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Summary judgment application

Decision date: 4 April 2013

Case: Peter William Mawhinney v Commissioner of Inland Revenue

Act(s): High Court Rules, Goods and Services Tax Act 1985

Keywords: Summary Judgment, High Court Rules Part 12, GST refunds, section 46 of the GST Act


The plaintiff made a summary judgment application which was unsuccessful on the grounds that the Commissioner has an arguable defence to both of the plaintiff's arguments.

Impact of Decision

Reiterates the position that summary judgment applications will not be successful when the defendant has an arguable defence.


This is a summary judgment application by Mr Mawhinney as trustee of the Forest Trust.

The plaintiff contends that the Commissioner has omitted to pay $594,210.48 in respect of Goods and Service Tax ("GST") refunds for the GST periods ended 31 May 2009 to 31 December 2011 (inclusive). The Commissioner has withheld payment under section 46 of the Goods and Services Tax Act 1985 ("the GST Act") while the returns are investigated. Mr Mawhinney argues that the refunds are payable as the Commissioner is relevantly satisfied that the returns are in order; and alternatively that the refund is payable because the Commissioner did not initiate an investigation within 15 working days of receiving the information requested under section 46(4) of the GST Act.


For his first argument, Mr Mawhinney says that the Commissioner is satisfied as a result of sending the taxpayer two letters. The first letter dated 2 May 2012, enclosed documents called "Notice of assessment for the Forest Trust" and sets out how the GST for each period from 31 May 2009 to 29 February 2012 has been treated. The second letter dated 20 June 2012 also enclosed documents but this time headed up "Acknowledgement of return for the Forest Trust". Apart from the change in title, they were similar to the documents sent with the letter of 2 May 2012.

Mr Mawhinney says that these documents are "assessments" under the Tax Administration Act 1994 and represent decisions made by the Commissioner under section 46(1)(b) of the GST Act that she is "relevantly satisfied" with the trust's GST returns.

The Commissioner refers to the self-assessment system for GST, when taxpayers lodge tax returns they self-assess their tax liability. The Commissioner admits that it was confusing that the documents attached to the 2 May 2012 letter were headed "notice of assessment". However, the Commissioner explains that the documents were generated to address a complaint made to Inland Revenue by Mr Mawhinney. The second letter dated 20 June 2012 notified the plaintiff of the errors in the documents and issued amended versions. The Commissioner submits that on the basis of that evidence, the documents were no more than responses to the taxpayer's requests for information about the GST returns and the label put on the documents is not decisive.

The Court accepted that the Commissioner had an arguable defence that these documents were not assessments and went on to note at [41]:

  • Mr Mawhinney's argument does not just turn on whether there were assessments. His claim is that the Commissioner was relevantly satisfied under section 46(1)(b) of the GST Act. For this decision, I assume that the Commissioner may be relevantly satisfied under that section and communicate his satisfaction without making an assessment or giving a notice of assessment as those terms are used in the tax legislation. Mr Mawhinney's reliance on the assessment provisions of the Tax Administration Act is not essential to his argument.

The Court concluded that the case law in Paul Finance Ltd v Commissioner of Inland Revenue (1995) 17 NZTC 12,379 (CA)and Contract Pacific Ltd v Commissioner of Inland Revenue (1995) 17 NZTC 12,379 (CA)go towards the Commissioner's defence that the documents are not evidence that she had made assessments and therefore, the Court cannot say that the defence is hopeless.

The second argument run by Mr Mawhinney focuses on section 46 of the GST Act. In particular, the Commissioner's request for information, the provision of that information by Mr Mawhinney and the absence of any notification of an investigation or communication within 15 days by the Commissioner of Mr Mawhinney providing that evidence.

The Court recognised in Contract Pacific Ltd v Commissioner of Inland Revenue that there are only two occasions when the Commissioner must refund. Neither of those situations applies here. The Court again concluded that the Commissioner has an arguable defence in regards to the interpretation of section 46 of the GST Act.


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