Commissioner’s Search and Surveillance Powers – 2012

The following papers have been presented at the NZ Institute of Chartered Accountants’ annual Tax Conferences:

Commissioner’s Search and Surveillance Powers

Search and Surveillance

NZICA Tax Conference 2012


What does the Commissioner search and survey?

Warrantless search

The Bill of Rights and the CIR’s Search Powers


Fishing is fine

Power to access computer drives

A “Relevance Search”


Warranted Search: Tauber

Context of s16(4)

Obligation of Candour

Application of factors in Tauber

Unreasonable Exercise of Search And Seizure Powers

Interference with Court proceedings

Search and Surveillance Act 2012


SSA applies to Commissioner’s Search Warrants

Subpart 1

Subpart 3

Subpart 4

Subpart 7

Subpart 9

Subpart 10

Conclusions on SSA

Use of Powers



1.                       This paper considers:

1.1.                 The width of the Commissioner’s search and surveillance powers;

1.2.                 The case law on the section 16 powers – the Avowal and Tauber cases;

1.3.                 The ability to challenge the reasonableness of an Inland Revenue search;

1.4.                 The remedy if searches and/or seizures are unlawful and/or unreasonable.

1.5.                 The provisions of the new Search and Surveillance Act as they apply to Inland Revenue;

1.6.                 The increase in the use of the Commissioner’s search powers – and why is this happening?

What does the Commissioner search and survey?

2.                       The Commissioner has only those powers of search and seizure given by statute:

2.1.                 The power to require production of documents and information in section 17 of the Tax Administration Act 1994 (“the TAA”, its provisions being referred to by section number only);

2.2.                 The powers of warrantless and warranted search and seizure in sections 16 and 16C.

3.                       Some taxpayers, somewhat scarred by their dealings with the Commissioner, have questioned whether their phone lines may be bugged.  The short answer is, no.  The Commissioner does not have the power to apply for an interception warrant.

4.                       However, it is as well to be aware of the extent to which new technology can assist the Commissioner use his powers to intercept communications:

4.1.                 The Commissioner can (and does, when using s16 searches) seize phones.  Text messages on phones will be available, as will voice messages;

4.2.                 Backing up most smart phones to computers and/or the Cloud via computers (e.g. synching an iPhone to iTunes) will leave multiple copies of text messages on the computer and on the ultimate Cloud destination.  These will be vulnerable to seizure;

4.3.                 Recovering and accessing the contents of phone calls or video calls over computers (VOIP technology, e.g. Skype) is more difficult but is possible.

5.                       In short, while the Commissioner cannot directly intercept communications, she can seize and examine devices on which those communications may be recorded.

6.                       The Commissioner has no power to search a person.  A person may be required to provide assistance to the Commissioner, and, for example, that may extend to being required to give up any items (cellphones seem like the most obvious example) about their person, but the Commissioner has no power to verify this by search.

Warrantless search

7.                       Section 16 provides for warrantless searches.  There are two exceptions to this, in that for a search of a dwellinghouse a warrant is required to permit access (under s16(4)) and a warrant is needed for removal and retention of documents (under s16C(2)).  Apart from that, the search power is probably the widest enjoyed by any government department: Chief Executive of the Ministry of Fisheries v United Fisheries Ltd [2010] NZCA 356.

The Bill of Rights and the CIR’s Search Powers

8.                       Shortly after the 1990 enactment of the New Zealand Bill of Rights Act, no less a tribunal than the Privy Council ruled in New Zealand Stock Exchange v CIR; National Bank of NZ v CIR [1992] 3 NZLR 1 that “the exercise of the powers conferred on the Commissioner by s 17 of the Act of 1974 is not, for the purposes of s 21 of the New Zealand Bill of Rights Act, “unreasonable””.  This line was followed for a number of years (see for example Wojcik v Police (1996) 17 NZTC 12,646 (DC) where Barber DCJ held that the application of s 17 TAA 1994 cannot generally be said to be unreasonable in terms of s 21 New Zealand Bill of Rights Act 1990).

9.                       A series of cases in recent years renewed the challenge to the exercise of the CIR’s search powers based on the procedural safeguards afforded and civil liberties protected by the Bill of Rights Act.  Those cases included Vinelight Nominees Ltd v CIR (2005) 22 NZTC 19,298 (HC), Chesterfield Preschools Ltd v CIR (No 2) (2005) 22 NZTC 19,500 (HC) and Re Next Generation Investments Ltd (in liq); Mason v CIR (2006) 22 NZTC 19,775 (HC).  A judicial consensus appears to have emerged, reflected in the decisions at every instance in the Avowal and Tauber decisions, that the use of the CIR’s search and detention powers is to be read with the Bill of Rights.


10.                    Nicholas Petroulias, a former Assistant Commissioner in the Australian Tax Office, fell from grace in spectacular fashion in the early years of last decade, subsequently appearing as defendant in a series of criminal prosecutions alleging various sorts of corrupt activity while in office, and being convicted in 2008 for corrupt conduct relating to his role at the Australian Taxation Office (ATO) – and unauthorised publication of documents.  

11.                    In 2006, perhaps wishing to get away from the pressures at home for a while before his last trial, Mr Petroulias came to New Zealand and stayed at Motueka River Lodge, described online[1] as “a small luxury hotel in a hidden valley with its own enchanted forest”.  However, Mr Petroulias’s worries followed him across the sea; the valley turned out to be insufficiently hidden, and its forest’s enchantments inadequate to repel the tax man.  On 8 November 2006 revenue authorities on both sides of the Tasman undertook a series of searches as part of an investigation into Mr Petroulias’s activities, including four New Zealand locations:

11.1.              The offices of Avowal Administrative Attorneys;

11.2.              The Mount Manganui premises of a Mr Lloyd;

11.3.              The Browns Bay premises of a Ms Chisnall;

11.4.              The Motueka River Lodge

12.                    Challenges to the validity and legality of these searches, and the seizure of computer records which resulted, were considered in:

12.1.              A decision of Baragwanath J, Avowal Administrative Attorneys Ltd v District Court at North Shore [2010] 2 NZLR 794 (HC);

12.2.              A decision of Venning J, Avowal Administrative Attorneys Ltd v District Court at North Shore and CIR (2009) 24 NZTC 23,252 (HC)) and

12.3.              On appeal Avowal Administrative Attorneys Ltd v District Court at North Shore and CIR [2010] 3 NZLR 661.

Fishing is fine

13.                    The decisions in Avowal all reinforced that section 16 is a broad power, and that there is nothing such as reasonable cause required as a pre-requisite to its use.  In this sense section 16 warrants are analogous to the long-recognised position in relation to section 17 notices, where the Commissioner can undertake a “fishing expedition”: CIR v NZ Stock Exchange [1992] 3 NZLR 1, 6 (PC).

14.                    The only jurisdictional limit to the CIR’s power in s 16(1) to access premises, which was expressed in subjective language, was that it was confined to cases where the CIR considered that there could be found books or documents (which included information contained in a computer: see the definition of “document” in the Evidence Act 2006, and R v Misic [2001] 3 NZLR 1, 8 (CA)), that were necessary or relevant for the purpose of collecting tax “or for the purpose of carrying out any other function lawfully conferred on the Commissioner, or considers likely to provide any information otherwise required for the purposes of any of those Acts or any of those functions”.

15.                    In Avowal, Baragwanath J held that even had the motivation simply been to assist the ATO under a double tax agreement, that would suffice as being “for the purpose of carrying out [a] function lawfully conferred on the Commissioner”. 

Power to access computer drives

16.                    The information in question was contained in various computers, and specifically, their hard drives.  Venning J, correcting an apparent oversight by Baragwanath J, referred to the definition of “books and documents” in the TAA and pointed out that it included various sorts of electronic storage media, “or any other type of record whatsoever”.  He held that a computer hard drive was a “book or document” for the purposes of the TAA, and could therefore be searched for and seized under s16.

A “Relevance Search”

17.                    In his ruling, Baragwanath J had held that:

In the circumstances [where the Commissioner or his officers is entitled to access property under s 16 of the Tax Administration Act 1994] there must be such inspection of the books or documents (including computer entries) before removal that the Commissioner has general reason to believe and does believe that it is necessary or relevant for the purposes of s 16(1).

18.                    This is known as a “relevance search”.  The tenor of the judgment seems to be, that if the CIR fails to undertake a relevance search or scan of the computer disk before seizing it, such a seizure may well transpire to be unreasonable and hence void by virtue of section 21 of the New Zealand Bill of Rights Act 1990 (“Bill of Rights”).

19.                    Amplifying these issues, Venning J found:

19.1.              The ultimate test must be whether the inspection is conducted in a reasonable fashion and whether the search and decision to copy is a reasonable decision having regard to all the circumstances of the case;

19.2.              Avowal had made a blanket claim that all material on the computer drives at its premises was subject to legal professional privilege.  While the IRD officers’ resulting decision not to undertake a relevance search was a cautious one (such a search could be undertaken in such a way as to respect legal privilege and not disclose to the IRD officers any privileged advice), they could not be criticised for following the provisions of section 20 TAA which set out a process for determining privilege claims;

19.3.              The search of Avowal’s premises took considerably longer than anticipated, and well into the evening the pragmatic decision appears to have been made by all concerned that IRD could remove the computers for copying.  This constituted a free and informed consent, such that the relevance check did not need to be undertaken;

19.4.              In carrying out a relevance check, what is required is a reasonable attempt to provide a preliminary filter, or sorting mechanism. A keyword search as was carried out in the present case was sufficient for that purpose.  There must be such inspection of the books or documents (which in this case includes hard drives) so that the IRD officers have general reason to believe that copying or removal of the hard drives is necessary or relevant;

19.5.              While it may have been technically possible for the computer technicians acting on behalf of the IRD to have copied just the documents which they had identified by the hits following their relevance checks, as a matter of principle that approach is not required by the authorities;

19.6.              Several hard drives were not subject to a relevance check, and there was no consent to their removal.  They were taken unlawfully and had to be returned. [The Court of Appeal does not appear to have had to decide this issue];

19.7.              Some hard drives belonging to Mr Petroulias were not subject to a relevance check, and hence their seizure was prima facie unlawful.  However, three of those drives’ contents were encrypted, effectively making the use of a preliminary keyword search of the drive pointless.  It was therefore reasonable and open to the CIR’s officers to take copies of the drives.

20.                    The conclusions from Avowal, then, are that the Commissioner’s powers under section 16 to conduct a warrantless search are very wide, and subject only to broad relevance considerations and the Bill of Rights. 

21.                    In the context of a warrantless search, at least as far as the justification for a search and/or seizure is concerned, the application of the Bill of Rights seems to be limited, however, to circumstances where a relevance check is not undertaken or is not satisfied.  In circumstances where a relevance check cannot be undertaken (because the taxpayer claims privilege, or the computer drive is encrypted) the Bill of Rights will not render a search unreasonable.


22.                    In the author’s view, it follows from the principles set out above that assuming a loose relevance test is satisfied, then effectively the only way in which the decision to undertake a warrantless search (as opposed to (i) a search under warrant and (ii) the manner in which a warrantless search is carried out – as to both of which, see below) can be challenged is on the basis that it is unreasonable in terms of section 21 of the New Zealand Bill of Rights Act 1990, which provides that everyone has the right to be secure against unreasonable search or seizure.

Warranted Search: Tauber

23.                    As noted above, Parliament has put two restrictions on the Commissioner’s broad powers of warrantless search. 

23.1.              First, if the Commissioner wants to search a dwellinghouse, he must obtain a warrant under section 16(4) to access the dwellinghouse;

23.2.              Second, if the Commissioner wishes to seize and retain books or documents (rather than temporarily remove, copy and return under section 16B) then he must obtain a warrant under section 16C(2) to authorise that seizure.

24.                    In March 2011 Inland Revenue officers, equipped with warrants issued under ss 16(4) TAA (the access warrants) and 16C(2) TAA (the warrants to remove and retain documents) of the Tax Administration Act 1994 (the Act), entered six premises in Auckland seeking access to documents relevant to the Commissioner’s investigation into the tax affairs of Mr Tauber and his business partner, Mr Webb, and associated entities.  The premises searches included the Tauber and Webb houses and the house of their third-party accountant, who ran her business from a home office.

25.                    The taxpayers brought judicial review proceedings in the High Court challenging the issuing and execution of the warrants and seeking orders directing the Commissioner not to inspect the seized documents and to return them to the appellants.

26.                    While the taxpayers did not succeed, the Court of Appeal judgment (Tauber & Ors v CIR [2012] NZCA 411, “Tauber”) gives useful guidance on the standards to be applied in determining whether a warrant should issue, and the circumstances which are likely to be relevant in assessing whether that standard is met.

Context of s16(4)

27.                    At [28] the Court said:

A warrant issued under s 16(4) is not a warrant to search premises for particular information or documents. Rather, it gives authority for access to enter a private dwelling. Once entry is made pursuant to the warrant the authorised officer(s) then has the powers under s 16(1) of the Act, which involve at all times having “full and free access to all lands, buildings, and places, and to all documents … for the purpose of inspecting any documents”. In other words s 16(4) does not alone provide a full code for access to a private dwelling and the information it may contain. It is but a part of a broader statutory scheme to enable the Commissioner to obtain access to information, but with the added protection of the requirement of a warrant where the place is a private dwelling.

28.                    During the Court of Appeal hearing the Crown Counsel moved from the original (limited) stance as to what “required” meant in the context of the judicial officer being satisfied that access was “required”.  The Court of Appeal considered competing submissions and concluded at [34] onwards:

Counsel for the appellants submitted that there was very little distance between the reading of s 16(4) proposed by the appellants and the view reached by counsel for the Commissioner during the course of the hearing. We agree. We consider that when viewed together these submissions point towards a correct interpretation of s 16(4). That interpretation can be stated as follows:

A judicial officer who … is satisfied [in all the circumstances] that the exercise by the Commissioner or an authorised officer of his or her functions under this section [reasonably] requires physical access to a private dwelling may issue to the Commissioner or an authorised officer a warrant to enter that private dwelling.

[35] This interpretation is consistent with the NZBOR Act.23 Section 21 of that Act states that everyone has the right to be secure against unreasonable search and seizure. We consider the interpretation of s 16(4) originally advanced by the Commissioner to be inconsistent with this right. That is because it would enable the Commissioner to enter a private dwelling in any case where entry could potentially further the Commissioner’s investigation in some way. This runs contrary to the long-established principle that individuals are entitled to a high expectation of privacy in relation to residential property.

29.                    Having concluded that a search will not be “required” for the purposes of s 16(4) unless it can be shown to be reasonably required in the circumstances, the Court then considered what those “circumstances” might entail and listed the following as potentially relevant factors at [39]:

(a) the Commissioner’s “tax interest”; i.e the nature of the investigation;

(b) what, if any, steps to obtain information have already been taken and with what results;

(c) why the Commissioner considers it is appropriate to use s 16 powers;

(d) the proposed search locations;

(e) why relevant information is likely to be found in those locations;

(f) the nature of the information likely to be found;

(g) why other mechanisms are not suitable; and

(h) whether there is any element of urgency.

30.                    In relation to removal warrants, a similar approach was adopted: at [46] it was said that the qualifying phrase “in all the circumstances” should follow the word “satisfied” in s 16C(2). Similarly, reading “reasonably” before “may require” is also appropriate.  The Court went on to say:

[47] If applications for an access warrant and a removal and retention warrant are made at the same time, the application will address matters such as those listed at [39] above. Additional factors supporting the need for removal and retention might include:

(a) why the Commissioner considers removal and retention may be required; and

(b) what is it about the investigation and/or the documents sought that may require retention for a longer period than contemplated by s 16B.

Obligation of Candour

31.                    The general law is that because an application for a search warrant is necessarily ex parte it is incumbent on the applicant for a search warrant to provide all reasonably relevant information to the person charged with making a decision as to the search warrant. 

32.                    The Court of Appeal stated in Tranz Rail Ltd v Wellington District Court [2002] 3 NZLR 780 that failure to provide reasonably relevant information is a grounds for a finding that a warrant or warrants are invalid. At para 21 the Court said:

… the judicial officer to whom the application is made is entitled to expect that the applicant will make full and candid disclosure of all facts and circumstances relevant to the question whether the warrant should be issued. A failure to make such disclosure runs the risk that any warrant obtained will be held to be invalid..

33.                    The Court endorsed the application of these principles in Tauber at [49], saying that:

There was no dispute between the parties that when the Commissioner was applying for a warrant under either ss 16(4) or 16C(2), an obligation of candour and completeness applied to the content of the application. This flows from the ex parte nature of the application process. The content of the obligation is based on the expectation that the applicant for the warrant will make full and candid disclosure of all facts and circumstances as are relevant to whether the warrant should issue.

Application of factors in Tauber

34.                    The outcome in Tauber was against the taxpayers on all points.

35.                    The Court found in favour of the Revenue in relation to the search of the third-party accountant’s house “by a narrow margin”.  The accountant had failed, in the Revenue view, to comply fully with two section 17 notices in relation to her clients.  The Court concluded:

Had Ms Bockett ensured full compliance with the s 17 notices, or given a reasonable explanation why she could not, then it is possible that it would not have been reasonable for the Commissioner to seek a warrant.

36.                    In the writer’s experience, section 17 notices are sometimes prepared with insufficient care, attention, or appreciation that they are documents compelling the provision of information with criminal sanctions for non-compliance.  And accountants sometimes treat them with the contempt which they think they deserve. 

37.                    The Tauber decision shows that even non-compliance with the silliest of section 17 notices may have severe impacts.

Unreasonable Exercise of Search And Seizure Powers

38.                    Case law recognises that a search and/or seizure which is reasonable as to its justification may nevertheless be rendered unreasonable because of the way in which it is carried out.

39.                    In R v Pratt [1994] 3 NZLR 21 (CA) Richardson J observed in his judgment that a search is unreasonable if the circumstances giving rise to it make the search itself unreasonable or if a search which would otherwise be reasonable is carried out in an unreasonable manner. In assessing the reasonableness of a search it is important to consider both the subject matter and the time, place and circumstance.  

40.                    Recently, however, the Court of Appeal in Gill v A-G [2011] 1 NZLR 433 (CA) recognised that it is difficult to determine the issue of the reasonableness of the way a search is carried out in the context of judicial review.  This is because the issues which may go to determine the reasonableness of the way a search was carried out are often nuanced and disputed.  In judicial review there is typically no opportunity to cross-examine, and evidence is submitted by way of affidavit. 

41.                    The Court of Appeal in Gill suggested that a party challenging the reasonableness of the way in which a search was carried out should instead rely on civil law remedies (presumably an action for trespass, conversion, misfeasance in public office, and recovery of specific chattels) and/or challenge the admissibility of any evidence obtained in breach of the Bill of Rights Act.

42.                    This difficulty was reflected in Tauber where the reasonableness of the way in which the search was carried out was challenged at first instance, but the taxpayers elected not to challenge that point further on appeal.

Interference with Court proceedings

43.                    The courts have considered whether the Commissioner’s powers to compel the provision of information under section 17 of the Tax Administration Act 1994 should be used when the Commissioner is engaged in Court proceedings with that taxpayer;

44.                    In Vinelight Nominees Ltd v Commissioner of Inland Revenue (2005) 22 NZTC 19,298 (HC)  Simon France J stated at para 55:

Each case will require its own analysis of whether in the circumstances the Notices are breaching the principle of litigation on an even basis. It is, I consider, reasonably clear that Notices could not be issued for the sole purpose of extracting information for the Court proceedings, and this is so, in my view, regardless of whether the Commissioner thinks the Court would be assisted by the collection of such information. If that is the motivation, then the Court’s own processes available to both the parties must be allowed to take their normal course.  Refer to Australian cases re contempt of court to use powers to interfere with litigation

45.                    Simon France J had previously stated at para 52 that section 17 is broad in its wording but its use after proceedings have been commenced must be consistent with section 27(3) of the New Zealand Bill of Rights Act 1990 which protects the right of persons to right to bring civil proceedings against, and to defend civil proceedings brought by, the Crown, and to have those proceedings heard, according to law, in the same way as civil proceedings between individuals;

46.                    The Australian authorities of re Brambles Holdings Limited, Trade Practices Commission & Bannerman (1980) 44 FLR 182, Pioneer Concrete v Trade Practices Commission (1982) 152 CLR 460 and re Kotan Holdings Pty Ltd (1991) 30 FCR 511 further support the proposition that it would amount to a contempt of court to use regulatory powers requiring production of documents that were related to proceedings already commenced;

47.                    Vinelight was doubted in Chesterfield Preschools Ltd v CIR (No 2) (2005) 22 NZTC 19,500 (HC) but affirmed in Mason v CIR (2006) 22 NZTC 19,775 (HC) (aka re Next Generation Investments Limited). In this decision, Priestley J discussed the different reasoning in Chesterfield and Vinelight, and preferred the balanced use of s 17 adopted by France J. Priestley J stated:

“The Judge [France J], rightly in my view, rejected a submission that s 17 has to be read down to the extent that it was not available when the subject matter of the s 17 notice was central to proceedings. … But it is apparent that … the Judge is not sanctioning the indiscriminate use by the Commissioner of s 17 in tandem with concurrent proceedings.”

48.                    The Court of Appeal recently considered these decisions in Commerce Commission v Air New Zealand Ltd [2011] NZCCLR 21, effectively approving the formulation reached in Vinelight.

49.                    Consequently, the Commissioner is limited in exercising his powers when there is litigation underway.  He certainly cannot use his search powers against a taxpayer with whom he is in litigation, for the purpose of obtaining evidence to use in that litigation.

Search and Surveillance Act 2012


50.                    The Search and Surveillance Act 2012 (“the SSA”) arose from a Law Commission Report, Search and Surveillance Powers (NZLC R97, 2007). The aim of the Act, as per the explanatory note to the Bill, was to “reform the law to provide a coherent, consistent and certain approach in balancing the complementary values of law enforcement and human rights”.

51.                    The SSA came into effect on 18 April 2012, but its staged implementation means it will apply to Inland Revenue from some time in 2013.

52.                    The SSA consolidates police powers in one Act and provides a detailed and clear set of rules as to how those powers and the powers of non-police agencies (such as Inland Revenue) are to be exercised. In recognition of the increasing prevalence of computers and other electronic devices the SSA provides explicit legislative powers to enable law enforcement and regulatory agencies to extract electronic information and use surveillance devices to investigate and combat crime.

53.                    At the same time, the SSA provides a set of safeguards against unjustified intrusions on “reasonable expectations of privacy”, a right that, in the context of search and surveillance, is given expression in s 21 of the NZBORA, as discussed above. In this respect, the SSA essentially codifies much of the law governing when search and surveillance can be regarded as reasonable. The Act:

53.1.              imposes more specific requirements around the application for and issuing of search warrants;

53.2.              sets out identification and notice requirements before searches can be undertaken;

53.3.              prescribes in detail the manner in which searches may be carried out;

53.4.              provides protections for privileged and confidential material at the time of search and surveillance;

53.5.              prescribes what must be done with seized or produced items and when they must be returned to the owner;

53.6.              imposes detailed reporting requirements.

SSA applies to Commissioner’s Search Warrants

54.                    The SSA applies to the exercise of the Commissioner’s powers under search warrants – in sections 16(4) and 16C(2) of the TAA.

55.                    Particular parts of the SSA which apply are subparts 1, 3, 4, 7, 9, and 10 (except sections 118, 119, and 130(4)) of Part 4.

Subpart 1

56.                    This subpart sets out some relatively innocuous definitional and machinery provisions.

Subpart 3

57.                    This subpart sets out the requirements for search warrant applications and the form of warrants themselves. 

58.                    As to the requirements for search warrant applications, section 98 of the SSA relevantly provides:

(1)           An application for a search warrant must contain, in reasonable detail, the following particulars:

(a)           the name of the applicant:

(b)           the provision authorising the making of the application:

(c)           the grounds on which the application is made (including the reasons why the legal requirements for issuing the warrant are believed by the applicant to be satisfied):

(d)           the address or other description of the place, vehicle, or other thing proposed to be entered, or entered and searched, inspected, or examined:

(e)           a description of the item or items or other evidential material believed to be in or on the place, vehicle, or other thing that are sought by the applicant:

(f)            the period for which the warrant is sought:

(g)           if the applicant wants to be able to execute the warrant on more than 1 occasion, the grounds on which execution on more than 1 occasion is believed to be necessary.

(2)           The issuing officer—

(a)           may require the applicant to supply further information concerning the grounds on which the search warrant is sought; but

(b)           must not, in any circumstances, require the applicant to disclose the name, address, or any other identifying detail of an informant unless, and only to the extent that, such information is necessary for the issuing officer to assess either or both of the following:

(i)            the credibility of the informant:

(ii)           whether there is a proper basis for issuing the warrant.

(3)           The applicant must disclose in the application—

(a)           details of any other application for a search warrant that the applicant knows to have been made within the previous 3 months in respect of the place, vehicle, or other thing proposed to be searched; and

(b)           the result of that application or those applications.

(4)           The applicant must, before making an application for a search warrant, make reasonable inquiries within the law enforcement agency in which the applicant is employed or engaged, for the purpose of complying with subsection (3).

(5)           The issuing officer may authorise the search warrant to be executed on more than 1 occasion during the period in which the warrant is in force if he or she is satisfied that this is required for the purposes for which the warrant is being issued.

59.                    It is probably a fair summary that these requirements incorporate both the current standard practice and the requirements of candour expressed in the cases summarised above.

60.                    As far as the contents of warrants are concerned, section 103(4) possibly requires a little more specificity than the specified form, in particular “a description [in reasonable detail] of what may be seized” as against the specified form[2] which simply provides that the warrant-holder has “the powers to obtain information given by” section 16(4) TAA.

61.                    Section 103 also provides that advice as to privilege must be given, although in practice Inland Revenue does this already.

62.                    Section 107 sets out when a search warrant will be invalid, and the consequences of such invalidity:

107         When search warrant invalid

(1)           A search warrant is invalid—

(a)           if, having regard to the information contained in the application, the grounds or conditions for lawful issue of a warrant set out in section 6 or, if applicable, the relevant enactment specified in column 2 of the Schedule to which this section applies were not satisfied at the time the search warrant was issued:

(b)           if the warrant contains a defect, irregularity, omission, or want of form that is likely to mislead anyone executing or affected by the warrant as to its purpose or scope.

(2)           If a warrant is invalid under this section, neither section 204 of the Summary Proceedings Act 1957 nor section 379 of the Criminal Procedure Act 2011 applies to that warrant.

63.                    Again, it is questionable in the extreme whether this provision does anything but codify existing law as discussed above.

Subpart 4

64.                    This subpart deals with the actual carrying out of searches (whether with or without warrant). Many of its provisions codify previous case law, but a number provide powers or obligations that were absent from, or uncertain and inconsistent under, previous law:

64.1.              An enforcement officer exercising a search power may use reasonable force to enter a place, vehicle or thing, to carry out the search and to effect any lawful seizure: ss 110 and 131(3).  This removes the uncertainty as to whether s16 authorises reasonable force.

64.2.              Where it is doubtful that an item found in a place, vehicle or thing or on a person may be lawfully seized, it may be removed for the purpose of examination or analysis to determine whether it may be lawfully seized: s 112. This does not itself constitute seizure, and the item must be returned immediately if it is found on examination or analysis not to constitute evidential material.

64.3.              Any person may be requested to assist with the search: s 110(b). Such assistants generally have the same powers as the person exercising the power, but are subject to the overall control and supervision of the person exercising the search power who must accompany them on the first occasion the assistant enters the place, vehicle or thing to be searched: ss 113-114. This reflects current law and practice under the TAA.

64.4.              The officer may secure the place or thing to be searched at the commencement of the search and may give directions to or exclude any person from that vicinity where there are reasonable grounds to believe that person will hinder the search: s 116.

64.5.              Where a search warrant is being applied for and an enforcement officer reasonably believes that evidence may be destroyed or damaged before a decision on the issue of the warrant has been made, the enforcement officer may enter the place or thing to be searched, secure evidential material found there, and direct others to assist with securing the search scene: s 117.  This provision is new.

64.6.              An enforcement officer carrying out the search of a place, vehicle or thing (including remote access searches) must provide an inventory of items seized and a copy of or information about the authority for the search either at the time of seizure or as soon as practicable thereafter, and in any event not later than seven days after seizure: s 133. An inventory of items seized following a search of the person must be prepared “promptly” and given to the person: s 125(4).  This reflects existing practice, albeit sometimes the inventory provided is rather cursory.

64.7.              The obligations of a person to provide identification and notice when exercising a power to search a place, vehicle or thing are prescribed in ss 131-135. They require the giving of identification and proof of identification by the person carrying out the search, at the time if the occupier is present or by notice otherwise.  Again, these provisions reflect current Inland Revenue practice. Compliance with the notice and inventory requirements may be postponed for a period of up to 12 months if a judge is satisfied that compliance would endanger safety or prejudice ongoing investigations (s 134), and a District Court Judge may further postpone compliance, or in some circumstances dispense with the requirements (s 135).

65.                    Various provisions in the Act set out the powers, duties, and obligations of enforcement officers with respect to computer searches:

65.1.              In exercising a search power, an enforcement officer is authorised to use reasonable measures to access a computer system (as defined in s 3) or data storage device and to copy the accessed material: s 110(h) and (i), s 113(2)(h) and (i), and s 125(1)(l) and (m).

65.2.              Generally, a forensic copy of the whole hard drive will be taken to ensure the evidential integrity of the seized material. The searcher may require a person to provide information reasonably necessary to access the data, except where that access information tends to incriminate that person: s 130(1)-(3).

65.3.              The provisions in subpart 5 relating to privilege and confidentiality apply to computer access information: s 130(4).

65.4.              A copy of individual data obtained from a computer or data storage device, or the forensic copy of the hard drive, must be destroyed if it does not contain evidential material, although data that contains a mixture of evidential and non-evidential material may be retained: s 161.

66.                    These provisions again reflect current practice.

Subpart 7

67.                    This subpart provides for immunity for the issuing officer akin to judicial immunity, and immunity for executing officers and for the Crown for acts done in good faith in relation to obtaining and executing the warrant.  The provisions reflect, and perhaps clear up some ambiguity relating to, existing Crown and judicial immunities from suit.

Subpart 9

68.                    This subpart contains offence provisions.  Offences include:

68.1.              Knowingly making a false statement in an application for a warrant or order (s 175);

68.2.              Disclosure of information acquired as a consequence of the exercise or execution of the various powers to disclose that information other than in the course duty (s 179);

68.3.              Leaving a search scene in breach of a direction (s 176);

68.4.              Failing to assist with a computer system search when required to do so (s 178).

69.                    Again, it is very questionable whether these offences add anything to the range of offences available against errant Inland Revenue officers or obstructive taxpayers.

Subpart 10

70.                    This subpart is entitled “miscellaneous”.  The only relevant section is section 180 which provides for the continuation of the effect of search and seizure warrants where an aggrieved person takes proceedings (such as judicial review proceedings) unless the criteria in subsection 3 are made out. 

71.                    Those criteria are:

An interim order may be made by the High Court overriding the effect of subsection (2), but only if the High Court is satisfied that—

(a)           the applicant has established a prima facie case that the warrant or order in question is unlawful; and

(b)           the applicant would suffer substantial harm from the exercise or discharge of the power or duty; and

(c)           if the power or duty is exercised or discharged before a final decision is made in the proceeding, none of the remedies specified in subsection (4) [damages, a declaration, or an order as to admissibility of the seized evidence], or any combination of those remedies, could subsequently provide an adequate remedy for that harm; and

(d)           the terms of that order do not unduly hinder or restrict the investigation or prosecution.

72.                    This provision seems to be a codification of the principles which are commonly considered on interim relief applications in Judicial Review proceedings.

Conclusions on SSA

73.                    It is hard to get very excited about the SSA, at least as it applies to Inland Revenue searches.  To a very large extent it codifies existing practice and law. 

Use of Powers

74.                    A feature which many practitioners who deal in tax disputes will have noticed, is an increase in aggressive Inland Revenue actions, such as prosecution and the use of the search powers.

75.                    In a paper delivered last year[3], Inland Revenue’s Graham Tubb presented statistics on the use of the search powers, showing a dramatic increase in just five years:

General S16 accessWarrant for access to private dwelling:Section 16(4)Section 16C removal warrant

76.                    Generally, an increase in policing of any sort, especially that which intrudes into citizens’ liberties, is justified by an intolerable situation, or a situation which is getting worse.  For example:

76.1.              The 11 September 2001 terrorist attacks in America prompted a world-wide increase in the rigour of airport security checks and aircraft security/safety;

76.2.              By 1990 New Zealand’s road death toll had been around 700 per annum for many years[4], a figure which put us at the top of developed nations.  Introduction of speed cameras, the removal of discretions, and the increase in officers assigned to road safety results in our current toll being less than half that, and around the middle figure for developed nations.

77.                    Where is the evidence that New Zealanders’ level of tax compliance is unacceptable, or that it is getting worse?  There is none of which the writer is aware, and some factors suggest the direct opposite:

77.1.              Our Commissioner has recently stated[5] that New Zealanders rank among some of the most compliant taxpayers in the OECD. 

77.2.              Anecdotally and experientially, standards of behaviour have got noticeably better over the past 15 years. 

78.                    One hopes that the question is being asked at the right levels of Inland Revenue: Are we prosecuting people more and intruding on their privacy and liberty more because we need to do so, or simply because we have lawyers and investigators who would otherwise have nothing to do.


79.                    In conclusion:

79.1.              The Commissioner’s search powers are broad;

79.2.              The decision to exercise a warrantless search will only be able to be challenged in extreme circumstances;

79.3.              The decision to grant a warrant is subject only to a broad “reasonably necessary in all the circumstances” threshold.  As the accountant in Tauber shows, that threshold is low;

79.4.              The reasonableness of exercise of a search will very rarely be subject to judicial review;

79.5.              The only real bright line limitation on the CIR’s use of his search powers is that he cannot use them against a taxpayer for the primary purpose of advancing litigation which is already under way;

79.6.              The SSA makes very few substantive changes to existing law and practice;

79.7.              Inland Revenue is using its s16 powers increasingly frequently, for no apparent reason except that it can.


[2] In Schedule 1 (s16(4) TAA) and 2 (s16C(2) TAA) of the Tax Administration (Form of Warrant) Regulations 2003

[3] Access to taxpayer premises: Use of section 16 powers by Inland Revenue: NZLS Tax Conference September 2012

[4] NZTA website

[5] , 22 August 2012

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