COMMISSIONER OF INLAND REVENUE V CHURTON FARMS LIMITED HC WANG CIV-2006-483-227

COMMISSIONER OF INLAND REVENUE V CHURTON FARMS LIMITED HC WANG CIV-2006-483-227 27 October 2006IN THE HIGH COURT OF NEW ZEALAND WANGANUI REGISTRY CIV-2006-483-227BETWEEN COMMISSIONER OF INLAND REVENUE Plaintiff AND CHURTON FARMS LIMITED Defendant Hearing: 27 October 2006 Appearances: R.E. Holloway and K. Doherty for Plaintiff G.A. Paine for Defendant Judgment: 27 October 2006ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL Introduction[1] Before the Court are proceedings by the plaintiff to place the defendant company into liquidation. [2] A statutory demand under s289 Companies Act 1993 was served upon the defendant on 24 May 2006 claiming $25,414.12, being an amount said to be due from the defendant company for goods and services tax, income tax and PAYE tax deductions. [3] Subsequently, on 25 July 2006 the plaintiff issued a Statement of Claim to put the defendant company into liquidation. [4] This Statement of Claim and related documents were served upon the defendant company on 25 July 2006.[5] Subsequently, advertising of this liquidation proceeding took place in the Wanganui Chronicle on 14 of August 2006 and in the New Zealand Gazette on 17 August 2006. [6] The matter was then called in this Court before His Honour Justice Miller on 29 August 2006. At that hearing Ms Doherty appeared for the plaintiff and Mr D.W. Churton endeavoured to appear on behalf of the defendant company. [7] In the meantime, on 15 August 2006 the defendant had filed a "Statement of Defence and counterclaim" disputing that the amount claimed by the plaintiff was due, and contending that the plaintiff owed the defendant amounts for GST refunds totalling $7,325.24, $37,147.90 and $6,384.00. [8] Shortly prior to the call of this matter on 29 August 2006, the defendant advised that its counterclaim against the plaintiff for these GST refund amounts was withdrawn. [9] When the matter was called before His Honour Justice Miller on 29 August 2006, he made directions in a Minute which included:Matter adjourned to 27 October 2006 – half day required And Mr Churton advised that he will not be permitted to represent the companies, they may only appear by counsel.[10] This matter was called before me today, 27 October 2006. [11] Mr Paine indicated that he had received instructions from the defendant company, but that these instructions were rather limited. Mr Paine advised that the instructions had been received either only late yesterday or early this morning, and that his instructions were simply to seek an adjournment of this matter today. [12] When I indicated that the defendant's request for an adjournment of the proceeding today was declined, Mr Paine made application to this Court to withdraw as counsel for the defendant company. I declined that application.[13] The defended application for liquidation of the defendant company then proceeded before me. [14] The plaintiff provided an appropriate solicitor's certificate confirming that the amount outstanding by the defendant to the plaintiff today, which remains unpaid, totals $27,739.85. [15] This amount, in essence, represents GST assessments dating back to 31 March 2004 which total $11,377.45, penalties on those assessments of $3,675.44, and interest of $3,448.39. The amount also includes $100.00 for income tax late payment penalties and assessments of PAYE tax deductions totalling $3,462.10, together with PAYE tax penalties of $4,287.73, and interest of $1,641.24. From all of these amounts, the sum of $252.50 was apparently paid by the defendant on or about 31 January 2004. [16] As I have noted above, on 15 August 2006 the defendant company filed a formal Statement of Defence to the plaintiff's claim. The majority of this document related to the counterclaim which was withdrawn on 29 August 2006. In addition, however, the defendant appears in its Statement of Defence to object to the amount claimed by the plaintiff, although no evidence had been placed before the Court indicating on what basis the amounts assessed and penalties may not be due. [17] What is clear to the Court is that when the statutory demand was served upon the defendant some five months ago on 24 May 2006, no application to set aside the statutory demand on the basis that the debt was not due was made by the defendant. [18] Further, there is no evidence placed before the Court by the defendant as to its financial position or as to its solvency. [19] Before me today, Mr Paine in response to submissions from the plaintiff reiterated that his instructions, received on this morning, were limited, and he reinforced his submission that he had sought leave to withdraw as counsel for the defendant, which I refused.[20] Mr Paine did go on to submit, however, that from the defendant's perspective, it should have an opportunity to put its defence before the Court before any final order is made. [21] This point is appropriately made, but notwithstanding this, in my view the defendant company has had every opportunity since the statutory demand was served upon it some five months ago to take appropriate steps to properly dispute the debt due. [22] I repeat that since the clear Minute of His Honour Justice Miller made in this Court on 29 August 2006, it must have been abundantly clear to the defendant that this matter was to proceed today, 27 October 2006, and that details of its defence would be required to be put before the Court. Indeed, it is significant in my view that on 29 August 2006 the defendant formally withdrew its counterclaim against the plaintiff which it had included earlier in its Statement of Defence. [23] For all these reasons, I am satisfied that the defendant has no defence to the claim made here by the plaintiff. [24] An order placing the defendant company into liquidation is clearly appropriate. [25] An order is now made placing the defendant company Churton Farms Limited into liquidation. [26] Bruce McCallum and David Stuart Vance are appointed liquidators. [27] Costs are awarded to the plaintiff on a category 2B basis, together with disbursements as fixed by the Registrar. As to costs, I certify for only one counsel for the appearance today. [28] This order is timed at 11.30am. __________________________Associate Judge D.I. Gendall