CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v THE COMMISSIONER OF INLAND REVENUE [2017] NZSC 168

CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v THE COMMISSIONER OF INLANDREVENUE [2017] NZSC 168 [16 November 2017]IN THE SUPREME COURT OF NEW ZEALANDSC 91/2017[2017] NZSC 168BETWEEN CHESTERFIELDS PRESCHOOLSLIMITED (IN LIQUIDATION)First ApplicantTHERESE ANNE SISSONSecond ApplicantAND THE COMMISSIONER OF INLANDREVENUERespondentCourt: Elias CJ, William Young and OʼRegan JJCounsel: Second Applicant in personP J Shamy and S M Kinsler for RespondentJudgment: 16 November 2017JUDGMENT OF THE COURTA Leave to appeal is granted on one ground only(Sisson v Commissioner of Inland Revenue [2017] NZCA326).B The approved question is whether the conditional order ofthe Court of Appeal setting aside the order of the HighCourt putting the first applicant into liquidation andremitting the proceeding to the High Court for rehearingshould be quashed and replaced with an unconditionalorder.C The application for leave to appeal is otherwise dismissed.D We make no award of costs.____________________________________________________________________REASONS[1] The essential paragraph of the Court of Appeal's judgment on the appeal to thatCourt was in these terms:1The appeal is allowed on the condition that within 15 working days of thisjudgment the appellant pays into the High Court at Christchurch the amountof $109,675.22. Subject to the condition being satisfied, the liquidation orderis set aside and the proceeding is remitted to the High Court for rehearing.[2] The liquidation order referred to by the Court of Appeal was the order madeby the High Court putting the first applicant (Chesterfields), a company with whichthe second applicant is associated, into liquidation.2[3] The respondent accepts that the condition was imposed on the mistakenassumption that Chesterfields had cash available to satisfy the condition and that, inreality, it has not been feasible for the condition to be satisfied. The respondentaccepts, therefore, that leave should be given on this point and the consequent appealshould be allowed so the condition is discharged and the Court of Appeal judgmentwill take effect.[4] We therefore grant leave on the question set out above. However, for reasonsthat follow, we do not grant leave on the other questions on which the leave is sought.[5] We ask the Registrar to set down the appeal on the approved question for abrief formal hearing at 9:00 am on 23 November 2017.[6] The hearing can be dispensed with if the parties consent to the appeal beingdealt with on the papers. Ms Sisson and counsel for the respondent should confer andadvise on or before 21 November 2017 whether they consent to the matter being dealtwith on the papers.[7] If the hearing proceeds, Ms Sisson may appear by videolink from Christchurchif the necessary facilities at the Christchurch court are available. She should notify1 Sisson v Commissioner of Inland Revenue [2017] NZCA 326, (2017) 28 NZTC ¶23-023 at [109](Brown, Dobson and Brewer JJ).2 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2015] NZHC 2440,(2015) 27 NZTC ¶22-029 (Associate Judge Osborne).the Registrar as soon as possible if she wishes to do so. No further written submissionsshould be filed.[8] As mentioned earlier, leave to appeal is declined on the other three points ofappeal foreshadowed in the application for leave to appeal for the reasons that follow.[9] Ms Sisson wants to challenge the decision of the Court of Appeal to dismissthe application to adduce fresh evidence in support of the appeal to the Court ofAppeal. No point of public importance arises in relation to this point and we see noappearance of miscarriage in the way the Court of Appeal applied settled law to theapplication.[10] Ms Sisson also seeks to challenge the finding that res judicata applied to afinding by the Court of Appeal3 in an earlier case that a reduction of penalties payableto the respondent by 15 per cent would more than fulfil the requirements of an earlierHigh Court case in which Chesterfields had been successful in a judicial reviewapplication against the respondent.4 This is a fact-specific issue that raises no point ofpublic importance and we do not consider it meets the criteria for leave to appeal tothis Court.[11] The final issue on which leave is sought relates to the finding by the Court ofAppeal that Chesterfields could not rely on potential claims of stayed proceedingsalleging misfeasance in public office and malicious institution of civil proceedingsagainst the respondent as an off-set or counterclaim against the amount it owes to therespondent for tax and penalties. Ms Sisson seeks to argue that the applicants' claimsof maladministration should be dealt with in the context of the liquidation proceeding.Nothing put forward by Ms Sisson causes us to doubt the correctness of the Court ofAppeal's finding on this point.[12] The application for leave to appeal is granted to the extent set out in thejudgment of the Court but otherwise dismissed.3 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400,(2010) 24 NZTC 24,500.4 Chesterfields Preschools Ltd v Commissioner of Inland Revenue (2007) 23 NZTC 21,125 (HC).[13] We record that, as this judgment was being finalised, we received amemorandum from Ms Sisson seeking leave to file further submissions and amemorandum from counsel for the respondent seeking to respond to this and othercommunications from Ms Sisson. We decided that we would not be assisted by furthersubmissions and that leave was therefore not granted. This meant there was no needfor a response from the respondent. Ms Sisson's application for interim relief will beaddressed in the light of this judgment.[14] As each party has had a measure of success, we make no award of costs.Solicitors:Crown Law Office, Wellington for Respondent