|
|
Home
| Databases
| WorldLII
| Search
| Feedback
National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
MP 31 of 2019
BETWEEN:
IN THE MATTER OF THE COMPANIES ACT, 1997
AND:
IN THE MATTER OF L & A ILB (PNG) LTD (1-14935)
Waigani: Anis J
2019: 20 & 30 August
COMPANIES ACT 1997 – Notice of motion by interested person to substitute petitioner – Companies Rules – Rule 23 – whether interested person should be allowed to substitute the petitioner under the circumstances – Rule 23(1)(a)(b) & (c) discussed – whether interested party has demonstrated a reason under sub-rule (1)(a)(b) or (c) – whether interested party has adduced prima facie evidence to convince the Court to exercise its discretion and grant the application on the basis that the interested party would have a right to present the petition
Cases cited:
Nil
Counsel:
Mr Mininga, for the Petitioner
Mr B Nutley, for the Interested Party/Applicant
Mr P Lowing, for the Alleged Debtor
RULING
30th August, 2019
1. ANIS J: This was an application by an interested party, namely, L & A Construction Limited (intending petitioner) who had sought to be substituted as the petitioner in this proceeding. It was heard on 20 August 2019 and I reserved to 9:30am today.
2. This is my ruling.
BACKGROUND
3. The petitioner, Kenmore Limited trading as Atlas Steel PNG, filed its petition against L & A ILB (PNG) Ltd (alleged debtor) on 24 June 2019. The petitioner has since received full payment of its debt as claimed in the petition. It is presently contemplating to withdraw the proceeding. On 6 August 2019, the intending petitioner filed a notice of motion (application).
4. The intending petitioner claims that the alleged debtor also owes it monies that have remained due and owing. It seeks to be substituted as the petitioner so that it could ask the Court to wind-up the alleged debtor.
APPLICATION
5. The application seeks two (2) main relief. They are, and I quote:
6. Rule 23(1) of the Companies Rules reads, and I quote:
(1) Where a petitioner is not entitled to present a petition or, whether he is so entitled or not, where he –
(a) fails to take all the steps prescribed by these Rules preliminary to the hearing of the petition; or
(b) consents to withdraw his petition or to allow it to be dismissed or the hearing to be adjourned; or
(c) fails to appear in support of his petition when it is called on in court on the day originally fixed for the hearing or any day to which the hearing has been adjourned, or appears and does not apply for an order in the terms of the prayer of his petition.
the Court, on such terms as it thinks just, may substitute as petitioner any person, who in the opinion of the Court, would have a right to present the petition and who wishes to proceed with the petition.
ISSUES
7. The main issues are, (i), whether the intending petitioner qualifies under one or more of the circumstances under Rule 23(1)(a)(b) or (c), to apply to be substituted as petitioner in this proceeding, and, (ii), subject to issue (i), whether the intending petitioner would have a right to present the petition in regard to the proceeding if allowed to be substituted.
DISCRETION
8. I note that the Court’s power in this matter is discretionary. I say this in light of Rule 23(1) and in particular, the part where it reads and I quote, the Court, on such terms as it thinks just, may substitute as petitioner.
9. Before exercising this discretion, the Court must be satisfied that at least one of the pre-requisites set out under Rule 23(1)(a)(b) or (c) of the Companies Rules, has been met. By that I of course mean the following:
(i) if the petitioner is not entitled to present the petition; or
(ii) if the petitioner is entitled to present the petition but fails to take all the steps prescribed by these Rules preliminary to the hearing of the petition; or
(iii) if the petitioner consents to withdraw his petition or to allow it to be dismissed or the hearing to be adjourned; or
(iv) if the petitioner fails to appear in support of his petition when it is called on in court on the day originally fixed for the hearing or any day to which the hearing has been adjourned, or appears and does not apply for an order in the terms of the prayer of his petition.
10. If one or more of the pre-requisites are met, the Court may exercise its discretion. But in order to do so, it must also be satisfied that the applicant would have a right to present the petition and who wishes to proceed with the petition. Let me address that.
PETITIONER’S DEBT
11. In the present case, again, it is not disputed that the petitioner has been paid fully its debt. That is, and I note that on 6 August 2019, a sum of K51,192.77 was paid by the alleged debtor and received by Ashurst Lawyers, the lawyers for the petitioner.
12. The petitioner had on 8 August 2019, requested time from the Court to clarify or clear the cheque payment that had been made by the alleged debtor. When the matter returned on 20 August 2019, this application was moved. The petitioner again requested more time. It said it required further time because it had taken issue concerning the source of payment from the cheque of K51, 192.77. And also, based on submissions from both the counsel for the petitioner and the alleged debtor, they say that the payment was made based on the understanding that the petition would be withdrawn. With respect, I find these submissions frivolous. The petitioner and the alleged debtor, in my view, have not provided any valid reasons that would estop the intending petitioner from moving the application. For example, a request by a petitioner for an adjournment itself, may be sufficient in terms of meeting the requirement under Rule 23(1)(b) of the Companies Rules. The other reason is failure by a petitioner to conduct the petition hearing.
CONSIDERATION
13. In the present case, I note that there is no real argument in term of the first requirement. I note that the petitioner’s debt has been settled and there may not be a need for the petitioner to continue with the proceeding. I also note that the petitioner had requested time to verify the source of where the money had come from to settle its debt, which I of course did not find convincing as I had indicated to counsel at the hearing, and as I have also stated above in my ruling. For this purpose, I am satisfied that the first requirement has been met by the conduct of the petitioner, that is, when it requested for two (2) adjournments of the hearing of the petition. I am satisfied that the applicant has established Rule 23(1)(b) of the Companies Rules. I also note that since the petitioner has received full payment, it no longer has a valid reason to pursue the matter or to remain as a party in this proceeding.
14. The only other main issue is in regard to the second leg, that is, whether the intending petitioner would have a right to present the petition. To determine that, I draw my attention firstly to the required debt as prescribed under the Companies Act 1997 and its regulation. Clause 16 states, and I quote, For the purposes of Section 337(2)(a) of the Act, the prescribed amount is K1,000.00. So with that, I have this question to ask. Is there evidence adduced by the intending petitioner that the debtor may owe it a sum that is equivalent to or that exceeds the prescribed amount? When I refer to the intending petitioner’s evidence, and I note in particular two affidavits filed that were deposed to by Sir Luciano Cragnolini. The affidavits were filed on 1 August 2019 and 9 August 2019. In brief, I must say that I can see prima facie evidence of possible debt the alleged debtor may owe to the intending petitioner. I also see prima facie evidence that there may also be instances of possible failures by the alleged debtor to pay its debts as and when they fell due. The debt which the intending petitioner alleges is owed to it by the alleged debtor is K9, 897, 813.00. By the same token, I also note the arguments from counsel for the alleged debtor. He challenged the evidence of debt. Counsel submitted that the evidence in the affidavit of debt was not relevant because it failed to show a debt that was owed directly by his client to the intending petitioner. Counsel also challenged the alleged debt of K9, 897,813.00. Counsel submitted that his client was not the sole beneficiary to the initial loan when the loan facility was signed; that there were many other companies that were involved together. Similarly, those arguments may be valid and may be raised at an appropriate time.
15. Having said these briefly, I note that I am not making a finding nor am I hearing the petition. It will of course be dealt with at a later date and time. But for now, I will say this. What I have gathered or referred to above, in my view, are sufficient for me to say and find that the intending petitioner would have a right to present the petition. I am therefore inclined to exercise my discretion and substitute the intending petitioner as the petitioner to this proceeding.
SUMMARY
16. I will therefore grant the application. I will order cost to be in the cause.
ORDERS OF THE COURT
17. I make the following orders:
________________________________________________________________
Ashurst PNG Lawyers: Lawyers for the Petitioner
O’Briens Lawyers: Lawyers for the intending Petitioner
Leahy, Lewin Lowing Sullivan Lawyers: Lawyers for the Alleged Debtor
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2019/201.html