COMMISSIONER OF INLAND REVENUE v FS FIBRESOLUTIONS LIMITED [2021] NZHC 2439

COMMISSIONER OF INLAND REVENUE v FS FIBRESOLUTIONS LIMITED [2021] NZHC 2439[16 September 2021]IN THE HIGH COURT OF NEW ZEALANDPALMERSTON NORTH REGISTRYI TE KŌTI MATUA O AOTEAROATE PAPAIOEA ROHECIV-2021-454-27[2021] NZHC 2439UNDER the Companies Act 1993IN THE MATTER of liquidation proceedingsBETWEEN COMMISSIONER OF INLANDREVENUEPlaintiffAND FS FIBRESOLUTIONS LIMITEDDefendantHearing: 16 September 2021Appearances: T Carr for plaintiffL Wong for defendantJudgment: 16 September 2021ORAL JUDGMENT OF ASSOCIATE JUDGE JOHNSTON[1] This is a standard proceeding for the winding up of the defendant company. Itwas commenced some time ago by the Commissioner of Inland Revenue and there hasbeen at least one adjournment in order to facilitate a possible settlement. That has nothappened and it is not obvious to me that there has been any fruitful engagementbetween the parties. In any event, when the matter was last called on 5 August 2021I adjourned it at the behest of the defendant company and made it clear that that wasto be a final adjournment.[2] Today Ms Wong on behalf of the defendant company seeks a furtheradjournment. There is no affidavit evidence supporting any of what follows, but shemanaged to get to the Registry a bundle of documentation and then made submissionsbased on that. Ms Wong said everything that could possibly be said on behalf of thedefendant company and in particular it appears from the documentation that thecompany has secured a business contract to carry out certain work which maypotentially produce revenue of around $70,000. There is no evidence as to the costsstructure from which that revenue will be driven so the Court has no appreciation ofhow much profit might be generated. In addition the company has applied for but notyet secured a loan for $68,000. The principals of the company, through Ms Wong,assure the Court (and the Inland Revenue Department) that whatever profit derivesfrom the contract and whatever money they were able to raise they will apply in areduction of the debt to the Revenue which is a little short of $100,000.[3] Having listened to both Ms Wong and Ms Carr I am not satisfied that propergrounds have been made out for a further adjournment. In particular this is a companywhich on the face of things is continuing to carry on business whilst insolvent or atleast in very strained financial circumstances and what it is effectively proposing isthat it substitute the debt it owes to the Inland Revenue for an alternative debt to athird party lender.[4] In my view the Commissioner is entitled to the order that she seeks.[5] Accordingly, on the application of the Commissioner of Inland Revenue, Imake an order winding up FS Fibresolutions Ltd. The approved liquidators areVivian Judith Fatupaito and Elizabeth Helen Keene. They are appointed in accordancewith the terms of their consent to act 29 June 2021 subject to s 284 of the CompaniesAct 1993. The liquidators will be entitled to exercise their powers individually unders 242 of that Act. The Commissioner will have her costs and disbursements in thetotal sum of $1,173.38, that amount to be paid out of the assets of the defendantcompany.[6] The order is timed at 10.49 am.Associate Judge JohnstonSolicitors:Inland Revenue Legal Services, Wellington for plaintiffNorling Law, Auckland for defendant