| Fiji Islands - Sami v Shantilal Brothers (Fiji) Ltd - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
At Suva
Appellate Jurisdiction
CIVIL APPEAL NO. 0021 OF 1999
Between :
NARAYAN SAMI
Appellant
- and -
SHANTILAL BROTHEIJI) LTD.
Respondent
Mr. G. O’Driscoll for the Appellant
Ms. P. Narayan for the Respondent
Mr. W. Archibald for the Official Receiver
JUDGMENT
This appeal concerns a refusal by the Magistrates Court, Suvato stay a receiving order granted against the appellant on t on the basis of a bankruptcy notice issued against
him pursuant to a consent judgment entered in the respondent’s favour in the Magistrate’s Court.
The grounds of appeal which are seven in number, raises various errors in law and in fact that that are said to have been committed by the learned magistrate in refusing
the appellant’s stay application.
None of these grounds were specifically pursued before me and it transpired from discus with appellant’s counsel nsel that the appellant’s
main grievance was the clear `ex parte’ direction in the magistrate’s final sentence of her judgment :
`... (that) the ial receiver be served a co a copy of this decision or sealed order and (is) directed herein to proceed with the requirements of advertisement forthwith.’
In the result, with the agreement of counsels, the following two (2) ques were formulated for argumargument :
`(1) Wh or not the Official Receiveceiver has a discretion on advertising (in a newspaper) a receivingr ?
(2) &nnsp;&&nsp;;&nspp;&nssp;&nsp; If yes, dhe Cturt hurt have a discretion to exercise a power to stop advertisement of a receiving orde oughto don thie ?’
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In order to maintain the status quo and ensure that the appeal was not rendered nugatory an interim stay order was granted pending
judgment in this appeal. The Official Receiver was also ordered to be served with the appeal papers and appeared as amicus to assist the Court. I am grateful for his assistance in this appeal.
ass=MsoNormal stal style="text-align: justify; margin-left: .9pt; margin-top: 1; margin-bottom: 1"> The requirement to advertise a receiving ors provided for in the following terms by Section 13 of the Bankruptcy Act (Cap.48)
`Notice of every receiving order, stating the name address and description of the dthe debtor, the date of the order, the court by
which the order was made, and the date of the petition shall be gazetted in the prescribed manner.’
This section, the learned Official Receiver has very properly pointed out in his written ssions, `differs slig slightly’ from the requirement under the equivalent section of the Bankruptcy Act 1914 (Imp) namely Section 11, which additionally requires a receiving order to be `advertised in a local newspaper’.
Notwithstanding the difference rdings, the Official Receiver nevertheless writes `... advertising in a locallocal newspaper is assumed to be required’. Furthermore this long-standing `practice of advertising in a local newspaper (in Fiji) appears to have arisen as a consequence of Rule 186 of the Bankruptcy Rules 1915 (Imp)’ which, by Section 146(5) of the Bankruptcy Act (Cap.48) :
`... are declared to be in force in Fiji and shall be read with and considered part of this Act :
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Provided that -
p class=Leve=Level1 style="text-align: justify; margin-top: 1; margin-bottom: 1"> (b) p; &nnsp;&nbp;&&nbp;;&nbpp; it shall be lawful for any court to construe the said rules ..., provided always that any such construction shall not be inconsistent
with the provisions of this Act.’
It is clear from the foregoing that the advertisement of a receiving order in al newspaper in this country is an `additional’ practice not expressly required or mandated by the Bankruptcy Act (Cap.48) but is, nevertheless, undertaken by the Official Receiver in substantial compliance with the requirement of Rule 186(2) of the Bankruptcy Rules 1915 (Imp) which provides :
`The Official Receiver shall forthwith send notice (of the receiving order) to such local paper as the Board of TradeTrade may from time to time direct, or in default of such direction as he may select.’
ass=MsoN=MsoNormal style="text-align: justify; margin-top: 1; margin-bottom: 1"> The question thus resolves itself into the much more general one i.e. given the absence specific requirement in thin the Bankruptcy Act (Cap.48) to advertise a receiving order in a local newspaper can such an additional requirement be prescribed under subsidiary legislation
and, if so, would it be `inconsistent with the provisions of the Act’?
After careful consideration I am driven to the clear conclusion that the answers to the questions posed above are `Yes’ and `No’ respectively.
In arriving at this conclusion I have considered the following : The text of Section 13 of our Act whilst differently worded to Section 11 of the Imperial Act is not exclusive as to the requirement to advertise a receiving order which is to be `... in the prescribed manner’. In this latter regard the Interpretation Act (Cap.7) defines `prescribed’ as meaning `prescribed by the Act in which the word occurs or by any subsidiary legislation’.
Secondly, the `addal’ requirement of advertising in a local newspaper plainly advances the purpose ofse of advertising a receiving order by reducing the
potential mischief that was clearly noted by James L.J. when his lordship observed in Ex parte Rabbidge (1878) 8 Ch D367 at 372 :
`It is much to be regretted that the advertisement of adjudications (in bankruptcy) o often postponed. These dese delays are a source of great mischief. It may be very hard on a debtor, who has been adjudged a bankrupt,
not to stay the advertisement of the adjudication, if he has a bona fide ground for appealing ; but, on the other hand, great hardship
may be done to other (innocent) persons if the adjudication is not advertised.’
Finally as is recorded in the headto Hills v. Stanford and Another (1904) 23 NZLR1061 :
`Rules and forms made and prescribed under a provision (empowering the making of rules) may be looked to anto and considered in interpreting an ambiguous provision of the statute itself ; and where a practice prescribed
by such rules has been followed for a number of years, that is also a fact which may be taken into consideration in interpreting
the statute.’
In this case the `practice’ of advertising receiving orders in a local aper is a longstanding one one of unquestionable utility and ought in my view, to be
sustained in the absence of any obvious inconsistency between it and the statutory requirements of the Bankruptcy Act (Cap.48) which merely lays down a minimum non-exclusive requirement to advertise a receiving order in the Fiji Gazette.
This view coincides with and is reinforced by the requirements of Sections) and 31(3) which deal with the advertising of a of an order adjudging a debtor bankrupt and the annulment thereof. In both instances the Bankruptcy Act requires a notice to be `advertised in a local newspaper in the prescribed manner’. In my view there is no element of discretion on the Official Receiver’s part in the advertising of a receiving order.
I turn next to consider the second of the questions posed in the appeal which is plainly an appeal against the refusal of the trial
magistrate to exercise her discretion to stay proceedings after the receiving order was made. Such a power is conferred by Sections 11 and 105 of the Bankruptcy Act (Cap.48) and Rule 188 of the Bankruptcy Rules 1914 (Imp.).
This aspect of the appeal is boo fail unless it can be clearly demonstrated that the magistrate’s refusal was plainly wron wrong in
law and/or was motivated by irrelevant considerations or over-looked material considerations.
In that regard the learned magistrate in her decision sets out several reasons for rejecting the stplication including the abse absence
of any denial of the judgment debt or proof of the existence of any counter-claim, set-off or cross-demand sufficient to extinguish the judgment debt, and the requirement
of finality and the wider public interest `in exposing and controlling an insolvent debtor’.
Given that the undoubted purpose of advertising a receiving order is to protect innocent third persoom dealing with the debtor btor
without notice, a stay of advertisement or of a receiving order must be considered an exceptional indulgence upon which the court
should require a high degree of satisfaction before it grants a stay and, even where a stay is granted, stringent terms and conditions
ought to be imposed so as to ensure that the debtor’s remaining assets and resources remain unencumbered, and are not secreted away
or wasted.
In this latter regard the appellant deposed before the learned magistrate:
:
`11. THAT if the Receiving Order is published in the daily newspaper all my remaining creditors will file their claims and in this event the
judgment creditor (respondent) stands to loose the sums owed to him as I do not possess properties which are worth to cover all my
creditors.
12. THAT no useful purpose will be obtainethe Receiving Order is published in the daily newspapers.’
In rejecting such a basis in Re Fidow (a debtor) (1989) 2 NZLR i>, Fisher J. said aaid after considering several cases, at p.445 :
`I conclude that the likelihood of little or no available assets for unsecured creditors in matter is not of itself a reason for declining
an adjudicatdication. It is simply a matter to be taken into account in the exercise of my overall discretion.’
In similar vein in Re A Debtor ex parte Official Receiver (1901) 84 LT 666 Stirling L.J. in setting aside the stay order in that case observed at p.669:
`I cannot say that that (i.e. that the publicity of advertising the receiving orduld ruin the prospects of t of the debtor in connection with a new company
which was coming out) is any reason for staying so much of the order as relates to Section 16 - namely, the furnishing of a statement of affairs and giving
complete information to the Official Receiver with regard to the assets of the debtor ... And it seems to me that it is absolutely
necessary that that portion at least of the consequences which follow from the making of the receiving order should come into operation.
Otherwise the public official who guards the interest of the public is left without the proper information which would enable him
to act.’
In this presase the Official Receiver confirms that `the debtor attended at (his) o office and has been made aware that he is required to file a Statement of affairs, but has not done so’.
Such a blatant disregard of a debtor’s elementary statutory duty followie making of a receiving order, cannot be legitimised or excr
excused by the grant of an exceptional indulgence such as a stay of proceedings. The public interest must also be considered.
The learned magistrate was entirely correct in her refusal of a stay of proceedings and this appeal must beis hereby dismissed as
enti entirely unmeritorious.
D.V. Fatiaki
JUDGE
At Suva,
N-GB>6th February, 2001.
HBA0021J.99S
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