Commissioner of Inland Revenue v Super Turf Limited
[2018] NZHC 1842
•24 July 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-0188
[2018] NZHC 1842
BETWEEN THE COMMISSIONER OF INLAND REVENUE
Substituted Plaintiff
AND
SUPER TURF LIMITED, SUPER TURF BOWLS LIMITED, ECORUBBER
LIMITED
DefendantsMAUKORO WATERCARE AHUWHENUA
The Owner of Super Turf Limited
Hearing: 20 July 2018 Appearances:
C Van Der Merwe for the Substituted Plaintiff
P V Shackleton for the liquidators of Super Turf Ltd
S Tēpu for the Maukoro Watercare Ahu Whenua TrustJudgment:
24 July 2018
JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 24 July 2018 at 9.30am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
Inland Revenue, Auckland Meredith Connell, Auckland
THE COMMISSIONER OF INLAND REVENUE v SUPER TURF LTD, SUPER TURF BOWLS LTD, ECORUBBER LTD [2018] NZHC 1842 [24 July 2018]
[1] On 31 May 2018 I gave judgment (the judgment) putting the defendant (Super Turf) into liquidation.1 I appointed Vivien Judith Madson-Ries and David Sean Webb as liquidators.
[2] Mr Tēpu made some representations and filed certain documents in the liquidation proceeding, on behalf of the Maukoro Watercare Ahu Whenua (the Ahu Whenua Trust), which he told me is a shareholder of Super Turf.
[3] On 15 June 2018, Mr Tēpu filed a document described as a "With Notice To Stop The Execution Of Orders: Breach of Te Tiriti O Waitangi Trust Deed 1840 and Customary Rights of Māori" (the Application). It was not immediately apparent on whose behalf the Application was filed, although the backing sheet did describe the Ahu Whenua Trust as "the owner of [Super Turf]". I will take the Application as having been filed on behalf of the Ahu Whenua Trust as shareholder.
[4]At paragraph 1G of the Application the Ahu Whenua Trust says:
We now require the implementation of a Stay of Proceedings of 63 days to stop the execution of Judgment Orders of Associate Judge Smith delivered on the 31st day of May 2018.2
[5] The stay of proceeding was sought to "prevent further breaches of Te Tiriti O Waitangi Trust 1840 by the New South Wales New Zealand Parliament, its Courts and its Citizens".
[6] While the exact basis for the relief sought is not entirely clear, I think it is plain enough that the Ahu Whenua Trust is asking for an order either terminating the liquidation under s 250 of the Companies Act 1993 (the Act) or staying the liquidation in the exercise of any inherent jurisdiction the Court might have to grant a stay.
[7] The Application was served on the Commissioner and the liquidators, and both filed memoranda in opposition. The matter was listed for mention in the miscellaneous companies list on 20 July 2018. Both the Commissioner and the
1 The Commissioner of Inland Revenue v Super Turf Limited [2018] NZHC 1269.
2 A reference to the judgment.
liquidators submitted that an early resolution is important, because the liquidators are presently impeded in carrying out their duties by the application.
[8] At the hearing on 20 July I advised counsel and Mr Tēpu that I would be prepared to hear brief submissions from Mr Tēpu, on the same basis that he was permitted to address the Court on 6 July 2018 in a liquidation proceeding (relating to a company in which the Ahu Whenua Trust also appears to have an interest) that recently came before Associate Judge Bell.3 Briefly, directors in companies liquidation list proceedings might be allowed to address the Court at list hearings, and could appear in their personal capacities as director or shareholder. However, the defendant company would need to instruct a solicitor to represent it in a hearing when the case has been set down for a defended hearing. The apparent urgency in this case also persuaded me that I should hear from Mr Tēpu on behalf of the Ahu Whenua Trust (notwithstanding that he does not appear to be personally a shareholder of Super Turf, and it was not clear whether he is a director). I advised Mr Tēpu and counsel that I would hear from them briefly, and consider the matter further. Early in the week of 23 July 2018 I would:
(a)give judgment on the Application; or
(b)if it appeared to be necessary to hear more detailed argument, issue a minute directing the filing of notices of opposition and allocating further hearing time.
[9] In the event, I consider that no further hearing time is required, and I now give judgment on the Application.
The Application and Mr Tēpu's submissions
[10]The introductory part of the Application, first six paragraphs, reads as follows:
A. Maukoro Watercare is an Ahuwhenua implemented under the mechanisms and provisions of section 217 Kaitiaki Taiao Trust and 215 Ahuwhenua Trust of Te Ture Whenua Māori Land Act/93 amended by s268(3) of 17(3)/94 with addition of rule 4 of the amendment act/94 with such act/94
3 Elite Underlay Limited v Elite Limited and Eco Rubber Industries Limited HC Auckland CIV-2018-404-0905, minute of Associate Judge Bell 6 July 2018 at [4].
adopted, amended and repealed by Te Ture Whenua Māori Incorporations Constitution Regulations Act 1955; and by s253 of the act/95 derived the additions to the constitution act of Nga Uri Whakatupuranga O Maukoro Māori Incorporation 2018 regulations, to carry on in the business of Environmental Protection for the Native Ministry for Environment by provisions of s216, s217, s215 for and the purpose of s218 retention use and development of the land in the hands of the hapu whanau …
B. Maukoro Watercare Ahuwhenua then proceeded to purchase certain companies under customary rights under section s129(2)(a) also under s253 as permitted by Te Kooti Rangatiratanga Marae O Nga Uri Whakatupuranga Māori Incorporation the Native Tribal Territorial Authority IRAROMAI O HAURAKI 1835/2018 on the record.
C. Such acts of customary rights require the companies SUPER TURF LTD and Ors, to change their status from a limited liability company to an ahuwhenua for Māori community purposes under [s284 (2) (t) & (u)] to transition such companies under the process and procedures of TIKANGA MĀORI LAW, in order for these entities to quality for Māori Community Funding granted under s98 of Te ture whenua Māori Community Purpose Fund.
D. Under section 271 of the act/93 and amendments 95/2018 it is unlawful for Te Kooti Rangatiratanga Marae O Nga Uri Whakatupuranga Māori Incorporation to disclose this sensitive information until these matters were heard and resolutions for the remedy were legislated into TIKANGA MĀORI LAW before such matters are made PUBLIC NOTICE (PANUI) in The New Zealand Gazette or any other.
E. This matter of SUPER TURF LTD and Ors have now been heard by TE KOOTI RANGATIRATANGA O NGA URI WHAKATUPURANGA O MAUKORO MĀORI INCORPORATION being Nga hapu whanau o MAUKORO, WAIARIKI and WAITAHA and have passed by special resolution the required remedy and shall institute such resolutions in Legislation and shall prepare such evidential documents for The Governor of The New South Wales Company Parliament in Occupation in Wellington to further institute such Legislation into The New Zealand Ministry and its legislative council, its Courts and its Citizens.
F. This was why we required The High Court to instruct THE COMMISSIONER OF INLAND REVENUE to meet The Māori Commissioners, to reach the understanding that a remedy was being sought to settle the matter CIV-2017-404-00188 by Maukoro Watercare Ahuwhenua, The appointed Kaitiaki Ahuwhenua for the Native Ministry for Environment of The Territorial Tribal Authority under MAUKORO MĀORI IRAROMAI O HAURAKI.
[11]The Ahu Whenua Trust submits that the judgment was ultra vires and void.
[12] In its submissions, the Ahu Whenua Trust referred to the "Māori Incorporations Constitution Regulations Act 1995", but I have not found any such statute enacted by the New Zealand Parliament. At the hearing Mr Tēpu effectively acknowledged that
– he told me that "Te Ture Whenua Māori Corporations Constitution Regulations Act 1995" was passed by a body representing 40 hapu from the seven native districts.
[13] In his oral submissions, Mr Tēpu submitted that Māori Incorporations are not subject to the Act. He referred in that regard to s 253 of Te Ture Whenua Māori Land Act 1993 (the Land Act) in support.4 He also referred to s 268 of the Land Act, which provides that every Māori incorporation is to have a constitution governing its internal management.
[14] Mr Tēpu relied on s 18(1)(a) of the Land Act. That section sets out the general jurisdiction of the Māori Land Court. Subsection 1(a) provides:
18 General jurisdiction of court
(1)In addition to any jurisdiction specifically conferred on the court otherwise than by this section, the court shall have the following jurisdiction:
(a)to hear and determine any claim, whether at law or in equity, to the ownership or possession of Māori freehold land, or to any right, title, estate, or interest in any such land or in the proceeds of the alienation of any such right, title, estate, or interest:
…
[15] Mr Tēpu submitted that the effect of this subsection is that this Court, sitting in its company liquidation jurisdiction, did not have jurisdiction to make the liquidation order made in the judgment.
4 Section 253 of the Land Act provides:
253 Capacity and powers of incorporation
Subject to this Act, and any other enactment, and the general law, and to any express limitations or restrictions imposed by the court in the order of incorporation or included in its constitution pursuant to section 253A, every Māori incorporation has, both within and outside New Zealand, in addition to the powers expressly conferred on it by this Part,—
(a)full capacity in the discharge of the obligations of the trust in the best interests of the shareholders, to carry on or undertake any business or activity, do any act, or enter into any transaction; and
(b)for the purposes of paragraph (a), full rights, powers, and privileges.
[16] Mr Tēpu also submitted, apparently in accordance with paragraph C from the application quoted at paragraph [10] above, that Super Turf is "transitioning" into the Māori incorporation, pursuant to the Māori preamble to the Land Act. The English translation of the preamble, as set out in the Land Act, reads:
Preamble
Whereas the Treaty of Waitangi established the special relationship between the Māori people and the Crown: And whereas it is desirable that the spirit of the exchange of kawanatanga for the protection of rangatiratanga embodied in the Treaty of Waitangi be reaffirmed: And whereas it is desirable to recognise that land is a taonga tuku iho of special significance to Māori people and, for that reason, to promote the retention of that land in the hands of its owners, their whanau, and their hapu, and to protect wahi tapu: and to facilitate the occupation, development, and utilisation of that land for the benefit of its owners, their whanau, and their hapu: And whereas it is desirable to maintain a court and to establish mechanisms to assist the Māori people to achieve the implementation of these principles.
[17] Generally in the Application and in Mr Tēpu's oral submissions, the Ahu Whenua Trust appears to have placed substantial reliance on the status of Māori customary land in New Zealand, as land held by Māori in accordance with tikanga Māori.5 This matter was said to involve a matter of Māori customary rights and laws concerned with Māori customary land.
[18] Finally, the Ahu Whenua Trust referred to ss 284(2)(t) and (u) of the Land Act, which provide for the Governor-General to make regulations in respect of the following:
284 Regulations
(1)The Governor-General may from time to time, by Order in Council, make regulations—
(a)prescribing the form of constitution for Māori incorporations; and
(b)specifying matters in the constitution which may, by special resolution of the shareholders, be altered, added to, or replaced.
(2)Without limiting the generality of subsection (1), regulations made under that subsection may provide for the following matters:
…
5 Referring to ss 129 and 144 of the Te Ture Whenua Māori Land Act 1993.
(t)any transitional provisions required in relation to Māori incorporations in existence on the commencement of this Act, which transitional provisions may provide for the continuation in force in relation to such Māori incorporations or any of them of provisions of Part 4 of the Māori Affairs Amendment Act 1967 or of any other enactment repealed by this Act:
(u)such other matters as are not inconsistent with this Act or with law.
Submissions for the Commissioner and the liquidators
[19] Mr Van Der Merwe and Mr Shackleton both submitted that there was nothing in the Application or in the various statutory or other provisions referred to by the Ahu Whenua Trust that would derogate from the provisions of the Act, nor any basis for the Court to terminate or stay the liquidation. Mr Van Der Merwe referred to Wallace v The Queen, in which the Supreme Court rejected a similar claim, stating:6
[1] The applicant is facing trial in the High Court on a number of criminal charges. He seeks leave to appeal direct from a ruling of Brewer J given on 11 October 2010 rejecting a protest to the jurisdiction of the High Court (advanced essentially on Māori sovereignty grounds)…
[2] As far as we can tell from the material supplied by the applicant, the arguments which he wishes to advance are confined to the jurisdiction of the High Court. These arguments, however, are plainly unsound legally.
Discussion and conclusions
[20] Whatever jurisdiction the Court might have to stay a liquidation (as opposed to making a termination order under s 250 of the Act), I see no arguable basis for any termination or stay order.
[21] I traversed many of the arguments raised for the Ahu Whenua Trust in the judgment, and it is not necessary to repeat all of them here. However, it is appropriate to refer again to the passage from the Court of Appeal decision in R v Mitchell,7 in which the Court of Appeal referred to the courts being "subservient to Parliament and must apply an act of Parliament in the terms in which it has been enacted. The issues
6 Wallace v The Queen [2011] NZSC 10.
7 R v Mitchell CA68/04, 23 August 2004.
which Mr Mitchell was seeking to raise could not be resolved by the courts [they] being a matter for public and political processes not a judicial one".8
[22] The starting point is that Super Turf is a company registered under the Act. It is not a Māori incorporation, or a trust established under the Land Act. Nor was Mr Tēpu able to tell me that Super Turf, as opposed to the Māori incorporation or the Ahu Whenua Trust, has any interest in land.
[23] The Ahu Whenua Trust made a number of arguments which appear to be concerned with the status of Māori customary land in New Zealand. Extensive reference was made to a number of provisions of the Land Act, and various other statutes or instruments, none of which seem to me to provide any basis for interfering with the judgment.
[24] The Commissioner's liquidation claim was not concerned with land at all, but with the failure of a limited liability company incorporated under the Act to pay its taxes, including substantial amounts of PAYE, and the insolvency which has resulted from that failure.
[25] While the Ahu Whenua Trust has attempted to make some connection between Super Turf and statutory protections (or Treaty protections) available to Māori, and/or in respect of taonga or tikanga, no such connection has been demonstrated on the facts of this case.
[26] The Application speaks of "customary rights" requiring Super Turf to "change [its] status from a limited liability company to an ahu whenua for Māori community purposes…", but I am not aware of any possible means by which that might occur. Ahu whenua trusts are constituted by order of the Māori Land Court under s 215 of the Land Act, and limited liability companies such as Super Turf do not appear to be among the persons or entities that the Māori Land Court may appoint as trustee of an Ahu Whenua Trust, under s 222 of the Land Act.
8 The Commissioner of Inland Revenue v Super Turf Limited, above n 1, at [24].
[27] A similar argument appears to have been run by Mr Tēpu before Associate Judge Bell on the 6 July 2018, when the Eco Rubber Industries Limited case was called. Associate Judge Bell made the following comments:9
[6] I address matters that Mr Tēpu has raised. His submissions were directed at showing that the company had become some kind of Māori incorporation. I do not understand the proper basis for what Mr Tēpu said. The defendant, which appears to have changed its name, is a duly incorporated company. It came into existence when it was incorporated. A company remains in existence as a company until it is either amalgamated with a company under Part 15 of the Companies Act, or until it is removed from the register under Part 17 of the Companies Act. Between incorporation and removal from the register, the company remains in existence as a company and is subject to the provisions of the Companies Act.10 The Te Ture Whenua Māori Act 1993 does not apply to companies.
[7] I encourage the defendant and his directors and shareholders to focus on company law issues rather than on matters of tikanga and the Te Ture Whenua Māori Act. I also encourage them to obtain legal advice and assistance to ensure their case is properly presented at the defended hearing.
[28] A very similar argument had been rejected by the same Associate Judge in Commissioner of Inland Revenue v Shearing Services Kamupene Limited.11 The Associate Judge noted in Shearing Services Kamupene Limited that a company is a distinct entity from its shareholders, and it keeps its identity, even if there are changes in directors and shareholders. There is nothing in the Act by which a company incorporated under it can be transformed into some other entity,12 and the submission based on "transformation" of the company was held ineffective to show that Shearing Services Kamupene Limited's liability (also for PAYE) "had somehow gone away".13
[29] I agree entirely with what the Associate Judge has said on this argument that a company such as Super Turf could somehow change its status. I am not persuaded that there is anything seriously arguable for the Ahu Whenua Trust on the claimed ability of Super Turf to somehow change its status into an entity (Ahu Whenua Trust, Māori Incorporation, or other) that might enjoy any relevant protections under the Land Act, the Treaty, tikanga Māori, or otherwise.
9 Elite Underlay Limited v Elite Limited and Eco Rubber Industries Limited, above n 3.
10 See Commissioner of Inland Revenue v Shearing Services Kamupene Limited [2016] NZHC 1379 at [23]-[34].
11 At [23]-[34].
12 At [27] and [29].
13 At [34].
[30] For completeness, I see nothing in s 253 of the Land Act, which is concerned with the capacity and powers of a Māori Incorporation, which could be relevant. Super Turf is not a Māori Incorporation, and I note in any event that a Māori Incorporation's powers are subject to "any other enactment",14 which would include the Act and the Tax Administration Act 1994. The regulation – making power conferred by s 284 of the Act is conferred on the Governor-General, and it is limited in its effect to matters relating to the constitutions of Māori Incorporations. Super Turf not being a Māori Incorporation, it is not at all clear how any regulations made under s 284 could be relevant.
[31] Nor do I see anything arguable for the Ahu Whenua Trust in s 18(1)(a) of the Land Act, or in the Preamble to the Land Act. Both are concerned with land, and the judgment was not concerned with any particular rights or interests in any land. Mr Tēpu did point out that the Māori version of the Preamble to the Land Act is to prevail in the event of any conflict in meaning between the Māori and the English versions,15 but he did not point to any conflict in meaning having any apparent bearing on the question of whether the liquidation of Super Turf should be stayed or terminated.
[32] There was a reference in the Application to s 8(3) of the Property Law Act 2007 (the PLA), but that provision simply says that the PLA does not apply to Māori customary land within the meaning of the Land Act. The provision does not touch the Commissioner's entitlement to pursue her liquidation claim under the Act.
[33] Other arguments advanced for the Ahu Whenua Trust appear to be political, and beyond the scope of this Court sitting in its company liquidation jurisdiction.
[34] Overall, I see no reasonable argument that it would be just and equitable to terminate the liquidation under s 250 of the Act, nor any arguable basis for granting a stay of the liquidation (assuming, without deciding, that the Court retains an inherent jurisdiction to stay a liquidation following the enactment of s 250 of the Act).
14 S 253 of the Land Act.
15 S 2(3) of the Land Act.
[35] For all of the foregoing reasons, the Application for termination or stay is dismissed.
[36] Neither the Commissioner nor the liquidators filed a formal notice of opposition to the Application, and it may be that, with sensible co-operation between them, the parties will be able to resolve any costs issues. However, if that cannot be done, the liquidators and the Commissioner may file memoranda on costs, within 30 working days of the date of this judgment. In that event, any reply memorandum by the Ahu Whenua Trust is to be filed and served within 20 working days after their receipt of the memoranda from the liquidators and/or the Commissioner.
Associate Judge Smith
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