Commissioner of Inland Revenue v Stepping Stone Hospitality Limited

[2025] NZHC 2802

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2025-409-140

[2025] NZHC 2802

UNDER

the Companies Act 1993

IN T HE MATTER

of the liquidation of STEPPING STONE HOSPITALITY LIMITED

BETWEEN

THE COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

STEPPING STONE HOSPITALITY LIMITED

Defendant

Hearing:

18 September 2025

(further submissions filed 23 September 2025)

Appearances:

D Lotz for Plaintiff

M R Gibson for Defendant

Judgment:

26 September 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 26 September 2025 at 9.30 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

THE COMMISSIONER OF INLAND REVENUE v STEPPING STONE HOSPITALITY LIMITED [2025]

NZHC 2802 [25 September 2025]

[1]                 This is an application by the Commissioner of Inland Revenue to put the defendant company, Stepping Stone Hospitality Ltd, into liquidation. The defendant company has not formally opposed the application.

[2]                 The application has come before the Court on 15 May 2025,  29 May 2025, 12 June 2025, 26 June 2025, 24 July 2025, and finally 18 September 2025. On the first five occasions the defendant company was given time to make arrangements satisfactory to the Commissioner to avoid liquidation.

[3]                 When the application came before me on 18 September 2025, Mr Gibson appeared for the defendant company and sought yet a further adjournment to the next list on 2 October 2025. This was on the basis that the defendant company had sold its business with the sale scheduled to settle on 26 September 2025, from the proceeds of which the Commissioner would be paid.

[4]                 Given the number of adjournments previously granted, the absence of any affidavit evidence to support the granting of a further adjournment, and noting also that the defendant company had failed to make a $40,000 payment to the Commissioner which was a condition of the adjournment granted on 24 July 2025, I was not prepared to grant  the adjournment sought.   I directed that by 3.30 pm on   22 September 2025 the defendant company was to file an affidavit providing evidence of the grounds upon which the adjournment was sought and advised counsel that in the event the information did not satisfy me an order for liquidation may be made.

[5]                 On 22 September 2025 an affidavit of Thomas Kurian, the director of the defendant company, was filed. Mr Kurian deposed that the agreement for the sale of the defendant company’s business had been cancelled. However, Mr Kurian said he wished to avoid the defendant company’s liquidation and was looking to attract new shareholders into the business but that would take time. He proposed that the Commissioner agree to a three-year payment plan at a weekly rate that was achievable for the defendant company. The proposal would require the Commissioner to waive penalties and interest applicable to the outstanding debt, which he said was justified as the debt arose due to national economic circumstances beyond the defendant company’s control.

[6]                 The Commissioner’s counsel filed a memorandum on 23 September 2025 in response to Mr Kurian’s affidavit, stating that the Commissioner opposed any further adjournments. Counsel also advised that the Commissioner will be declining the proposed payment plan, and that the proposal was similar to previous ones that had already been declined by the Commissioner.

[7]                 In an email sent to the Registry also on 23 September 2025 the defendant company’s counsel requested that the Court not make any decision until 3.30 pm on 25 September 2025 so that consideration could be given to whether the cancellation of the agreement for sale of the defendant company’s business was valid. The defendant company’s counsel has confirmed in a memorandum of 25 September 2025 that it is accepted the cancellation was valid.

[8]                 The position is that the Commissioner’s application to put the defendant company into liquidation is in order. The application has not been opposed. I am satisfied that the defendant company is unable to pay its debts and the grounds for making an order putting it into liquidation are made out. The Commissioner has taken all steps required of it under the Companies Act 1993 and the High Court Rules 2016 to obtain an order for liquidation. It would be wrong to grant the defendant company any further adjournments and to allow it to continue to trade when it has no realistic prospect of satisfying its existing tax liabilities. In those circumstances, an order for liquidation will be made.

Result

[9]There will be an order for liquidation of the defendant company.

[10]Wendy Ann Somerville and Malcolm Grant Hollis are appointed liquidators.

[11]              The liquidators’ remuneration is approved in accordance with their consent to act as liquidators dated 12 May 2025.

[12]              The liquidators are allowed to exercise their powers individually pursuant to  s 242 of the Companies Act 1993.

[13]              The Commissioner is awarded actual costs and disbursements but not exceeding scale 2B costs.

[14]The order is timed at 9.30 am on 26 September 2025.

O G Paulsen Associate Judge

Solicitors:

Inland Revenue Legal Services, Christchurch Corcoran French, Christchurch