Decision date: 25 October 2013
Case: Bristol Forestry Venture Ltd and Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue
Act(s): Companies Act 1993, Court of Appeal (Civil) Rules 2005 and Judicature Act 1908, schedule 2, High Court Rules
Keywords: Stay of proceeding, liquidation
The plaintiffs had previously unsuccessfully applied to have the Commissioner of Inland Revenue's ("the Commissioner") statutory demands set aside. This application was to stay the orders of the judgment of Faire AJ, pending the hearing and determination of an appeal. The plaintiff's application was refused.
This judgment sets out the applicable law and the factors to be balanced when considering whether a stay of a proceeding should be ordered.
This judgment also confirms the position that due to the debt being owed and not paid within the ordered time frame of 10 working days by the plaintiffs, the Commissioner is entitled to make an application for the liquidation of the companies.
On 12 September 2013, Faire AJ declined the plaintiffs' application to set aside the statutory demands. Faire AJ ordered that the plaintiffs pay the sums claimed in the respective statutory demands and if they failed to make the required payments within ten (10) working days of the judgment, the Commissioner could make an application to put the companies into liquidation.
The plaintiffs have filed an appeal against the judgment of Faire AJ based on the grounds that one, the tax liability of the plaintiffs has not been finally determined as there is an outstanding application by the plaintiffs to set aside the 2004 Venning J decision Accent Management Ltd v Commissioner of Inland Revenue (2004) 22 NZTC 19,027, and two, that the Commissioner is not a creditor.
The plaintiffs now apply for orders seeking to:
The Court noted that this matter was considered by Bell AJ, who made an order on 31 May 2013 as follows:
Faire AJ held that if the judgment of 12 September 2013 was to be stayed, pending the hearing of the appeal, the order made by Bell AJ would apply and time would be extended by his order without the need for the possible and questionable intervention of rule 1.19(2) of the High Court Rules.
Faire AJ was required to balance the two principles set out in Duncan v Osborne Building Ltd (1992) 6 PRNZ 85 (CA) at , as well as consider the matters set out in Keung v GBR Investment Ltd  NZCA 396,  NZAR 17.
After considering these matters, Faire AJ found as follows:
Faire AJ accordingly held that a stay, pending the appeal, should not be granted. The plaintiffs' application was refused and costs were reserved.