CHARTER HOLDINGS LIMITED v THE COMMISSIONER OF INLAND REVENUE [2015] NZHC 2470 [8 October 2015]

CHARTER HOLDINGS LIMITED v THE COMMISSIONER OF INLAND REVENUE [2015] NZHC 2470 [8 October 2015]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-003013[2015] NZHC 2470BETWEEN CHARTER HOLDINGS LIMITEDApplicantAND THE COMMISSIONER OF INLANDREVENUERespondentHearing: (On the papers)Counsel: John Land and Sam Carey for the ApplicantPauline Courtney and Polly Higbee for the RespondentJudgment: 8 October 2015JUDGMENT OF MOORE J[Interim injunction]This judgment was delivered by me on 8 October 2015 at 3:30pmpursuant to Rule 11.5 of the High Court Rules.Registrar/ Deputy RegistrarDate:[1] On 27 August 2015, I issued a judgment dismissing an application by CharterHoldings Limited ("CHL") for judicial review of the decision of the Commissioner of Inland Revenue (the "Commissioner"), not to reassess her assessments for the 2006 to 2012 tax years. The practical effect of that decision is that CHL is required to pay a significant amount of unpaid tax, interest and penalties. CHL has now appealed that decision to the Court of Appeal.[2] Prior to my decision, the Commissioner had applied to the Court to place CHL in liquidation. Those proceedings had been stayed by consent until the release of my judgment. However, the proceedings have now been recommenced and will be called tomorrow, 9 October 2015.[3] CHL has applied for an interim injunction against the Commissioner to protect its right of appeal to the Court of Appeal against my decision. It says that if it is placed in liquidation its appeal will be rendered nugatory. It also says that there will be no prejudice to the Commissioner if the liquidation is delayed until after the appeal has been heard.[4] Rule 20.10(2)(c) of the High Court Rules gives this Court the power to order any interim relief it considers that course is necessary pending an appeal to the Court of Appeal. This is confirmed by r 12(3)(b) of the Court of Appeal (Civil) Rules 2005.[5] The position in regard to granting interim relief is well known. While parties are generally entitled to the fruits of a judgment, this is not necessarily the case where such a course would render an appeal nugatory.1 In such cases, the Court will balance the position of each party and will grant interim relief if it is in the interests of justice to do so.2[6] I accept the argument for CHL that if it is placed in liquidation its appeal will be rendered nugatory. I also accept that the prejudice to the Commissioner if1 Philip Morris (NZ) Ltd v Liggett & Myers Tobacco Co (NZ) Ltd [1977] 2 NZLR 41 (CA).2 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA); Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd [1999] 3 NZLR 239 (HC).liquidation is delayed will be limited. In these circumstances I consider it is in the interests of justice to grant the application for interim relied.[7] I order that the Commissioner is not to continue the liquidation proceedings until after the Court of Appeal has delivered its decision on the appeal. I direct that the liquidation proceedings are to be stayed until judgment is given by the Court of Appeal. I also grant leave to either party to apply for such further orders as may be necessary to give effect to this judgment.[8] CHL is entitled to costs on this application. I order costs be fixed on a 2B basis.Moore JSolicitors:Mr Land, AucklandCrown Law, Wellington