REDCLIFFE FORESTRY VENTURE LIMITED v THE COMMISSIONER OF INLAND REVENUE [2013] NZHC 2818

REDCLIFFE FORESTRY VENTURE LIMITED v THE COMMISSIONER OF INLAND REVENUE [2013] NZHC 2818 [25 October 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2013-404-3068[2013] NZHC 2818UNDER the Companies Act 1993IN THE MATTER of an application under section 290 to setaside statutory demandBETWEEN REDCLIFFE FORESTRY VENTURELIMITEDPlaintiffAND THE COMMISSIONER OF INLANDREVENUEDefendantHearing: 7, 11 and 24 October 2013Counsel: MS Hinde for plaintiffsRL Roff and SJ Leslie for defendantJudgment: 25 October 2013JUDGMENT OF ASSOCIATE JUDGE FAIRE[on application to set aside statutory demand]This judgment was delivered by me on 25 October 2013 at 2:30pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Stainton Chellew, AucklandCrown Law, WellingtonThe application[1] The plaintiff applies for various orders relating to a statutory demand which was served on it. The statutory demand seeks payment of $819,268.18. That is described as:Being the amount which you are indebted to the Commissioner in respect of amounts owing under Revenue Acts for 1998 tax year as set out in the attached statement of account.[2] The significant parts of the amount claimed are a tax shortfall penalty of $391,746.78 and interest of $427,519.63.[3] The application seeks orders:(a) Declaring that the document purported to be a statutory demand is not a statutory demand; alternatively(b) Setting aside the statutory demand;(c) Extending the date for compliance with the demand pending such orders being made;and for orders for costs.The grounds advanced in support[4] The plaintiff pleads that:(a) there is a substantial dispute whether or not the debts are owing or are due and rely on s 290(4)(a) of the Companies Act 1993;(b) the demands ought to be set aside on other grounds, because in the circumstances of the case, the serving of statutory demands is an abuse of process. This ground relies upon s 290(4)(c) of the Companies Act 1993; and(c) the demands do not fall within the definition of a statutory demand, contained in s 289 of the Companies Act 1993 and are therefore not statutory demands.[5] Ms Hinde, for the plaintiff, was invited to articulate how the third matterpleaded advanced the plaintiff's case beyond the principal ground relied upon and based on s 290(4)(a) of the Companies Act 1993. In addition, she was invited to provide the court with any authority for the court to give a declaration, having regard to the limited matters that are referred to in s 290(4).[6] She advised the court that, for similar reasons to those that were advanced inBristol Forestry Venture Ltd v Commissioner of Inland Revenue, the real issue involved in this case were the first two matters pleaded.1 The third matter pleaded was advanced to emphasise the plaintiff's proposition that any debt owed to theCommissioner was not yet due and therefore a demand for it did not satisfy the requirements of s 289. When it is looked at in that light, the third matter advanced does not add to the matters that require determination on this application.Origin of the debts[7] Save for one matter, the background to this matter is similar to that which I recorded in my judgment delivered on 12 September 2013.2 Redcliffe Forestry Venture Ltd claimed tax deductions in connection with a forestry investment in the 1998 tax year. It was, at the relevant time, a loss attributing qualifying company(LAQC). The result of the plaintiff's claimed tax deductions was that they were attributed to the plaintiff's shareholders. The plaintiff's shareholders were Mr GarryAlbert Muir, Mr Peter Arnold Maude and Mrs Deborah Jane Muir (now Taylor).[8] The Commissioner reassessed the shareholders and imposed tax on them and imposed penalties, as well as on the plaintiff company in respect of the 1998 tax year. Deborah Jane Muir has paid all tax liability owed to the defendant arising from her shareholding in the plaintiff and relating to the 1998 income tax year. The penalty tax for which Peter Arnold Maude was assessed for the 1998 income tax year has been challenged. Those challenges were stayed and have not yet been determined by a hearing authority. In the case of Garry Albert Muir, the penalty tax for which he was assessed, and arising from his shareholding in the plaintiff and relating to the 1998 income tax year, was challenged. That challenge was struck out1 Bristol Forestry Venture Ltd v Commissioner of Inland Revenue [2013] NZHC 2384.2 Ibid.by the hearing authority.3 That decision has been appealed and is currently pending in the High Court.[9] Ms Hinde, in her submissions, advised that the distinction between this case and the matter that I analysed in Bristol Forestry Venture Ltd relates to the challenges by the shareholders. That matter will be the subject of comment later in this judgment.[10] The Supreme Court found the plaintiff liable for penalties, by the operation ofthe definitions of "shortfall" and "tax position".4 The former definition includes the shortfall where a tax position results in too little tax paid, or payable by the taxpayer"or another person", or overstates a tax benefit, credit or advantage of any type or description whatever by or benefiting the taxpayer "or another person".[11] There is a potential for double penalties being imposed. I referred to that in [7] in my judgment as follows:5As "another person", being a shareholder, paid too little tax and benefittedby the tax position taken by the plaintiff companies, the plaintiff companies, as well as the shareholders were held to be liable for the penalties, notwithstanding the fact that this results in the doubling up of the penalties. The Supreme Court described the mechanism to deal with relief from double penalties.6 The penalties on the shareholders must be reduced where the plaintiff companies (the LAQCs) pay in full the amount of the shortfall penalty and the shareholders request application of the relevant section.[12] This plaintiff was part of a challenge to the defendant's assessment under Part8A of the Tax Administration Act 1994 which was heard before Venning J as a hearing authority. He dismissed the challenge. His judgment went on appeal to the Court of Appeal7 and then to the Supreme Court.8 The appeal courts upheld the decision dismissing the challenges.3 TRA No 042/03 [2011] NZTRA 2, TRA No 42/03 (No 2) [2011] NZTRA 64 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue [2008] NZSC 115, [2009] NZLR 289 at [210]–[215].5 Bristol Forestry Venture Ltd v Commissioner of Inland Revenue, above n 1.6 Ibid, at [215].7 Accent Management Ltd v Commissioner of Revenue [2007] NZCA 230, (2007) 23 NZTC 21,323.8 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, above n 4.The statutory basis for the application[13] The first ground relies on s 290(4)(a) of the Companies Act 1993. The relevant parts of s 290(4)(a) provide:290 Court may set aside statutory demand(4) The Court may grant an application to set aside a statutory demand if it is satisfied that—(a) There is a substantial dispute whether or not the debt is owing or is due; orThe court's approach to an application to set aside a statutory demand based onthe Companies Act 1993, s 290(4)(a)[14] The approach that the court adopts to an application that relies on the Companies Act 1993, s 290(4)(a) can be shortly stated. The court is required to determine whether there is a substantial dispute whether or not the debt is owing or is due. The applicant must show a fairly arguable basis upon which it is not liable for the amount claimed: Forge Holdings Ltd v Kearney Finance (NZ) Ltd9 andQueen City Residential Ltd v Patterson Co-Partners Architects.10 That formulation was approved in United Homes (1988) Ltd v Workman.11 Once that position is reached the statutory demand should be set aside and the dispute is then disposed of, if necessary, by other proceedings in the ordinary way.[15] The second ground relies on s 290(4)(c) of the Companies Act 1993. Section 290(4)(c) provides:290 Court may set aside statutory demand(4) The Court may grant an application to set aside a statutory demand if it is satisfied that—(c) The demand ought to be set aside on other grounds.9 Forge Holdings Ltd v Kearney Finance (NZ) Ltd HC Christchurch M149/95, 20 June 1995 at 2.10 Queen City Residential Limited v Patterson Co-Partners Architects Ltd [1995] 3 NZLR 307 (HC).11 United Homes (1988) Ltd v Workman [2001] 3 NZLR 447 (CA) at 451-452.The court's approach to an application to set aside a statutory demand based onthe Companies Act 1993, s 290(4)(c)[16] Before analysing the facts of this case it is appropriate that I refer to the examination of this question by the Court of Appeal in Commissioner of Inland Revenue v Chester Trustee Services Ltd:12That said, I agree with Baragwanath J that the general policy of the Act that insolvent companies should be put into liquidation, if a creditor seeks such an order, should not be departed from lightly. To justify such departure there must be some other factor, be it policy, principle or simply the justice of the particular case, which outweighs the prima facie entitlement of the creditor to an order putting the insolvent company into liquidation. If the focus is on the justice of the particular case the discretion must always be exercised on a principled basis and not on some ad hoc perception of what individual justice might require. All cases involving s 290(4)(c) must in the end comedown to a judgment by the Court as to whether the creditor's prima facieentitlement is outweighed by some factor or factors making it plainly unjust for liquidation to ensue.[17] The Court of Appeal has given guidance in those situations where the company relies on an alleged ground of its solvency as a stand-alone ground for setting aside a statutory demand under the Companies Act 1993, s 290(4)(c). InAMC Construction Ltd v Frews Contracting Ltd the Court of Appeal said:13If there is no dispute as to the company's liability, so that para (a) or (b) [of s 290(4)] cannot be invoked, it is difficult to imagine circumstances in which the company should be able to avoid paying a debt, merely by proving that it is able to pay that debt. If the debt is indisputably owing, then it should be paid. If the company simply refuses to pay, without good reason, it should not be able to avoid the statutory demand process by proving, at the statutory demand stage, that it is solvent. The demand should be allowed to proceed. If it is not met, and an application for liquidation is filed, in reliance on the presumption in s 287(a) that the company is unable to pay its debts, then the company will have an opportunity on the liquidation application to rebut thestatutory presumption, which applies "unless the contrary is proved". Theremight be circumstances in which it is appropriate to advance the inquiry as to solvency to the s 290 stage, but that would require some particular circumstance not present in this case.The opposition[18] The Commissioner of Inland Revenue opposes the application on the following grounds:12 Commissioner of Inland Revenue v Chester Trustee Services Ltd [2003] 1 NZLR (CA) 395 at [3].13 AMC Construction Ltd v Frews Contracting Ltd [2008] NZCA 389, (2008) 19 PRNZ 13 at [7].(a) There is no substantial or genuine dispute as to whether or not the debt is due or owing because:(i) The debt results from the assessment of a shortfall penalty. A shortfall penalty is a disputable decision. A disputable decision cannot be challenged in a court and is deemed to be, and is to be taken as being, correct in all respects except in challenge proceedings under Part 8 or Part 8A of the Tax Administration Act 1994; and(ii) The shortfall penalty has been disputed in challenge proceedings and was upheld by the Supreme Court in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue;14 and(iii) The plaintiff is attempting to collaterally attach the Supreme Court's judgment. If there is no legitimate legal basis it is not therefore reasonably arguable;(b) It is not appropriate that the court exercise its discretion on other grounds pursuant to s 290(4)(c) of the Companies Act 1993 as there is no abuse of process in this case.[19] As was the case in the Bristol Forestry Venture Ltd decision, the Commissioner invited the court to exercise its powers under s 291 of the Companies Act 1993 to dismiss the application and forthwith make an order under s 241(4) of the Companies Act 1993 putting the plaintiff company into liquidation on the grounds that it is unable to pay its debts. For completeness I set out the options available to the court should the application to set aside the statutory demand be dismissed. Section 291 of the Companies Act 1993 provides:14 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, above n 4.291 Additional powers of Court on application to set aside statutory demand(1) If, on the hearing of an application under section 290 of this Act, the Court is satisfied that there is a debt due by the company to the creditor that is not the subject of a substantial dispute, or is not subject to a counterclaim, set-off, or cross-demand, the Court may—(a) Order the company to pay the debt within a specified period and that, in default of payment, the creditor may make an application to put the company into liquidation; or(b) Dismiss the application and forthwith make an order under section 241(4) of this Act putting the company into liquidation,—on the ground that the company is unable to pay its debts.(2) For the purposes of the hearing of an application to put the company into liquidation pursuant to an order made under subsection (1)(a) of this section, the company is presumed to be unable to pay its debts if it failed to pay the debt within the specified period.[20] I will discuss later in this judgment the court's approach to the two possibleconclusions to an examination of an application under s 290 of the Companies Act 1993.[21] In the Bristol Forestry Ventures case I adopted a summary of various proceedings taken by parties involved in the Trinity tax cases. For the purposes of this judgment, it is sufficient that I refer to the summary set out in [17] and [18] of that judgment which was as follows:In the recent judgment of the Supreme Court in Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd:15[2] On 19 December 2008 this Court delivered judgment in an appeal by nine investors and loss-attributing qualifying companies (the Trinity investors), who had claimed tax deductions as a result of their participation in a forestry development project known as the Trinity scheme. TheCourt's judgment, in favour of the Commissioner of InlandRevenue, concluded that the Trinity scheme was a tax avoidance arrangement. Assessments by the Commissioner, disallowing the claimed deductions and imposing penalties on the investors for taking an abusive tax position, were upheld by this Court. Earlier High Court and Court of15 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at 812.Appeal judgments had reached the same conclusions (but taking different views on the analysis of the scheme under specific tax provisions).[3] Four days after this Court's judgment, Accent ManagementLtd and six other Trinity investors (including Redcliffe Forestry Investment Ltd) brought a representative proceeding seeking judicial review of the assessments upheld by the Supreme Court. An application by the Commissioner to the High Court to strike out this proceeding was granted by Keane J on 12 March 2010. An appeal against that judgment was later abandoned. Other challenges to the tax treatment of the Trinity scheme have also been brought since this Court's judgment, but it is onlynecessary for our purposes to refer to the proceeding next mentioned, which is the subject of the present appeal.[4} On 15 September 2009, Redcliffe and six other Trinity investors, along with Dr Muir, a director of Redcliffe who had devised and set up the Trinity scheme, brought a new proceeding against the Commissioner. These plaintiffs, towhom we refer as "Redcliffe", sought orders setting asidethe judgment of the High Court, delivered by Venning J in 2004, in the Trinity scheme litigation on the ground that the Commissioner had obtained that judgment by knowinglypresenting a "false case" in the High Court. Redcliffepleaded that the Commissioner had deliberately refrained from putting material facts and law, applicable to the treatment of the scheme by the Inland Revenue Department, before the High Court, so as to secure a judgment that departmental officers knew would not have been available if there had been full and frank disclosure of the legal position.Redcliffe's specific contention is that the Commissionerknowingly and wrongly applied a depreciation allowance to expenditure incurred by the Trinity investors under subpart EG of the Income Tax Act 2004 when subpart EH8(l) required that the expenditure be calculated under its provisions.[5] Redcliffe accepts that, in general, following completion of available appeals the decision of a court is final and a trial court is functus officio. Relying, however, on the exception to that principle which allows such a judgment to be attacked on the ground of fraud, Redcliffe contends that the Commissioner is not able to rely on the finality of theSupreme Court's judgment concerning the tax treatment of the Trinity scheme. (Citations omitted)[18] The Supreme Court concluded:[45] In this appeal Redcliffe's error in commencing a freshproceeding in the High Court on the correctness of the legal conclusions of the Supreme Court is one that goes to the High Court's jurisdiction because what Redcliffe allegesdoes not constitute a case capable of leading the High Courtto set aside the 2004 judgment. The High Court accordinglylacks jurisdiction to determine whether the Supreme Court'slegal conclusions in Ben Nevis were wrong and for thisreason Redcliffe's proceeding must be dismissed[22] To that summary I set out the Supreme Court's analysis of Redcliffe'sposition:16[216] Ms Hinde argued that Redcliffe Forestry Venture Ltd, a syndicate member, had taken a correct tax position in its return so that there was no tax shortfall in its case that could result in penalties. Counselemphasised that Redcliffe ultimately made a "nil" return of taxableincome or net loss. She said the return correctly recorded what had been calculated and attributed in respect of its investment, the relevant sums being passed through to shareholders.[217] In its return for the 1998 year Redcliffe recorded that it had incurred a gross loss of $1,208,382, largely being due to its share of the amortised licence premium of $41,000 per plantable hectare. The return showed that Redcliffe was an LAQC and that it had allocated the sum of $1,208,382 to its shareholders with the result that it had no income (or loss). The three shareholders in Redcliffe, who included Dr Muir, returned attributed losses in proportion to their shareholdings.[218] The definition of "tax position" is very broad. It covers any positionor approach with regard to tax under any laws. These include"without limitation" any position or approach with regard to theincurring of a loss, the allowing of a deduction of an amount of loss or the availability of losses or the offsetting or use of net losses. What Redcliffe did in its return in our view is caught by these provisions. Redcliffe recorded its share of the loss under the Trinity scheme and claimed status as an LAQC to facilitate the attribution of the losses to its shareholders and the proportionate claims made by Dr Muir and others. In doing so Redcliffe took an incorrect tax position in relation to itself, giving rise to a tax effect different from the correct tax position for the period. It is not in point that its own ultimate position did not claim a loss. Viewed as a whole, which is what the Act requires, Redcliffe's return involved taking a taxposition in relation to the Trinity scheme which resulted in too littletax being paid by Redcliffe's shareholders. That was a tax shortfallwhich resulted in Redcliffe being correctly held liable to a shortfall penalty.Outcome[219] In the light of our conclusions, the appeals must be dismissed.16 Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, above n 4 at [216]–[219].The plaintiff's submissions[23] Ms Hinde submitted that the Commissioner's claim was a claim for acontingent or prospective composite sum, which was yet to be determined as to the amount due. She submitted that the amount could not be ascertained until the taxobligations of the plaintiff's three shareholders for the 1998 income tax year hadbeen finally determined. That, she submitted, would not be known until the challenges made by the shareholders had been determined in each case. As mentioned, one is currently stayed; another was struck out and is subject to an appeal; the third has been settled with the Commissioner.[24] Ms Hinde emphasised that the plaintiff no longer disputed its liability to pay a tax shortfall penalty. She advised that the plaintiff accepted that liability for the tax shortfall penalty had been determined finally with the Supreme Court decision. However, she submitted that the amount to be paid required a calculation. She submitted that until that calculation could be carried out, the amount of the tax shortfall penalty could not be formally ascertained and quantified. That is why, she submitted, that the debt was at best a contingent or prospective one.[25] Ms Hinde referred to the definition of "tax shortfall" contained in s 3(1) of the Tax Administration Act 1994 as amended by the Taxation (Remedial Provisions) Act 1997, s 68. Section 3(1) provides:3 Interpretation(1) In this Act, unless the context otherwise requires,—tax shortfall, for a return period, means the difference between the tax effect of—(b) A taxpayer's tax position for the return period; and(c) The correct tax position for that period,—when the taxpayer's tax position results in too little tax paid or payable by the taxpayer or another person or overstates a tax benefit, credit, or advantage of any type or description whatever by or benefiting (as the case may be) the taxpayer or another person:[26] She drew attention to the fact that s 141(3) of the Tax Administration Act 1994 requires a separate tax shortfall calculation for each return period. The section goes on to determine how the tax shortfall for a tax type is calculated. She submitted, therefore, that a calculation of the shortfall penalty cannot be completeduntil the outcome of the shareholder challenges is known, because the "tax effect" element of the calculation cannot be finally calculated until the defined "tax shortfall" is finally determined under that challenge process.[27] Ms Roff submitted that the Supreme Court decision in fact determined the question. That was made clear by the paragraph in the Supreme Court analysis that I have referred to in [21] of this judgment. It follows from that position that the firststage in the challenge process was a consideration of the Commissioner's assessmentby the hearing authority, in this case Venning J in Accent Management Ltd v Commissioner of Inland Revenue.17 That being the case, the calculation has alreadybeen undertaken and approved by the court's decisions taken in their capacity as hearing authority in the first instance, and appeals from the hearing authority. That, by itself, is sufficient to answer the plaintiff's contention in this case.[28] Following the hearing, and before the issue of my judgment, counsel for the plaintiff filed a memorandum on 9 October 2013. The memorandum provided as follows:1. Late on Monday afternoon your Honour raised the factual issue as tothe scope of the Plaintiff's challenge proceedings, and the outcomesin the hearing authority, and under the appeals to the Court of Appeal and the Supreme Court.2. The issue was whether the calculation of the shortfall penalty had been challenged. I was unable to assist the Court. I have now obtained instructions which explain the apparent gap.3. THE CIR assessed Redcliffe for a shortfall penalty.4. In the hearing authority Venning J was not asked to consider the impact on quantification of the Redcliffe shareholders who had not been assessed for tax shortfalls.5. In the Supreme Court Mr Harley, for some other appellants, raised the point that an LAQC could not be assessed for a shortfall penalty17 Accent Management Ltd v Commissioner of Inland Revenue (2004) 22 NZTC 19,027.if its shareholders had not been penalized. At Tab 3 of the CIR's Bundle of Authorities (in Accent/Lexington), paragraph [214], the Supreme Court accepted that proposition, but found that an LAQC would be liable to pay a penalty in relation to the shareholders tax shortfall once established.6. That ruling of the Supreme Court at paragraph [214] it is submitted impliedly over-ruled any finding by Venning J in the hearing authority in relation to Redcliffe.7. Consequently the CIR's challenged assessment of Redcliffe for the shortfall penalty was also replaced by that Supreme Court ruling.[29] On receipt, I called a conference of counsel which was held on 11 October 2013. As a result I issued a minute, the significant parts of which are paragraphs [2] and [3] as follows:[2] A point has been raised as to precisely what the final decision is in relation to the tax challenges taken by the plaintiff company as an LAQC. I was directed specifically to consider paragraph 214 of theBen Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue[2008] NZSC 115, [2009] 2 NZLR 289 (SC).[3] What I need so that I can track through precisely what the decisions are, are the following documents:(a) The Commissioner's assessment for the plaintiff for the1998 tax year with particular reference to the tax shortfall penalty;(b) The sealed order following Venning J's judgment in Accent Management Ltd v Commissioner of Inland Revenue (2004) 22 NZTC 19,027 (HC);(c) The sealed order following the Court of Appeal judgment inAccent Management Ltd v Commissioner of Inland Revenue[2007] NZCA 230, (2007) 23 NZTC 21,333; and, finally(d) if a formal order was sealed in relation to the Ben NevisSupreme Court judgment, that sealed order.[30] Ms Roff provided me with the following:(a) The Commissioner's notice of assessment which contains theCommissioner's assessment of shortfall penalty and abusive tax position $391,746.78.(b) The sealed judgment of Venning J dated 20 December 2004. The operative part of that document provides:The plaintiffs' challenges to the assessments issued by the Commissioner are dismissed.(c) The Court of Appeal sealed judgment which provides that:The appeal is dismissed.(d) The sealed order of the Supreme Court, which likewise records:The appeals are dismissed.[31] Accordingly, the sealed orders of the court disclose to me that there is no reason to conclude other than I have in [27] of this judgment.[32] No doubt anticipating the outcome, Ms Hinde forwarded to this court on 21 October 2013 a copy of an application by the plaintiff to recall a paragraph of the Supreme Court judgment.[33] I called a conference of counsel, which was held on 24 October 2013, to discuss this development. In my view, the application made by Ms Hinde confuses the judgment on the one hand with the reasons for judgment on the other. The formal judgment is admissible evidence of the outcome of the case.18 Without a recall of the formal judgment, the result as pronounced by the Supreme Court stands. I am therefore satisfied that the conclusion that I have reached in [31] should stand and should not be delayed whilst any further application is made to the Supreme Court.[34] I conclude, therefore, that there is no substantial dispute. The plaintiff has failed to make out a case based on s 290(4)(a) of the Companies Act 1993. The debt is due. It therefore satisfies the definition of a statutory demand as prescribed by s 289 of the Companies Act 1993. The two potential grounds raised are therefore answered.18 Rawlinson v Rice (1998) 12 PRNZ 639 (HC).[35] I consider the alternative ground referred to in the papers, that relies on s 290(4)(c). Ms Hinde did not separately address me on this aspect of the case, understandably in my view. The written argument was based on the fact that the challenges to assessments that had been entered by the shareholders had not been concluded. I have already concluded that that matter is no answer to this company's liability to the Commissioner, having regard to the Supreme Court's decision. Itherefore conclude that there are no proper grounds for applying s 290(4)(c) to this case.[36] The written submissions also referred to the question of solvency. That matter, and the question of whether I should exercise the discretion vested in the court pursuant to s 291(1)(b) of the Companies Act 1993 requires further comment. I invited counsel to advise if either wished to contest the conclusions that I set out in [49] to [57] of my judgment in the Bristol Forest Ventures Ltd case. Both advised me that they did not wish to. I therefore conclude that this is not an appropriate case to order the winding up of the company and the appointment of a liquidator. Rather, it is appropriate that I order that the plaintiff, Redcliffe Forestry Venture Ltd, pay the sum of $819,268.18 within 10 working days of this judgment and should a default in payment in made, the defendant may make application to put Redcliffe Forestry Venture Ltd into liquidation. I order accordingly.Costs[37] I discussed the question of costs with counsel. Both asked that I reserved costs. I do so and invite counsel to agree. In the event that they cannot agree, memoranda in support, opposition and reply shall be filed and served at seven-day intervals. On receipt of the reply memorandum, the memoranda shall be referred to me for consideration of the appropriate order for costs._____________________JA FaireAssociate Judge