HIGH COURT OF SOLOMON
ISLANDS
Civil Case No.172 of 2001
GABRIEL SURI & AEY -
GENERAL
v
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WAYNE FREDRICK MORRIS &
BENJAMIN OF GILES PRICE
(AS PURPORTED SPECIAL
MANAGERS/TRUSTEES
OF REX FERA & OTHERS)
High Court of Solomon Islands
Before: Frank O. Kabui J.
Hearing: 24th July
/span>
Judgement: 26th July
2001
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G. Suri in person as the
Applicant
J. Kenipisia for the 2nd
Applicant
J. Sullivan for the 1st
Respondent
C. Ashley for the 2nd
Respondent
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JUDGMENT
(Kabui, J):
By Originating Summons filed on 19thth
July 2001, the Applicant
seeks the following declarations and orders-
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1. A declaration that the
Applicant has been lawfully appointed as a Deputy Official Receiver for the
Estate of Rex Fera
pursuant to section 75 of the Bankruptcy Act [Cap. 3].
2. A declaration that the
appointment of Wayne Frederick Morris and Benjamin of Giles Price as Special
Managers/Trustees
of Rex Fera is contrary to section 15 as read with
sections 13 and 75 of Bankruptcy Act [Cap. 3] and is thereby null and void
ab initio.
/p>
3. Consequential upon the
declarations sought ight in paragraphs 1 and 2 being granted the First and Second
Applicant
seek the following Orders -
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[1] that the First
Respondentcease forthwith to have pose possession of or deal with, in any
manner, the shares in the
Estate of Rex Fera.
[2] that the First and
Second Respondents do d do deliver possession of all documents, books of full
accounts and records,
bank accounts and records thereof and statutory
registers relating to or affecting the shares, accounts and assets and
affairs of the Estate of Rex Fera to the first Applicant who shall have
lawful possession thereof.
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[3t the First Applicant
may exercise, in the name of anof and on behalf of Rex Fera, all rights attaching
to the shares
of the Estate of Rex Fera.
(i) assessing statement of
affairs of those companiesan>
(ii) appointing or
continuing or removf Directors and Officers ofrs of those companies.
4. Further and other Orders
as the deems meet.
>
5. Costs and incidental to
this application be borne by the First Respondents.
<
With the agreement of Counsel
for all the parties, only Order 1, above was argued at the hearing, as
deciding it first
would determine the fate of the other declaration and
orders sought above. That is to say, if I decide against the Applicant
that
would be the end of the matter. If not, there will be need for directions to
be made by the Court in terms of what
steps to be taken before hearing of
the Originating Summons.
Brief Background
The Applicant is Gabriel K.
Suri of Vura 1, Honiara. He is a Solicitor and Barrister of the High Court
of Solomon Islands.
By Gazette Notice dated 28th May 2001,
the Minister of Commerce, Employment and Trade (the Minister) appointed him
Deputy Official Receiver of the
Estate of Rex Fera with effect from 26th
June 2001. The Minister made the appointment pursuant to section 75 of the
Bankruptcy Act (Cap.3).
The arguments on both s/span>
The case for the Applicant is
that he was appointed Deputy Official Receiver of the Estate of Rex Fera
with effect from
26th June 2001. The appointment he said was made
pursuant to section 75 of the Bankruptcy Act because in my judgment in Civil
Case No. 37/2001 I had found that no Official Receiver had in fact been
appointed under
section 75 of the Bankruptcy Act. He cited section 2 and
section 75 of the Bankruptcy Act as being the basis for his appointment.
Counsel for the 2nd Applicant, Mr. Keniapisia, supported the Applicant�s
case.
Counsel for the 2nd Respondent Mr Ashley also supported the
Applicant�s case. He pointed out that there being no Official Receiver in
place
under section 75 of the Bankruptcy Act, there were obviously a case
for the appointment of a Deputy Official Receiver for the Estate of Mr. Fera.
He also took
up the point that Special Managers should not have been
appointed in the absence of the prior appointment of an official Receiver.
The case for the 1st
Respondent is that the appoit of the Applicant was wron wrong in law because
it purported to appoint the Applicant under
section 75 of the Bankruptcy Act
as a receiver for the estate of Mr. Fera. Counsel for the 1st
Respondent, Mr. Sullivan, argued that Gazette No. 82 of 2001 was none other
than usurpation of judicial power of the
Court in bankruptcy proceedings.
This was the main thrust of Mr. Sullivan�s arguments. His other arguments
were supplementary
in nature though the effect of the combination of all his
arguments was for the court to dismiss the Applicant�s application
with
costs.
Gazette 2 of 2001
: 1">
This Gazette Notice contains
the appointment of Mr Suri as Deputy Official Receiver of the estate of Mr
Fera with effect
from 26th June 2001. It is a rather strange
instrument of appointment. Strange in the sense that it was purported to
have been
signed by the Minister on 26th June 2001 and then
published on 28th May 2001 retrospectively. It may have been a
mistake that it was published on 28th May 2001 whereas in fact it
should have been published in the Gazette sometime after 26th
June 2001. Mr. Suri said in his affidavit filed on 19th July 2001
that he only received the Gazette on Tuesday 17th July 2001. The
implication is that he had not been consulted and agreed to the appointment
before it was made. If this
is so, the Minister had clearly acted without
prior consultation with Mr. Suri. This is not the correct practice in the
Public Service. Always prior consultation is made before any appointment is
made in the exercise of statutory powers. However,
this is not the issue in
this case and no one takes issue on this point.
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Rather, the issue is whether or
not the ter can appoint a person under section 75 of the Bankruptcyuptcy Act
to be a receiver
of an estate of another person for the purpose of
bankruptcy proceedings. Section 75 states -
�(1) Subject to provisions of subsection (2), there may be appointed fted from time to time a fit
and proper person to
be Official Receiver and such number of Deputy Official
Receivers as may be required, and any such appointment shall, if the
person
appointed is to be a public officer, be made in accordance with the
Constitution, but otherwise shall be made
by the Minister.
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(2) No person shall b appointed Official ReceiReceiver or Deputy Official Receiver, unless at the date
of such appointment,
he is a legal practitioner in Solomon Islands.
(3) The Official Rer
shall act under ther the general authority and direction of the Minister and
shall also be an officer
of the court.
(4) Every Deputy Official
Receiver shall have all the powers conferred on the Official Receiver under
this Act.
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(5) Every Deputy Official
Receiver shall act under the generaeneral authority and direction of the official
Receiver for
the time being, or if there be no Official Receiver for the
time being, under the general authority and direction of the Minister,
and
shall also be an officer of the court�.
The Applicant and Counsel f the 2nd Respondent had urged me to read the Bankruptcy Act as a
whole hole to discover its true spirit and intent when construing section 75 of
the Bankruptcy Act. The Applicant further argued that under section 75 (3)
and (5) both the Official Receiver and Deputy Official Receiver are
officers
of the Court therefore his appointment as Deputy Official Receiver was not
usurpation of the Court�s power under
the provisions of the Bankruptcy Act.
He urged me to hold that his appointment was a valid one.
Administration of Mr. Fera�s
Estate
In my view, the position would become clearer if I begin with Civil Case No. 177 of 2000. In that case,
Mobil Oil AOil Australia
Ltd. was the creditor which filed for a Petition for
Bankruptcy against Mr Fera under section 5 of the Bankruptcy Act. I granted
the orders sought by Mobil Oil Australia Ltd on 24th November
2000. One of those orders was that the Official Receiver be appointed under
section 13 of the Bankruptcy Act an interim receiver of the property of Mr.
Fera as from that date. These Orders lapsed on my making subsequent Order on
13th December 2000. Amongst these Orders was an order appointing
the Official Receiver under section 5 of the Bankruptcy Act the receiver for
the protection of Mr Fera�s property and the other appointing under section
15 of the Bankruptcy Act Wayne Fredrick Morris and Benjamin St Giles Prince
as Special Managers. In my judgment delivered on 23rd May 2001 in
Civil Case No. 37 of 2001, I found that no Official Receiver had been
appointed under section 75 of the Bankruptcy Act. What then is the effect of
the Court appointments made on 24th November 2000 and on 13th
December 2000 respectively? As regards the first appointment, it is already
spent. It is too late to cry over it. As
regards the second appointment, it
is also spent in that the Special Managers were appointed the same day upon
the agreement
of Miss Irene Vaukei in Court in the belief that she was the
Official Receiver appointed under section 75 of the Bankruptcy Act. She
stated in Court that she lacked the accounting experience and office
infrastructure to fulfil the duties of the
Official Receiver under the
Bankruptcy Act. The appointment of Special Managers was done under section
15 of the Bankruptcy Act upon the application of the Creditors and not of
the Official Receiver.
My finding in Civil Case No. 37
of 2001 as referred to above does in my view, defeat the lawf lawfulness of
the appointment
of the Official Receiver as interim receiver on 24th
November 2000 and as receiver on 13th December 2000 because of
the principle that the Order of a Superior Court remains valid until it is
set aside or reversed
on appeal. Everything done under such order is
protected until reversed. (See Reef Pacific Trading Ltd & Joan Marie
Meiners v Price Waterhouse, Richard Anthony Barber & William Douglas
McClusky (Civil Case No. 164/94 at 10 - 11). The most recent judgment I
delivered in Civil Case No. 177 of 2000 was on 13th June 2001. In
that judgment, I granted the Orders sought one of which was to adjudge Mr.
Fera a bankrupt. The other Order
was the appointment of Wayne Morris and
Benjamin St Giles Prince as Joint Trustees of the property of Mr. Fera under
section 24 of the Bankruptcy Act upon them being discharged as Special
Managers. Where then does the appointment of the Applicant fit in
after these events? There is no room for the appointment of anyone else
to be the receiver for the property of Mr. Fera. That stage in the
procedure has already passed and there is no reason for going
back for the
recommencement of the procedure. The Orders I made on 24th
November and on 13th December 2000 have not been set aside nor
appealed and reversed. The fact that no Official Receiver has been appointed
under section 75 of the Bankruptcy Act referred to above is not relevant as
far as Mr. Fera�s estate is concerned. It is not relevant because that fact
does
not in any way undo the administration of Mr. Fera�s estate up to now.
Even if Mrs. Irene Vaukei had been the Official Receiver,
her duties and
powers had ceased on 13th December 2001 when the Special Managers
were appointed. The appointment of the Applicant as a Deputy Official
Receiver
for the purpose of the administration of Mr. Fera�s estate is
therefore a mistake ill - conceived by the Minister and his advisers.
The
Applicant was not therefore lawfully appointed by the Minister.
The wording of the Applic
appointment also files in the face of section 12 of Bankruptcy Act in that
the the Official Receiver or the Deputy Official Receiver for that matter is
constituted as receiver of the
property of the debtor only upon the
receiving order being made by the Court pursuant to section 5 of the
Bankruptcy Act. In this case, there is absolutely no evidence to show that
any one had appeared before the High Court and as a result of which
the
Applicant was constituted as the receiver of Mr. Fera�s estate. An
appointment under section 75 of the Bankruptcy Act of any person as Official
Receiver or Deputy Official Receiver does not constitute that person a
receiver of the property
of any debtor because any attempt to do so runs
counter to section 12 of the Bankruptcy Act. Section 75 above therefore
cannot be construed in the manner urged upon me by the Applicant and Counsel
for the 2nd Respondent. As much as I would like to help Mr. Fera
in his trouble, the law is against me on this point. The position of the
Court is that �most of the proceedings in connection with a bankruptcy
are of administrative nature, often involving detailed work with accounts
and commercial investigations. These tasks are not appropriate ones for the
Court. Bankrupt estates are therefore not
administered by the Court but by
official receivers and registered trustees under the supervision of the
Court and of
specially qualified government officials�. (Lewis�s
Australian Bankruptcy Law, by Dennis J. Rose, 1970, Sixth Edition at 22).
Unfortunately, I must again rule against
Mr. Fera�s interest. This
application is dismissed with costs.
F.O. Kabui
Judge
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