Gag on biggest tax case may end

By IRENE CHAPPLE

The wide-ranging suppression order cloaking the country's biggest tax avoidance case, which began in the High Court at Auckland yesterday, could be lifted within days.

The Inland Revenue Department had applied to have the suppression and confidentiality orders lifted and Justice Geoffrey Venning, in a memo to media, said the decision would be delivered later this week.

Venning's memo warned reporters the effect of the confidentiality orders meant all the proceedings at the case's opening were confidential.

It said: "The taxpayers are not to be identified and no part of the court file is to be searched, inspected or copied by any person except the parties' solicitors, counsel and their agents."

However, a previous related judgment on the case shows it centres around investments in douglas fir trees.

That judgment, made by Justice Barry Paterson in 2003, detailed a case being taken by investors whose deduction claims were disallowed by the IRD.

The IRD has dubbed the case the Trinity scheme and it involves more than 84 investors.

Trinity was promoted to wealthy individuals in the late 1990s including Ernst & Young clients and TV3 owner CanWest, before Labour came to power and lifted the top individual tax rate to 39 per cent from 33 per cent.

The dispute is over tax deductions claimed in the 1997 and 1998 years.