Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue

IN THE SUPREME COURT OF NEW ZEALAND

SC 91/2017
[2017] NZSC 176

BETWEEN	CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) First Appellant THERESE ANNE SISSON Second Appellant
AND	THE COMMISSIONER OF INLAND REVENUE Respondent

Court:	Elias CJ, William Young, Glazebrook, OʼRegan and Ellen France JJ
Counsel:	Second Appellant in person P J Shamy and S M Kinsler for Respondent
Judgment:	23 November 2017

JUDGMENT OF THE COURT

AThe appeal is allowed.

BThe order made by the Court of Appeal setting aside the order of the High Court putting the first appellant into liquidation and remitting the proceeding to the High Court for rehearing, subject to the condition that within 15 working days of the Court of Appeal judgment, the second appellant pay into the High Court at Christchurch the amount of $109,675.22, is quashed.

CIn its place we make an order setting aside the order putting the first appellant into liquidation and remitting the proceeding to the High Court for rehearing.

DThere is no order as to costs.

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REASONS

On 16 November 2017, leave to appeal was granted on a single ground.[1] The approved question was:
… whether the conditional order of the Court of Appeal setting aside the order of the High Court putting the first applicant into liquidation and remitting the proceeding to the High Court for rehearing should be quashed and replaced with an unconditional order.
[1]Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2017] NZSC 168.
In the reasons for judgment, it was noted that the condition imposed by the Court of Appeal was imposed on the assumption that the first appellant had cash available to satisfy the condition but, as it transpired, that had proved to be incorrect and it had not been feasible for the condition to be satisfied.[2] The respondent accepted that leave should be given on this point and the consequent appeal should be allowed so that the condition was discharged. That would mean no condition attached to the Court of Appeal’s order. The proceeding would then be remitted to the High Court for a rehearing on the issue as to whether the first appellant should be placed in liquidation.
[2]At [3].
We set a fixture for the hearing of the appeal, but noted that this could be dispensed with if the parties consented to the appeal being dealt with on the papers.[3] The parties have advised that they consent to the appeal being dealt with on the papers.
[3]At [5]–[6].
We are satisfied that the condition imposed by the Court of Appeal was based on an assumption that has proven to be incorrect and that it should be discharged. We therefore allow the appeal by consent and make the orders set out above.
No costs were awarded in relation to the leave application, given that each party had a measure of success. As this judgment is based on the parties’ agreed position, we take the same approach in this judgment.

Solicitors:
Crown Law Office, Wellington for Respondent

CaseChat Overview and Summary

The Supreme Court of New Zealand dealt with an appeal by Chesterfields Preschools Ltd (in liquidation) and its director, Therese Anne Sisson, against the Commissioner of Inland Revenue. The central issue was the validity of a conditional order made by the Court of Appeal, which set aside a liquidation order made by the High Court and remitted the proceeding to the High Court. The condition imposed by the Court of Appeal required the payment of a specific sum into the High Court within a defined period, which the first appellant found unfeasible due to a lack of available cash. The appeal raised the question of whether the conditional order should be quashed and replaced with an unconditional order.

The court examined the premise on which the conditional order was based, finding it to be incorrect. The Court of Appeal had assumed the availability of funds, which had not been the case. The Commissioner accepted that the condition should be discharged, leading to an unconditional order that set aside the liquidation order and remitted the proceeding to the High Court. This decision allowed for a rehearing on whether the first appellant should be placed in liquidation. The Supreme Court accepted the parties' consent to proceed on the papers, leading to the allowance of the appeal and the issuance of new orders.

The Supreme Court quashed the conditional order made by the Court of Appeal and replaced it with an unconditional order. This decision allowed the appeal to be successful, discharging the condition that had been deemed unfeasible. The court noted that no costs were awarded in relation to the leave application, as both parties had achieved some measure of success. This judgment reflected the agreed position of the parties.

The final orders were to quash the conditional order set by the Court of Appeal and to remit the proceeding to the High Court for rehearing. The new order was unconditional, allowing for the rehearing of the issue concerning the liquidation of the first appellant. No costs were awarded in relation to the appeal itself.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established