Fisk v Turvey - [2023] NZHC 308

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-136

[2023] NZHC 308

UNDER the Companies Act 1993, the Receiverships Act 1993, the Property Law Act 2007, the Land Transfer Act 2017 and Part 19 of the High Court Rules 2016

BETWEEN

JOHN HOWARD ROSS FISK and RICHARD JOHN NACEY

First Applicants

VEY GROUP LIMITED (IN
LIQUIDATION AND RECEIVERSHIP)
Second Applicant

AND

DARYN TURVEY

First Respondent

AOKAUTERE LAND HOLDINGS LIMITED

Second Respondent

Continued…

On the Papers

Counsel:

R L Pinny for the Applicants

D Turvey for the First Respondent
J K Mahuta-Coyle for the Second Respondent
K I S Naik-Leong for the Commissioner of Inland Revenue

Judgment:

27 February 2023

JUDGMENT OF GWYN J

(Implementation of Sale Orders)

FISK and NACEY v TURVEY [2023] NZHC 308 [27 February 2023]

… Continued

AND
DAVID VANCE and IAN MILLARD AS TRUSTEES OF THE ORANA TRUST

First Interested Party

LESLIE WILLIAM FUGLE
Second Interested Party

GREGORY JOHN SHERRIFF
Third Interested Party

AND

THE COMMISSIONER OF INLAND REVENUE

First Interested Non-Party

Introduction

[1] On 27 September 2022 I gave judgment in favour of the applicants, the liquidators of Vey Group Limited (Vey) (in receivership and liquidation) (the Liquidators).1 I ordered that the Liquidators:

(a)sell a property owned by Vey, located in Webb Street, Wellington (the Property); and

(b)apply the sale proceeds in the manner set out in the court order which included that certain amounts be paid by the Liquidators to Aokautere Land Holdings Limited (ALHL), the second respondent, as second mortgagee.

(the Sale Orders)

[2] On 22 December 2022 counsel for the Liquidators advised the Court that Vey had received a notice from the Commissioner of Inland Revenue (Commissioner), pursuant to s 157 of the Tax Administration Act 1994 (TAA), requiring Vey to pay the amounts payable to ALHL to the Commissioner (the Notice).

[3] Counsel advised the Court that, on its face, the Liquidators appear to be subject to two conflicting legal obligations:

(a)Pursuant to the terms of the Sale Orders, the Liquidators are to “pay to ALHL” the amount of $1,185,458.37.

(b)Pursuant to the terms of the Notice, the Liquidators are required to pay any amounts payable to ALHL to the Inland Revenue immediately.

[4] The Liquidators therefore considered it prudent to seek further directions from the Court as to whom the sale proceeds payable to ALHL under the Sale Orders ought to be paid in those circumstances.

1 Fisk v Turvey [2022] NZHC 2462.

[5] Counsel for the Liquidators acknowledged that neither the Liquidators nor Vey have any interest in the substantive issue of whether the Commissioner or ALHL is entitled to be paid the funds.

[6] The application came before Isac J as Duty Judge on 23 December 2022 and the Judge made the following interim directions:

(a)pending any further direction of the Court, the Liquidators are to hold the amounts payable under [6(b)] of the Sale Orders in the Trust Account; and

(b)the parties’ memoranda and this minute…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Fisk v Turvey

Details

AGLC: Fisk v Turvey [2023] NZHC 308
Case: [2023] NZHC 308
Decision Date: 27 February 2023

CaseChat Overview and Summary

In the High Court of New Zealand, the case of Fisk v Turvey involved the liquidators of Vey Group Limited, the Commissioner of Inland Revenue, and Aokautere Land Holdings Limited. The liquidators sought clarification on the implementation of a previous court order requiring them to sell a property and pay the proceeds to various parties, including Aokautere Land Holdings Limited. The Commissioner subsequently issued a notice under the Tax Administration Act 1994, requiring the liquidators to pay the amount due to Aokautere Land Holdings Limited directly to the Commissioner to satisfy Aokautere Land Holdings Limited's outstanding tax liability. The liquidators sought further directions from the court on how to proceed, given the conflicting obligations imposed by the court order and the Commissioner's notice.

The legal issues before the court were whether the liquidators were subject to conflicting legal obligations, and if so, who the sale proceeds payable to Aokautere Land Holdings Limited should be paid to in light of the Commissioner's notice. The court found that the liquidators were not subject to conflicting obligations and that the liquidators were required to pay the amount due to Aokautere Land Holdings Limited to the Commissioner to be credited against Aokautere Land Holdings Limited's outstanding income tax liability. The court held that Aokautere Land Holdings Limited had no recourse in this proceeding beyond the written submissions already allowed, as the liquidators were deemed to be acting under the authority of Aokautere Land Holdings Limited when complying with the Commissioner's notice.

The court's reasoning was based on the statutory framework governing tax assessments and collection, as well as the effect of section 157(7) of the Tax Administration Act 1994, which deems the liquidators to be acting under the authority of Aokautere Land Holdings Limited when complying with the Commissioner's notice. The court found that Aokautere Land Holdings Limited's proposed judicial review was fraught with difficulty and would amount to a collateral attack on the Commissioner's assessments. The court held that the liquidators were directed to comply with the notice and pay the amount of $1,185,458.37 to the Commissioner to be credited against Aokautere Land Holdings Limited's outstanding income tax liability.

Orders