The applicant was adjudicated bankrupt on 14 April 2016.[1] The underlying debts were pursuant to orders for costs made against him in earlier proceedings against the Commissioner of Inland Revenue.[2] He appealed against that decision to the Court of Appeal.[3] In that appeal, his review of a decision of the Registrar as to security for costs was unsuccessful but he has not provided security for costs.[4] Nor has he taken any other steps to have the appeal set down for hearing. He did, however, file an application for an extension of time for the filing of the case on appeal. Unless such extension can be obtained, his appeal is deemed to be abandoned.
[1]Commissioner of Inland Revenue v Faloon [2016] NZHC 760, (2016) 27 NZTC 22-076 (Associate Judge Bell).
[2]These cases are set out at [5]–[9].
[3]Faloon v Commissioner of Inland Revenue [2016] NZCA 537, (2016) 27 NZTC 22-077 (Randerson, Cooper and Winkelmann JJ) [Faloon (CA)].
[4]See at [10].
He has also applied, unsuccessfully, to the High Court for an order under s 416 of the Insolvency Act 2006 suspending his bankruptcy pending the hearing of his appeal.[5] He has also appealed against the judgment refusing him the extension sought.[6]
[5]Faloon v Commissioner of Inland Revenue [2016] NZHC 2063.
[6]See Faloon (CA), above n 3, at [12] the application has been given the file number CA450/2016.
When his application for an extension of time in respect of the first appeal came on for hearing, the position he adopted was that the suspension appeal should be heard first, with the adjudication appeal suspended indefinitely while he pursued five other sets of proceedings in the High Court.[7] As the Court of Appeal noted, this position is not consistent with the purpose of s 416 which provides for suspension of an adjudication pending appeal against the adjudication.[8] Section 416 does not provide a basis for the deferring an adjudication appeal.
[7]At [16].
[8]At [17].
It follows that, as the Court of Appeal held, the basis upon which the applicant sought an extension of time was illegitimate.[9] This was a sufficient basis for a refusal of the extension sought. For good measure the Court addressed the merits of the appeal.[10] We are inclined to the view that, for the reasons given, the adjudication appeal can be regarded as truly hopeless. But given that the applicant has not provided a credible argument for challenging the view of the Court of Appeal as to his reasons for an extension, we need not go into that aspect of the case.

[9]At [17].

[10]At [19]–[29].

The proposed appeal does not meet the leave criteria and accordingly leave to appeal is refused.

Solicitors:
Crown Law Office, Wellington for First Respondent

Details

AGLC: Faloon v Commissioner of Inland Revenue [2017] NZSC 65
Case: [2017] NZSC 65
Decision Date: 5 May 2017

CaseChat Overview and Summary

The applicant, Clarence John Faloon, was seeking leave to appeal a decision of the Court of Appeal, which had dismissed his appeal against his adjudication of bankruptcy. The first respondent, the Commissioner of Inland Revenue, and the second respondent, the Official Assignee in Bankruptcy of Clarence John Faloon, were the other parties involved in the proceedings. The appeal was heard by Justice William Young, Justice O'Regan, and Justice Ellen France of the Supreme Court of New Zealand. The central legal issues that the Court had to address were whether the applicant had provided a credible argument for an extension of time to file his appeal, and whether the proposed appeal met the criteria for leave to appeal. The Court had to determine whether the applicant's reasons for seeking an extension of time were legitimate and whether the appeal was truly hopeless.

The Court of Appeal had previously held that the applicant's reasons for seeking an extension of time were not legitimate, and that the appeal was truly hopeless. The Court of Appeal noted that the applicant's proposal to defer his adjudication appeal indefinitely while he pursued other proceedings in the High Court was not consistent with the purpose of section 416 of the Insolvency Act 2006, which provides for suspension of an adjudication pending appeal against the adjudication. The Court of Appeal had also addressed the merits of the appeal and concluded that it was truly hopeless. The Supreme Court found that the applicant had not provided a credible argument for challenging the Court of Appeal's view as to his reasons for an extension. Therefore, the Court was inclined to the view that the adjudication appeal could be regarded as truly hopeless. The Supreme Court concluded that the proposed appeal did not meet the leave criteria and refused leave to appeal.

The final orders of the Court were that the applicant's application for leave to appeal was dismissed and that the applicant was to pay the first respondent costs of $2,500.

Orders