THE COMMISSIONER OF INLAND REVENUE V CENTURY CITY MANAGEMENT LIMITED HC WN CIV-2010-485-2098

THE COMMISSIONER OF INLAND REVENUE V CENTURY CITY MANAGEMENT LIMITED HC WN CIV-2010-485-2098 19 April 2011IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYCIV-2010-485-2098IN THE MATTER OF the Companies Act 1993BETWEEN THE COMMISSIONER OF INLANDREVENUEPlaintiffAND CENTURY CITY MANAGEMENTLIMITEDDefendantHearing: 19 April 2011(Heard at Wellington)Counsel: Y. Meng - Solicitor for PlaintiffJ. Toebes - Solicitor for DefendantJudgment: 19 April 2011ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALLSolicitors: Inland Revenue Department, PO Box 1462, WellingtonJ.T. Law, Solicitors, PO Box 25443, Wellington[1] Before the Court is an application by the plaintiff to place the defendant company into liquidation.[2] This is the seventh call of this matter, these proceedings having been filed on 21 October 2010.[3] The debt claimed by the plaintiff from the defendant in its statement of claim totalled $402,969.60. It related to a statutory demand which was served upon the defendant company on 28 September 2010.[4] Over the course of this proceeding as I have noted, there have been some seven adjournments. These adjournments have principally been at the request of the plaintiff and based upon negotiations with the defendant in an endeavour to reach settlement of this matter.[5] As I understand the position, various offers have been made on behalf of the defendant company including the possible provision of security from outside third parties for the debt, together with planned repayment of the debt from possible loans arranged or financing assistance provided from New Zealand and overseas sources.[6] Before me, Mr Meng, counsel for the plaintiff indicated that a part-payment of the debt owing by the defendant of some $182,000.00 is to be paid today, 19 April 2011. He went on to state that the balance of the debt owing to the Commissioner had been offered to be paid over a period of some 6 months from now and that this was acceptable to the Commissioner.[7] On this basis, Mr Meng for the Commissioner as plaintiff sought leave of the Court to withdraw this proceeding.[8] It is important, in my view, that I again record now that on several occasions in the past when this matter was adjourned at the request of the defendant these adjournment requests were acceded to by the Court with some reluctance andspecifically on the basis that "the debts of the company will be cleared in full" by theadjourned date. This was specifically the case in a Minute I issued in this Court on10 March 2011. By this, the debts of this company were to be cleared in full by yesterday, 18 April 2011.[9] Notwithstanding this, today 19 April 2011, this matter having been adjourned for 24 hours when called yesterday, 18 April 2011, the Court is now informed that less than half the outstanding debt owing by the defendant company is to be paid with the balance spread by agreement over a period of 6 months.[10] There is little before the Court to indicate the financial position of the defendant company. Although an affidavit was filed in this and related matters by Mr Eleftarious Serepisos in March of this year, it provided little by way of information concerning the asset and liability position of the present defendant.[11] These must all be matters of concern to the Court here.[12] Today, however, 19 April 2011 counsel did indicate to the Court that this defendant company is simply a management company which has few, if any, employees and no other liabilities. Although, as I understand it, the defendant is continuing to trade, it has been indicated to me that it is able to meet its debts as they fall due.[13] That said, I am of the view that, given the stance which the Commissioner as plaintiff has taken this morning, it is not appropriate today for an order to be made placing this defendant company into liquidation.[14] Notwithstanding this, I do not accept that it is appropriate to grant leave here to the plaintiff Commissioner on his request to withdraw this proceeding.[15] The debt in question to the Commissioner is not inconsiderable and has been outstanding for some considerable time. It is not to be cleared finally until a date some 6 months from now.[16] That said, the Commissioner's request for leave to withdraw this proceedingis refused.[17] The proceeding is to remain on foot.[18] The proceeding is adjourned to a new call in the List on 26 September 2011 at 10.00 am. This is to monitor compliance with the repayment arrangement I understand has been reached for the balance of this debt to be cleared over the next 6 month period.[19] Leave is reserved, however, for either party on 48 hours notice to request that this matter be brought before the Court again if required.'Associate Judge D.I. Gendall'