CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v COMMISSIONER OF INLAND REVENUE [2021] NZSC 133

CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v COMMISSIONER OF INLANDREVENUE [2021] NZSC 133 [8 October 2021]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 12/2021[2021] NZSC 133BETWEEN CHESTERFIELDS PRESCHOOLSLIMITED (IN LIQUIDATION)First ApplicantTHERESE ANNE SISSONSecond ApplicantAND COMMISSIONER OF INLANDREVENUERespondentSC 17/2021BETWEEN THERESE ANNE SISSONApplicantAND CHESTERFIELDS PRESCHOOLSLIMITED (IN LIQUIDATION)RespondentSC 18/2021BETWEEN THERESE ANNE SISSONApplicantAND CHESTERFIELDS PRESCHOOLSLIMITED (IN LIQUIDATION)RespondentCourt: William Young, O'Regan and Ellen France JJCounsel: T A Sisson in personS M Kinsler for Commissioner of Inland RevenueJudgment: 8 October 2021JUDGMENT OF THE COURTA The application for recall of this Court's judgment of12 July 2021 (Chesterfields Preschools Ltd (in liq) vCommissioner of Inland Revenue [2021] NZSC 83) isdismissed.B The applicant must pay costs of $500 to the Commissionerof Inland Revenue.____________________________________________________________________REASONSIntroduction[1] The applicant, Ms Sisson, seeks recall of our judgment of 12 July 2021declining leave to appeal.1 The leave applications related to three Court of Appealjudgments which dismissed a number of appeals against judgments of the High Court.2The primary focus of the applications concerned the liquidation of ChesterfieldsPreschools Ltd (CPL), a company associated with Ms Sisson and her former husband,Mr Hampton.[2] Recall is sought on the basis that the Court has not been directed to legislativeprovisions and authoritative decisions of plain relevance, and on the basis that forsome other very special reason, justice requires that the judgment be recalled.3 Theprovisions relied on are ss 109 and 114 of the Tax Administration Act 1994, and thedecision relied on is this Court's judgment in Tannadyce InvestmentsLtd v Commissioner of Inland Revenue.41 Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2021] NZSC 83[SC leave judgment].2 Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2020] NZCA 686 (Miller,Venning and Katz JJ) [2020 CA liquidation judgment]; Sisson v Chesterfields Preschools Ltd(in liq) [2020] NZCA 687 (Miller, Venning and Katz JJ); and Sisson v Chesterfields PreschoolsLtd (in liq) [2020] NZCA 689 (Miller, Venning and Katz JJ).3 Saxmere Co Ltd v Wool Board Disestablishment Co Ltd (No 2) [2009] NZSC 122, [2010]1 NZLR 76 at [2], citing Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633. Seealso Craig v Williams [2019] NZSC 60 at [10].4 Tannadyce Investments Ltd v Commissioner of Inland Revenue [2011] NZSC 158, [2012]2 NZLR 153. Reference is also made to Chesterfields Preschools Ltd v Commissioner of InlandRevenue (No 4) [2012] NZHC 1525, (2012) 25 NZTC ¶20-132 and decisions associated with thatjudgment, but we do not see those decisions as relevant.Background[3] The background to the current proceedings is procedurally complex.5 It issufficient to say that the argument Ms Sisson wishes to make on appeal is that if CPL'stax debt had been properly calculated, CPL would not be insolvent and so should nothave been put into liquidation. The Court of Appeal rejected this argument about thecalculation,6 referring in that context to earlier judgments of that Court on these issuesin 20107 and in 2017.8 The relevant part of the applicant's claim for present purposesis that, in calculating the amount owing, insufficient account has been taken of whatMs Sisson says have been denials of non-disclosure by the Commissioner of InlandRevenue in relation to the Commissioner's arrangements with the taxpayer and latediscovery in the context of the litigation between the parties.[4] In declining leave, this Court said that questions about disclosure were at theheart of misfeasance proceedings brought by the applicant. The judgment noted:9But the argument that the liquidation order was premature and should haveawaited the outcome of those proceedings faces a number of impedimentssuch that we are satisfied that it has insufficient prospects to warrant leave.This argument was rejected by the Court of Appeal in its 2017 judgment.Leave to appeal on this point was declined. In addition, nothing raised byMs Sisson suggests any apparent error in the 2020 Court of Appeal'sassessment of the legal position. As the Court said, at its best, this is acontingent and unliquidated claim. It is for the liquidator to decide whetherto pursue it. Finally, the misfeasance proceedings are currently stayed and thestay would still need to be lifted by the High Court.The recall application[5] Ms Sisson's argument in respect of the recall application is that this Court'sexpectation that the misfeasance proceedings were capable of providing a full rangeof remedies to her are frustrated by the ouster provisions in ss 109 and 114 of the TaxAdministration Act as construed by the Court in Tannadyce. That is because, she says,the effect of Tannadyce is that the questions as to the import of the issues relating to5 See the description in SC leave judgment, above n 1, at [3]–[7] and [13]–[15].6 2020 CA liquidation judgment, above n 2.7 Commissioner of Inland Revenue v Chesterfields Preschools Ltd (No 2) [2010] NZCA 400, (2010)24 NZTC 24,500.8 Sisson v Commissioner of Inland Revenue [2017] NZCA 326, (2017) 28 NZTC ¶23-023 [2017 CAjudgment].9 SC leave judgment, above n 1, at [24] (footnotes omitted).disclosure could only be heard and resolved by the Taxation Review Authority (or theHigh Court if elected) in the context of earlier tax challenge proceedings brought bythe applicant.10 In other words, the tax challenge proceedings provide the appropriateforum for the outstanding issues to be resolved and the failure to recognise that mayhave given rise to a miscarriage of justice.[6] Ms Sisson also says that this Court and the other Courts which have heard theseand related proceedings have been misled by the Commissioner's denials ofnon-disclosure and late discovery. The argument is that, if proven, this would providea basis for challenging aspects of both the Court of Appeal's 2010 judgment and thelater 2017 judgment.11 This, she says, constitutes a very special reason where justicerequires the judgment be recalled.[7] We do not see these matters as providing a basis for recall of the Court's earlierjudgment. The Court of Appeal in the 2017 judgment said that the "issues that wereultimately addressed and resolved" by that Court "may not be revisited again in theso-called TRA proceeding or the NOPA proceeding".12 That was because "[t]hoseproceedings do not live on in isolation from the previous conclusions reached by thisCourt".13 Ms Sisson seeks to downplay that conclusion, but she needed to challengethe res judicata finding in that context. Her attempt to do so was not successful.14That is the end of the matter. Further, whatever the merits of the argument Ms Sissonnow wishes to make based on the approach in Tannadyce or based on denials ofnon-disclosure and late discovery, those arguments could and should have been madewell before now. The claims about the Commissioner's approach to disclosure anddiscovery are by no means recent ones. It is simply too late now to seek to recast thearguments about the effect of those matters.10 This is a reference to a proceeding brought in 2005 (and amended in 2007) in the Taxation ReviewAuthority (the TRA proceeding) and a proceeding brought in 2009 to enforce a Notice of ProposedAdjustment lodged in 2007 (the NOPA proceeding).11 The end result would be to show there was a genuine and substantial dispute as to the existence ofthe debt, such that it was premature to make a liquidation order. The applicant relies in this respecton s 290(4) of the Companies Act 1993 and Yan v Mainzeal Property and Construction Ltd (in recand in liq) [2014] NZCA 190.12 2017 CA judgment, above n 8, at [102].13 At [102].14 Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2017] NZSC 168,(2017) 28 NZTC ¶23-038.Result[8] The application for recall of this Court's judgment of 12 July 2021(Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2021]NZSC 83) is dismissed.[9] The applicant must pay costs of $500 to the Commissioner of Inland Revenue.Solicitors:Lane Neave, Christchurch for Chesterfields Preschools Ltd (in liq)Crown Law Office, Wellington for Commissioner of Inland Revenue and Official Assignee