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31 Jul 2019
31 Jul 2019
Appeal Status

Unsuccessful strike-out application to Commissioner of Inland Revenue’s Property Law Act 2007 claim

The High Court dismissed the defendants’ application to strike out the Commissioner of Inland Revenue’s (“the Commissioner”) claim.

Commissioner of Inland Revenue v Wallace and Mancer (as executors of the estate of Robertson) and ors [2019] NZHC 1820
Legal terms
Strike-out application, Inherent jurisdiction, Prejudicial dispositions, Liquidation, Increased costs

r 15.1 High Court Rules 2016, ss 345 and 348
Property Law Act 2007, Part 16
Companies Act 1993


The High Court dismissed the defendants’, the late Mr Kris McPherson Robertson (“Mr Robertson”) (Mr Wayne Andrew Wallace and Mr Clifford William Mancer acting as executors of Mr Robertson’s estate), Bianca Café Limited (previously Coffee Distribution NZ Limited), and Kaffee Espresso NZ Limited (collectively “the Defendants”), application to strike out the Commissioner of Inland Revenue’s (“the Commissioner”) claim. Associate Judge Matthews held that the Defendants had failed to establish that the Commissioner’s case was so clearly untenable that she could not succeed at trial. The defendants’ application was subsequently dismissed, and the Commissioner was awarded 2B costs with a 50 per cent uplift.


Unless explicitly provided for in the legislation, actions taken or omitted under the Companies Act 1993 (“the CA”) will not restrict a legitimate claim brought under s 348 of the Property Law Act 2007 (“the PLA”). This decision also highlights a situation where it is appropriate for the Commissioner to claim an uplift in costs.


The Commissioner has brought an application under the PLA for compensation for dispositions of property that have prejudiced her. Coffee Suppliers Limited (“CSL”) owed the Commissioner circa $300k in unpaid taxes. CSL was in receipt of a significant number of receivables from its Director, Mr Robertson. CSL and Mr Robertson restructured these receivables to go to other related entities leaving CSL without any assets. CSL was subsequently put into voluntary liquidation.


Associate Judge Matthews found that the defendants’ application fell short of the well- established principles for strike out as outlined in Attorney-General v Prince & Gardner [1998] 1 NZLR 626 (CA) at [267]) and affirmed by the Supreme Court in Couch v Attorney-General [2008] NZSC 45, [2008] 2 NZLR 725 at [33] and Carter Holt Harvey Ltd v Minister of Education [2016] NZSC 95, [2017] 1 NZLR 78 at [10].

The Defendants contended that the Commissioner’s PLA claim was an attempt to undo and/or override and/or extend the provisions of the CA and the powers of liquidators. The Court rejected this and held that the Commissioner was entitled to proceed with her PLA claim regardless of the decision of the liquidators in not taking proceedings under the CA. The Court noted that the two statutory provisions were separate and not interrelated.

It was also clear to the Court from the pleadings, that the Commissioner was not (as the Defendants argued) relying on the inherent jurisdiction of the Court to override the powers given to liquidators under the voidable transaction regime under the CA. The Commissioner’s claim was squarely based on the grounds as laid out in the PLA, in which the Associate Judge had already concluded was available to the Commissioner to argue.

The Associate Judge dismissed several attempts made by the Defendants to raise substantive matters for argument by stating that those issues were to be dealt with at trial and not at strike out.

Taken together, these factors led the Court to conclude that the Defendants had not met the threshold proving the Commissioner’s causes of action were “so clearly untenable that they cannot possibly succeed” or that her case was “so certainly or clearly bad” that it could not proceed.

The Court concluded that the Commissioner be awarded 2B costs plus uplift of 50 per cent and disbursements.