Commissioner of Inland Revenue v What it Takes Limited (in liquidation)

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA303/2018
[2019] NZCA 6

BETWEEN	THE COMMISSIONER OF INLAND REVENUE Appellant
AND	WHAT IT TAKES LIMITED (IN LIQUIDATION) Respondent

Court:	Brown, Clifford and Gilbert JJ
Counsel:	M Deligiannis for Appellant C D Owens for Respondent
Judgment: (On the papers)	12 February 2019 at 11.30 am

JUDGMENT OF THE COURT

The appeal is allowed.

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REASONS OF THE COURT

(Given by Brown J)

On 10 May 2018 Associate Judge Matthews delivered a judgment dismissing the Commissioner’s application for costs in the liquidation proceedings against the respondent on the basis he was bound by the reasoning of this Court in Joint Action Funding Ltd v Eichelbaum[1] and McGuire v Secretary for Justice.[2] Consequent upon the Supreme Court’s judgment in allowing the appeal in McGuire v Secretary for Justice[3] the parties request that the Commissioner’s appeal be allowed. No order for costs are sought in this Court and the parties agree that the matter does not need to be referred back to the High Court.
[1]Joint Action Funding Ltd v Eichelbaum [2017] NZCA 249, [2018] 2 NZAR 70.
[2]McGuire v Secretary for Justice [2018] NZCA 37, [2018] 3 NZLR 71.
[3]McGuire v Secretary for Justice [2018] NZSC 116.
The parties consenting, the Commissioner’s appeal is allowed.

Solicitors:
Crown Law Office, Wellington

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from the Commissioner of Inland Revenue against a decision by What it Takes Limited (in liquidation). The Commissioner sought to challenge the lower court's decision which had dismissed his application for costs in liquidation proceedings. The original case was decided on the basis of the Court of Appeal's reasoning in Joint Action Funding Ltd v Eichelbaum and McGuire v Secretary for Justice. The Commissioner's appeal was dismissed by Associate Judge Matthews on 10 May 2018. However, in light of the Supreme Court's decision to allow the appeal in McGuire v Secretary for Justice, the Commissioner sought to appeal the lower court's decision.

The central legal issue before the Court of Appeal was whether the Supreme Court's decision in McGuire v Secretary for Justice required a reconsideration of the Commissioner's application for costs. The appeal hinged on the interpretation and application of the precedent set by the Supreme Court's ruling. The Court needed to determine if the earlier Court of Appeal decision, which had dismissed the Commissioner's application for costs, should be overturned in light of the new Supreme Court ruling.

The Court of Appeal, in allowing the Commissioner's appeal, found that the Supreme Court's judgment in McGuire v Secretary for Justice did indeed require a reconsideration of the lower court's decision. The Court of Appeal concluded that the Commissioner's appeal should be allowed, as the reasoning in the earlier decision was no longer binding in light of the Supreme Court's ruling. The Court of Appeal emphasised that the matter did not need to be referred back to the High Court, and no order for costs was sought in this Court.

The final orders of the Court of Appeal were that the appeal by the Commissioner of Inland Revenue was allowed. The Court of Appeal's decision effectively overturned the earlier decision by the Associate Judge and aligned the case with the Supreme Court's ruling in McGuire v Secretary for Justice. The case now stands for reconsideration of the Commissioner's application for costs in light of the new precedent.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established