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New Zealand Stock Exchange v Commissioner of Inland Revenue; The National Bank of New Zealand Limited v CIR (1991) 


  1. NZX were asked to supply lists of their largest clients together with details of their share dealing through the share brokers.
  2. Bankers were asked to identify investors with them in commercial bills and to give details of each investment cost and realisation.
  3. NZX and National Bank joined and filed a case against the commissioner
  4. The target was a wider population rather than specific individuals.
  5. The case was brought to the court for direction under section 17 of Inland Revenue Department Act (now s 17 of TRA 1994)
  6. High court decided into a favour of taxpayer stating s 17 doesn’t have a wider scope. COA rejected HC decision, and stated s 17 has much wider powers. The case was brought in the Privy Council.


What is the scope of s17 i.e. how far and what extent this can be used.

Tax laws

  • s 17 of the Inland Revenue Department Act 1974: Every person shall, when required by the Commissioner furnish in writing any information and produce for inspection any books and documents which the Commissioner considers necessary or relevant for any purpose relating to the administration or enforcement of any of the Inland Revenue Acts


  • s 17 TRA 1994 Every person (including any officer employed in or in connection with any department of the government or by any public authority, and any other public officer) shall, when required by the Commissioner, furnish in writing any information and produce for inspection any documents which the Commissioner considers necessary or relevant for any purpose relating to the administration or enforcement of any of the Inland Revenue Acts or for any purpose relating to the administration or enforcement of any matter arising from or connected with any other function lawfully conferred on the Commissioner.


Taxpayer’s arguments

  1. Confidentiality: needed to remain confidential with client’s files and data. This will break their relationship and trust.
  2. Onerous burden: of research and report their clients affairs. Expensive system to maintain.

Commissioner of Inland Revenue v West-Walker (1954) NZLR 191. Similar facts were solicitor was excused to provide relevant information.
“For the perfect administration of justice, and for the protection of the confidence which exists between the solicitor and his client, it has been established as a principle of public policy that those confidential communications shall not be subject to production”.

The court mentioned the principle of legal professional privilege was exercised which is not present in the current case.
Appellants also referred Australian case, Federal Commissioner of Taxation v Australia and New Zealand Banking Group Limited (1979) and a Canadian case, James Richardson & Sons Ltd v Minister of National Revenue 85 DTC 6325. In both cases tax affairs of the specific individuals were discussed, it was mainly related to relevant tax years and taxpayers. However, wide powers of the commissioner to search general population were not discussed.

Appellants also referred s 21 in the New Zealand Bill of Rights Act 1990
“Everyone has the right to be secure against unreasonable search or seizure, whether of the person, property or correspondence or otherwise”.
Therefore, the taxpayer sought for order to decline the validity of the notice on its member and limited the scope under section 17(1) of the Inland Revenue Department Act 1974.

Commissioner’s argument

The Commissioner based their arguments on section 17 of the Inland Revenue Department Act. This section gave them power to acquire information from the taxpayers with the purpose of carrying out their statutory functions.

Court’s decision

Richardson J Pointed out s 17 is expressed in the widest terms. Lord Templeman delivered the judgement:

  1. The role of the Commissioner and the obligations of the taxpayers under the Income Tax Act were discussed. It was noted s 17 assist the Commissioner with their statutory functions.
  2. The court disagreed with confidentiality point. Instead, the court admitted it would be harder for the Commissioner to assess dishonest taxpayers. The whole rationale of taxation would break down and the whole burden of taxation would fall only on diligent and honest taxpayers. Moreover, s 13 in the Inland Revenue Department Act 1974 (now s 81 of TRA1994) also required the Commissioner or IRD officer to maintain secrecy of the taxpayers’ affairs.
  3. West-Walker case argument was rejected. Principle of legal professional privilege is absent in current case.
  4. Argument of both Australian and Canadian case rejected mainly due to facts are different. As in both cases particular class of taxpayers were under investigation.
  5. Bill of Right Act argument rejected as secrecy provisions are present in the act. Moreover, the Commissioner puts the interests of the community in first place to ensure assessable income of every taxpayer is assessed and collect the right amount of tax.

In discussing the burden on NZX and Bankers the Commissioner agreed to modify his requests to suit with what the members have.

It was concluded that the Commissioner must carry his functions of ensuring that assessable income is assessed and relevant tax is paid and s17 gave them more power to carry his functions. S 17 requires information to be produced within the Commissioner “considers necessary or relevant”. Therefore, the Court dismissed appeal from taxpayer.