CHESTERFIELDS PRESCHOOLS LIMITED AND ORS V THE COMMISSIONER OF INLAND REVENUE HC CHCH CIV 2008-409-000722

CHESTERFIELDS PRESCHOOLS LIMITED AND ORS V THE COMMISSIONER OF INLAND REVENUE HC CHCH CIV 2008-409-000722

The Court exercised its discretion to permit a limited $75,000 first mortgage over 67 Augusta Street because the advance was small relative to the total assets, the stated purposes (including living and educational expenses) were legitimate, the IRD had not yet obtained judgment and its opposition lacked sufficient merit to deny interim finance; the order was granted subject to a two working week stay to permit appeal.

Citation
openlaw-37507b87_13f8_4697_b0a1_dc447034f17d.pdf
Parties
First Plaintiff: Chesterfields Preschools Limited; Second Plaintiff: David John Hampton; Third Plaintiff: Chesterfields Partnership; Fourth Plaintiff: Chesterfields Preschools Partnership; Fifth Plaintiff: Anolbe Enterprises Limited; First Defendant: The Commissioner of Inland Revenue
Court
High Court
Jurisdiction
New Zealand
Judgment Date
16 March 2010
Procedural Posture
Civil (tax/creditor Dispute; Application for Consent to Charge Property Pending Resolution) / Interim Application for Consent to Raise Finance / Charging Order Pending Final Determination
Outcome
Application granted with stay of two working weeks; costs reserved
Legal Topics
Charging Order, Mareva Injunctions, Interim Finance, Stay Pending Appeal, Court Discretion to Permit Depletion of Assets
Civil Procedure Equity Property Law Tax Law Insolvency Charging Order Mareva Injunctions Interim Finance +2 more

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Parties

Chesterfields Preschools Limited

First Plaintiff

David John Hampton

Second Plaintiff

Chesterfields Partnership

Third Plaintiff

Chesterfields Preschools Partnership

Fourth Plaintiff

Anolbe Enterprises Limited

Fifth Plaintiff

The Commissioner of Inland Revenue

First Defendant

Procedural Posture

Civil (tax/creditor Dispute; Application for Consent to Charge Property Pending Resolution) / Interim Application for Consent to Raise Finance / Charging Order Pending Final Determination

Legal Issues

  1. 1 Whether the Court should grant consent to charge 67 Augusta Street with a first mortgage to secure a $75,000 loan pending resolution of proceedings
  2. 2 Whether the plaintiffs are insolvent and whether further charges would improperly deplete assets available to creditors (in particular the IRD)
  3. 3 Whether funds may be used to pay living and educational expenses of a litigant pending appeal

Ratio Decidendi

The Court exercised its discretion to permit a limited $75,000 first mortgage over 67 Augusta Street because the advance was small relative to the total assets, the stated purposes (including living and educational expenses) were legitimate, the IRD had not yet obtained judgment and its opposition lacked sufficient merit to deny interim finance; the order was granted subject to a two working week stay to permit appeal.

Court Disposition

Application granted with stay of two working weeks; costs reserved

Orders

  • Approval granted to charge property at 67 Augusta Street with a first mortgage to secure a loan of $75,000 from Papprill Hadfield and Aldous Solicitors Nominee Company Limited
  • Loan terms: two years, interest 10% per annum, capitalised interest retained for repayment during term; proceeds to repay Goldband advance and provide approximately $38,000 to plaintiffs for specified purposes