Faloon v Commissioner of Inland Revenue

The case of Faloon v Commissioner of Inland Revenue involves three stay applications filed by Clarence John Faloon against the Commissioner of Inland Revenue. The stay applications all relate to a costs judgment dated 4 June 2013, which ordered Mr Faloon to pay $19,106.98 in costs. The first stay application sought to stay the costs judgment pending a review, which was dismissed by Woodhouse J on 9 July 2013. The first stay application was deemed dismissed unless the costs were paid into court by 19 July 2013. Woolford J later extended this deadline to 9 August 2013. The second and third stay applications sought to stay the costs judgment pending an appeal and the outcome of the second stay application respectively. The court considered whether to grant the stay applications and if so, whether the costs should be paid into court pending the outcome of the appeals.

The court held that the stay applications should be dismissed unless the costs were paid into court by 9 August 2013. If the costs were paid, then enforcement of the costs judgment would be stayed pending the outcome of the appeals. The court considered the merits of the stay applications and concluded that the stay should be granted on the same basis as the first stay application. The court found that Mr Faloon's rights of appeal would not be rendered nugatory if a stay was not granted, as the Commissioner would be required to refund any costs recovered from Mr Faloon if the appeal succeeded. The court also found that the Commissioner's opposition to the stay applications was not filed within the required 10 working day period, but this did not prejudice Mr Faloon.

The court noted the procedural complexity of the case and the unfortunate fact that three stay applications had arisen out of one costs judgment. The court sought to deal with the stay applications consistently, if possible. The court found no principled basis for treating the second or third stay application differently to the first stay application and made orders in relation to the second and third stay applications that mirrored those made by Woodhouse J. The court also directed that any costs issues would be determined on the papers.