HC-CC No: 215 of 1999
SOLOMON MOTORS LIMITED
-V-
lass="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 0; margin-bottom: 0">
BUDGET RECAR
CORPORATION
AND BUDGET RENT A CAR
INTERNATIONAL INC.
HIGH COF SOLOMON ISLANDS
(PALMER J.)
CIVIL CASE NUMBER 215 OF 1999
HEARING: 14th
SEPTEMBER 1999
class="MsoNormal" style="margin-top: 0; margin-bottom: 0">
0">
JUDGMENT: 1st
NOVEMBER 1999
SOL-LAW FOR THE PLAINTIFF
R. MEYERS AND RAMONA WILSON FOR
THE DEFENDANTS
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
PALMER J.: n>
There are two applications
b before this Court. The first one is a Summons filed 26th July 1999 by Budget
Rent A Car
Corporation ("Budget Corporation") and Budget Rent A Car
International Inc, ("Budget International") the First and Second
Defendants, (hereinafter referred to as "the Defendants") for the following
orders:
"1. That the Writ of Summon filed by the Plaintiff in Civil Case No. 215 of 1999 on 9 on June 10, 1999 and
Summons filed
by the Plaintiff in Civil Case No. 218 of 1999 on June 10,
1999 be struck out under Order 21, Rule 29 and Order 27, Rule 4
of the High
Court (Civil Procedure) Rules 1964 and / or the inherent jurisdiction of the
Court on the grounds that:
(a) &nthey are unnecessecessaryssary
or scandalous;
&nb"> span>
(b) areyan a use of
the the process of the Court;
pan lEN-GBle="font-size: 12.0 12.0pt">&pt"> nbsp;
(c) &nbsey tend to
jupree,dice,dice, embarrass or delay the fair trial of the action in Civil Case No.
182 of 1999;
and
(d)  y are frivolous
and vexatious."
The second Summons was filed on
10th June 1999 in Civil Case 218 of 1999 for orders inter alia that:
"1. Soatutemy D oand of d the Respondent dated 14 May 1999 and served on the Applicant on 20 May 1999
be
set aside.
2. p; &nsp;&nIn the alternative,
a a stay of proceedings on the Statutory Demand pending judgment in High Court
Civil Case No. 215 99 anil CaiginaSummons No. 182 of
1999 1999."
This was then followed by a
Notice of Motion filed 28 July 1999h sought orders similar to r to the
Summons filed 10th
June 1999. I quote:
class="MsoNoMsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0">
&q. That Budget R nt A
t A C Car Corporation and Budget Rent A Car International Inc be restrained from
filing or
advertising any petition to wind up Solomon Motors Limited until
after the hearing and determination of the summons of Solomon
Motors Limited
to set aside the statutory demand of Budget Rent A Car Corporation dated 14
May 1999 and served on Solomon
Motors Limited on 20 May 1999, the hearing
and determination of the originating summons for declarations regarding
termination
of contract in Civil Case No. 182 of 1999, the hearing and
determination of Writ No. 238 of 1999 and Writ No. 215 of 1999."
CIVIL CASE NO. 215 OF 1999
The Statement of Claim in Civil
Case No. 215/99 was fon 28 July 1999. The facts as pleaded are
summarised ised as follows.
In or about 30 November 1981, Budget Corporation
entered into a written agreement ("the Head Agreement") with Budget
Rent A Car System Pty Ltd ("BRACS"), an Australian based company
whereby Budget Corporation licensed to BRACS the right to use certain
intellectual
property including the use of the name "Budget Rent A Car" and
a system of operating standardised motor vehicle hire
outlets in certain
territories including Solomon Islands. Sometime in or about 1984, BRACS
entered in turn into a sub-licence
agreement ("the Agreement") with Solomon
Motors Limited, the Plaintiff ("Solomon Motors") to operate a
motor vehicle
hire business within Solomon Islands utilising the Budget Rent A Car name
and system and other intellectual
property. A copy of that Agreement is
annexed to the affidavit of Ramona Wilson filed 10th September 1999. Clause
19.2
of the Agreement provided inter alia, that in the event of termination
of the Head Agreement, Budget Corporation would be substituted
for BRACS as
a party to the Agreement and Budget Corporation would be entitled to assign
its rights and obligations under
the Agreement. In or about April 1990,
BRACS went into liquidation. Budget Corporation was substituted
automatically
thereafter. No dispute appears to be taken about this.
Following the substitution, problems arose. Budget Corporation and Budget
International alleged breaches of certain clauses of the Agreement. Details
of these are set out in the Statement of
Claim filed on or about 16 July
1999 in Civil Case Number 238 of 1998 at paragraphs 14 - 17. These were
disputed by Solomon
Motors right from the beginning (see affidavit of Steve
Theodore Patrick filed 10th June 1999 - exhibits STP1, STP4 and STP5).
By
letter dated 5 January 1999, the Defendants served on Solomon Motors a
Notice of Default dated 30 December 1998 requiring
Solomon Motors to rectify
the breaches alleged within thirty days of receipt (see clause 18 and 19 of
the said Statement
of Claim). The breaches (being disputed) were not
rectified within the time required. By letter dated 8 February 1999, the
Defendants gave notice of termination of the Agreement to Solomon Motors.
The Defendants claim Solomon Motors is indebted
to them for monthly service
fee payments for inter alia, the period April 1995 to July 1996 in the sum
of SBD75,536-34.
On 20 May 1999, the Defendants served on Solomon Motors a
Statutory Demand pursuant to section 211(a) of the Companies Act, demanding
payment of the SBD75,536-34 within three weeks of that date (see affidavit
of William David Ramsay filed 28
July 1999 Exhibit WDR9). On same date
Defendants filed Originating Summons in Civil Case No. 182 of 1999 seeking
declarations
inter alia, that the Agreement had been effectively terminated
on February 7 1999. As early as 28 May 1999 Solomon Motors by
its solicitors
disputed the debt, gave notice of a genuine dispute and called on the
Defendants to withdraw the Demand
by 4.00 p.m. on 1 June 1999 or Solomon
Motors would apply to Court for orders to set the Demand aside. On 4 June
1999
Solomon Motors instructed its solicitors to hold the sum of
SBD75,536-34 in their trust account for the purposes of this matter
and to
offer to pay said amount into Court to abide decision of Court. Solomon
Motors issued its Writ of Summons in Civil
Case Number 215 of 1999 on 9 June
1999 and filed Statement of Claim on 28 July 1999.
The claim of the tiff can
be summarised under two grounds. The first alleges the existence and breach each
of certain
terms in the Agreement, either expressed or implied, and in the
alternative, in a collateral agreement (see paragraphs 7 and
8 of the
Statement of Claim). The terms alleged read as follows:
(a) &nnbsp;; that Budget Rent Rent Rent A
Car System Pty Ltd ("BRACS") would at its cost advertise the Plaintiff's
bus boternatly and regionally in relevant magazines brochures
and trade manuamanuals, wls, wherebhereby the Plaintiffs
business would be advertised as
part of the international and regional Budget Rent A Car network;
(b) &nbssp;&nthat BRat BRACS woCS would at
its cost maintain an international and regional referral system whereby the
Plaintiff would make and receive international and regional vehicle h ngs;
/p>
<
(c) &nbbsp;& that BRACS wouldwouldwould
ensure that such referrals under the said system were made to the Plaintiff
by other intionalregioudget vehicle hire operators."
Solomon Motors claims the First
Defendant had since in or about July breached term (a) above, bye, by
failing or neglecting
to advertise the Plaintiff's business internationally
and regionally as part of the Budget Rent A Car network. It also claims
terms (b) and (c) above were breached by the First Defendant since in or
about April 1997 by failing or neglecting:
(a) &nnbsp;;&nbs maio maintain tain an
international and rend regional referral system whereby the Plaintiff would be
able to mnd re international and regional vehicle hire bookings;
and
p class="MsoNoMsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0">
(b) & to ensu ensure that such
refe referrals were made to the Plaintiff by other international and regional
Budget
vehicle hire operators.
It sets out its claim for
losses and damages incurred in paragraphf the Statement of Claim.
The second ground relied on
pertains to the question of termination of the Agreement. Thithe
subject also, rai, raised
in Civil Case No. 182 of 1999 by the Defendants (as
First and Second Plaintiffs respectively) seeking declarations that the
Agreement was terminated on February 7 1999, whereas the Plaintiff claims
(in Civil Case No 215 of 1999) termination
was effected on 4th June 1999.
TRIABLE OR SERIOUS ISSUES
The first issue whiches
for consideration when dealing with the Summons of the Defendants is whether
there are triable
issues raised in the Statement of Claim of the Plaintiff
(Solomon Motors) in CC 215/99. The Defendants argue the issues raised
pertaining to the terms pleaded as forming part of the Agreement were (i)
unnecessary or scandalous; (ii) an abuse of
the process of the Court; (iii)
tend to prejudice, embarrass or delay the fair trial of the action in Civil
Case No.
182 of 1999; and (iv) are frivolous and vexatious.
ass="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
The Plaintiff relies primarily
on the other hand on the evidence containedhe affidavit of William
m
David Ramsay filed
10th June 1999 at paragraphs 4 to 6. Learned Counsel Bob
Meyers takes objection with the admissibility of this information
on grounds
it contains second hand hearsay evidence. Unfortunately that overlooks the
fact Mr Tomlin was at the alleged
time the General Manager of the Plaintiff
company and therefore a person directly involved in the negotiations with
Bob
Ansett and others on behalf of BRACS. Order 40 rule 3 of the High Court
(Civil Procedure) Rules 1964 allows an affidavit to
contain statements of
information and belief. The material sworn to by Mr Ramsay as to his
information and belief for
purposes of this application, contrary to the
submissions of Mr Meyers, is admissible evidence. That, with respect, at
this point of time is evidence of the terms of the Agreement whether express
or implied, and in the alternative that they
were terms of a collateral
contract between the parties. Evidence in support of the alleged breaches is
also contained
in the affidavit of Mr Ramsay at paragraphs 6 - 16, and in
respect of the referrals system in paragraphs 17 - 19. Questions
of proof
are matters properly left for determination at trial after hearing of
evidence.
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
Further, the question whether
the terms alleged can be implied to give bss efficacy to the Agreemeneement
at this point
of time is a matter properly left for determination at trial.
One of theial submissions
raised by the Defendants against the Statement of Claim pertains to t to the
principle of novation.
They argue clause 19.2 had the effect of a novation
when BRACS went into liquidation in 1990 and was substituted by Budget
Corporation. In consequence, whatever rights existed under the original
contract were extinguished with the novation;
that included the alleged
rights contained in the terms claimed by the Plaintiff to be part of the
Agreement as express
or implied terms or part of a collateral contract. A
number of authorities were referred to in support (see
Cheshire and Fifoot's Law of
Contract paragraph [8.49]; Olson v. Dyson [1969] HCA 3; (1969) 120 CLR 365 at 388-389;
Bailey "Novation" 1999 14 Journal of Contract Law 189 at 204).
Thnovation had occurred
pursuant to clause 19.2 is not in dispute. This much is concedenceded by the
Plaintiff. The issue
whether the rights and obligations under the
substituted contract or new contract (between the Plaintiff and Budget
Corporation)
included the terms claimed by the Plaintiff to have been
breached is not as clear cut and obvious as sought to be argued by
learned
Counsel for the Defendants. Their inclusion as part of the terms of the
substituted Agreement will depend on
the initial arguments whether they
formed part of the Agreement as express terms or implied terms or as part of
a collateral
contract. What is clear to me at this point of time is that
this is a triable issue, to be determined on the evidence of the
parties at
trial. Secondly, it will depend on the construction of clause 19.2 whether
those rights and obligations were
also transferred and became part and
parcel of the new substituted Agreement (see comment of Julian Bailey in his
Article
"Novation" (ibid) at page 204 in which the learned Author states:
"In each case, it is up to the parties to the new contract to decide what
they want their respective rights and obligations
to be under that
contract.") Again this is a matter for submission at trial proper.
One of the submissionsed
by the Defendant against the inclusion of the terms claimed by the Plaintiff
to have been
breached pertained to the question of knowledge. It denies
knowledge of the existence of those terms and that accordingly the
novated
contract could not have included those terms. Unfortunately that is a matter
that is not conceded by the Plaintiff
and therefore an arguable issue and a
matter proper for trial.
Further, the Plaintiff's claim
was that the said terms fopart of the Agreement and or in the
alternative, were were part
of a collateral contract, and thereby survived the
novation. If for instance, those terms were to be implied to give business
efficacy to the Agreement then surely the argument whether they survived the
novation is a triable issue (see Codelfa Construction Pty Ltd v. State
Rail Authority of NSW (1982) 149 CLA 337, 345-356).
Another argument sought to be
raised against the claim of the Plaintiff was tt was now statute
bar barred. Unfortunately
it overlooked paragraphs 10 and 11 of the Statement of
Claim which pleaded the breaches were committed in or about July of
1994 and
April of 1997. That cannot be statute barred.
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
One of the arts raised by
the Defendants also pertained to the application and effect of clause 27se 27 of
the Agreement.
Unfortunately the effect of that clause and the application
of the parol evidence rule in excluding any implied terms or the
existence
of a collateral contract is not conceded by the Plaintiff and therefore a
matter properly to be tried at trial.
The question whether terms should be
implied in the new Sub-Licence Agreement between Budget Corporation and the
Plaintiff
is a matter for argument at trial (see Codelfa Construction
Proprietary Limited v. State Rail Authority of New South Wales 149 C.L.R.
337, 345-356 [Mason J].
In the circumstances I am
satisfied there are triable issues r in the Statement of Claim laim and that
these are not unnecessary,
scandalous, an abuse of process, frivolous or
vexatious or tending to prejudice, embarrass or delay the fair trial of the
action in civil case no. 182 of 1999. It is clear on evidence before me the
claims of the Defendant had been resisted
right from the beginning. I am
also satisfied the issues raised in the Statement of Claim are triable
issues. The Summons
of the Defendants must be dismissed.
<
APPLON TO SET ASIDE
STATUTORY DEMAND
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
A number of grounds are relied
on by Plaintiff in support of applicationet aside demand. The first irst one
raised is
that the demand is defective in that it calls for payment of an
alleged debt by Solomon Motors in Solomon Islands Dollars.
The Agreement
requires all payments made pursuant to the Agreement to be paid in
Australian currency in Melbourne at
BRACS's address in Australia unless
otherwise directed in writing by BRACS (clause 18.3). Unfortunately, this
submission
overlooks the fact that Budget Corporation had in fact nominated
the currency to be paid by indicating to Solomon Motors the
amount due as
contained in the affidavit of Russel Imaoka sworn in Melbourne, Australia on
May 14 1999 at paragraphs
8-11. With respect I fail to see any defect in the
way the Demand is made.
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
The second ground relied on is
that the Plaintiff denies being indebted to the Defendant for the sum
(SBD75,536-34) claimed
in the demand as owing. Even if said sum is owed, it
argues the counter-claim (that is claim in civil case 215/99) for a greater
sum would off-set whatever amount is owing and therefore there is genuine
dispute to the debt claimed. Thirdly, Plaintiff
argues, it is not insolvent.
At no time when Demand was made had it given impression it was unable to
meet Demand. What
it did make clear was the existence of a genuine dispute
and therefore Demand should have been withdrawn by Defendants instead
of
persisting in issuing threats to have the Plaintiff petitioned for a
winding-up order. Fourthly, Plaintiff argues
it had made it clear from the
beginning that it was prepared to pay Demand into Court to abide the
decision of the Court
pending determination of the issues raised by the
Defendants which are disputed and therefore its claim cannot be said to be
frivolous, vexatious or done with intent to delay claims of the Defendant
pursued in Civil Case 182 of 1999 or Civil
Case 238 of 1999.
THE LAW ON WINDING UP
Section 210 of the nies
Act provides a company may be wound-up by the court if inter alia, it is
u unable to pay its
debts. Section 211(a) gives the statutory definition of
inability to pay. I quote:
"A company shall be dee to be unable to pay its debts-
(a)
if a creditor, by assignment or t or otherwise, to whom the company is
indebted in a sum exceeding one hundred dollars then
due has served on the
company, by leaving it at the registered office of the company, a demand
under his hand requiring
the company to pay the sum so due and the company
has for three weeks thereafter neglected to pay the sum or to secure or
compound for it to the reasonable satisfaction of the creditor;"
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
A prerequisitfiling
petition under section 211(a) is that the petitioner is a creditor. In this
is
case, the Defendants
claim they are creditors and owed money to the tune of
SBD75,536-34. Unfortunately this claim has been disputed right from
the
beginning (see Exhibit JK1 in affidavit of John G. Katahanas filed 28 July
1999). This is also confirmed by the conduct
of the Plaintiff in response to
the demand which is consistent with that of a person who has a genuine
dispute.
>Re Clem Jones Pty Ltd
[1969] QLR 14, 16 a demand for the sum of $6,440-00 had bead been made by the
petitioner (Colin Frank Follett) to the company (Clem Jones
Pty. Ltd.). That
demand had not been met. The company had sought by notice of motion an
injunction against the advertisement
of the winding-up petition, asserting
that presentation of petition in the circumstances amounted to an abuse of
process
of the court because there had been no neglect by the company within
the meaning of section 222 of the Companies Acts 1961
to 1964; a provision
similar to our section 211. Counsel for the company argued debt was disputed
and that company was
solvent. An injunction was sought to restrain further
proceedings on petition. The Court found there might have been some money
owing to the petitioner. On question of disputed debt, Court found there was
counter-claim against the petitioner for
a greater sum. I quote:
&que fact that the claim is
in effect a counterclaim against the petitioner appears to j to justify a
conclusion that
the petitioner's debt is disputed, provided it be
established that the claim is bona fide and one of substance".
It was held by the Court there
was a substantial dispute and concluded the company had not neglected to
comply with the
petitioner's demand. His Lordship Mathews J. made the
following conclusion:
<
"In my vie differences
between the parties should by common lawn law action be resolved before the
company is subjected
to the damage which seems to be presumed to flow from
continuance of winding up proceedings. On that basis, 1 propose to grant
an
injunction."
The facts in Clem Jones Case
are very similar to the facts in this case. A genuine dispute exists between
the parties. There had been a counter-claim
made against the Defendants for
a greater sum which is not scandalous or unnecessary, frivolous or
vexatious. It is bona
fide and has substance. Secondly, the Plaintiff
company is solvent. Clem Jones Case is clear authority for the
proposition that in such circumstances, a restraining order should be made.
The case of Mann v.
Goldstein [1968] 1 W.L.R. 1091 also supports that proposition. At page
1093-1094, his Lordship Ungoed-Thomas states:
"It is well established that
thist has jurisdiction to restrrestrain the presentation or advertising of a
winding-up
petition and restrain all further proceedings on it. That
jurisdiction is a facet of the court's inherent jurisdiction to prevent
an
abuse of the process of the court. It will be exercised where a winding-up
application is presented or prosecuted
otherwise than in accordance with the
legitimate purpose of such process.
The presentation of petition is governed by statutory provision. Section 22on 224 of the Companies
Act, 1948, provides that
an application to wind up a company shall be by
petition presented, so far as material for present purposes '.... by any
creditor or creditors....' The section seems to me plainly, on the face of
it, exhaustive, so that a person not within
its ambit cannot petition. This
conclusion is in accordance with the note in Buckley on the Companies Act
(13th ed. (1957),
p. 462), based on the observation of Wynn-Parry J. in In
re H. L. J. Bolton Engineering Co. Ltd. Of course, a person not named
in
section 224 as a person entitled to present a winding-up petition, does not
become so named because the company is
insolvent. Therefore, so far as
material to our case, if the defendants are not creditors they are not
entitled to present
or advertise their petitions or apply for a winding-up
order; they have no locus standi, and their petitions are bound to fail
even
though the company be insolvent. So if a creditor's petition is not
restrained by such an application as is now
before me and comes before the
Companies Court, that court will, in limine, before proceeding further,
consider the petitioner's
claim to be a creditor.
.....
What the Companies Court will
not do is to proceed any further at all on a petition founded on a debt
which is not thus
shown in limine to exist, for in such a case there is not,
of course, the necessary creditor required by section 224 to apply
for a
winding-up order."
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
At page 1095, his Lordship
continues:
"But there is
no authority, so far as I have been able to ascertain, to support the
suggestion that a company might be wound up on a creditor's
petition where
the company is insolvent though the debt upon which the petition is founded
is disputed."
p class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
His Lordship makes the
final conclusions:
"For my part, I would prefer
to rest the jurisdictirectly on the comparativeltively simple propositions
that a creditor's
petition can only be presented by creditor, that the
winding-up jurisdiction is not for the purpose of deciding a disputed
debt
(that is, disputed on substantial and not insubstantial grounds), since,
until a creditor is
established as a creditor he is not entitled to present the petition and
has no locus standi in the Companies Court; and that,
therefore, to invoke
the winding-up jurisdiction when the debt is disputed (that is, on
substantial grounds) or after
it has become clear that it is so
disputed is an abuse of the process of the court
... So I return to what was
mentioned earlier in this judgment, that it is an abuse of the process of
the court to prosecute
a winding-up application otherwise than in accordance
with the legitimate purpose of such a process. The legitimate purpose
of
such a process is to wind up a company on a ground specified in the
Companies Act, which, so far as material to this
case, is
the ground that it is unable to pay its debts. It is not its
legitimate purpose to decide whether a petitioner claiming to be a creditor
is
a creditor, because section 224 makes it a prerequisite that he should be
a creditor before he is even entitled to present
a petition at all and
before any consideration of the company's insolvency can become relevant.
So, in my view, when
a petitioning creditor's debt is disputed on
some such substantial ground this court should restrain the prosecution of
the petition as an abuse of the
process of the court even though it should
appear to the court that the company is insolvent."
class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0">
See also In re A Company
2 Ch 1894 349; in which it was held if ation for winding-up is not not
presented in good faith and for the legitimate
purpose of obtaining a
winding-up order, but for other purposes, such as putting pressure on the
company, the Court had
inherent jurisdiction to prevent an abuse of process
and may restrain the advertisement of the petition. In Cadiz Waterworks
Company v Barnett [1874] L.R. 19 Eq. 82; it was held a creditor of a
solvent company whose debt is bona fide disputed will be restrained from
presenting a petition
for winding up of a company. See also In re Gold
Hill Mines [1883] UKLawRpCh 22; [1883] 23 Ch D 210; and In re L.H.F. Wools Ltd [1970]
1 Ch 27
The Plaintiff also rely on the
case of In re Imperial Guardian Life Assu Society [1869] L.R. 9 R. [1869] UKLawRpEq 210; 9
Eq. 447; 450 as supporting its case that a winding-up petition is not to be
used as a machinery for trying a common law action. In
this case, the
Defendants claim damages for breaches of the Sub-Licence Agreement entered
into with the Plaintiff but
which is disputed by the Plaintiff. The proper
course of action would have been to have that action tried first.
In Theiss Peabody Mitsui
Coal Pty Ltd v A. E. Goodwin Ltd (1966) QD. R. 1 it was held the
prov provision relating to winding-up, section 222(2)(a) [similar to our section
211(a)], was intended
to be operated and can only be operated when there was
a genuine debt exceeding the statutory amount; in our case the sum of
$100-00. It was not intended to by-pass the ordinary jurisdiction of the
Court to determine whether there was a genuine
dispute as to liability and
to resolve the dispute where it exists. It should not be tolerated as a
means to oppress
the debtor company. In this instance, there being a genuine
dispute in existence, the proper course of action to take would
be to have
that dispute resolved first. The petition should not be permitted to be
proceeded with. To do so would not
only be to oppress the debtor company but
would cause damage to the reputation of the company.
The Plainalso rely on the
case of Charles Forte Investments Ltd v Amanda [1963] 3 WLR 6WLR 662, 674
for the proposition that the Court will invoke its inherent jurisdiction to
prevent the presentation of a
petition which is bound to fail as this is an
abuse of the process of the Court. The Plaintiff submits even if the
petition
is presented in this court, it is bound to fail. He points out the
amount demanded had actually been realised and paid into
court. There is no
grounds whatsoever therefore to say that the Plaintiff is unable to pay its
debts if any. The Plaintiff
points out and rightly so, if the Defendant
should win its case at the end of the day the said amount will be paid out.
The Court also haisdiction
to dismiss a petition with costs where it is shown the object of the
petition was not
to obtain a winding-up order but to put pressure on the
debtor to pay - see In re London and Paris Banking Corporation [1874] UKLawRpEq 171; (1874)
L.R. 19 Eq. 444, 448 (Jessel MR); Charles Forte at 675-676 (Danckwerts
LJ) and 677 (Cross J); and In re a Company [1894] UKLawRpCh 61; [1894] 2 Ch 349, 351
(Vaughan Williams J.). In the facts of this case, Plaintiff argues the whole
process is designed to put undue pressure
on Solomon Motors in circumstances
where the debt is clearly disputed; if not there is a counter-claim for a
set-off
which is greater than the Demand.
CONCLUSION:
It is clear from court
authoritiat any petition founded on the Demand is bound to fail. Not. Not
only is there a genuine
dispute as to liability to pay but that it cannot be
said in the circumstances of this case the Plaintiff had neglected to
pay
the said sum. At the earliest possible time (see affidavit of Steve Theodore
Patrick filed 10th June 1999) the debt
claimed in the Demand had been
disputed. Further the Plaintiff is solvent. As well, as early as 4th June
1999, well within
the period of twenty one days of service of Demand, the
Plaintiff instructed its solicitors to hold the said sum of SBD75,536-34
in
their trust account and to offer to pay said amount in Court to abide
decision of Court. It is my respectful view
the said Demand should be set
aside with costs. The Plaintiffs have asked for costs on indemnity basis. In
my respectful
view that is inappropriate in the circumstances of this case.
The Plaintiffs however are to have their costs on party and party
basis.
ORDERS OF THE COURT:
1. &nbbsp;& &nsp; issp;iss Summons
ofDehe Dehe Defendants filed 26th July 1999.
<&nb">
2. &nbssp;&nnsp;& Ssp; Ssp; Sep; Set aside
Statutory Demand of Budget Corporation dated 14 May 1999.
class="Mss="MsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0">
3. p; The Plfinti s
are tare to have their costs in this matter.
p>
THE COURT
--webbot bot="Include" u-in u-include="../../../footer.html" tag="BODY" startspan -->
[About the School of Law]
| [Courses Offered] | [Course Materials] | [Staff]
[Pacific Law Materials] | [Journal of South Pacific Law]
[Emalus Campus Library] | [Recommended Internet Links]
[Latest Additions] | [Search the Site]
� University of the South Pacific 1998-2002
If you you have any comments, suggestions or
difficulties with using this web site please email
Robynne Blake,
Internet Project Manager, The School
of Law, The University of the South Pacific or fax: (678) 27785
Last Update:
Tuesday, January 29, 2002 12:14
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/sb/cases/SBHC/1999/107.html
