CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v THE COMMISSIONER OF INLAND REVENUE [2019] NZCA 213

CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) v THE COMMISSIONER OF INLANDREVENUE [2019] NZCA 213 [12 June 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA115/2019[2019] NZCA 213BETWEEN CHESTERFIELDS PRESCHOOLSLIMITED (IN LIQUIDATION)First AppellantTHERESE ANNE SISSONSecond AppellantAND THE COMMISSIONER OF INLANDREVENUERespondentCounsel: B M Russell and J C Wedlake for First AppellantSecond Appellant in personP J Shamy, S M Kinsler and P H Courtney for RespondentJudgment:(On the papers)12 June 2019 at 3.00 pmJUDGMENT OF MILLER JThe application for extension of the stay on appeals CA285/2017, CA310/2017,and CA404/2017 is declined.____________________________________________________________________REASONS[1] Ms Therese Sisson seeks extension of a stay on three appeals filed in this Courtpending the outcome of a new appeal against the decision of Osborne J puttingChesterfields Preschools Ltd into liquidation.1Background[2] Chesterfields Preschools Ltd (Chesterfields), with Ms Sisson as seconddefendant, was subject to a liquidation application in the High Court as a result of anoutstanding tax debt. Chesterfields was put into liquidation on 6 October 2015,2 butMs Sisson successfully appealed that order so that it was remitted back tothe High Court for re-hearing.3[3] Ms Sisson and Chesterfields have seven appeals underway in this Court.A stay on all their appeals was originally granted by Brown J on 25 October 2017 untilany order of the Supreme Court was made.4 After the Supreme Court orderedthe liquidation decision to be remitted back to the High Court, French J granted anextension of the stay by consent on 23 May 2018 until such a time as the High Courtdelivered its reserved decision after the re-hearing.5 On 26 February 2019 (re-issued7 May 2019), Osborne J delivered his decision again ordering liquidation ofChesterfields.6[4] Ms Sisson has now appealed against this decision of Osborne J (the liquidationjudgment). She seeks to extend the stay on three of her appeals until resolution of thisnew appeal. The first matter she seeks to further stay is an appeal against a judgmentof Gendall J refusing to set aside a sealed judgment granted by consent and ordering1 Commissioner of Inland Revenue v Chesterfields Preschools Ltd (in interim liq) [2019] NZHC272 [Liquidation judgment].2 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2015] NZHC 2440, (2015) 27NZTC 22-029.3 Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2017] NZSC 176 [SCappeal].4 The original stay order was made in Sisson v Commissioner of Inland Revenue [2017] NZCA 416.This was extended to stay all appeals on-foot in Sisson v Chesterfields Preschools Ltd (in liq)CA404/2017, 25 October 2017.5 Sisson v Chesterfields Preschools Ltd (in interim liq) CA285/2017, 23 May 2018.6 Liquidation judgment, above n 1.costs against Ms Sisson.7 The other appeals are against two judgments of Osborne AJ(as he then was): the first dismissing Ms Sisson's application to halt adjudication forbankruptcy and the second adjudicating her bankrupt and awarding increased costsagainst her.8Arguments[5] Ms Sisson argues that the grounds of appeal against the liquidation judgmentare relevant and common to the substantive issues in the three appeals she seeks tofurther stay.[6] The first appellant (though respondent in several stayed appeals),the liquidators, opposes the application to extend the stay. They contend thatthe liquidation judgment brought an end to the existing stay and no formal applicationwas made for an extension of that stay. There is no reason to further delay proceedingsand there are no legal issues in the liquidation judgment which will affect the appealsMs Sisson wishes to further stay. They also argue that two appeals relate to MsSisson's personal bankruptcy and are thus unrelated to the appeal of the liquidationjudgment.[7] The respondent, the Commissioner of Inland Revenue, takes no position.Analysis[8] To determine a stay application (and any extension),9 the Court must balancethe right of the party who obtained the appealed judgment against preserving theappellant's position if their appeal succeeds.10 Relevant factors to this decisioninclude:11 whether an appeal may be rendered nugatory by the lack of a stay;the bona fides of the applicant as to prosecution of the appeal; whether the successfulparty will be injuriously affected by the stay; the effect on third parties; the novelty7 Chesterfields Preschools Ltd (in liq) v Sisson [2017] NZHC 859 [Judgment of Gendall J].8 Chesterfields Preschools Ltd (in liq) v Sisson [2017] NZHC 1292; and Chesterfields PreschoolsLtd (in liq) v Sisson [2017] NZHC 1410.9 The Court has jurisdiction to vary a stay order under r 12(7) of the Court of Appeal (Civil) Rules2005.10 Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.11 Keung v GBR Investment Ltd [2010] NZCA 396, [2012] NZAR 17 at [11]; and DymocksFranchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].and importance of the questions involved; the public interest in the proceeding; andthe overall balance of convenience.[9] Liquidation proceedings relating to Chesterfields have been ongoing since2015 and Ms Sisson's various appeals have been stayed since October 2017.The liquidators correctly state that the stay on these appeals came to an end on deliveryof the liquidation judgment, though we note that it was re-issued on 7 May 2019.The liquidators and Commissioner of Inland Revenue consented to the decision on theCommissioner's liquidation application being remitted back to the High Court,12 andconsented to the two previous stays on Ms Sisson's appeals. They have beenaccommodating toward Ms Sisson throughout proceedings and have a right to finaldetermination of this matter.[10] Ms Sisson first seeks to stay her appeal against the decision of Gendall J.13His Honour refused to set aside an earlier judgment which vested assets inthe liquidators of Chesterfields by consent.14 That consent judgment was sealed andthe Judge held that there was no injustice or inequity which would enable the court toset it aside.15 The exercise of the High Court's inherent jurisdiction to set aside asealed judgment is a matter unrelated to the challenge to the liquidation order orOsborne J's assessment of Chesterfield's debts. I cannot see how a successful appealagainst the former judgment would render the latter appeal nugatory.[11] As the respondents contend, the other two appeals relate to Ms Sisson'spersonal bankruptcy. This has no bearing on the liquidation of Chesterfields, of whichshe is no longer a director.[12] I am satisfied the balance of convenience is in favour of preventing furtherdelay to the stayed appeals. Accordingly, I decline to extend Ms Sisson's stay.12 SC appeal, above n 3, at [4].13 Judgment of Gendall J, above n 7.14 Chesterfields Preschools Ltd (in liq) v Sisson [2017] NZHC 181.15 Judgment of Gendall J, above n 7, at [36].Result[13] The application for extension of the stay on appeals CA285/2017,CA310/2017, and CA404/2017 is declined.Solicitors:Lane Neave, Christchurch for First AppellantCrown Law Office, Wellington for Respondent