Legal stoush over between Customs and Otago wine company Shaky Bridge Wines Limited
A legal battle between Customs and a Central Otago wine company over unpaid duty is over.
Customs sought an order placing Shaky Bridge Wines Limited into liquidation while the Alexander-registered company owed $349,464.86.
The debt included unpaid excise duty of $154,515.02, and additional duty of $192,348.56, Customs claimed.
The company argued it had paid $80,000 towards the unpaid excise duty, and disputed the additional duty imposed by Customs.
It also applied for an order restraining advertising of the liquidation application.
The company had paid the core debt by March, with the majority of additional duty remitted, and was given a 24-month instalment payment programme for the penalty.
The company sought legal costs over the stoush, which was the subject of a May 15 High Court decision by Associate Judge John Matthews.
In his decision, the judge said Customs was justified in issuing the original proceeding. The action "had the effect of ensuring that the entire amount of the core debt was paid".
"There was a substantial dispute going back over a period of years in relation to remission of penalties."
He did not accept the argument from Shaky Bridge's counsel that the comptroller's decision to withdraw the application was an admission it would fail if the application went to a hearing.
Judge Matthews said the decision recognised the difference between the parties had been resolved.
"There was a significant core debt owing in respect of which there does not appear to have been any defence. Leaving aside any question about whether the additional duty should have been the subject of the proceeding, as it is not necessary to decide the point, the comptroller was justified in bringing the application.
The judge rejected the company's bid for costs, with both parties to pay their own.
A Shaky Bridge spokesman said "commonsense prevailed at the end of the day".
A Customs' spokesman said the department was pleased with the decision not to order costs against it.
"Customs has a duty to collect all due revenue and works closely with taxpayers to encourage voluntary compliance. However, where companies are reluctant to bring themselves into compliance by paying outstanding duty, Customs will take necessary steps to recover outstanding revenue."
Now the core debt had been paid and a payment order was in place, the department no longer wanted the company to be placed in liquidation, he said.