Commissioner of Inland Revenue v Fs Fibresolutions Limited

[2021] NZHC 2439

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2021-454-27

[2021] NZHC 2439

UNDER

the Companies Act 1993

IN THE MATTER

of liquidation proceedings

BETWEEN

COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

FS FIBRESOLUTIONS LIMITED

Defendant

Hearing:

16 September 2021

Appearances:

T Carr for plaintiff

L Wong for defendant

Judgment:

16 September 2021

ORAL JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1]    This is a standard proceeding for the winding up of the defendant company. It was commenced some time ago by the Commissioner of Inland Revenue and there has been at least one adjournment in order to facilitate a possible settlement. That has not happened and it is not obvious to me that there has been any fruitful engagement between the parties. In any event, when the matter was last called on 5 August 2021  I adjourned it at the behest of the defendant company and made it clear that that was to be a final adjournment.

[2]    Today Ms Wong on behalf of the defendant company seeks a further adjournment. There is no affidavit evidence supporting any of what follows, but she managed to get to the Registry a bundle of documentation and then made submissions

COMMISSIONER OF INLAND REVENUE v FS FIBRESOLUTIONS LIMITED [2021] NZHC 2439
[16 September 2021]

based on that. Ms Wong said everything that could possibly be said on behalf of the defendant company and in particular it appears from the documentation that the company has secured a business contract to carry out certain work which may potentially produce revenue of around $70,000. There is no evidence as to the costs structure from which that revenue will be driven so the Court has no appreciation of how much profit might be generated. In addition the company has applied for but not yet secured a loan for $68,000. The principals of the company, through Ms Wong, assure the Court (and the Inland Revenue Department) that whatever profit derives from the contract and whatever money they were able to raise they will apply in a reduction of the debt to the Revenue which is a little short of $100,000.

[3]    Having listened to both Ms Wong and Ms Carr I am not satisfied that proper grounds have been made out for a further adjournment. In particular this is a company which on the face of things is continuing to carry on business whilst insolvent or at least in very strained financial circumstances and what it is effectively proposing is that it substitute the debt it owes to the Inland Revenue for an alternative debt to a third party lender.

[4]In my view the Commissioner is entitled to the order that she seeks.

[5]    Accordingly, on the application of the Commissioner of Inland Revenue, I make an order winding up FS Fibresolutions Ltd. The approved liquidators are Vivian Judith Fatupaito and Elizabeth Helen Keene. They are appointed in accordance with the terms of their consent to act 29 June 2021 subject to s 284 of the Companies Act 1993. The liquidators will be entitled to exercise their powers individually under s 242 of that Act. The Commissioner will have her costs and disbursements in the total sum of $1,173.38, that amount to be paid out of the assets of the defendant company.

[6]The order is timed at 10.49 am.

Associate Judge Johnston

Solicitors:

Inland Revenue Legal Services, Wellington for plaintiff Norling Law, Auckland for defendant