DT United Kingdom Ltd v Commissioner of Inland Revenue HC Auckland Civ-2009-404-5580

[2011] NZHC 273

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-5580

IN THE MATTER OF     of the Tax Administration Act 1994

BETWEEN  DT UNITED KINGDOM LIMITED Plaintiff

ANDTHE COMMISSIONER OF INLAND REVENUE

Defendant

Hearing:         30 March 2011

Judgment:      30 March 2011 at 3:00 PM

INTERIM JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 30 March 2011 at 3 pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date ..........................

Solicitors:
Christopher Taylor, PO Box 37772, Parnell 1151

Crown Law Office, PO Box 2558, Wellington 6140

DT UNITED KINGDOM LIMITED V THE COMMISSIONER OF INLAND REVENUE HC AK CIV-2009-

404-5580 30 March 2011

[1]      In response to my minute of 15 March 2011 counsel for the defendant advises that the defendant does not intend to file any submissions in reply and would prefer that the application for an “unless” order and order for dismissal be determined on the papers according to the prior indication of both counsel.  Counsel for the plaintiff would like the application argued.

[2]      Since receiving that advice, I have reviewed the principles to be applied in an application to strike out plaintiff’s proceeding on the grounds of non-compliance with an order for security for costs.   The principles were set out by Thorp J in Jagwar Holdings Ltd v Fullers Corporation Ltd (1991) 4 PRNZ 577 at 578, and discussed at some length recently by Associate Judge Bell in Giuseppina Prager- Macholl v Susan Michell and Anor HC Auckland CIV2010-404-000917, 1 March

2011, Judge Bell also discussed what are called the Hytec principles.  He stated at

[17]:

In cases where a plaintiff has failed to pay security for costs, the effect of the  Hytec principles and the approach taken by Thorp J in the  Jagwar Holdings case are combined in these principles set out in McGechan at HR5.45.11(4):

a)        The plaintiff is entitled to a reasonable opportunity to comply; generally the

Court fixes the time;

b)If the plaintiff fails to provide security within the time allowed, or within a reasonable time, the Court may strike out the proceeding, and an “unless” order may be made;

c)If  the  defendant  cannot  establish  the  more  general ground  of  failure  to prosecute under r 15.2, a proceeding should only be dismissed if the non- compliance is “intentional and contumelious”;  and

d)Generally, the proceeding will only be dismissed if its continuation would involve substantial prejudice to the defendant.

[3]      Applying these principles, I find that the defendant has not established that an “unless” order that would likely result in striking out of the plaintiff’s proceeding should  be  made  at  this  stage.        No  submission  identifies  evidence  of  any unavoidable or substantial prejudice that would arise if a stay were to continue for the period Mr Gould proposes and I am also not satisfied that other unavoidable prejudice has been identified.   I do not therefore find it necessary to hear further argument.

[4]      Though  I  accept  that  a  stay  cannot  continue  indefinitely  and  that  the defendant should not have to suffer inordinate delay I do not think that point has been reached.  I therefore issue this minute as an interim decision.  I order that the defendant can seek the order by way of a memorandum on 2 days notice if, by 30

November 2011, the plaintiff has not paid or otherwise provided to the Registrar’s

satisfaction the first tranche of security.

[5]      I  also  grant  leave  for  the  defendant  to  file  and  serve  a  memorandum, supported by affidavit, on two days notice to seek further orders in the event that substantial prejudice is said to arise.

[6]      Costs are reserved.

Associate Judge Sargisson