Commissioner of Inland Revenue v Pop-Up Globe Foundation Limited

[2021] NZHC 718

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-91

[2021] NZHC 718

BETWEEN

THE COMMISSIONER OF INLAND REVENUE

Plaintiff

AND

THE POP-UP GLOBE FOUNDATION LIMITED

Defendant

Hearing:

On the papers

Appearances:

C Van Der Merwe for the Commissioner

J Marcetic for the shareholder, The Pop-Up Globe International Limited

Judgment:

31 March 2021

COSTS JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 31 March 2021 at 4:30pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Inland Revenue (Cloete van der Merwe/Paul Sparrow), Auckland, for the Plaintiff Chapman Tripp (Janko Marcetic/Michael D Arthur), Auckland, for the Defendant Copy for:

Gareth Hoole and Clive Bish (liquidators), Ecovis KGA

THE COMMISSIONER OF INLAND REVENUE v THE POP-UP GLOBE FOUNDATION LIMITED [2021] NZHC 718 [31 March 2021]

[1]                 On 12 March 2021, I dismissed the Commissioner’s application to put the Pop- Up Globe Foundation Ltd into liquidation, because the company had already been put into liquidation by a valid shareholder resolution on 3 March 2021.1 That resolution was within time under s 241AA(2)(a) of the Companies Act 1993. I awarded costs to the Commissioner as sought, because notwithstanding the dismissal of the proceeding the Commissioner had been vindicated in seeking liquidation. Spurred by the Commissioner’s application, the shareholder recognised that the company’s insolvency required liquidation.

[2]                 The hearing on 12 March 2021 concerned the Commissioner’s argument that the shareholder’s resolution was ineffective under s 241AA. The Commissioner contended unsuccessfully that her consent was also required to the appointment of the liquidators. The shareholder, The Pop-Up Globe International Ltd, presented opposing argument. The hearing was brief.

[3]                 The Pop-Up Globe International Ltd now seeks costs against the Commissioner.

[4]                 Once the Commissioner rejected the validity of the shareholder’s resolution of 3 March 2021, there was a live issue which required the court’s decision. On that issue, The Pop-Up Globe International Ltd succeeded. The normal rule that costs follow the event applies.2 The Pop-Up Globe International Ltd should accordingly have costs for the steps it took to have the resolution of 3 March 2021 upheld.

[5]                 Under category 2 it seeks costs of $3,824.00, claiming one day for filing a statement of defence, 0.4 of a day for the appearance at the hearing, and 0.2 for filing a memorandum as to costs.

[6]                 It seeks one day for the statement of defence and affidavit by analogy with step 38 of Schedule 3 of the High Court Rules 2016 – filing a notice of opposition and supporting affidavits in response to an originating application. In response, the

1      Commissioner of Inland Revenue v The Pop-Up Globe Foundation Ltd [2021] NZHC 515.

2      High Court Rules 2016, r 14.2(1)(a).

Commissioner says that the appropriate analogy is with step 23 - notice of opposition to an interlocutory application.

[7]                 I am with the Commissioner that the appropriate analogy is with Step 23. The shareholder’s steps were equivalent to those taken in opposition to an interlocutory application, rather than an originating application. The matter required a decision on a single point. The Commissioner proposes 0.3 of a day under Band A, but 0.6 of a day under Band B is more appropriate as the time required to prepare and file the opposition documents.

[8]                 The Commissioner proposes 0.2 of a day for the appearance, whereas the shareholder proposes 0.4 of a day. I take it that the time claimed for the appearance also includes some preparation time. 0.4 of a day is appropriate. This is not a case where costs should be awarded for preparing the costs application.

[9]                 Accordingly, the Commissioner is to pay The Pop-Up Globe International Ltd costs under category 2 for one day, $2,390.00, plus the filing fee for the statement of defence, $93.50.

…………………………………….

Associate Judge R M Bell