Chesterfields Preschools Limited v Sisson - [2016] NZHC 2368

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2016-409-000040 [2016] NZHC 2368

BETWEEN
CHESTERFIELDS PRESCHOOLS

LIMITED Plaintiff

AND

THERESE ANNE SISSON Defendant

CIV-2016-409-000185

BETWEEN THERESE ANNE SISSON Plaintiff

ANDOFFICIAL ASSIGNEE First Defendant

ANDCOMMISSIONER OF INLAND REVENUE
Second Defendant

CIV-2015-409-000043

BETWEEN COMMISSIONER OF INLAND REVENUE
Plaintiff

ANDCHESTERFIELDS PRESCHOOLS LIMITED
First Defendant

ANDTHERESE ANNE SISSON Second Defendant

Hearing: 3 October 2016

Representation:

T A Sisson in person with D J Hampton as McKenzie Friend S M Kinsler and C L Russell for Commissioner of Inland Revenue

G E Slevin for Official Assignee
B M Russell and K M Kendrick for Chesterfields

Preschools (in liq)

M Mitchell for IAG, an affected party (appearing, but not

CHESTERFIELDS PRESCHOOLS LIMITED v SISSON [2016] NZHC 2368 [5 October 2016]

making submissions)

Judgment:

5 October 2016

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
dismissing stay application

Background

[1] Therese Sisson (with her former husband, David Hampton) was involved in the business of Chesterfields Preschools Ltd (now in liquidation) and associated entities. Issues over taxation led to much litigation between the Sisson interests and the Commissioner of Inland Revenue over many years. The Sisson interests had some success through judicial review and appeal. But ultimately Chesterfields had an indisputable debt owing to the Commissioner which was not met. This Court made an order putting Chesterfields into liquidation in October 2015.

Two proceedings to be heard in November 2016

[2] The first two proceedings which are the subject of this judgment are to be heard in November 2016. In the -40 proceeding, Chesterfields (in liq) seeks orders (amongst others) vesting a Colombo Street property and certain insurance proceeds in Chesterfields. The Commissioner is an intervener – she is the principal creditor in Chesterfields’ liquidation and was joined for the purpose of providing evidence and submissions which may assist the Court to determine the application.

[3] In the -185 litigation, Ms Sisson seeks a declaration that as trustee of the Anolbe Family Trust, she is entitled to the proceeds of the sale of a Christchurch property which are held by the Official Assignee in the bankruptcy of Mr Hampton.

Third proceeding – the Chesterfields liquidation proceeding

[4] The Chesterfields liquidation proceeding concluded, as I have indicated, with an order putting Chesterfields into liquidation in October 2015. An appeal was filed but was subsequently deemed abandoned.

Current proceedings

[5] The three proceedings which are the subject of this judgment are not the only current proceedings in which Ms Sisson has until now been involved.

[6] Yesterday I heard and granted a strike out application in relation to a proceeding commenced by Ms Sisson against the Commissioner, by which she sought to have the liquidation of Chesterfields overturned.1

Ms Sisson’s stay application

[7] Ms Sisson applied for a stay of each of the proceedings which is the subject of this judgment upon the ground that her claims to be pursued in the other proceeding (now struck out) were so related and could affect the outcome of these proceedings that these proceedings needed to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] NZHC 2368
Decision Date: 5 October 2016

CaseChat Overview and Summary

In the High Court of New Zealand, Christchurch Registry, Associate Judge Osborne dismissed an application for a stay of three proceedings brought by Therese Anne Sisson. The proceedings were related to the liquidation of Chesterfields Preschools Ltd, a company in which Sisson was involved with her former husband. The first proceeding involved a claim by Chesterfields Preschools Ltd (in liquidation) to vest a property and certain insurance proceeds in the company. The second proceeding involved a claim by Sisson, as trustee of the Anolbe Family Trust, to the proceeds of the sale of a Christchurch property held by the Official Assignee in the bankruptcy of David Hampton. The third proceeding was the Chesterfields Preschools Ltd liquidation proceeding which concluded with an order putting the company into liquidation. Sisson applied for a stay of the three proceedings on the ground that her claims in another proceeding (which was struck out) were related and could affect the outcome of these proceedings.

The court considered whether the proceedings should be stayed due to the relationship between them and the other proceeding which was struck out. The court found that the stay application was dependent on the outcome of the strike out application and that the grounds for the stay fell away with the order striking out the other proceeding. The court also found that Sisson had no standing to apply for a stay of enforcement of the judgment adjudicating Mr Hampton bankrupt.

The court dismissed the stay application and ordered Sisson to pay the costs of the stay application to each of the respondents on a 2B4 basis with an uplift of 50 per cent. The court certified for a one half day hearing of the interlocutory application for the Official Assignee and Chesterfields Preschools Ltd (in liquidation). The court also ordered Sisson to pay the reasonable disbursements of each of the respondents to be fixed by the Registrar.

This case highlights the importance of considering the relationship between different proceedings and the impact that one proceeding may have on another. The court found that the stay application was dependent on the outcome of the strike out application and that the grounds for the stay fell away with the order striking out the other proceeding. The court also found that Sisson had no standing to apply for a stay of enforcement of the judgment adjudicating Mr Hampton bankrupt. The court's decision to dismiss the stay application and order costs demonstrates the court's willingness to manage the litigation process efficiently and effectively.

Orders