Persistent litigant discouraged
2011 case note - Interlocutory applications which attempted to re-open finalised decisions dismissed - judicial review, strikeout, re-litigation, indemnity costs.
A number of interlocutory applications which attempted to re-open finalised decisions were dismissed by the Court.
Impact of decision
The decision is further confirmation of the approach the Court will take to persistent re-litigation of previously decided and/or unmeritorious matters.
Mr Faloon's father was the director of two companies, Trade Lines Limited and Central Equipment Company Limited, which are in liquidation.
Mr Faloon claims that there is compensation owing on assets which were once owned by the companies. The compensation relates to a pipe diversion of a stream by the Palmerston North City Council and the taking of land by the Crown for airport extensions. He also claims that he should be compensated by the Commissioner of Inland Revenue for the loss of patent rights which were owned by one of the companies.
Compensation of $80,000 was paid to Trade Lines Limited for the land in December 1993. The compensation was paid in accordance with the requirements of the Public Works Act 1993.
Mr Faloon remains aggrieved over the loss of company assets and claims that the compensation was inadequate. He has been involved in litigation against the Crown and the Commissioner for a number of years and despite those claims being rejected by the courts, he continues to re-litigate the issues. There have been over 20 proceedings touching on these matters to date.
On 15 October 2010, Mr Faloon made a Statement of Claim naming the Commissioner as defendant in the High Court in Tauranga. The claim related to correspondence between Mr Faloon and the Commissioner. The claim is similar to the other claims made by Mr Faloon who believes that the correspondence from the Commissioner amounts to a "disputable decision" as defined in the Tax Administration Act 1994.
The Commissioner applied to "strike out" the proceedings and on 8 December 2010, Associate Judge Doogue agreed to hear the Commissioner's application.
- On 13 December 2010, Mr Faloon made an interlocutory application for a judicial review of the decision of Associate Judge Doogue to hear the strikeout.
- On 16 February 2011, Mr Faloon made a second interlocutory application asking the Court to order that a letter sent to him by the Commissioner on 4 February 2011 be declared "void". In the letter, the Commissioner had declined to give Mr Faloon the information requested until Mr Faloon had clarified the "scope" of his request.
- On 24 February 2011, Mr Faloon applied for orders setting aside the Commissioner's memorandum in response to his application dated 16 February 2011.
Justice Brewer held that rule 15.1 of the High Court Rules gives the Court the power to strike out all or part of a proceeding. He noted that the Tax Administration Act 1994 ("TAA") does not, in any way, "trammel" the defendant's right to do so; Mr Faloon had argued that an extant challenge under Part VIIIA of the TAA could not be struck out. The Commissioner as defendant had every right to apply for a strikeout. Judicial review proceedings were therefore dismissed.
There was held to be no underlying infringement of rights or oppressive conduct which might call for court intervention. The plaintiff's first interlocutory application was therefore dismissed.
His Honour, in dismissing the second interlocutory application, simply set Mr Faloon's memorandum out in full and said: "This is another example of Mr Faloon's passionate but obsessive pursuit of his case. As will be evident from the foregoing, there is no basis in law for the application and accordingly it is dismissed."
Indemnity costs, which are often left as an issue until after the conclusion of a case, were awarded against Mr Faloon. The Court said: "… I believe that something must be done to bring home to Mr Faloon that a litigant who files multiple applications that have no chance of succeeding because they have no basis in law will be held accountable for wasting the Court's time ..."
High Court Rules, Tax Administration Act 1994