Trinity tax architect fails to halt bankruptcy action

An architect of the Trinity forestry tax scheme has failed to convince the High Court to halt bankruptcy action against him.

Bank of New Zealand launched the action against Garry Muir after being awarded a $160,000 judgment against him and Justitiae Trustee Company in August.

The BNZ has also applied to wind up the trustee company, which is the trustee of Carbon Trust.

Muir and this trustee company are challenging the $160,000 judgment and applied earlier this month to halt the bankruptcy and wind-up proceedings pending this appeal. But Associate Judge John Matthews, when considering these applications, dismissed both of them. He said if the bankruptcy application came before a judge, it would be for the court to decide whether to put it off to await the decision on the appeal.

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According to the August ruling in the BNZ's favour, Muir had guaranteed the debt of the Carbon Trust to the bank. The evidence was that Muir used Carbon Trust's overdraft facility in 2012 for $145,000 of payments to himself.

Muir is best known in this country for devising the Trinity tax scheme, which in 2004 was ruled to be a tax avoidance arrangement by the High Court. This decision was upheld by the Supreme Court four years later.

While most investors in the scheme settled with IRD prior to 2004, a handful fought on.

Three of them were put into liquidation last Friday.