Riverside Management Limited v Commissioner of Inland Revenue

[2012] NZHC 374

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2011-419-1381 [2012] NZHC 374

BETWEEN  RIVERSIDE MANAGEMENT LIMITED Applicant

ANDCOMMISSIONER OF INLAND REVENUE

Respondent

CIV-2011-419-1382 [2012] NZHC 374

AND BETWEEN            LEAMINGTON HOSPITALITY LIMITED

Applicant

ANDCOMMISSIONER OF INLAND REVENUE

Respondent

Hearing:         6 March 2012

Appearances: R B Quin for Applicants

A Reimer-Reeder for Respondent

Judgment:      6 March 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Nielsen Law (A C Stutt) P O Box 1108 Hamilton 3240

Email:   [email protected]

Inland Revenue Department, P O Box 432 Hamilton 2001

Email:   [email protected]

Copy for:
Robert B Quin, P O Box 20-109 Hamilton 3241

Email:   [email protected]

Case Officer:

Email:   [email protected]

RIVERSIDE MANAGEMENT LIMITED V COMMISSIONER OF INLAND REVENUE HC HAM CIV-2011-

419-1381 [6 March 2012]

[1]      The  matters  before  the  court  are  two  applications  to  set  aside  statutory demands  issued  by  the  Commissioner  of  Inland  Revenue.     There  are  also applications by the Commissioner for the companies to be put into liquidation, but those matters have been put on hold pending the outcome of the applications under s 290 of the Companies Act.

[2]      Last week I was advised that the parties sought an adjournment, because they wanted to enter into settlement discussions.   While happy to see that the parties wanted to see if they could resolve matters outside of court, I directed this hearing to determine a preliminary issue which had been raised in the notice of opposition by the Commissioner.  That issue is whether the applicants had complied with s 290(2) to file and serve their applications within 10 working days of being served with the statutory demand.

[3]      The statutory demands were served on 6 September 2011.  The last day for the companies to file and serve applications under s 290 was 20 September 2011. An officer of the Inland Revenue Department says that the Commissioner was served with an application and an affidavit on the afternoon of 20 September 2011.   The application was not signed.   It did not give a sufficient address for service.   The person  who  was  responsible  for  instigating  the  application  on  behalf  of  the companies  was  a  Mr  Robin  Murray.   At  the time, Mr Murray was  a  bankrupt although he had earlier been a director of the company.   As a bankrupt he was disqualified from acting as a director of the company.  The application was made in the name of the companies.  It was not apparent that there were any solicitors who were acting on the applications.

[4]      The Commissioner objects on the grounds that Mr Murray is disqualified from being involved in the management of a company because he is a bankrupt, and also on the grounds that there had not been compliance with the rule in G J Mannix

Ltd.[1]   I am informed that applications were presented to the court on 20 September;

the court rejected them; they were re-filed early the next week and they were re- served.   By the time they were re-filed and re-served, Nielsen Law had been appointed to act for the companies, and a proper address for service was given.  I am advised also that the current director of the company has ratified the actions taken by Mr Robin Murray.

[1] G J Mannix Ltd [1984] 1 NZLR 309.

[5]      Insofar as there have been irregularities with compliance with the rules, the standard approach is under r 1.5 of the High Court Rules: a failure to comply with the requirements of the rules must be treated only as an irregularity and not as a nullity.  Insofar as there was an insufficient address for service and documents were not fully signed, I am prepared to regard those simply as irregularities but not as nullifying the applications.

[6]      So far as the rule in G J Mannix is concerned, in practice that rule is treated as having some flexibility.   It is important, particularly when it comes to representation in court and the presentation of argument and evidence, that counsel be appointed. However, in practice, at earlier stages, while the practice is not encouraged, it can happen that a company will appear through its directors.

[7]      In this case the company lodged the documents directly itself, to come within the 10 working days limit under s 290 of the Companies Act. I can take judicial notice that trying to mount an application within that limited time-frame can often be a struggle.  Things may not always be done perfectly within those tight time limits. In my view, the court should not adopt too strict a view when it comes to seeing whether a 10 working day requirement under s 290(2) has been complied with.

[8]      In this case, soon after the documents were filed and served, the company did arrange for legal representation and it did provide a proper address for service, and signed applications were delivered and served.  The director of the company ratified the actions taken to file the documents in court.

[9]      In   all   these   circumstances,   this   is   an   appropriate   case   where   these irregularities should not nullify the applications.   I rule that the applications have been filed and served within time under s 290(2).

...................................................

R M Bell

Associate Judge