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In re Fresh Fish Exporters (Fiji) Ltd [2002] FJHC 132; HBE0066j.2001S (1 July 2002)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

COMPANIES (WINDING UP) ACTION NO. 66 OF 2001

IN THE MATTER of FRESH FISH EXPORTERS (FIJI) LIMITED

AND

IN THE MATTER of THE COMPANIES ACT (CAP. 247)

Ms. G. Phillips for Petitioner
Mr. D. Prasad for the Company

JUDGMENT

By Petition dated 11 April 2001 and filed in Court on 17 May 2001, Competitive Foods Australia Limited (the APetitioner@) in terms of section 340(6) of the Companies Act Cap. 247 (hereafter referred to as the >Act=) seeks an order under that section, restoring the name of the company to the Register of Companies in Fiji. The company in question is Fresh Fish Exporters (Fiji) Limited (hereafter referred as Athe company@) which was incorporated on 6 September 1988 and was struck off the Register in terms of section 340(5) of the Act in July 2000.

As a result of a dispute between the company and Wasawasa Fisheries Limited (AWasawasa@) and Grahame Southwick, the affairs of the company fell into disarray and, amongst other things, annual general meetings were not held after 1991. Detailed circumstances surrounding the striking off of the company and the reasons for the Petition are set out at paragraph 9 of the Petition and in the Affidavit in Support. I also refer particularly to paragraphs 10 and 11 of the Petition which are as follows:

10. Although disarray as a result of the matters mentioned above, on 13 June 2000 and on 21 July 2000 the company was in operation, that is to say, it was entitled to and was, amongst other things, in the process of levying execution against Wasawasa of the judgment handed down by the Fiji Court of Appeal on 29 May 1998. Your petitioner values the right to that judgment at not less than $500,000.00 and the property of the company as of more than that value, and says that in addition to being a member of the company your petitioner in the sum of not less than $92,544.00 as disclosed in the audited accounts of the company to 30 June 1991.
    
11. Your petitioner is aggrieved by the name of the company having been struck off the register and says that it is just and equitable on the grounds contained herein and in the affidavit of Patrick Boyle sworn and filed herein that the name of the company should be restored to the register. Your petitioner will undertake immediate and proper compliance with the up-dating of the company=s statutory obligations in the event that an order to that effect is made.
    

An affidavit in Reply was filed by Grahame Bruce Southwick (hereafter referred to as >Southwick=) as a director of Wasawasa Fisheries Limited (AWasawasa@) which he says is the only shareholder of Fresh Fish Exporters (Fiji) Limited and which latter company he says has been de-registered by the Registrar of Companies.

In his affidavit he gives a history of his dealings with the Petitioner. He says that eventually his employment with the company (Fresh Fish) was terminated and the company ceased business in Fiji and did not begin operations again upto the date of its >de-registration=. He denies that the Petitioner is owed any money by the Company.

That in short is the gist of the Affidavit evidence before the Court.

This file was put before me for the first time on 13 November 2001 and I heard argument in December 2001 by which time written submissions as previously ordered were filed and counsel relied on them without the need to present oral argument.

Determination of the issue

At the outset I must say that both counsel have put before me some very useful written submissions with authorities and this has assisted me in determining the issue.

The Petition has been presented pursuant to section 340(6) of the Companies Act, Cap. 247 (the AAct@) which provides as follows:

(6) If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register the court on an application made by the company or member or creditor before the expiration of ten years from the publication in the Gazette of the notice aforesaid may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register, and upon a certified copy of the order being delivered to the registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.

The issue for the Court=s determination is whether the Petitioner is entitled to petition the Court for restoration of the company=s name under the said s340(6) of the Act and if so, whether this is a case in which the court ought to exercise its discretion under that section to accede to the Petition.

The power to strike off a company is given to the Registrar of Companies by section 340(5) of the Act which provides:

(5) At the expiration of the time mentioned in the notice the registrar may, unless cause to the contrary is previously shown by the company, or the liquidator, as the case may be, strike the name of the company off the register, and shall publish notice thereof in the Gazette, and on the publication in the Gazette of this notice of the company shall be dissolved:

Provided that -

(i) the liability, if any, of every director, officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and

(ii) nothing in this subsection shall affect the power of the court to wind up a company the name of which has been struck off the register.

On the aspect of whether the Petitioner qualifies to petition or not in view of the wording of s340(6) which commences with the words Aif a company or any member or creditor thereof feels aggrieved .....@ has been discussed in some detail in the case of In re New Timbiqui Gold Mines Ltd [1961] 1 Ch. 319 by Buckley J at 324 et seq. This is what Buckley J had to say at p.324-325:

The opening words of the subsection refer to a company or a member or creditor feeling aggrieved by the company having been struck off the register, which creates a somewhat artificial state of affairs in which it has to be assumed that the company or some member or creditor thereof can still be properly so described although the company has been struck off the register and consequently has become dissolved. It is one of the anomalies of company law that a company which has been dissolved can petition the court under this section to have its name restored to the register. The opening words of the subsection clearly relate to a date after the company has been struck off and, therefore, they necessarily involve some latitude in the construction of the reference to Aa company or any member or creditor Athereof@.

His Lordship came to the following conclusion at 326:

Although I think the point is a difficult one, I reach the conclusion that, in order to qualify to be a petitioner under this subsection, the petitioner must show that, at the date when the company was dissolved, he was a member or a creditor; and that anyone who, whether in ignorance of the dissolution of the company or otherwise, purports to become a member or creditor of the company afterwards is not a member or a creditor within the subsection.

Locus standi to petition

It is the Petitioner=s contention that it was both a member and a creditor of the company. This is denied by Southwick for the company in his said affidavit in reply.

The Petitioner says that it was a member at the time the company was dissolved despite Southwick=s assertion in paragraph 1 of his affidavit that Wasawasa is the only shareholder of the company (vide annexure PB4 and PB6 in the supporting affidavit). It is also clear from >PB9' that the Petitioner was also a creditor at the relevant time in the sum of $92,544.00 as disclosed in the audited account of the company (annexure PB9).

On the affidavit evidence before me and as evinced through the various annexures it is abundantly clear that at the time the Company was struck off the

Register of Companies it was a member and creditor of the company. It therefore has the locus standi to petition under section 340(6) of the Act.

Grounds of petition in compliance with s340(6)

(i) Company in operation

On the evidence before me I am satisfied that at the relevant time the company was in operation and the Petitioner was in the process of levying execution against Wasawasa of the Court of Appeal judgment of 29 May 1998 on the property of the company. The Petitioner was also a creditor of the company in the said sum of $92,544.00.

I agree with Ms. Phillips that there is no doubt that Wasawasa would be prejudiced if an order to restore is made herein as it would be subject to enforcement proceedings of a substantial judgment debt. So to avoid payment of this judgment debt it would not want an Order made.

I consider that in these circumstances it would only be just that the relief sought by the Petitioner be granted.

(ii) Or Otherwise it is just

In regard to the second requirement of s.340(6) that >or otherwise it is just that the company be restored to the register=, I agree with Ms. Phillips that it is just and equitable that the order for restoration be made. The Court has a discretion in the matter. In the case of In the Matter of Blenheim Leisure (Restaurants) Limited [1999] EWCA (26 July 1999) Lord Justice Tuckey at 22 stated that section 653:

Agives the court a wide discretion as to whether to allow restoration, particularly where one of the grounds relied on is that it is just to do so.@

The learned counsel for the Petitioner referred the Court to authorities which are relevant to the consideration of what is >just= in a case of this nature. They are Joseph Seton Hunter v Investment Properties Ltd FCA Civ. Action No. 67 1977 where Gould VP at 229 said:

AThe question whether it is Ajust@ that the order should be made did not fall to be decided by the learned judge having regard to his view of the matter. No argument has been addressed to us on this question, but we consider it to be manifestly just that a creditor, even one whose claim is disputed, should be permitted to exhaust his remedies against a company before it goes out of existence, unless he himself is shown to have been at fault in some way@.

On the interpretation of the word >creditor= in s.340(6), His Lordship at 226 citing Megarry J in Re Harvest Lane Motor Bodies Limited [1969] 1 Ch. 487 said:

A...In my judgment the section contains a sufficient indication that Acreditor@ ought to be construed widely. It begins with the words: >If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register.....= The subsection is thus concerned with a grievance on the part of some person, whether a company or a member or a creditor. Here we have the case of petitioner who, at the time when the company was struck off, had an action in being against the company which was rendered ineffective by the disappearance of the company from the register. Where one is concerned with those who might feel a legitimate grievance because a company has been struck off, it seems to me that one should look somewhat generously at the word >creditor= which precedes the phrase >feels aggrieved=.@

Ms. Phillips also referred to the case of Reclaiming Motion for the Petitioner in Petition of Fabrizio C 1985 [2000] Scott C S (14 January 2000) where Lord Presner said at 6 on >just=:-

AAnd in such circumstances other things being equal, it would indeed be Ajust@ that the company be restored to the register, if a member or creditor could thus be allowed to take a benefit which would have been his but for the company having been struck off@.

Bearing in mind the affidavit evidence before me including Southwick=s affidavit, I can come to no other conclusion than that in the exercise of my discretion it is just that order as prayed be made. Southwick=s evidence treads on grounds that have already been traversed and decided upon in the Court actions previously involving Wasawasa and there is no matter in his affidavit bearing sufficiently on the issue before me for my consideration. The execution of the judgments of the Court referred to hereabove cannot be allowed to be circumvented by the nature of the affidavit filed in opposition to the Petition. The Petitioner ought not to be prevented from enforcing the judgment which involved a substantial sum of money by allowing Wasawasa to oppose the application on the grounds stated.

In the outcome in all the circumstances of this case, in the exercise of my discretion under s.340(6) of the Act, I consider it just that the company be restored to the Register for the Petitioner is >aggrieved= within the meaning of the section.

I therefore grant the order as prayed under s.340(6) of the Companies Act Cap. 247 restoring the name the Company Fresh Fish Exporters (Fiji) Limited to the Register of Companies of Fiji and order that the second half of that subsection be complied with by all concerned and what the final words of that subsection mean is as stated in the headnote to Tyman=s LD v Craven [1952] 2 QB 100 at 101 thus, which I respectfully adopt and order accordingly:

(2) that the final words of the subsection empowering the court to give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off, are not expository, qualifying the scope of the preceding general words, but complementary only to those general words, so as to enable the court to achieve to the fullest extent with justice the Aas you were@ position of the company.

I make no order as to costs.

D. Pathik
Judge

At Suva
1^st July 2002