Tax lawyer owes $8.2m: judge

New pleadings described as ‘no more than shadow-boxing’

The architect of the Trinity tax scheme owes $8.2 million to Inland Revenue, says a High Court judge. Auckland tax lawyer Garry Muir devised and set up the Trinity scheme, which in 2004 was ruled to be a tax-avoidance arrangement — a decision upheld by the Supreme Court four years later.

The IRD at the time claimed the scheme would have cost taxpayers up to $3.7 billion over its 50-year lifespan.

Muir disputes the tax-avoidance conclusion but the Inland Revenue says he has exhausted his challenges to income tax assessments.

IRD is suing him for unpaid taxes, interest and penalties between 1997 and 2010 and says Muir owes $8.2m.

The tax department, in June, applied in the High Court for summary judgment against Muir over the alleged debt, claiming he had no defence to its claim.

Muir argued that IRD’s application was premature as he still has legal action on foot challenging the tax assessments.

Muir also said Associate Judge Roger Bell — who was hearing the case — should recuse himself for alleged bias or predetermination.

Associate Judge Bell said Muir’s challenge in the Taxation Revenue Authority and the High Court has “been determined by the decisions of the authority, this court, the Court of Appeal and the Supreme Court”.

“His final liability has been determined and his income taxes have become payable,” the judge said.

“As the challenges have been determined, it is futile for Dr Muir to continue to dispute the assessments. These new pleadings are no more than shadow-boxing.”

The judge said that IRD had shown that Muir does not have any arguable defence to its case for the unpaid tax, interest and penalties between 1997 and 2010 and that those debts amounted to $8.2m. He entered judgment against Muir for that amount and ordered him to pay IRD costs.

Muir’s lawyer, Robert Hucker, said the decision was being appealed.