Commissioner of Inland Revenue v Sand Piper Lodge Limited HC Auckland CIV 2007-404-973

[2007] NZHC 1800

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-973

IN THE MATTER OF     the Companies Act 1993

BETWEEN  THE COMMISSIONER OF INLAND REVENUE

Plaintiff

ANDSAND PIPER LODGE LIMITED Defendant

Hearing:         7 June 2007

Appearances: Mr Macredie for Judgment Creditor

No appearance for Debtor

Judgment:      7 June 2007

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

Inland Revenue Department, P O Box 33150, Takapuna (Mr Macredie) - by facsimile: 09 984 3114

Sand Piper Lodge Limited, 841 Takatu Road, R D 6, Warkworth

THE COMMISSIONER OF INLAND REVENUE V SAND PIPER LODGE LTD HC AK CIV 2007-404-973 7

June 2007

[1]      This first calling of this proceeding was on 7 June 2007.   Mr Macredie appeared for the Commissioner and there was no appearance for the defendant.

[2]      The  Commissioner  served  a  statutory  demand  9  December  2006.    The statement of claim was filed 27 February 2007.   I have not myself done the calculation, but Mr Macredie tells me that the statutory demand is stale.   The Commissioner is unable to rely upon the service of and non response to the statutory demand as given rise to a rebuttable presumption of an insolvency unless, Mr Macredie submitted, I conclude that the company was insolvent because of the size of the debt and the period of time for which it had been outstanding.  He referred me to an English authority Re Taylors Industrial Flooring [1990] BCC 44; (1990) 8

ACLC 529 (CA).  In which the Court of Appeal apparently determined that even in the absence of a statutory notice equivalent to the New Zealand section 289 type notice, the Court could infer insolvency from non-payment of the debt.

[3]      I agree that in some cases that may be possible.  It’s always a matter of fact for the Judge determining the matter to come to a conclusion on.  In my judgment the Commissioner cannot persuade me that the company is insolvent.  As to the size of the debt that would have great significance if I knew something about the overall state of accounts of the defendant and how much money and how much property it owns. I have no information.  As to the second, the fact that the company has not paid its debt is just as consistent with an unwillingness to pay as it is with an inability to pay.  That being so the Commissioner has not discharged the burden of proofing that the company is insolvent.  I decline to make the orders sought.  The

proceeding will be dismissed and there will be no order for costs.

J.P. Doogue

Associate Judge