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Chatfield & Co Limited v. Commissioner of Inland Revenue - (11 Apr 2017)

Supreme Court must not give leave to appeal on an interlocutory matter unless it is in interests of justice to have proposed appeal heard and determined before trial


Applicant is registered tax agent in respect of 15 companies having their registered offices in New Zealand. In 2014, Commissioner of Inland Revenue received a request from National Taxation Service (NTS) of Republic of Korea (Korea) for information relating to those companies. Request was made under a double taxation agreement between New Zealand and Korea. Commissioner gathered some information from public sources but sought additional information from companies directly, by issuing notices under Section 17 of Tax Administration Act 1994 (TAA). Chatfield then issued judicial review proceedings challenging issuance of notices. 

In context of proceedings, Chatfield sought copies of documents exchanged between Commissioner and NTS, including a copy of original request. Commissioner refused to provide copies, on basis that they were not relevant to issues in proceedings and, in any event, related to matters of state in terms of s 70 of Evidence Act 2006. Korea indicated that, it claimed confidentiality in the information and opposed its release to Chatfield. Ultimately, Ellis J ruled that information was confidential and should not be disclosed. Chatfield appealed against Ellis J’s decision declining its application for discovery of material exchanged pursuant to double tax treaty. In dismissing appeal, the Court of Appeal noted that discovery in judicial review cases is not as of right but is a matter of discretion

Appellant has not established any basis upon which an order for discovery should be made. Section 13(4) of Supreme Court Act 2003 provided that, Supreme Court must not give leave to appeal on an interlocutory matter unless it is satisfied that it is in interests of justice to have proposed appeal heard and determined before trial.

Court had a discretion whether or not to order discovery. In considering whether to exercise discretion, Court had to consider whether materials sought were “relevant” given the only remaining live issue, namely whether Commissioner considered Article 25 when making decision to issue Section 17 notices. Court concluded that, on pleadings, they were not. That is a matter of application of settled principles to a particular fact situation rather than a matter with which it is necessary that this Court engage. Accordingly, application for leave to appeal is dismissed. The applicant must pay costs of $2,500 to the Respondent.


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