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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
MP No. 31 OF 2019
IN THE MATTER OF THE COMPANIES ACT 1997
AND
IN THE MATTER OF L & A ILB (PNG) LTD (1-14935)-
Waigani: Linge A J
2022: 15 & 25th August
COMPANY LAW – PRACTICE AND PROCEDURE – winding up – application by director and shareholder of L&A ILB (PNG) Limited seeking to adjourn proceeding pending outcome of another related matter before the supreme court – whether adjournment will be prejudicial to parties - no evidence before court that the adjournment would prejudice the interest of either party- no utility in adjourning the petition to the Registry - Supreme Court has its own timeline so as the National Court - application for adjournment dismissed - petition to progress to its hearing.
Cases Cited:
Independent Public Business Corporation of PNG -v- Motor Vehicle Insurance Ltd [2018] PGNC 110; N5953
Siune –v- Rimua [2013] PGNC 95; N5281
Counsel:
Mr. B Sinen, for the Intervener
Mr. P W Smith, for the Petitioning Creditors
RULING
25th August, 2022
1 LINGE A J: On the 19 July 2022 Yumei Ni Cragnolini as director and shareholder of L&A ILB (PNG) Limited filed this Notice of Motion as the intervener seeking to adjourn this proceeding MP No. 31 of 2019 generally pending the outcome of the Supreme Court proceeding in SCA No. 62 of 2021 pursuant to Order 12 Rule 1 of the National Court Rules.
2. I heard the application inter parties on the 15 August 2022 and this is my ruling.
Background
3. On the 23 the 17 June 2021 Kandakasi, DCJ in proceeding MP No.8 of 2020 ordered that L&A ILB (PNG) Limited be wound up and appointed Andrew Pini as the liquidator. The Petitioning Creditor was Nosrida Limited in that MP No.8 of 2020 – In the Matter of the Companies Act 1997 and In the Matter of L&A ILB (PNG) Ltd.
4. On the 23 June 2021 Yumei Ni Cragnolini filed SCA No. 62 of 2021 in her capacity as director and shareholder of L&A ILB (PNG) Limited. The parties in the appeal are L&A ILB (PNG) Limited v Nosrida Limited & Andrew Pini of Pini Accountants & Advisers as Court appointed Liquidator of L&A ILB (PNG) Limited. The appeal is against the order of Kandakasi DCJ in MP No.8 of 2020.
5. On the 14 August 2021, the Supreme Court in SCA No.62 of 2021 issued orders staying the Winding Up Order of the 17 June 2021 and restrained the Liquidator from conducting the Winding Up.
6. On the 22 January 2020 L&A Construction Ltd filed a Supreme Court Appeal against the dismissal of the Petition made on the 17 December 2020.The reference to that appeal is SCA No. 9 of 2020 – L&A Construction –ats- L&A ILB (PNG) Limited.
7. On the 4 March 2022 the Supreme Court in SCA No. 9 of 2020 upheld the Appeal and ordered that the matter be reinstated in the National Court for determination of L&A Construction’s Petition to Wind Up.
Facts
8. For purposes of this application for adjournment, the following are the relevant facts.
9. Kenmore Limited t/a Atlas Steel PNG-Port Moresby initially filed this petition on the 24 June 2019 seeking the winding up of L
& A ILB (PNG) Limited. On the 30 August 2019 by order of the Court L&A Construction Limited became the substituted petitioner instead of Kenmore.
10. The petitioner Lady Ni Cragnolini joined the proceeding as director and shareholder of L&A ILB (PNG) Limited on the 17 December
2020.
11. On the 26 September 2019 Nosrida Ltd, filed its notice of intention to appear as interested Creditor in this proceeding MP No.31 of 2019.
12. Nosrida Ltd who is a party in SCA No.62 of 2021 on the 17 June 2020 filed petition as interested Creditor in this proceeding MP 31 of 2019. It was also the petitioner in MP No. 8 of 2020, that culminated in the winding up of L&A ILB (PNG) Limited and appointment of a liquidator.
13. On the 23 June 2021 Yumei Ni Cragnolini in her capacity as director of L&A ILB (PNG) Ltd, filed an appeal against the appointment of the liquidator over L&A ILB (PNG) Limited in SCA No. 62 of 2021. Parties in the appeal are: Yumei Ni Cragnolini as Director of L&A ILB (PNG) Limited –v- Nosrida Limited & Andrew Pini of Pini Accountants & Advisors as Credit Appointed Liquidator of L&A ILB (PNG) Limited.
Submissions
For the petitioner
14. Mr Sinen of Counsel for the applicant acknowledges that SCA N.62 of 2021 is an appeal from decision in MP No. 8 of 2020, filed by Nosrida Ltd that culminated in the winding up of L&A ILB (PNG) Limited and appointment of a liquidator.
15. He submits that Yumei Ni Cragnolini although not a party in MP No. 8 of 2020, in her capacity as a shareholder in L&A ILB (PNG) Limited has an interest in the outcome of the appeal in SCA No.62 of 2021.
16. Counsel also submits that there is utility in staying or adjourning the current proceeding to allow for orderly disposition of the matter. He submits that the Supreme Court appeal impacts on the liquidity and solvency of L&A ILB (PNG) Limited.
17. He contends that in the event that the appeal is successful the petitioner, Yumei Ni Cragolini can still exercise her rights over L&A ILB (PNG) Limited. If on the other hand the appeal is unsuccessful, MP No.8 of 2020 would be consolidated with MP No.31 of 2019. In essence he submits that the respondent will not be prejudiced by the adjournment.
For the respondent
18. Mr. Smith submits that the applicant must justify the adjournment of MP No.31 of 2019. Such application must contain and be based on good reasons adduced before the Court for it to exercise its discretion, the exercise of which will in turn deny the Creditor its rights to be heard on the Petition.
19. He submits that Order 12 Rule 1, National Court Rules gives the Court discretion, and the application must show facts and/or legal issues which SCA No.62 of 2021 will decide, clarify or establish that are so relevant to MP No.31 of 2019 so as to justify staying that proceeding.
20. This Petition has been returned for Hearing by the Supreme Court and thus submits that only highly persuasive facts or rulings of law should interfere with the hearing of that Petition. He submits there is nothing in the supporting affidavit to the Notice of Motion which raises such issues.
21. Counsel pointed out that as between SCA No.62 of 2021 and MP No. 31 of 2019, the Respondent submits that:
(i) There are no common facts either in issue, or at all.
(ii) The Parties are different.
(iii) The Petitioning Creditors are different entities.
(iv) The debts are different.
(v) The Respondent has shown no interest or right in L&A.
(vi) Construction Ltd which is subject to, pleaded in or appealed against in SCA No.62 of 2021.
(vi) The primary decision appealed against did not concern or involve L&A Construction Ltd or MP 31 of 2019.
(vii) L&A Construction Ltd was not a party to, or in any way involved in MP No.8 of 2020.
22. Counsel submits that SCA No.62 of 2021 appeals the judicial decision-making process, alleged errors of fact and law in MP 8 of 2020, not any legal principle which may affect MP 31 of 2019 in any way.
23. He submits that the stay order issued in SCA No.62 of 2020 is general and restricted to the parties in MP No.8 of 2020 and that Petition and Winding Up and does not apply to MP No.31 of 2019 or the Petitioning Creditor.
24. Counsel also submits that the Stay Order issued by the Supreme Court in SCA No.62 of 2020 and that Supreme Court Appeal do not involve or include any evidence, state of the debt, the statutory presumption of insolvency, the procedure adopted or any other matter relevant to MP No.31 of 2019 or the Petitioning Creditor.
25. Even if SCA No. 62 of 2020 is successful for the Appellant, the Applicant identifies no effect on MP No. 31 of 2019, the Petitioning Creditors rights, the procedure or any other matter and the Applicant presents no evidence to this effect. Thus, the petitioning creditor should have his right to proceed in MP No. 31 of 2019 and this motion must be dismissed he submits.
The Law
26. Order 12 Rule 1 of the National Court Rules provides a general relief for the Court to make orders upon application as the nature of the case requires. It does not matter if
the applicant does not make a claim for that relief or claim in any originating process. It is discretionary
27. The Rule has been invoked in different scenarios including to vary an original order as in Siune –v- Rimua [2013] PGNC 95; N5281 or in an application to stay a proceeding as in Independent Public Business Corporation of PNG –v- Motor Vehicle Insurance Ltd [2018] PGNC 110; N5953 where the Court raised the question whether the issue to be argued in the National Court would pre-empt or pre-judge an issue that has been heard, reserved and not delivered by the Supreme Court.
28. The applicant/receiver relies on the Rule to seek an adjournment generally pending the outcome of SC No. 62 of 2021. It falls short of seeking an injunction.
Consideration
29. The issue for my consideration is whether the appeal against the appointment of the liquidator over L&A ILB (PNG) Limited in SCA No.62 of 2021has any bearing and would impact the National Court proceeding.
30. I take cognizance of the fact that Nosrida Ltd has been joined as an interested Creditor in this MP No. 31 of 2019. It is also the petitioner in MP No. 8 of 2020, that resulted in the winding up order and appointment of liquidator for L&A ILB (PNG) Limited and appointment of a liquidator on the 17 June 2020 over L&A ILB (PNG) Limited which is the subject of appeal in SC No. 62 of 2021.
31. It is evident that Yumei Ni Cragnolini is a Director of L&A ILB (PNG) Limited and thus would have an interest in the outcome of the appeal in SCA No. 62 of 2021.
32. Conversely, I consider whether the current petition can proceed to finality without affecting creditor’s or debtor’s rights which may be sub judice in SCA No. 62 of 2021, which would compel me to adjourn the matter generally to the Registry pending the outcome of the appeal.
33. I had the benefit of perusing the Grounds of Appeal and note that save for Ground 3.3 (f) Solvency and otherwise of the Company, the other grounds are legal and procedural in nature.
34. I also take judicial notice of the currency of the order of the Supreme Court in SCA No. 62 of 2021 issued on the 14 August 2021 staying the Winding Up Order of the 17 June 2021 and restraining the Liquidator from conducting the Winding Up.
35. In my view, the above-mentioned stay order is sufficient to maintain the status quo of the current proceeding and the solvency of the company to allow petition to proceed to full hearing.
36. The Supreme Court had on the 4 March 2022 ordered that the matter be reinstated in the National Court for determination of L&A Construction’s Petition to Wind Up. It is judicially proper to not deviate from that ruling.
37. While I accept that both Nosrida Ltd and L&A ILB (PNG) Limited are interested parties in this proceeding MP No. 31 of 2019 as either intervener and parties in SCA No. 62 of 2021respectively, there is no evidence before me that the adjournment would prejudice or otherwise the interest of either party.
38. I therefore find no utility in adjourning the petition to the Registry. The Supreme Court has its own timeline so as the National Court.
39. In the exercise of my discretion I will make orders that will ensure the petition progress to its hearing.
Order
Ordered Accordingly
_______________________________________________________________
O’Briens Lawyers: Lawyers for the Substituted Petitioner
Leahy Levin Lowing Sullivan Lawyers: Lawyers for the Intervene
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