Central Equipment Company Ltd v Commissioner of Inland Revenue

IN THE COURT OF APPEAL OF NEW ZEALAND
CA233/06
BETWEENCENTRAL EQUIPMENT COMPANY LIMITED

Appellant

ANDTHE COMMISSIONER OF INLAND REVENUE

Respondent

Counsel:C J Faloon, an office holder in the Appellant

J A L Oliver for Respondent

Judgment:12 December 2006

JUDGMENT OF CHAMBERS J

The application to review the decision of the registrar declining to dispense with security for costs is dismissed. Payment of security in the sum of $4,740 must be made on or before 24 January 2007.
REASONS
[1]       Mr C J Faloon, who variously describes himself as a “controlling person” of the appellant and as “co-surety” and “co-trustee” with the appellant, applied for security for costs to be dispensed with. The registrar declined that application on 27 November 2006.
[2]       Mr Faloon has sought a review of the registrar’s decision under r 7(2) of the Court of Appeal (Civil) Rules 2005. I have considered that application. I did not find it necessary to call for further submissions from the Commissioner of Inland Revenue, the respondent. Mr Oliver had presented submissions for the Commissioner in respect of the original application to dispense with security.
[3]       Mr Faloon has not shown the registrar’s decision was wrong. His submissions in support of the application for review show a lack of understanding of the purpose of security. Security is intended to protect the respondent should the appellant be unsuccessful on the appeal. No satisfactory reasons have been provided as to why the Commissioner is not entitled to that standard protection in this case.
Solicitors:
Crown Law Office, Wellington

CaseChat Overview and Summary

The case of Central Equipment Company Limited versus the Commissioner of Inland Revenue was heard by the Court of Appeal of New Zealand. The appellant, Central Equipment Company Limited, sought a review of the registrar's decision to deny their application to dispense with security for costs. The registrar's decision required the appellant to pay a sum of $4,740 before 24 January 2007. The appeal was brought forth by C J Faloon, who represented himself as a controlling person, co-surety, and co-trustee of the appellant.

The legal issue at hand was whether the registrar's decision to decline the application for security for costs was justified. The appellant argued that the registrar's decision was incorrect, but the court found that the appellant had not provided satisfactory reasons to demonstrate why the Commissioner of Inland Revenue should not be granted standard protection. The purpose of security for costs is to protect the respondent in case the appellant is unsuccessful on appeal, and the appellant failed to provide adequate justification for dispensing with this requirement.

The court dismissed the application to review the registrar's decision and upheld the requirement for the appellant to pay the security for costs. The reasoning behind the court's decision was that the appellant did not demonstrate that the registrar's decision was wrong or that there were valid reasons to dispense with the security for costs. The court found that the appellant had not provided sufficient justification to warrant a departure from the standard protection afforded to the Commissioner of Inland Revenue. As a result, the appellant was required to pay the security for costs by the specified deadline.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established