IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

ACTION NO. HBC0137 OF 2005

BETWEEN:

COMMISSIONER OF INLAND REVENUE
Level 5, Dominion House, Scott Street, Suva
PLAINTIFF

AND:

PUNJAS LIMITED
a duly incorporated company having its registered office at 63
Vitogo Parade, Lautoka
FIRST DEFENDANT

PUNJA AND SONS COMPANY LIMITED
an incorporated company having its
registered office at 63 Vitogo Parade, Lautoka.
SECOND DEFENDANT

Ms S. Tabaiwalu for the Plaintiff (o/i Legal Officer of FIRCA)
Mr J. Rabuku for the Defendants

Date of Hearing: 26 August 2005
Dates for Submission: 9 September, 23 September & 30 September 2005,
subsequently extended 13 October 2005.
Date of Judgment: 04 November 2005

JUDGMENT OF FINNIGAN J

The Plaintiff has applied by Originating Summons for an order setting aside a consent order that was made in another action.

The order in question was made on 6 September 2002 in Action No HBC 101 of 2002L. That previous action, cause or matter had been brought by the present Defendants against the present Plaintiff. The consent order enshrined an Agreement made between Counsel for the parties. The terms of their Agreement numbered 15 in all and these terms were put before a Judge who made an order by consent embodying the 15 clauses of the Agreement.

The parties have not informed me of the nature of the earlier proceedings or any of its details and there seem to be good reasons for that. Nonetheless one of the arguments I am required to consider and decide (without knowing the details of the previous action causes or matter) is whether the consent order was made without jurisdiction.

My aim is to express the reasons for my decision in simple terms. The submission have been completed. I want the parties to have a decision so that they can move on. I have given this matter some priority for that reason but my decision will be expressed in short form. This is made possible by the breadth and depth of the submissions of Counsel and by the copies supplied of the multiple authorities to which they have referred me. However I will not refer to the arguments in considerative detail.

The grounds on which this application is made are (briefly);

(a)	The consent order was ultra vires the parties and the Court in attempting to waive or forgo the Plaintiff’s entitlement/duty to assess tax; 

(b)	That the order was ultra vires and void in as much as it attempted to invoke the doctrine of estoppel; and

(c)	The order was ultra vires in as much as it purported to make the Plaintiff subject to the direction of this Court in carrying out his statutory duty to assess tax.

These are the conclusions I have reached. 

1.	This Court does have jurisdiction in the present proceedings to revisit the order which effectively terminated the previous proceedings. I assume from the arguments and affidavits that the costs issue being resolved the proceedings were discontinued or terminated. Among the authorities I rely on Dumbar –v- Paccar Inc (2000)14 PRNZ 408. 

2.	The agreement of Counsel, in so far as it restricts the ability of the Commissioner to assess the liability of the Defendants to a particular quantum of VAT may have been urtra vires the parties. I accept the authorities cited by Counsel for the Plaintiff, particularly, IRC –v- Lemmington Holdings Ltd (1982) 13 ATR 622 (NZCA). The classic principle is stated perhaps in Elmiger –v- IRC(NZ) (1966) 10 AITR 349 (NZCA).

3.	For that reason I am prepared to hold that the consent order may have been without jurisdiction. After considering the recent judgment of the Court of Appeal in FIRCA –v- NZPTC Ltd, Civil Appeal No. ABU 0085 of 2004S, Judgment 15 July 2005, I rule that in any event the proceedings instituted by the present Defendants in Action No HBC0101.2002 was not within jurisdiction because it was not within the classes of tax case allowed by the Court of Appeal as being within this Court’s jurisdiction. 

4.	The word “estopped” in clause 4 of the Consent Order was perhaps used without full thought as to its consequences. If it were to be given its normal legal significance it would have little effect in creating any cause of action or defence against the Commissioner because his statutory function to assess the quantum of a taxpayer’s liability cannot be stifled by estoppel. Lemmington (above) is among the authorities on which I rely.

5.	In case it is not already clear I reject the initially attractive argument raised by Mr B.C. Patel on behalf of the Defendants that the order in question is now res judicata. Measured against the weight of the other authorities, the case cited, Hoystead –v- Commissioner of Taxation (1926) AC 155 (PC) carries little weight in the present circumstances where the application is to set aside an order made by consent on an agreement which I would be prepared to hold is void.

Those in brief are my reasons and for those reasons together with others that I draw from the submissions of both Counsel but more particularly from those of Plaintiff’s Counsel I make the orders sought. I set aside the order made by consent between these parties on 30 August and 6 September 2002 in Action No HBC0101.2002L.

Costs follow the event and are allowed to the Plaintiff. Bearing in mind the considerable amount of work required of Counsel for both parties I summarily assess quantum at $800.00, assessed against both Defendants jointly and severally.

D.D. Finnigan
JUDGE

At Lautoka
04 November 2005