Commissioner of Inland Revenue v Fantail Management Limited

[2012] NZHC 1611

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-939 [2012] NZHC 1611

UNDER  the Companies Act 1993

BETWEEN  THE COMMISSIONER OF INLAND REVENUE

Plaintiff

ANDFANTAIL MANAGEMENT LIMITED Defendant

Hearing:         9 July 2012

Counsel:         FF Nizam for plaintiff

JD Turner for defendant

Judgment:      9 July 2012

(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for stay]

Solicitors:           Meredith Connell, PO Box 2213, Auckland 1140

McVeagh Fleming, PO Box 300 844, Albany 0752

THE COMMISSIONER OF INLAND REVENUE V FANTAIL MANAGEMENT LIMITED HC AK CIV-2012-

404-939 [9 July 2012]

[1]      On 18 June 2012 I issued a judgment in which I granted an adjournment of an application to appoint a liquidator on conditions as follows:

[14]     Accordingly I order:

(a)      This proceeding is adjourned for a 30 minute hearing before me at 9am on 9 July 2012;

(b)      It is a condition of the adjournment that:

(i)        the defendant pay the sum of $56,647.77 into the trust account of McVeagh Fleming Lawyers and give notice  to  the  plaintiff  of  such  payment  by  2 July

2012.    Such  sum  shall  be  held  by  the  lawyers pending further order of this Court or the consent of

the parties; and

(ii)      reply to the notice issued by the plaintiff seeking further information to enable consideration  of the position under s 113 of the Tax Administration Act

1994  by  2  July  2012.     In  respect  of  this  last condition, the Court expects substantial compliance.

It is understood there may be a need to obtain access to documents not actually held by the defendant, which would take additional time.  Nevertheless, the

Court  expects  substantial  compliance.     Any additional   information   to   be   provided   will   be

considered at the hearing on 9 July 2012;

[2]      Counsel has confirmed that the sum of $56,647.77 is held in the trust account of McVeagh  Fleming, lawyers, thus satisfying the first  condition set out in my judgment of 18 June 2012.

[3]      Information has been supplied by the defendant to the plaintiff, unfortunately only latterly, but in substantial compliance with the second condition referred to in paragraph 14 of my judgment.

[4]      Counsel for the plaintiff could not give me a finite time within which the defendant’s request for consideration under s 113 of the Tax Administration Act 1994 might be completed by the Commissioner and a decision on it issued.  However, it is thought that a better knowledge of the position would be known within a month.  I bear that in mind in the orders that I make.

[5]      In my judgment of 18 June 2012 I referred to the specific considerations which the court must take into account in considering an application to appoint a liquidator.   Those considerations also bear on the court’s discretion to stay a proceeding.  I take them into account in the orders I now make.

[6]      A stay is justified to enable s 113 of the Tax Administration Act 1994 to be considered at this time.  Whether it is appropriate to extend the stay or to take some other step in the proceeding can only be determined when counsel report on the up- to-date position in respect of the application under s 113 of the Tax Administration Act 1994.

Orders

[7]      I order:

(a)       This proceeding is stayed until 15 August 2012;

(b)      The proceeding shall be called at 9am in open Court on 15 August

2012  for  the  purpose  of  reviewing  the  position  in  relation  to  the application under s 113 of the Tax Administration Act 1994.

(c)       The  plaintiff  shall  notify  the  defendant’s  counsel  by  5pm  on

13 August 2012 of the current position in relation to the s 113 Tax

Administration Act 1994 case.

[8]      Costs in relation to this application are reserved.

JA Faire

Associate Judge