Criminal tax charges stayed for undue delay
Harris v District Court at Auckland & Anor (2008) 23 NZTC 22,088
This case was a judicial review of the way in which a District Court Judge dealt with certain procedural challenges to charges laid by the Commissioner of Inland Revenue under the Tax Administration Act 1994. The taxpayer was charged with failing to comply with notices to furnish information when required to do so by the IRD in relation to three companies of which he was a director and also personally. Four issues arose out of the District Court’s decisions. They were:
(a) Were the charges laid out of time?
(b) Were they otherwise nullities?
(c) Should the District Court Judge have stayed the prosecutions for delay?
(d) Should he have stayed the prosecutions as an abuse of process because of inadequate disclosure to the defendant?
The taxpayer was successful on the review and as a result an order was made by the High Court staying the prosecutions. The decisions of Venning J were broadly in the Commissioner’s favour save for the question of delay in the prosecution which was decided in favour of the taxpayer.
As to the argument that the informations were laid out of time, the Judge concluded that informations could be laid within 10 years of an offence. That finding was based upon the view that although the obligation to supply information was provided for under the Tax Administration Act, it was an obligation in relation to the Income Tax Act and accordingly a 10 year time limit applied. The defendant had argued that the obligation to supply information was a requirement of the Tax Administration Act not the Income Tax Act or Goods and Services Tax Act so that the 10 year time limit for laying an information did not apply, but this was rejected.
As to whether the informations were nullities apart from the limitation issue, the Court held that the only basis on which this was advanced, ie, a mistake as to the time the offence was committed, could not be sustained and it was within the jurisdiction of the Court to amend the charges to cover this point and more time was required to allow the District Court to consider that.
The District Court Judge had concluded that a failure by Inland Revenue to provide certain documents in disclosure was inadvertent and did not reflect on the bona fides of Inland Revenue as a prosecuting agency. Accordingly the High Court decided that the District Court Judge’s decision to adjourn to allow disclosure issues to be remedied should not be disturbed.
A stay was granted, however, on the basis of delay. Section 25(b) of the New Zealand Bill of Rights Act 1990 guarantees that everyone charged with an offence will have that determined without undue delay. The Court relied upon the Court of Appeal’s decision in Martin v District Court of Tauranga (1995) 12 CRNZ 509, following Canadian authority. No slavish mathematical or administrative formula was to be applied when assessing delay but a determination made balancing the interests which the section is designed to protect against the factors which lead to or cause delay. A delay of 14 months form charge to hearing was not undue and so no breach of the defendant’s rights under the New Zealand Bill of Rights Act occurred.
Quite apart from that, the Court reviewed whether, exercising its inherent jurisdiction, the District Court should have stayed the proceedings and, in particular, whether the District Court Judge had been wrong to consider each set of charges separately. In this regard there was authority for the fact that a period of delay following the offence rather than the laying of a charge, could be considered.
In this case the failure to supply information requested by Inland Revenue occurred in 2004. At that time Inland Revenue had given notice of its intention to prosecute and a further such notice was given in 2005. However, the informations were not laid until early 2007 and it was not until April 2008 that the defendant’s technical challenges to the informations were dealt with. There was limited evidence of prejudice arising from the delay however the Court concluded that the real reason for delay lay in mistakes made by the prosecuting authority. It laid two sets of informations that were out of time and were struck out. These factors were balanced against a conclusion by the Court that the offending was not the most serious kind and it was also relevant that Inland Revenue had very substantial resources which should have been able to advance the prosecution effectively.
The case makes it plain that despite the legislative time limit of 10 years within which a prosecution may ostensibly be brought, once a decision is made to prosecute, it should be promptly followed through. A failure to do so may lead to judicial intervention to stay the prosecution regardless of the apparent statutory time frame within which an offence may be prosecuted. The statutory time limit exists more to allow prosecuting authorities to act if they become aware of an offense a considerable time after it has been committed. Where, however, the facts are known at an early stage and a decision has been made to prosecute, the time limit will offer no protection from the consequences of delay.