Manawatu Taxis Limited v Commissioner of Inland Revenue HC PMN CIV 2006-454-163

[2008] NZHC 2327

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV 2006-454-163

IN THE MATTER OF     the Companies Act 1993

BETWEEN  MANAWATU TAXIS LIMITED Applicant

ANDCOMMISSIONER OF INLAND REVENUE

Respondent

Appearances: F Hill - Applicant

K. Doherty - Counsel for the Respondent

Decision:        15 May 2008

ORAL DECISION OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           K Doherty, Technical Legal Support, Wellington Service Centre, IRD, PO Box 1462, Wellington

MANAWATU TAXIS LIMITED V COMMISSIONER OF INLAND REVENUE HC PMN CIV 2006-454-163

15 May 2008

[1]      This matter once again came before me in a directions telephone conference today.

[2]      In an oral judgment I gave in this proceeding on 17 July 2007 I made an order setting aside a statutory demand issued by the respondent against the applicant upon certain conditions.  Those conditions were as follows:

a)       The applicant company, Manawatu Taxis Limited, was by  5.00 pm on 31 July 2007 to pay into this Court the sum of $10,905.18.

b)If the applicant defaulted in making payment of this $10,905.18 into Court by 31 July 2007 then the respondent Commissioner could immediately bring an application to this Court to place the applicant, Manawatu Taxis Limited into liquidation.

c)       It was envisaged that this $10,905.18 would be retained in Court for a period of no more than four months from July 2007.  These monies were to be retained, however, pending final resolution of the amount due to the respondent Commissioner as claimed in the statutory demand.

d)Leave was reserved for either party at any time on 5 days notice to apply to the Court for further orders or directions with respect to the

$10,905.18 amount retained.

[3]      Since my judgment of 17 July 2007 the $10,905.18 has been paid by the applicant company into Court.  There has also, as I understand it, been a substantial number   of   discussions   and   communications   between   the   applicant   and   the respondent regarding the outstanding GST and tax in question.

[4]      This  Court  has  also  been  involved  in  a  range  of  different  directions conferences with the parties.  This has included conferences on 15 November 2007,

10 December 2007, 29 January 2008, 26 February 2008, 1 April 2008, 6 May 2008 and today 15 May 2008.

[5]      As I understand the position there has also been a significant number of meetings between the tax agent for the applicant company, officers of the applicant company and officers of the respondent, Inland Revenue Department.

[6]      All of this, as I understand it, has culminated in the respondent indicating in a detailed form an amount which he was prepared to accept in final settlement of the claim under the statutory demand.  This amount as I understand it totals $7,887.67. It includes core GST and tax of approximately $3,300.00 with a balance made up of outstanding interest and penalties.

[7]      As  I understand the position from Mr  Hill, the director  of  the applicant company, it is contended that the amount outstanding is said to be “still in dispute”. He argued that a dispute resolution process was still underway with  the  Inland Revenue Department and no monies should be paid to the Commissioner at this point.

[8]      Notwithstanding that, in response to my question of him, Mr Hill indicated that he cannot at this point tell whether or not the $7,887.67 claimed by the Commissioner will in fact be the final agreed figure.  In his words to me today he said that the applicant and its advisers “Haven’t really had time to research these figures in depth.”

[9]      As to that last comment I must place on record my concerns and the view that I do not accept it is an accurate description of the events which have occurred here. Much time has elapsed since the original statutory demand was issued and since my

17 July 2007 judgment was given.

[10]     What is clear to me is that from the date of that judgment in this matter in July 2007, substantial dealings have taken place between all parties and as I have noted above, these have involved the Court’s participation on a number of further occasions.

[11]     It  is  clear  that  the  applicant  has  had  significant  information  from  the respondent and indeed the detailed calculations for the $7,887.67 figure have been with the respondent for a period of time.

[12]     I  form  the  view  that  the  only  explanation  that  can  be  given  for  the respondent’s position in this matter is that a significant and repeated delaying tactic is being undertaken.

[13]     That said and given the comment in my oral judgment of 17 July 2007 at paragraph [23](d) that it is envisaged the $10,905.18 retention would be held in Court for a period of not more than four months from that time, it is appropriate in my view for a further order to be made at this point for payment from the retained monies of the outstanding tax, interest and penalties due to the respondent Commissioner.

[14]     Effectively, as I see the position, the $7,887.67 now certified as due from the Commissioner is not  in  any real  way disputed  by the  applicant.    An  order  for payment of this sum from the retained monies on what is effectively a long-standing application from the respondent is accordingly appropriate.

[15]     Orders are now made that the Registrar is:

a)       To pay from the $10,905.18 held in this Court the sum of $7,887.67 to the respondent Commissioner of Inland Revenue;

b)Following this payment The Registrar is to refund to the applicant, Manawatu Taxis Limited, the balance of the $10,905.18 held in this Court together with any interest which may have been earned on this sum.

[16]     That now disposes of this proceeding.

‘Associate Judge D.I. Gendall’