was not objected to, if Mr Russell should attend any future conferences, he will not be able to address the Court on behalf of the company.

Emborion's application for the proceeding to be determined on the papers

The Court dismissed Emborion’s application to have the matter determined on the papers. First, the Court found that the high level of disagreement of the points at issue between the Commissioner and Emborion would make it a difficult matter for a judge to determine on the papers. Secondly, as it was proposed that the hearing would take five days and the Commissioner will likely wish to cross examine Mr Russell, it would again make it difficult to be satisfactorily determined on the papers.

Additionally, the Court also dismissed Emborion’s application to have its legal fees and court costs met by the Commissioner. Costs will only be determined once the outcome of a matter is known.

Schedule 5 of the High Court Rules

The Court noted that the parties are largely in agreement on the matters to be considered under Schedule 5 of the High Court Rules. A timetable was accordingly set down for the matter.

High Court Rules 2016; New Zealand Bill of Rights Act 1990; Interpretation Act 1999