Acting Justice Raynard S. Rigby KC dismissed the application, ordered Machinery & Energy Limited to pay the Comptroller of VAT’s costs of the application and reaffirmed the principle that a successful litigant should ordinarily be entitled to the fruits of its judgment unless special circumstances justify a stay.
The appeal arises from a decision of the Tax Appeal Commission delivered on 9 December 2025, which upheld a VAT assessment against Machinery & Energy Limited. The company subsequently appealed to the Supreme Court and, on 19 January 2026, applied for a stay of execution pending the determination of that appeal.
The company argued that its appeal had reasonable prospects of success, that the Comptroller would suffer no prejudice because the company’s potential liability was secured by a Letter of Guarantee issued by CIBC Caribbean Bank (Bahamas) Limited, and that immediate payment of the assessment, together with penalties and interest, would significantly disrupt its cash flow, business operations and ability to continue trading.
The application was supported by affidavits from the company’s financial controller, Antonia Benjamin, who maintained that payment of the assessment would materially impair the business and pointed to delays that could arise in recovering funds from the Government if the appeal ultimately succeeded.
As additional security, Machinery & Energy Limited relied upon a bank guarantee issued by CIBC Caribbean irrevocably guaranteeing payment of $1,275,892.06 to the Department of Inland Revenue. However, the guarantee was due to expire on 31 December 2026.
The Comptroller of VAT opposed the application through evidence from James Rhodes, who challenged both the grounds of appeal and the alleged financial hardship. The Respondent argued that the assessment was lawfully issued under the Value Added Tax Act, denied that the assessment amounted to impermissible double taxation, and maintained that the company had failed to demonstrate that the assessment was excessive or incorrect.
Mr. Rhodes also stated that Machinery & Energy Limited had never approached the Department of Inland Revenue to negotiate a payment plan that could accommodate its cash flow while satisfying its tax obligations.
Significantly, the Respondent relied on the company’s VAT returns to contend that Machinery & Energy Limited earned approximately $7.38 million in profit during 2025, making the disputed assessment equivalent to only about 18 per cent of its annual profit. The company did not file evidence responding to those calculations.
In considering the application, Acting Justice Rigby observed that the Court’s jurisdiction to grant a stay is discretionary and that established legal principles require an applicant to demonstrate both an arguable appeal and that refusal of a stay would render the appeal nugatory by causing irreparable prejudice.
The judge emphasized that merely having an arguable appeal is insufficient.
He noted that while Machinery & Energy Limited asserted that payment would cause financial ruin, it failed to produce any financial statements, cash flow information or other records supporting those assertions.
“The Applicant’s decision to place no financial information before the Court to support its position of financial hardship or ruin and to show that it lacks the resources to pay the tax liability gave me no basis to assess and determine the substance of their submissions,” the judge stated.
Justice Rigby further observed that the company’s ability to obtain a bank guarantee suggested that it had access to financial resources capable of meeting the disputed liability.
The Court also found little comfort in the bank guarantee because it expired on 31 December 2026, concluding that a guarantee of limited duration failed to adequately protect the Respondent’s ability to recover the tax if the appeal remained unresolved beyond that date.
The judge additionally accepted the Respondent’s evidence that a structured payment arrangement remained available, observing that such an option substantially undermined the Applicant’s claim that payment of the assessment would inevitably cripple its business operations.
Addressing the Applicant’s concern that recovering funds from the Government could be delayed if the appeal succeeded, Justice Rigby said there was insufficient evidence before the Court to support that assertion and that, in any event, such speculation did not justify granting a stay.
Although the Court acknowledged that some of the proposed grounds of appeal might arguably be capable of consideration, including issues concerning the burden of proof under section 17 of the Tax Appeal Commission Act and allegations of double taxation, the judge concluded that those issues alone could not satisfy the legal test.
He stressed that the starting point remains that a successful party should not be deprived of the fruits of its judgment unless exceptional circumstances exist.
Finding that Machinery & Energy Limited had failed to establish special circumstances or demonstrate that refusal of a stay would cause serious or irremediable damage, the Court dismissed the application.
The stay of execution was therefore refused, and the company was ordered to pay the Comptroller of VAT’s costs of the application, with those costs to be agreed or, failing agreement, assessed by the Registrar of the Supreme Court.
The substantive appeal against the Tax Appeal Commission’s decision remains scheduled to be heard by the Supreme Court on 8 October 2026.
