Commissioner of Inland Revenue v Banbrook

[2019] NZHC 1010

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000046

[2019] NZHC 1010

BETWEEN

THE COMMISSIONER OF INLAND REVENUE
Judgment Creditor

AND

ANTHONY DAVID BANBROOK

Judgment Debtor

Hearing:

9 May 2019

Appearances:

J V Angelson for Commissioner

No appearance for Judgment Debtor

Judgment:

9 May 2019

ORAL JUDGMENT OF VENNING J

Solicitors:           Legal Services Auckland Copy to:  Judgment Debtor

THE COMMISSIONER OF INLAND REVENUE v BANBROOK [2019] NZHC 1010 [9 May 2019]

[1]    This is an application to set aside a bankruptcy notice. On 12 June 2018 the Commissioner of Inland Revenue obtained judgment in the District Court against Anthony David Banbrook in the sum of $157,490.74. The Commissioner subsequently issued a bankruptcy notice to collect that debt. The bankruptcy notice was served on Mr Banbrook on 3 April 2019.

[2]    On 15 April Mr Banbrook applied to this Court to set aside the bankruptcy notice. He also filed an affidavit in support of that application. The Commissioner opposes the application to set aside and has filed an affidavit of Mr Prasad, a customer services officer, in response to the affidavit of Mr Banbrook.

[3]    I am advised by counsel for the Commissioner that those documents were sent by courier to be delivered to the address for service given by Mr Banbrook of 118 Mahana Lane, Te Awamutu, Waipa. However the courier tracking advises that the documents were not able to be delivered to Mr Banbrook and Mr Banbrook has not collected them.

[4]    Notwithstanding that, the application to set aside the bankruptcy notice was allocated this morning’s hearing and Mr Banbrook would be aware of that date, it being his application to set aside. There is nothing on the file to explain Mr Banbrook’s non-appearance this morning in support of the application. In the circumstances it would be open to the Court to dismiss the application on the basis that there is no appearance to support it. However I propose to deal with the matter on the merits.

[5]    A judgment debtor’s options are somewhat limited when served with a bankruptcy notice. The debtor may either pay or settle the claim or satisfy the Court that he or she has a cross-claim against the creditor.

[6]Mr Banbrook seeks to have the bankruptcy notice set aside on the grounds:

(a)he has applied to have the judgment on which the bankruptcy notice is based set aside;

(b)he has a counterclaim which he could not have advanced in the District Court proceedings.

[7]    Mr Banbrook says that he has applied to the District Court to set aside the default judgment and has attached copies of an application dated 27 July 2018. He also says that he has issued a claim against the judgment creditor for damages for the use of a perjured affidavit. He puts in issue whether he was properly served with the Commissioner’s proceedings in the District Court. He alleges that the judgment and publication of the judgment subsequently effectively supports a claim for defamation.

[8]    Mr Banbrook’s application to set aside the bankruptcy notice faces a number of hurdles. First, his application to set aside the judgment was actually dismissed by Judge Harrison in the District Court on 11 October 2018. Mr Banbrook has apparently applied a second time to set the judgment aside. That application is yet to be allocated a definite date for hearing in the District Court.

[9]    On the face of the record and given the background to these proceedings and quite apart from the fact that it is a second application, Mr Banbrook’s application to set aside the judgment faces a number of difficulties. The starting point is that s 109 of the Tax Administration Act 1994 would appear to apply. That deems the assessment of tax to be correct and therefore indisputable except in objection or challenge proceedings under the Act.

[10]   There are also what appear on the face of it to be insurmountable issues for Mr Banbrook with the proposed counter claim. The counter claim as I say proceeds on the basis that he disputes having been served with the proceedings in the District Court. He claims against the process server, Baycorp, and the Commissioner. He seeks to raise causes of actions of malicious process and defamation and seeks in round figures

$100,000 for damages and $75,000 in exemplary damages.

[11]   As the Commissioner points out in the notice of opposition the affidavit evidence provided to the District Court confirms Mr Banbrook was served with the proceedings in the District Court. That was deposed to by an affidavit of 8 March 2018 by the process server. There was further a supplementary affidavit sworn by the

process server dated 18 September 2018 annexing an acknowledgement of service signed by Mr Banbrook. These issues were before the District Court on the application to set aside the judgment and were dealt with by Judge Harrison dismissing the application to set aside the judgment in his judgment of 11 October 2018.

[12]   The defamation claim appears misconceived. Section 14 of the Defamation Act 1992 confirms an absolute privilege in relation to anything said, written or done by a party, representative, or witness in court proceedings.

[13]   The proposed claim by Mr Banbrook appears on the face of it to have been manufactured as an attempt to create a counterclaim to the Commissioner’s proceeding.

[14]   There is a further issue. Even if there was a cross claim r 5.61 of the High Court Rules 2016 prohibits the defendant advancing any set-off or counter claim in a proceeding by the Crown for recovery of taxes, duties or penalties.1 While the current proceedings by Mr Banbrook are commenced by way of a separate proceeding, for the above reasons I consider them on the face of it to be lacking in merit.

[15]   For those reasons I am satisfied that the application to set aside the bankruptcy notice is fatally flawed. It is dismissed with costs reserved but in favour of the Commissioner to be quantified at the substantive hearing of the bankruptcy petition which may now follow.

Venning J

1      Attorney-General v Bell-Booth Group Ltd (1991) 3 PRNZ 416.