Shaky Bridge bid to recoup its legal costs is declined

AN Alexandra wine company has failed in its bid to recoup costs from a legal battle with the New Zealand Customs Service.

A High Court decision from Associate Judge John Matthews released last month declined to award legal costs to Shaky Bridge Wines Ltd, saying ‘‘costs will lie where they fall’’.

The application arose from a matter relating to unpaid excise duty by Shaky Bridge Wines and an additional penalty imposed by Customs.

Shaky Bridge had owed $154,515.02 in unpaid excise duty and Customs had imposed an additional penalty of $192,348.56.

The Comptroller of Customs had sought an order placing Shaky Bridge into liquidation, but the company filed a statement of defence saying it had since paid $80,000 towards the unpaid excise duty, and disputed the additional duty imposed. It also sought an order restraining advertising of the liquidation application.

A fixture about the additional duties was then held before the Customs Appeal Authority in Queenstown last December and the authority ruled that most of the additional duty was to be remitted. In the meantime, the company had repaid the core debt.

Costs were reserved by the court but Shaky Bridge subsequently sought costs from Customs.

Judge Matthews said Customs was justified in issuing the original proceeding for liquidation, as it ‘‘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 Comptroller’s decision to withdraw the liquidation application was an admission it would fail if the application went to a hearing.

‘‘It simply recognised that the differences between the parties had been resolved and there was a payment order in place in relation to the balance of the additional duty, the core debt having been paid.’’

A Customs spokesman said Customs was pleased with the decision not to order costs against it.

Shaky Bridge director Dave Grant said the issue had been a result of miscommunication and once it was finally ‘‘sorted’’, an outcome was received.

He was pleased most of the additional penalty had been remitted, and said that was what made Shaky Bridge believe it had a valid argument in seeking legal costs.