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CSUM 22 02
Issued
05 May 2022
Decision
18 Mar 2022
Court
NZHC
Appeal Status
Not appealed

High Court confirms that forfeiture of criminal proceeds is not 'payment in lieu' of tax

Mr Li and his company, AA Taxation & Accounting Service Ltd ("AA Taxation") applied for three declaratory orders under Declaratory Judgment Act 1908 to vindicate their contention that the forfeiture of assets by Mr Li and his wife under the Criminal Proceeds (Recovery) Act 2009 ("CPRA") may be treated as 'payment in lieu' of tax. 
Wylie J declined to grant each of the three declarations sought by Mr Li and AA Taxation. 
By way of counterclaim, the CIR sought five declarations on various grounds. Of these:

  • Wylie J declined to grant two declarations in relation to whether any assets of AA Taxation were restrained or forfeited in the CPRA proceeding because that issue was not determined in the CPRA  proceeding.
  • Wylie J granted three declarations sought by the CIR, and emphasised that the relevant restraining orders and asset forfeiture orders did not represent the payment of tax; and the CIR was/is not prevented from collecting the tax owed by Mr Li and/or AA Taxation.

Case
Li and AA Taxation & Accounting Service Ltd v CoP & CIR [2022] NZHC 514
Legal terms
Criminal proceeds forfeiture, Inland Revenue Acts

Criminal Proceeds (Recovery) Act 2009, ss 21(1)(a), 28(1)(c), 33(1), 35, 59(1)(b), 95 High Court Rules 2016, r 4.4(1)(c)
Tax Administration Act 1994, ss 6, 6A, 89AB(4)(a), 89C(c), 89O(1B)(b), 109, 143B

Li and AA Taxation & Accounting Service Ltd v CoP & CIR [2022] NZHC 514