Friday 9th November 2012
|Text too small?|
New Zealand's Supreme Court has rejected a claim the Inland Revenue Department fraudulently won its $3.7 billion tax case involving the 'Trinity' forestry scheme.
The court bench, comprising Chief Justice Sian Elias and Justices Andrew Tipping, John McGrath, William Young and Thomas Gault, upheld an appeal by the Commissioner of Inland Revenue, and restored a High Court decision maintaining the tax department's interpretation about tax deductions made by the scheme's investors. The decision was delivered by Justice McGrath in Wellington today.
The tax department has previously said the scheme would have cost taxpayers up to $3.7 billion over the 50-year-lifespan of the investment scheme.
A group of Trinity investors, including the scheme's architect Garry Muir, claimed the IRD "deliberately refrained from putting material facts and law" before the High Court in the original proceeding, "so as to secure a judgment that department officers knew would not have been available if there had been full and frank disclosure of the legal position," the judgment said.
The group, led by Muir's Redcliffe Forestry Venture, said the commissioner "knowingly and wrongly applied a depreciation allowance to expenditure incurred by the Trinity investors" under a certain provision of the Income Tax Act.
The Supreme Court judges rejected the accusation, saying the "Redcliffe cannot credibly claim that the litigation strategy attributed to the commissioner compromised its ability to mount an argument on the subpart's applicability."
Because Redcliffe challenged the legal correctness of a Supreme Court ruling, underpinned by the allegation of fraud, it erred in filing a new proceeding in the High Court, the judgment said.
"What Redcliffe alleges does not constitute a case capable of leading the High Court to set aside the 2004 judgment," it said.
Redcliffe and the other Trinity investors were ordered to pay $15,000 in costs with reasonable disbursements, and reversed a costs order in their favour in the Court of Appeal.
No comments yet
MARKET CLOSE: NZ shares down, Air NZ and Vector fall, as markets mixed ahead of May's Brexit speech and Trump inauguration
NZ, Israeli business relations seen as sailing through sour diplomatic affairs
NZ dollar little changed before dairy auction as futures fall, traders await May speech
IRD follows IRS lead, audits Microsoft NZ over transfer pricing
Postr raises $3 million from NZVIF, Singapore-based investors to fund expansion into Asia
Powerco eyes price hikes to pay for $1.4 billion network upgrade
NZ Oil & Gas takes control of Cue Energy almost two years after launching full takeover offer
NZ median house price slips 0.8% in December from November's high
ANZ New Zealand, NZOG join early 2017 executive reshuffle
NZ firms stay upbeat in December on building boom, rural recovery