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In re Ribtec International Fibreglass Tanks (Fiji) Ltd [2005] FJHC 54; HBE0059J.2004S (11 March 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

COMPANIES ACTION HBE0059J OF 2004S

IN THE MATTER OF RIBTEC INTERNATIONAL FIBREGLASS TANKS (FIJI) LIMITED
PLAINTIFF

IN THE MATTER OF THE Companies Act 1983, Section 221
DEFENDANT

Counsel for the Petitioner: S. Parshotam: Parshotam & Co.
Counsel for Company: S. Naqase: Naqase Law Practice

Date of Judgment: 11 March, 2005
Time of Judgment: 9.30 a.m.

JUDGMENT

This is an opposed Winding-Up petition.

The facts are not in dispute. ANZ, this Petitioning Creditor, on 10 July 1993 credited by error, the sum of $13,515.15 to the Company’s bank account. The mistake was not discovered until some 5 months later. Subsequently, following a series of meetings between the parties, the Company agreed to pay back the money. Only a single payment of $1500.00 had been received by the petitioner. The balance of $12,015.55 owing is the subject of this winding up action.

The law on winding up is well established, and the circumstances in which a company maybe wound up is set out under section 220 of the Companies Act (Cap 247). The petitioner must satisfy the Court that there is a debt which is not disputed and that the Company is not able to pay the debt within the meaning of section 221.

The Company while admitting that $13,515.15 had been mistakenly paid into its account by the Petitioner, denies liability. Counsel argued that it was completely unaware of the mistaken payment and continued to trade in good faith on its account for over 5 months until the mistake was discovered. It argued that it had acted to its detriment in reliance on trading with the money in its account.

As to its partial payment it already made to the petitioner, the Company argued that this was only made under duress after the petitioner had linked its action to a criminal act and also the possibility of the petitioner of preventing him from running his business.

In support of its case for equitable relief for payment that had been made under mistake, the Company had begun proceedings against the petitioner in CA 272/2004. The basis is to be found under sections 111 and 112 of the Property Law Act (Cap. 130). These provide for relief in respect for payment under mistake, if the Company in good faith has so altered its position in reliance on the validity of the payment.

This Court finds that there is merit in the Company’s arguments. While there is no dispute on the payment of the money by mistake into the Company’s account, it has raised the statutory defence available to it under section 112 of the Property Law Act, by bringing proceedings against the petitioner in CA 272/2004. Until the Court decides in that case on the liability of the Company to pay and to what extent the amount is owed, I am not in a position to grant the winding up of the Company.

Petitioner’s application is stayed until the decision in CA 272/2004.

Costs in the cause.

F. Jitoko
JUDGE

At Suva
11th March, 2005