In what looks like regular high-stakes games of chicken, the Court of Appeal heard Jeremy James McGuire has more than once faced bankruptcy applications from Inland Revenue forcing payment of tax due. Most recently, he was ordered to pay, in full, Inland Revenue’s $50,200 legal costs defending what was described as a ‘hopeless’ legal challenge to a current tax ruling; a challenge most likely intended to delay bankruptcy, the court said.
The most recent challenge saw Mr McGuire seeking judicial review of a District Court ruling enforcing Inland Revenue’s assessment of income tax and penalties due for multiple tax years: some $39,700.
Normal procedure would involve an appeal to the High Court of a District Court decision, not judicial review.
An appeal considers whether legal principles were properly applied; judicial review looks at the process by which a decision was reached, not the merits of a decision.
The Court of Appeal was told Mr McGuire’s application for judicial review was filed after Inland Revenue had served a bankruptcy notice; first step in potentially having him bankrupted for failing to pay the $39,700 taxes as ordered by the District Court.
This judicial review application was later dismissed.
Inland Revenue asked for indemnity costs; reimbursement of its litigation costs in full, ordered by a trial judge where there has been ‘flagrant misconduct’ by a litigant.
Ordering payment, the trial judge stated Mr McGuire’s judicial review application was ‘hopeless’ and ‘so clearly untenable that it could not succeed.’
On appeal, the Court of Appeal confirmed indemnity costs of $50,200 must be paid, despite Mr McGuire’s claim he had made genuine mistakes about the outcome of prior negotiations with Inland Revenue.
It came out in evidence that on a previous occasion Mr McGuire belatedly paid some $76,600 in tax and penalties, to avoid being bankrupted then by Inland Revenue.
McGuire v. Inland Revenue – Court of Appeal (27.07.26)
26.208