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In re Pacific Emerging Technologies Ltd [2014] FJHC 118; HBE71.2012 (5 March 2014)

IN THE HIGH COURT OF FIJI AT SUVA
COMPANIES JURISDICTION

Companies [Winding Up] Action: HBE 71 of 2012

BETWEEN:

IN THE MATTER OF PACIFIC EMERGING TECHNOLOGIES LIMITED

AND:

IN THE MATTER OF THE COMPANIES ACT (CAP 247)

BEFORE : Hon. Justice Mayadunne Corea

COUNSEL : Ms M Muir for the Appellant
Mr. R. Nand & Ms A Nabalarua for the Respondent

Date of Hearing : 14th February 2014
Date of Judgment : 5th March 2014

JUDGMENT

[1]. Application before me is for a permanent stay of the winding up order made by the Master on 25.7.2013.

[2]. On 7.8.13, inter-partes summons were filed for the following orders:-

1. That the Winding Up Proceedings and the Order of the Master made on 25th July 2013 be stayed on a temporary/interim basis;
   
2. That the Court approves the proposed transfer of 51% shares in Pacific Emerging Technologies Limited from Amalgamated Telecom Holdings Limited to the Petitioner Pacific Electronic Commerce Pty Limited.
   
3. That the costs of this application be cost in the cause.
   

[3]. In the supporting affidavit, the Chairman of the Pacific Emerging Technologies Ltd and a director of Amalgamated Telecom Holdings Limited deposed that, Amalgamated Telecom Holdings Limited is the majority shareholder who holds 51% shares of the company to be wound up. The deponent further deposes that it will sell the said shares to the Petitioner "Pacific Electronic Commerce Pty Limited giving it 100% shares of the company.

[4]. It is further deposed that the debt due to the intervening creditor Smart frog was to be settled.

[5]. When the case came up before me all parties sought for a consent order seeking an interim stay of the Master's order. The petitioner and the Respondents submitted to court that even though the order for winding up was made it had not been formerly drawn up and no receiver appointed.

[6]. Accordingly a consent order was granted by this court staying the winding up proceedings and the order of Master on a temporary/interim basis.

[7]. On 10.12.13 the parties have filed summons seeking a permanent stay of the winding up. The said summons stated:

• (a) That the time for service of this summons be abridged;
  
• (b) That the interim stay of the Winding Up Proceedings and Order of the Master of the High Court of 25th July 2013, granted on 26th September 2013, be extended and made a permanent stay of these Winding Up proceedings;
  
• (c) That the costs of this application be cost in the cause.
  

[8]. The said application has been made pursuant to Section 252 of the Companies Act and Order 32 Rule 2 of the High Court Rules, and the inherent jurisdiction of the court.

Affidavit in Support of the Petitioner

[9]. One Rodney Denis Galloway filed an affidavit in support of the summons seeking a permanent stay.

[10]. In the said affidavit dated 10.2.2014 the deponent among other things had deposed.

• The Petitioner has succeeded in acquiring ATH's shares in the Respondent Company and now controls the same.
  
• Now that the Petitioner is in control of the Respondent Company, it has attended to the payment of its debts.
  
• The monies owed to the Petitioner have been transferred from the Respondent after obtaining the necessary consents.
  
• The Supporting Creditor has been paid by the Respondent as well.
  
• The Respondent Company is solvent and operational at this time.
  
• I am informed by the Petitioner's solicitor and I verily believe that all the interested parties have consented to permanent stay through their solicitors.
  
• In the circumstances it is right and just that the winding up proceedings be permanently stayed and the Respondent Company allowed to operate and prayed for orders in term of the summons for permanent stay."
  

The Legal Position

[11]. It was submitted that the application was being made under Section 252 of the Companies Act.

[12]. Section 252 of the Companies Act states:

1. The court may, at any time after an order for winding up, on the application either of the liquidator or the official receiver or any creditor or contributory, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time, on such terms and conditions as the court thinks fit.
   
2. On any application under this section, the court may, before making an order, require the official receiver to furnish to the court a report with respect to any facts or matters which are in his opinion relevant to the application.
   
3. A copy of every order made under this section shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the registrar for registration.
   

[13]. It was decided in re Ba Provincial Holdings Company Ltd [2011] FJHC 459, HBE 32/2009 & HBE 02.2010, that as per the section an application for permanent stay can be made only by a liquidator or the official receiver or any creditor or contributor. This application seeking a permanent stay of the winding up order has been made by the petitioner, who was originally a creditor.

[14]. When the case was heard before this court on 6.2.14 and on 19.2.14 all parties consented in court for this court to grant a permanent Stay as per summons.

Proof for a Permanent Stay

[15]. Section 252 provides the court to grant a permanent stay in winding up of proceedings.

[16]. The petitioner who is seeking the permanent stay has to prove "to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed".

[17]. Once the court is satisfied, the court can make an order staying the proceedings for a limited time or granting a permanent stay.

[18]. The Companies Act section 252 does not stipulate what condition a court shall consider or on what grounds the court should be satisfied to grant a permanent stay.

[19]. The application for a permanent stay can be sought only by the liquidator, official receiver a creditor or contributor. However in this application filed by a creditor all parties before court have specifically consented to the court granting the permanent stay order.

[20]. It is also pertinent to note that as per the affidavits before me and the submissions made the Petitioner Creditor has now acquired 100% shares of the company to be wound up. It was further submitted that all dues to the creditors who were before court in the application have been settled.

[21]. It was also submitted that no official receiver had been appointed in this matter.

Conclusion

[22]. The petitioner filed the winding up application as a creditor who was not paid. When the winding up application was pending there was another intervenient creditor. However after the winding up was granted by the Master the situation has changed.

[23]. I have considered the affidavits filed and the submissions made in support of the permanent stay of the winding up order.

[24]. The deponent has deposed that the petitioner who sought the winding up has obtained 100% shares of the company sought to be wound up. Accordingly it is submitted that the debt owed to the creditors including the intervening creditor have been satisfied. The petitioner has submitted to court a copy of an email confirming it.

[25]. The court has not been submitted with the present assets and liabilities of the company against whom the winding up order was granted. However it was submitted to court that the company has settled all the debts. All parties before the court have consented to the granting of the permanent stay of the winding up order. In my view the above stated facts are sufficient for the court to grant a permanent stay.

[26]. Accordingly in pursuance of Section 252 of the Company Act and the inherent power of the court, this court grants the orders as per Para (a) (b) and (c) of the summons dated 16.12.13.

Mayadunne Corea
JUDGE

05.03.2014