IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

COMPANIES MATTER NO.: HBE0011 OF 2003

IN THE MATTER OF FISHINVEST (FIJI) LIMITED
A limited liability company having its registered offices
At 6th Floor Honson Building, Suva
PLAINTIFF

AND

IN THE MATTER OF THE COMPANIES ACT
DEFENDANT

Mr. J. Savou - For Applicant/Petitioner
Mr. M. Prasad - For Respondent/Debtor

JUDGMENT

These are contested winding up proceedings.

By a winding up petition dated 27th March 2003, the petitioner PASHKA (FIJI) ISLANDS LIMITED has petitioned the court to wind up Fishinvest (Fiji) Limited. The amount alleged to be owed is $6,000.00 being for payment of goods supplied by BP Oil to Fishinvest which it neglected to pay. It alleges that the petitioner purchased a vessel Cresta 1. Cresta 1 was arrested after the petitioner purchased it for a debt incurred by Fishinvest (Fiji) Ltd while Fishinvest was operating the vessel. The petitioner was forced to pay the debt to BP Oil to get release of vessel. It annexed invoices issued by BP Oil.

CONTENTION OF FISHINVEST:

The position of Fishinvest is contained in the affidavit of one Mesake Cokanauto a director and principal shareholder in Fishinvest. It denies owing the petitioner any sum. He deposed that Cresta 1 is ship registered in the Cook Islands in the name of Pashka (Cook Islands) Limited. It agrees that Cresta 1 was formerly operated by Fishinvest under an agreement between the directors but this agreement broke down. The agreement between the directors of Fishinvest was that one of its directors one Eugene Narodetsky would be responsible and would operate Cresta 1 and be responsible for all costs incurred by Cresta 1. He alleges that on 7th August 2002 BP Oil had been informed that the other two directors would not take any responsibility for debts incurred in respect of Cresta 1 – see Annexure 10. The petitioner it says has no locus to bring the action.

REPLY BY PETITIONER:

In its reply the petitioner says it purchased Cresta 1 after an order by consent made by the Deputy Registrar on 11th November 2002 under which Pashka (Cook Islands) Limited agreed to transfer to Cresta 1 to the petitioner. Immediately afterward the vessel was arrested. It says that Cresta 1 was operating in Fiji waters under a licence granted to Fishinvest (Fiji) Limited. The licence was in the name of Saco Debt Collection. Fishinvest (Fiji) Limited was previously known as Saco Debt Collection and Investigation Services Limited – see Annexure 11 of Affidavit in opposition.

ISSUES:

Before considering the major issues, it is noted that the company had raised the propriety of service on the company. It alleges that the petitioner knew that Cromptons were acting as solicitors for the company and yet it chose to serve the petition at 6th Floor Honson Building, Suva. When asked by the court if that was the registered office of the company, the counsel agreed it was. That effectively disposes of this issue as the Companies Act requires service of documents at a company’s registered office.

LOCUS STANDI:

The company submitted that the petitioner-lacked locus to bring this action on the ground that first the petitioner is not the owner of the ship Cresta 1. It relies on the fact that the Maritime Cook Islands Authority still shows that the vessel is registered in the name of Pashka (Cook Islands) Limited and therefore the petitioner is not the owner of Cresta 1. It is not a creditor.

The petitioner submits that it is creditor by assignment. It submits that it has paid off the company’s debt to BP Oil and therefore is creditor by assignment under Section 221 of the Companies Act.

Among other documents which are annexed to affidavit of Mesake Cokanauto in opposition is a Default Judgment entered in Action HBG 9 of 2002 where BP South West Pacific Limited are plaintiff and The Owners of Motor Vessel Cresta 1 and Motor Vessel Cresta 1 are defendants. The default judgment is for $26,495.85. The petitioner has paid $6,000.00 of that sum. The petitioner also submits that the company had intervened in HBG 9 of 2002 by filing a caveat against release on grounds that Owners of Cresta 1 owed it money including payment made to BP on behalf of the owners. It was therefore aware of these proceedings.

The defendant says that on 7th August 2002 it informed BP Oil that it would not assume responsibility for debts in respect of Cresta 1. However, opposed to that assertion is a judgment of the court in HBG 9 of 2002. That judgment still stands so the defendant can hardly dispute liability. Further in affidavit in reply of Peter Savona is a fishing licence in name of Saco Debt Collection. The period of licence is 6th March 2002 to 31st December 2002. That licence is in respect of Cresta 1. The vessel is run under the company’s licence and yet the company tries to evade responsibility for expenses incurred in pursuing the activity sanctioned by that licence. The company attempts to shoulder its responsibility onto one Eugene Narodertsky who may well be a person living in some remote part of the world.

The petitioner has taken over the debts of the company from BP Oil. It has paid off $6,000.00. The petitioner by the assignment of debt becomes a creditor in equity and is able to present a petition for winding up the company – In re: Steel Wing Company Limited – 1921 1 Ch. D. 349. The grant of a winding up order or its refusal is a discretionary matter. The court will generally not make an order if the debt is contested on substantial grounds. Substantial means grounds having substance and not frivolous.

The company is saying that it should not be held liable because on 7th August 2002 it informed BP Oil that it would not be responsible for debts in respect of Cresta 1. In face of such a clear message BP Oil should not hold the company liable for fuel supplied after that. BP Oil should have acted to protect its interests in view of this letter. However I note from annexure E8 of affidavit of Peter Savona dated 4th May 2003 that on 6th August 2002 a day prior to that letter a debt of $12,992.00 was incurred. At that time BP Oil had no notice. Accordingly there can be no dispute as to this sum.

Accordingly I conclude that the petitioner has the locus to bring this petition and further there is no substantial dispute up to at least a sum of $12,992.00.

Ms Prasad informed the court that the company is able to pay its debts. In the interest of justice, I give the company seven days to clear the debt failing which a winding up order would be made.

[ Jiten Singh ]
JUDGE

At Suva
 September 2003