Having fought to the bitter end litigation by Vey Group minority shareholders with a High Court order eventually forcing sale of an investment property in Wellington, company director Leslie Fugle then saw Inland Revenue snatch his $1.18 million payout in part-payment of $2.7 million tax debt owed by a Manawatu land development company he owned.
Mr Fugle is sole director and shareholder of Manawatu company: Aokautere Land Holdings Ltd. In February 2021, Inland Revenue assessed Aokautere to $2.71 million tax on sales of land over the previous five years. Aokautere had filed no tax returns for the period. It did not challenge the default assessment. It did not pay the tax.
Nearly two years later, Mr Fugle’s Aokautere Land was expecting to receive a payout on the court-ordered sale of Vey Group’s Webb Street property in Wellington. Mr Fugle gained a controlling interest in Vey Group after initial investors fell out. He engineered a secured loan from Aokautere to Vey Group, after gaining control. A sum of $1.185 million was owed Aokautere following sale of Webb Street. Inland Revenue pounced, claiming this money in part-payment of Aokautere’s earlier default tax assessment.
Aokautere is belatedly challenging Inland Revenue’s earlier default tax assessment and with it the right to seize cash expected from the Webb Street sale.
Mr Fugle claims Inland Revenue is not playing by the rules. He says Inland Revenue did not comply with its own 2020 policy statement: The Disputes Resolution Process and Fair Trial Rights.
Under this policy, Inland Revenue waives timelimits for challenges to tax assessments where a related criminal tax prosecution is likely. At time of the default assessment, both Mr Fugle personally and a company related to Aokautere Land were under investigation with allegations of GST fraud. The High Court was told this fraud investigation has since been dropped.
There was no evidence of Inland Revenue ever considering a criminal prosecution against Aokautere.
Meanwhile, Aokautere asked the High Court to order disclosure of internal Inland Revenue documents justifying steps taken to snatch the $1.18 million from sale of Webb Street.
Justice Gwyn stated this demand was no more than a ‘fishing expedition,’ with Aokautere trying to build a judicial review case to overturn Inland Revenue’s seizure of the expected $1.18 million payout. Disclosure was refused.
Aokautere Land Holdings Ltd v. Inland Revenue – High Court (13.07.23)
23.115