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Ca'Bella Pacific Construction (Fiji) Ltd v Yaukuve Island Resort Limited [2012] FJHC 1123; HBC 415.2005 (23 May 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 415 of 2005

BETWEEN:

CA'BELLA PACIFIC CONSTRUCTION (FIJI) LIMITED
a limited liability company incorporated in New Zealand.

PLAINTIFF

AND:

YAUKUVE ISLAND RESORT LIMITED
a limited liability company incorporated in Fiji.

DEFENDANT

BEFORE : Master Deepthi Amaratunga

COUNSEL : Mr. Mr. Clark W with Prasad V. for the Plaintiff
Mr. Sharma P. with Mr. Sharma D. for the Defendant

Date of Hearing : 29th March, 2012

Date of Ruling : 23rd May, 2012

RULING

1. INTRODUCTION
   

1. There are two Plaintiffs in this action and the 1st Plaintiff is seeking to eliminate the Second Plaintiff from the statement of claim, on the basis that a winding up order has been made against the 2nd Plaintiff, and the removal of the 2nd Plaintiff from the claim would result expeditious determination of the matter. It is admitted fact that a winding up order has been made against the 2nd Plaintiff. The result of that is fairly and squarely contained in Companies Act. The efficiency of the litigation cannot be a reason to override the express provisions contained in the Companies Act and the Winding up rules contained therein to remove 2nd Plaintiff without obtaining proper consent.
   

2. FACTS
   

2. The First Plaintiff (Ca'Bella Pacific Construction (Fiji) Limited and the Second Plaintiff (Lomac Construction and Project Service Limited) are the Plaintiffs in the present proceedings. The 2nd Plaintiff was joined as a Plaintiff to the proceeding following a Ruling delivered on 3rd July 2007.
   
3. A Second Amended Statement of Claim was prepared and filed on behalf of both Plaintiffs and it was accepted by the court. It is this Statement of Claim which is now sought to be amended. The amendments sought, can be broadly categorized for the purpose of this ruling as follows (as per paragraph 11 of the affidavit in support)
   
   1. Renumbering of the averments contained in the Second Amended statement of claim.
      
   2. Total Damage contained in paragraph 13(c) to be corrected to depict the summation of damages averred.
      
   100. The Removal of 2nd Plaintiff from the statement of claim and, amendments ancillary to the said removal.
        
4. In the affidavit in opposition there is no express objection to the amendments sought under (a) and (b) contained in the previous paragraph. At the hearing the position of the Defendants were concentrated to the amendment seeking removal of 2nd Plaintiff, hence the amendments to facilitate any error in the numbering of paragraphs and the calculation of the total damage contained in paragraph 13(c) of the Second Amended Statement of Claim is granted without any serious opposition to them.
   

100. ANALYSIS
     

5. The 1st Plaintiff relied on Order 15 rule 6 for the removal of 2nd Plaintiff. Under the High Court Rules 1988, Order 15, rule 6 the rights of the parties on misjoinder and non-joinder is set out. Rules 6(1), (2) and (3) provide:
   

"Misjoinder and non-joinder of parties (O.15, r.6)

6.-(1) No cause or matter shall be defeated by reason of the misjoinder or nonjoinder of any party; and the Court may determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.

(2) Subject to the provisions of this rule, at any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its motion or on application-

(a) order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be a party;

(b) order any of the following persons to be added as a party, namely-

(i) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determine and adjudicated upon, or

(ii) any person between who and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy which in the opinion of the Court it would be just and convenient to determine as between his and that party as well as between the parties to the cause or matter.

(3) An application by any person for an order under paragraph (2) adding him as a party must, except with the leave of the Court, be supported by an affidavit showing his interest in the matters in dispute or, as the case may be, the question or issue to be determined as between him and any party to the cause or matter." (emphasis is added)

6. The Order 15 rule 6(2) (a) cannot be resorted by the 1st Plaintiff seeking the removal of the 2nd Plaintiff. The instances mentioned in the said provision have no application to the issue before me. One cannot state that the addition of 2nd Plaintiff is unnecessary or improper as it was done in pursuant a ruling of Justice Singh and the said decision was not subject to an appeal. The other criterion for the omission of a party is where the 2nd Plaintiff for 'any reason ceased to be a proper or necessary party'. If one were to satisfy the said criterion, there should be a reason which resulted the 2nd Plaintiff cease to be a party. The only reason that the 1st Plaintiff relies on is the Winding up order of the court against the 2nd Plaintiff, and that is not a reason that can be considered which resulted the 2nd Plaintiff cease to be a party.
   
7. In the Singh J's Ruling that the relationship between the two Plaintiffs and the Defendant, was expressed as follows:
   

"Without expressing any final view on this matter, all I can say at this stage is that the contracting Clause 1(c) states that the rights and obligations of each of the parties defined as contractor mainly the Plaintiff and Lomac shall be joint and several. Whether the right and obligations were subsequently altered from being joint and several or whether Lomac was released from its obligation to the Defendant is a matter of evidence at the trial."

The said ruling indicate the nature of the relationship and its uncertain manner where His Lordship decided that it should be left and decided at the trial as a matter of oral/ Documentary evidence to be determined by the court.

8. By virtue of this winding up order proceedings by or against Lomac were automatically stayed in terms of the provisions contained in the Companies Act. In Mohammed Sheik's Rental – v – Official Receiver 1999 Fiji Law Report 220 Justice Pathik discussed the issue relating to the status of a company after it being wound up. At p 223 it was held
   

'Upon the making up of the winding up order there is transferred (sic) to the liquidator all the powers of the directors which it can reasonably have been intended to vest in the liquidator and the powers of the directors come to and end with the appointment of a permanent liquidator as is the case here. After this the directors do not have any power, inter alia, to conduct proceedings on behalf of the company.'

9. The legal position upon a winding up order being granted is trite law and the control of the 2nd Plaintiff Company's affairs upon a winding up is vested in the liquidator. Justice Pathik in Mohammed Sheik's Rental – v – Official Receiver(supra) at p 223-224 held
   

'In a winding up by the Court, the liquidator is an officer of the Court, and as such he has public responsibilities to investigate past activities with the Company and in appropriate cases to initiate such further proceedings, civil or criminal, as the circumstances may dictate (Re Allebart Pty (In Liq) and The Companies Act, Re Home Holdings Pry, Ltd (In Liq) and Companies Act, Street J (1971) NSW LR 24) He is empowered under the Act, as one of his powers to commence or to continue action in Court.' (emphasis is added)

The fact of winding up order being made against the 2nd Plaintiff under the circumstances cannot be a reason as enumerated in Order 15 rule 6(2)(a) to consider that 2nd Plaintiff ceased to be a proper or necessary party as the law is clear on that issue.

10. The 1st Plaintiff also relies on Order 20 Rule 5 of the High Court Rules 1988, I do not think that that the provisions contained in Order 20 rule 5 can be expanded to remove the 2nd Plaintiff against whom a winding up order had been made, without the consent of the official receiver/liquidator. I need not discuss the efficiency of the litigation as a reason to removal of a party as I have not been appraised on that contention with legal provision and, or case law on that.
    

4. CONCLUSION
   

11. The 1st Plaintiff has added 2nd Plaintiff to the action in pursuant a ruling. There are two Plaintiffs in this action and a winding up order is being made against the 2nd Plaintiff. The 1st Plaintiff is seeking to removal of the 2nd Plaintiff from this action on the basis of the winding up order and also efficiency of the litigation. The 1st Plaintiff relied on Order 15 rule 6(2)(a) which in my analysis rejected as not applicable to the 2nd Plaintiff since it cannot be considered to have ceased to be a party upon an order of the court to wind up. The amendment to pleading contained in Order 20 Rule 5 of the High Court Rules 1988 cannot be relied on to remove a party to an action, for the reason that a winding up order has been made against it. No provision or case law has been sited to support the contention of the efficiency of the litigation being a reason to remove a party to the action. The contentions of the 1st Plaintiff to remove the 2nd Plaintiff is refused. I have granted the unopposed amendments that would rectify the errors in numbering of the paragraphs and the calculation of total damage contained in paragraph 13(c) of the Second Amended Statement of Claim. Considering the circumstances of the case the cost of this application will be cost in the cause.
    

5. FINAL ORDERS
   

1. The amendment seeking removal of 2nd Plaintiff from the Second Amended Statement of Claim is refused.
2. The amendment seeking renumbering of the Second Amended Statement of Claim is granted.

100. The amendment to depict the correct total damage contained in paragraph 13(c) of the Second Amended Statement of Claim is granted.

4. Cost of this application is cost in the cause.
   

Dated at Suva this 23rd day of May, 2012.

Master Deepthi Amaratunga
High Court, Suva