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High Court of Fiji |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 257 of 2010
BETWEEN:
EXCELLENCE (FIJI) LIMITED a limited liability company having its registered office at Suva, Fiji.
PLAINTIFF
AND:
VODAFONE (FIJI) LIMITED a limited liability company having its registered office at Suva, Fiji.
DEFENDANT
BEFORE : Master Deepthi Amaratunga
COUNSELS : Mr Anand Singh for the Plaintiff
Ms Bavana Narayan for the Defendant
Date of Hearing: 25th March, 2011
Date of Ruling: 27th May, 2011
RULING
10. This action is related to a prior winding up action instituted by the Defendant against the Plaintiff in Suva High Court HBE No. 34 of 2010. The Defendant's petition to wind up the Plaintiff in action No. 34 of 2010 was based on the inability of the Plaintiff to pay the debt owned to the Defendant, and the said winding up was unopposed.
11. The Defendant had issued the winding up petition pursuant to sections 220(e) and 221(a) of the Companies Act by the registered post.
12. According to Section 220(e), a petitioner has the right to issue a petition to wind up a company on the grounds that "the company is unable to pay its debts."
13. Further, pursuant to Section 221(a), a debt remaining unpaid by a company is, in the circumstances set out in the Section prima facie evidence that the company is unable to pay its debts (In the matter of Architectural Aluminum Limited Winding Up Cause HBE 85/97).
14. The Plaintiff state that it had not received the Notice of Demand issued against it by the Defendant under Section 221 which the Defendant claims to have served on its registered office prior to filing the winding up petition but it is evident that Plaintiff was aware of the Winding Up action and had requested the Defendant to withdraw the winding up and in fact had returned the notice to the Defendant. There is evidence that even before the filling of Winding Up the Plaintiff had notice of that and in fact he had asked the Defendant to go ahead with the intended winding up at that time. As per rules of the Companies Act, it only requires the service of the notice to the company's registered office irrespective of whether it is accepted or not. It was also noteworthy, that the Plaintiff was not prepared to defend the Winding Up action, but instead tried to avoid and or evade it through various methods. Acceptance of the notice is not a requirement and if that is a requirement errant companies will resort to return the notices received by them in pursuant to Section 221 of the Companies Act that would make the Winding Up redundant and winding up of them impossible.
15. The Plaintiff also state that, it had an arrangement in place for payment plan to pay off its indebtedness to the Defendant and hence the Plaintiff was not in default and the winding up petition issued by the Defendant was without any legal justification being issued during the currency of the alleged settlement plan dated 19th March, 2000.
16. It is clear that there was an email sent by the Plaintiff to the Defendants on 18th March 2010 suggesting certain payment plan where he had agreed to inter alia.
"I take full responsibility of the above debt and I propose to pay Vodafone as follows:
1. $500 on or before 30th May, 2010.
2. $500 on or before 31st July 2010.
3. Full and final settlement on or before 30th September, 2010"
17. It is note worthy that in the said detailed and long email, no amount of debt is disclosed by the Plaintiff though he states "I take full responsibility of the above debt". There was no debt that is stated in the said email.
18. Before the said email is sent, a letter dated 17th March, 2010 was sent by the legal officer of the Defendant to the Plaintiff and it clearly gives only 7 days for the settlement of the Debt.
It further states as follows:
"We request for full settlement within 7 days from the time of this letter. Failure to comply will leave us not alternative but to commence Legal proceedings to recover the debts including but not limited to bankruptcy proceedings. We wish to also advise you the Vodafone Fiji Ltd is a member of Data Bureau (Fiji Credit Bureau) whereas your defaults on this account information will be updated with all leading financiers. Your information would remain on the data bureau record for seven years and will have severe implications should you wish to seek loan or purchase on credit among other financial needs."(emphasis is added)
19. So, even before that said email of 18th March, 2010, where the Plaintiff has put forward a proposal for settlement of the Debt, the Defendant has indicated in no uncertain terms that they will not only file a winding up application but also the details of the debt will be provided to Data Bureau, to share among the members of the Data Bureau to assess the credit worthiness of the Plaintiff. All those are the actions that the Defendant can legally take recourse under the circumstances.This is a clear warning to the Plaintiff and he has not settled the debt in 7 days as stipulated by the Defendat, but has sought time for more than 6 months and has actually took that amount of time to settle the debt . In response to the said letter of the Defendant dated 17th March, 2010 the Plaintiff sent the email dated 18th March, 2010 where he suggested a payment of $500 by the end of May, 2010 and another payment of similar amount by the end of July, 2010 and to settle the rest by end of September, 2010. The Plaintiff did not honour that settlement.
20. On the very next day on 19th March, 2010 the Plaintiff sent another email where he proposed to pay a monthly payment of $ 100 from 31st March, 2010 and to clear the full amount by 30th September,2010. The Plaintiff again did adhear to said 'revised settlement plan' of 19th March, 2010.
21. The Plaintiff relies heavily on this second proposal, dated 19th March, 2010 but it is noteworthy that payment receipts produced were done only in March and July. So even if the Defendant accepted the second proposal of the email dated 19th March, 2010 there were defaults for months of May, and June. The advertisemt of the winding up was published on "Fiji Times" on 19/6/10 and at that time the Plaintiff was already in default of his own alleged arrangement of settlement contained in the email of 19th March, 2010.
22. It is noteworthy that Plaintiff has only produced two receipts for $100 and those were also made in the months of March and July (the receipt dated 1.6.2010 according to the Plaintiff's own affidavit was made in the month of July) and by this it is evident that Plaintiff was in default of his second revised proposal dated 19th March, 2010 where he agreed to pay $100 per mensum. So, there were no payments for the months of April, May and June. In any event the debt is not settled and the ultimatum granted to the Plaintiff by its letter dated 17th March, had expired long time ago and the debt is not disputed and also has not settled it or opposed the Winding Up action.
23. It is also important to note that the Defendant had only given an ultimatum on 17th March, 2010 by its letter to the Plaintiff to settle the full debt within 7 days and has not replied to the settlements offered by the Plaintiff on 18th March 2010 and the revised offer of 19th March, 2010 though in a later corresponds there are evidence that is contrary and not conclusive on this issue. Plaintiff's email dated 29th March, 2011 clearly state what was accepted by the Defendant is not the revised offer as suggested in this action, but the initial settlement offer on 18th March, 2010 where he agreed to pay $ 500 at the end of May, and another similar amount by the end of July, Which he had clearly defaulted.
24. The Defendant was at liberty to accept them or to stick to their earlier ultimatum or to observe the Plaintiff's commitments to settlement of the debt and take appropriate action including winding up. As long as there is an outstanding debt and it has not been settled the debtor can file a winding up action after complying with the provisions of the law.
25. The Plaintiff's email of 29th March, 2010 which is marked as 'SS 6' attached the Plaintiff's affidavit in opposition to this action state that proposal dated 18th March, 2010 was initially rejected, but it was later accepted by the Defendant. Accoring to the said proposal of 18th March, 2010, the Plaintiff has to make payments of $500 each on or before 30th May, 2010 and 31st July, 2010. This email is contrary to his positon that is taken in this action and the emails filed by the Plaintiff marked SS 6.
26. It is clear that Plaintiff has not paid $500 on or before 30th May, 2010 and has clearly defaulted even the said proposal by the end of May, 2010 and in any event when the Winding Up was advertised the Plaintiff has neither complied with his initial proposal dated 18th March, 2010 nor the revised settlement dated 19th March, 2010. It is also note worthy that though Plaintiff heavily relies on the revised settlement proposal of 19th March, 2010 the above mentioned email of the Plaintiff dated 29th March, 2010 stands contrary to that.
The email of the Plaintiff dated 29th March, 2010 marked SS 6 states as follows:
"This was my response my friend, however they did not agree to this proposal and we later agreed via telephone conversation which I will forward to you now"
27. The forwarded email is the proposal of the Plaintiff dated 18th March, 2010. So according to the said email of the Plaintiff the accepted offer for settlement was not the revised offer of 19th March, 2010, but the initial offer of 18th Marh, 2010.
28. The Affidavit evidence before this Court clearly shows that both the parties' position differed in respect of the allegations made by the Plaintiff on the arrangement for payment with the Defendant on the debt claimed and the only undisputed arrangement that was reached between the parties was the acknowledgement of the debt that was reached on the 14th July, 2010 and on 21st July, 2010, the Winding Up action was withdrawn.
29. In paragraph 4 of the Defendant's Affidavit, the Defendant states that the Notice of Intention to wind up the Plaintiff dated 5/3/11 was forwarded to the Plaintiff Company via postal mail to the Plaintiff's registered address as per the public records held at the Companies Registry. The Notice expired on or about 31/3/11. In response to this, at paragraph 27 of the Plaintiff's Affidavit the deponent, Steven Singh (the Managing Director of the Plaintiff) states that the company did not receive the section 221 Notice.
30. The chain of emails dated 30/5/10 being annexures "SS7", "SS8", "SS9" and "SS10" of the Plaintiff's Affidavit clearly shows evidence contrary to that. In annexure "SS8", Steven Singh asserts that he was never aware of the winding up notice or was served with any notice. He further goes on to say:
"If you feel otherwise please go ahead with your action and I want to put you on notice that will defend this as per our arrangement with Vodafone." (emphasis added)
It is also important to note that the SS 6 is contrary to the Plaintiff's position that there was an arrangement dated 19th March, 2010.
31. The SS7 email dated 3rd May, 2010 from Emily King state that she was advised by the Defendant's Legal/Accounts that the monthly payment of $100 was 'initially accepted' if that is so the Plaintiff has to may $ 100.00 per mensum starting from 31st March, 2010 and would have paid for March, and April by 3rd of May, 2010 when the said email was sent. The said email clearly warns again if there was even a single default that they would proceed to Winding Up. There was a default for the month of April at the time of the said email and the default continued for months of May and for June (the payment for June was paid in early July by the Plaintiff's own admission though the receipt date shows a different date).
32. In the case of Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 the Court of Appeal of the Fiji cited the case of B.W. Holding v Graham Eden and Assocaites 2000 FJHC 3 and quoted the following passage of the Justice Scott:
"In Fiji's circumstances where there is a notoriously high failure to comply with detailed requirements of the Companies Act and where prosecutions for such failure are virtually unknown. I am firmly of the opinion that these provisions of the Companies Act shoud be read permissively. The purpose of these provisions is to provide the way in which service should ordinarily be effected on companies. Where, as here, the Company has not fully complied with Section 110(1) the fundamental question is whether the service, as in fact effected, will have reached the Company's Management."
It was also held in Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 at paragraph 28:
"In this case I find that the Notice served by fax on 19th February 2009 under Section 221 of the Companies Act to the Secretary and the Directors, Khan Buses Limited Navutu Industrial Subdivision, Kings Highway, P O Box 6549, Lautoka was good service although not left at the Khan Buses Limited's registered office. Out of caution the letter should also be left at the registered office. However if the document in all the circumstances relating to the company to be served was likely to be immediately received by the Secretary and Directors of the company as was the case here, then the rule can be read permissively and service of the Notice accepted as lawful. In my judgment the fact that the letter was immediately received tends to prove that the method chosen was in all the circumstances likely to be successful." (emphasis is added)
33. The notice of winding up in the Winding Up action HBE 34 of 2010 was thus served according to the provisions of the law, though denied by the Defendant. That is clear from the email of SS 10 written by Emily King, filed by the Plaintiff. Plaintiff has not opposed the said Winding Up action on the basis that he has not received notice.
34. Furthermore, the Plaintiff had also via his email marked as 'SS 8' dated 3/5/10 warned the Defendant's solicitors that they could go ahead with the winding up action and that he will defend it as per his arrangement with the Defendant. Hence at the least, by 3/5/10 the Plaintiff was clearly aware of the Defendant's intention to proceed with the Winding Up action and the Plaintiff had also warned of its intention to defend it. It was an indication that Plaintiff was under sound legal knowledge on this issue at that time. This was further evidenced from the Plaintiff's email SS10.
35. Also important to note from the email correspondence in the said annexures "SS7", "SS8", "SS9" and "SS10", the dispute about the installment payments. Both parties' had contrary positions on the alleged arrangement for installment payments. In annexure "SS9", the Defendant's solicitor, Emily King in her email dated 3/5/10 sent at 1:45pm said:
"Please provide scanned copies of the cheques mentioned and receipts issued by Vodafone for clarification"
36. In response, Steven Singh in his email of same date sent at 2:12pm (annexure "SS10") said:
"I have the cheques and receipts for all payments from Vodafone. My arrangement is with Vodafone so I will continue paying them unless instructed by them to pay you."
37. The Plaintiff didn't furnish copies of the cheques and receipts that the Defendant's Solicitor had sought from him as proof of his alleged payments and arrangement with the Defendant. There are only two receipts of alleged payments made annexed to the Plaintiff's Affidavit as annexure "SS4" which contains a receipt dated 31/3/10 from Vodafone for $100.00 and annexure "SS5" which contains a receipt dated 1/6/10 by the Defendant's solicitors which payment was receipt on a "without prejudice" basis to the legal action in train.
38. In relation to this it is important to note paragraph 18 of the Plaintiff's Affidavit where Steven Singh states that he went to the office of the solicitor to make the repayment for the preceding month and he further states in the subsequent paragraph 19 that "Notwithstanding the petition, the solicitor accepted the repayment of $100 for the month of June 2010". This clearly shows that the payment for the month of June 2010 was in fact made by the Plaintiff on 1/7/10 although the receipt is dated 1/6/10 was a clear error as regards to the date. There is further no evidence of any payment made in April or May 2010 and also admittedly, no payment made in the month of June, 2010.
39. The Winding Up petition was filed on 23/4/10 and served on the registered office of the Plaintiff situated at 7 Yasiyasi Road, Nadera, Nasinu on 6/5/10. An Affidavit of Service was duly filed by the Defendant's solicitors on 13/5/10. The Petition was advertised in the Fiji Times on 19/6/10. Hence the Plaintiff had more than ample time from 6/5/10 to make an application to restrain or stay further proceedings on the Winding Up Petition. The Plaintiff also had the right to file an Affidavit in Opposition pursuant to Rule 31 of the Companies (Supreme Court) Rules, 1983 which was not done.
40. Furthermore, it is well-settled law that a Winding Up petition can only be opposed on substantial grounds. In this case, the debt was clearly admitted by the Plaintiff and hence it had no substantial ground to oppose the petition. The Winding Up petition was withdrawn on 21/7/10 based on the "Acknowledgement of Debt & Undertaking" dated 14/7/10 executed by the Plaintiff (annexure "DC3" of the Defendant's Affidavit and "SS13" of the Plaintiff's Affidavit) and that was also done after the Plaintiff made a request to withdraw the winding up action filed against the company.
41. In light of the above, it can be clearly seen that there is no merits in the Plaintiff's allegations to support its claim filed herein. If the Plaintiff had genuinely felt threatened by the winding up action, it would have acted immediately to take steps to oppose the same or restrain advertisement of the petition. It is also important that no clause was included in the 'acknowledgement of the Debt and understanding regarding the pending legal proceeding on the said debt.
42. No evidence is admissible on an application under Order 18 Rule 18(1) (a). It is the allegations in the pleadings along that are to be examined (Republic of Peru v Peruvian Guano Company (1887) 36 Ch. D489 at p. 498.) Allegations in pleadings are scandalous if:
43. Striking out for abuse of process is a power which any Court of justice has to prevent the misuse of its procedure in a way which would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise being the administration of justice into disrepute among right thinking people (per Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529 at p.536).
44. Halsbury's Laws of England 4th Ed Vol. 37 para 434 states on 'abuse of process' that-
"An abuse of the process of the court arises where its process is used, not in good faith and for proper purposes, but as a means of vexation or oppression or for ulterior purposes, or, more simply, where the process is misused. In such a case, even if the pleading or indorsement does not offend any of the other specified grounds for striking out, the facts may show that it constitutes an abuse of the process of the court, and on this ground the court may be justified in striking out the whole pleading or indorsement or any offending part of it. Even where a party strictly complies with the literal terms of the rules of court, yet if he acts with an ulterior motive to the prejudice of the opposite party, he may be guilty of abuse of process, and where subsequent events render what was originally a maintainable action one which becomes inevitably doomed to failure, the action may be dismissed as an abuse of the process of the court."
45. In Henderson v. Henderson [1843] EngR 917; (1843-60) ALL ER 378, Wigram V.C. at page 381 said:
"Where a given matter becomes the subject of litigation in, and of adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under specific circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought at the time." So if the Plaintiff wanted to dispute the Section 221 (Companies Act) notice, or advertisement of winding up he would have done so in the winding up action.
46. As stated in paragraph 9 of the Defendant's Affidavit, the Plaintiff has brought this action on the premise that the Winding Up petition should not have been advertised .The law requires the Defendant to advertise the petition. Rule 23 of the Companies (Supreme Court) Rules, 1983 provides for a mandatory requirement for a petitioner to advertise the Winding Up petition at least seven days before the hearing date given on the petition and further states that if the petition is not advertised within the time prescribed by the rules or within such extended time as the registrar may allow, the appointment of the time and place at which the petition is to be heard shall be cancelled unless a judge or registrar shall otherwise direct.
47. The Defendant was therefore complying with the rules within the legal framework of the statutory requirements of winding up action. In relation to this the Defendant relies on the Court of Appeal Judgment in Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 which is direct on the point of the issue of advertisement raised in this matter and which case comprehensively dealt with and pointed out the correct principles of law relating to whether there could be any issue of abuse of process of Court when the petitioners advertise winding up petitions. At paragraphs 31 and 32 on the Court of Appeal referred to the requirements of advertisement under Rule 23. Then at paragraph 33 refers to an accurate summary of the case law as summarized in Halsbury's Laws 4th Edition, 1988, vol. 7. In that case, the Respondent company had alleged that the Winding Up Petition was issued by the Appellant (the petitioner therein) because of ulterior or improper motive or purpose. At paragraph 40 on page, the Court of Appeal cited with approval the following passage from Mann v. Goldstein [1968] 1 WLR 1091 where Justice Ungoed Thomas said:
"I come now to the allegation of lack of bonafides and to abuse of process. It seems to me that to pursue a substantial claim in accordance with the procedure provide and in the normal manner, even though with personal hostility or even venom, and from some ulterior motive, such as the hope of compromise or some indirect advantage, is not an abuse of the process of the court or acting mala fide but acting bona fide in accordance with the process. And certainly no authority suggesting otherwise has been brought to my attention." [bold for emphasis]
48. Further, at paragraph 46 on page 18, the Court of Appeal said:
"If abuse of the statutory process is made out then usually an injunction will follow. But as the above cases demonstrate it will be extremely rare for the very limited abuse of process doctrine in this statutory context to be applicable. There have been millions of cases since 1862 and as stated in paragraph 1 above there is only a handful of cases in mainstream jurisdictions where injunctions issue." (bold for emphasis)
49. The Court of Appeal went on to say at paragraph 47, 48 and 49:
"In a very few cases, it may be proper by inter partes summons to raise the question of the statutory advertisement with the winding up High Court judge in an abuse of process application. If the High Court judge is sure on the evidence that the debt is disputed on substantial grounds then the hearing of the petition should be brought forward and the petition should be withdrawn and dismissed or simply dismissed. Alternatively, there may be an undertaking by the petitioner not to advertise or an injunction and such should only apply until the hearing of the petition. It has to be remembered however, that the advertisement procedure must be gone through before a winding up order can be made.
If however, the High Court judge is not satisfied that the debt is disputed on substantial grounds, the statutory advertisement should not be restrained. This is because in that situation there is no abuse of process. Allowing other creditors to join the petition is an integral part of the winding up process. Limited liability makes allowing debts of companies to remain unpaid a very risky strategy. So the long established statutory framework offsets the advantages of trading with limited liability with the balancing factor of a relatively immediate sanction should the company not pay off its debts when they become due.
In many cases there will be no abuse of process summons re advertisement. The policy of law reflected in the cases is that a solvent company should be able to dispute a debt where there is a substantial dispute. This is achieved by withdrawal and dismissal or simply dismissal of the petition which then requires the petitioner to take civil proceedings to try to establish the debt."
50. At paragraph 51, the Court of Appeal in summarizing the position of the Australian cases, at the last sentence said: "That is not surprising because it is only the very occasional case that abuse of process is raised let along established; all other cases are resolved within the legal framework."
51. The above principles evaluated by the Court of Appeal clearly shows that advertisements in winding up actions are merely an integral part of the legal framework of winding up actions and cannot be equated to normal advertisements in other situations. The advertisement is compulsory. The claim is baseless given that the advertisement was a statutory advertisement.
52. The Court of Appeal in Aleem's case (above) did refer to a situation where an advertisement in the course of winding up action would result in abuse of process. The case of Australian Beverage Distributors Pty Ltd v. Evans and Tate Premium Wines Pty Ltd and Another. In that case, the Court of Appeal had dismissed all the orders of the Judge at the first instance based on abuse of process, except one. The one upheld by the Court of appeal involved not the statutory advertisement but the Petitioner sending a press release which was published in the media publicizing the fact of a petition, and that it was needed because the debtor company was hopelessly bankrupt. The press release was issued prior to the statutory advertisement
53. The advertisement of the petition expressly requires the petitioner to inform other potential supporters or opponents of the petition as stated by the Court of Appeal in paragraphs 31 and 32 on page 14 in Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 case
54. Also as is well settled law the Plaintiff could have only opposed the petition on substantial grounds The Plaintiff's allegation that there was an arrangement in place to pay the debt in installments is not a substantial ground on which a winding up petition could be opposed as that does not equate to the company being solvent. It is common that debtor companies propose payments once warned of winding up action or upon petition being served on them. The Court does not dismiss petitions on such grounds until the petitioner is satisfied that its debt will be paid and withdraws the petition. The petition is not precluded from being advertised during the course of negotiations for payment or arrangement as the debt is still owed. The advertisement is for the other debtors to give notice of the already filed the Winding Up action.
55. In the case of Mann v. Goldstein [1968] 1 WLR 1091 Justice Ungoed Thomas said " It seems to me that to pursue a substantial claim in accordance with the procedure provided and in the normal manner, even though with personal hostility or even venom, and from some ulterior motive, such as the hope of compromise or some indirect advantage, is not an abuse of the process of the court or acting mala fide but acting bona fide in accordance with the process". (emphasis is added) The said case was decided more than 40 years ago and Fiji Court of Appeal applied the principles in that case and cited with authority in 2011 in Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 and that shows the principles laid down in the Mann v. Goldstein(supra) has withstood the test of time as regarding winding up actions.
56. It is noteworthy that Plaintiff has neither opposed the said Winding Up Action HBE 34 of 2010 filed by the Defendant nor has it taken any step to restrain the said winding up action and even if the Plaintiff had opposed the petition or applied to restrain the advertisement of same on allegations of entering into an arrangement for payment with the Defendant, that would not have satisfied the requirement of being a substantial ground for seeking such relief and that is clear from the decision of the Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 and by application of the same legal precedence and for the reasoning given in this ruling, the Plaintiff cannot bring this action for damages against the Defendant and in the light of that decision, it is a clear that there is no reasonable cause of action that is disclosed in the Plaint and it is also an abuse of process of the Court . The behavior of the Plaintiff that evidenced in the materials before me shows that he has without any reservations admitted the debt and proposed a settlement plan when the Defendant's demand letter was sent. On 18th March, 2010 he proposed to pay $500 by the end of May and another $500 by end of July, 2010, but on the very next day on 19th State that he will be only paying $100 per month and only pays for $100 on 31st March, 2010 and another payment on 1st July, 2010 (without prejudice basis) and had not accepted the notice given in terms of Section 221 of the Companies Act, and did not oppose or restrain the Winding Up action and as per rules it was advertised and when the matter was ready for hearing the Defendant request the winding up action be withdrawn on 13th July, 2010 and on the following day on 14th July, 2010 an 'acknowledgement of debt and understanding' was entered between the parties and a legally binding document was signed and the Winding Up was withdrawn. After withdrawal the Plaintiff has filed this action for damages. The evidence before me as analyzed in this ruling clearly shows that this action is an abuse of the process of the court.
57. In the light of the Aleems Investments Ltd v Khan Buses Ltd [2011] FJCA 4; ABU0036 of 2009 I it is clear that an advertisement in an already filed Winding Up action cannot be a ground for a cause of action as long as the debt is not settled and undisputed . It was also held in Mann v. Goldstein [1968] 1 WLR 1091 that the debtor with the settlement or ulterior motive could file a winding up action. The Plaintiff's claim is based on the advertisement. In the circumstances the claim is struck out for non disclosure of reasonable cause of action and it also amounts to an abuse of process of the court.
58. The Plaintiff's claim is struck out and the Defendant is also granted a cost of $1000 assessed summarily.
Dated at Suva this 27th day of May, 2011
.............................................
Mr Deepthi Amaratunga
Acting Master of the High Court
Suva
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