Chesterfields Preschools Limited (in liquidation) v Commissioner of Inland Revenue [2019] NZCA 213 (12 June 2019)

Last Updated: 18 June 2019

IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA

CA115/2019 [2019] NZCA 213

	BETWEEN	CHESTERFIELDS PRESCHOOLS LIMITED (IN LIQUIDATION) First Appellant THERESE ANNE SISSON Second Appellant
	AND	THE COMMISSIONER OF INLAND REVENUE Respondent

Counsel:	B M Russell and J C Wedlake for First Appellant Second Appellant in person P J Shamy, S M Kinsler and P H Courtney for Respondent
Judgment: (On the papers)	12 June 2019 at 3.00 pm

JUDGMENT OF MILLER J

The application for extension of the stay on appeals CA285/2017, CA310/2017, and CA404/2017 is declined.
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REASONS

[1] Ms Therese Sisson seeks extension of a stay on three appeals filed in this Court pending the outcome of a new appeal against the decision of Osborne J putting Chesterfields Preschools Ltd into liquidation.^[1]

Background

[2] Chesterfields Preschools Ltd (Chesterfields), with Ms Sisson as second defendant, was subject to a liquidation application in the High Court as a result of an outstanding tax debt. Chesterfields was put into liquidation on 6 October 2015,^[2] but Ms Sisson successfully appealed that order so that it was remitted back to the 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 until any order of the Supreme Court was made.^[4] After the Supreme Court ordered the liquidation decision to be remitted back to the High Court, French J granted an extension of the stay by consent on 23 May 2018 until such a time as the High Court delivered its reserved decision after the re-hearing.^[5] On 26 February 2019 (re-issued 7 May 2019), Osborne J delivered his decision again ordering liquidation of Chesterfields.^[6]
[4] Ms Sisson has now appealed against this decision of Osborne J (the liquidation judgment). She seeks to extend the stay on three of her appeals until resolution of this new appeal. The first matter she seeks to further stay is an appeal against a judgment of Gendall J refusing to set aside a sealed judgment granted by consent and ordering 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 for bankruptcy and the second adjudicating her bankrupt and awarding increased costs against her.^[8]

Arguments

[5] Ms Sisson argues that the grounds of appeal against the liquidation judgment are relevant and common to the substantive issues in the three appeals she seeks to further stay.
[6] The first appellant (though respondent in several stayed appeals), the liquidators, opposes the application to extend the stay. They contend that the liquidation judgment brought an end to the existing stay and no formal application was made for an extension of that stay. There is no reason to further delay proceedings and there are no legal issues in the liquidation judgment which will affect the appeals Ms Sisson wishes to further stay. They also argue that two appeals relate to Ms Sisson’s personal bankruptcy and are thus unrelated to the appeal of the liquidation judgment.
[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 balance the right of the party who obtained the appealed judgment against preserving the appellant’s position if their appeal succeeds.^[10] Relevant factors to this decision include:^[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 successful party will be injuriously affected by the stay; the effect on third parties; the novelty and importance of the questions involved; the public interest in the proceeding; and the overall balance of convenience.
[9] Liquidation proceedings relating to Chesterfields have been ongoing since 2015 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 delivery of 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 the Commissioner’s liquidation application being remitted back to the High Court,^[12] and consented to the two previous stays on Ms Sisson’s appeals. They have been accommodating toward Ms Sisson throughout proceedings and have a right to final determination of this matter.
[10] Ms Sisson first seeks to stay her appeal against the decision of Gendall J.^[13] His Honour refused to set aside an earlier judgment which vested assets in the liquidators of Chesterfields by consent.^[14] That consent judgment was sealed and the Judge held that there was no injustice or inequity which would enable the court to set it aside.^[15] The exercise of the High Court’s inherent jurisdiction to set aside a sealed judgment is a matter unrelated to the challenge to the liquidation order or Osborne J’s assessment of Chesterfield’s debts. I cannot see how a successful appeal against the former judgment would render the latter appeal nugatory.
[11] As the respondents contend, the other two appeals relate to Ms Sisson’s personal bankruptcy. This has no bearing on the liquidation of Chesterfields, of which she is no longer a director.
[12] I am satisfied the balance of convenience is in favour of preventing further delay to the stayed appeals. Accordingly, I decline to extend Ms Sisson’s stay.

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 Appellant
Crown Law Office, Wellington for Respondent

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^[1] Commissioner of Inland Revenue v Chesterfields Preschools Ltd (in interim liq) [2019] NZHC 272 [Liquidation judgment].

^[2] Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2015] NZHC 2440, (2015) 27 NZTC 22-029.

^[3] Chesterfields Preschools Ltd (in liq) v Commissioner of Inland Revenue [2017] NZSC 176 [SC appeal].

^[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.

^[7] 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 Preschools Ltd (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) Rules 2005.

^[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 Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].

^[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].