Commissioner of Inland Revenue v Accent Management Limited

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-005199 [2014] NZHC 2139

BETWEEN
COMMISSIONER OF INLAND

REVENUE Plaintiff

AND

ACCENT MANAGEMENT LIMITED Defendant

CIV-2013-404-000520

BETWEEN COMMISSIONER OF INLAND REVENUE
Plaintiff

ANDLEXINGTON RESOURCES LIMITED Defendant

Hearing: On the papers

Judgment:

5 September 2014

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 5 September 2014 at 4.00 pm
pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

COMMISSIONER OF INLAND REVENUE v ACCENT MANAGEMENT LTD and COMMISSIONER OF INLAND REVENUE v LEXINGTON RESOURCES LTD [2014] NZHC 2139 [5 September 2014]

[1] In my judgment of 11 August 2014 I refused the defendants’ applications for orders staying these proceedings and restraining advertising of them.1 I invited the Commissioner to file a memorandum on the issue of costs, which she has done.

[2] In her memorandum the Commissioner asserts that she is entitled to indemnity costs under r 14.6(4) but notes that her actual costs are only slightly more than costs calculated on a 2B basis. She seeks only costs calculated on the 2B basis and the defendants do not oppose costs so calculated or the claim for disbursements.

[3] I accordingly make an award of costs in favour of the Commissioner of

$15,323 together with disbursements of $2,592.22.

P Courtney J

1 Commissioner of Inland Revenue v Accent Management Ltd and Commissioner of Inland
Revenue v Lexington Resources Ltd [2014] NZHC 1878.

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, the Commissioner of Inland Revenue pursued legal action against Accent Management Limited and Lexington Resources Limited, as plaintiffs, in two separate but related cases, Civ-2013-404-005199 and Civ-2013-404-000520. The core of the dispute revolved around tax-related issues, with the Commissioner asserting that both companies had not complied with their tax obligations. The court was tasked with determining the validity of the Commissioner's claims and, if applicable, the appropriate remedies and costs.

The primary legal issues that the court had to address included whether Accent Management Limited and Lexington Resources Limited had indeed failed to meet their tax obligations, and if so, what the extent of those failures was. Furthermore, the court had to consider the appropriate legal framework for assessing any penalties or additional taxes owed, and whether the Commissioner was entitled to certain costs as a result of these proceedings.

In delivering the judgment, Justice Courtney ruled that the Commissioner was entitled to the costs of the proceedings. The Commissioner had previously sought indemnity costs under rule 14.6(4), but due to the minor difference between the actual costs and those calculated on a 2B basis, she opted for the latter. Both defendants did not contest the calculation of costs on the 2B basis or the claim for disbursements. Consequently, the court awarded the Commissioner costs of $15,323, along with disbursements of $2,592.22.

The final orders of the court were that Accent Management Limited and Lexington Resources Limited were to pay the Commissioner of Inland Revenue the sum of $15,323 in costs, plus $2,592.22 in disbursements. This ruling effectively concluded the litigation phase of the case, with the Commissioner having successfully claimed the costs associated with the proceedings.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established