THE COMMISSIONER OF INLAND REVENUE V FANTAIL MANAGEMENT LIMITED HC AK CIV-2012-404-939

THE COMMISSIONER OF INLAND REVENUE V FANTAIL MANAGEMENT LIMITED HC AK CIV-2012- 404-939 [9 July 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-939[2012] NZHC 1611UNDER the Companies Act 1993BETWEEN THE COMMISSIONER OF INLANDREVENUEPlaintiffAND FANTAIL MANAGEMENT LIMITEDDefendantHearing: 9 July 2012Counsel: FF Nizam for plaintiffJD Turner for defendantJudgment: 9 July 2012(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE[on application for stay]Solicitors: Meredith Connell, PO Box 2213, Auckland 1140McVeagh Fleming, PO Box 300 844, Albany 0752[1] On 18 June 2012 I issued a judgment in which I granted an adjournment of an application to appoint a liquidator on conditions as follows:[14] Accordingly I order:(a) This proceeding is adjourned for a 30 minute hearing before me at 9am on 9 July 2012;(b) It is a condition of the adjournment that:(i) the defendant pay the sum of $56,647.77 into the trust account of McVeagh Fleming Lawyers and give notice to the plaintiff of such payment by 2 July 2012. Such sum shall be held by the lawyers pending further order of this Court or the consent of the parties; and(ii) reply to the notice issued by the plaintiff seeking further information to enable consideration of the position under s 113 of the Tax Administration Act 1994 by 2 July 2012. In respect of this last condition, the Court expects substantial compliance. It is understood there may be a need to obtain access to documents not actually held by the defendant, which would take additional time. Nevertheless, the Court expects substantial compliance. Any additional information to be provided will be considered at the hearing on 9 July 2012;[2] Counsel has confirmed that the sum of $56,647.77 is held in the trust account of McVeagh Fleming, lawyers, thus satisfying the first condition set out in my judgment of 18 June 2012.[3] Information has been supplied by the defendant to the plaintiff, unfortunately only latterly, but in substantial compliance with the second condition referred to in paragraph 14 of my judgment.[4] Counsel for the plaintiff could not give me a finite time within which thedefendant's request for consideration under s 113 of the Tax Administration Act 1994 might be completed by the Commissioner and a decision on it issued. However, it is thought that a better knowledge of the position would be known within a month. I bear that in mind in the orders that I make.[5] In my judgment of 18 June 2012 I referred to the specific considerations which the court must take into account in considering an application to appoint a liquidator. Those considerations also bear on the court's discretion to stay aproceeding. I take them into account in the orders I now make.[6] A stay is justified to enable s 113 of the Tax Administration Act 1994 to be considered at this time. Whether it is appropriate to extend the stay or to take some other step in the proceeding can only be determined when counsel report on the up- to-date position in respect of the application under s 113 of the Tax Administration Act 1994.Orders[7] I order:(a) This proceeding is stayed until 15 August 2012;(b) The proceeding shall be called at 9am in open Court on 15 August 2012 for the purpose of reviewing the position in relation to the application under s 113 of the Tax Administration Act 1994.(c) The plaintiff shall notify the defendant's counsel by 5pm on 13 August 2012 of the current position in relation to the s 113 Tax Administration Act 1994 case.[8] Costs in relation to this application are reserved._____________________JA FaireAssociate Judge