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In re Angco Medical Clinic Ltd [2014] FJHC 30; Winding Up 12.2013 (3 February 2014)

IN THE HIGH COURT OF THE REPUBLIC OF FIJI
WESTERN DIVISION
AT LAUTOKA

[CIVIL JURISDICTION]

Winding Up Action No. 12 of 2013

IN THE MATTER OF ANGCO MEDICAL CLINIC LIMITED
a limited liability having its company registered office situated at 9 Kings Street, Yalalevu, Ba.

AND

IN THE MATTER
of the Companies Act.

Appearances:
Messrs Neel Shivam Lawyers, Barristers & Solicitors for the Petitioner.
Date of Hearing: 3 February 2014
Date of Ruling: 3 February 2014

RULING

INTRODUCTION

[1] Credit Corporation (Fiji) Limited (hereinafter sometimes may be referred to as "the Petitioner") presented and filed on 9 May 2013 a Petition for a winding up order pursuant to section 220 of the Companies Act, Cap 247 of 1984 ("the Act) and prayed for the following orders:

(a) That ANGCO MEDICAL CLINIC LIMITED be wound up by the Court under provisions of the Companies Act; or

(b) That such other order may be made in the premises as shall be just.

[2] The Petitioner has also filed on 10 May 2013 affidavit of Neelam Kavita Sharma (General Manager Legal of the company) sworn on 6 May 2013 verifying petition.

[3] The company neither filed affidavit in opposition, nor did appear in Court to oppose the Petitioner's application for winding-up.

[4] Pursuant to the provisions of the Companies (Winding Up) Rules 1983, the Petitioner's solicitors filed MEMORANDUM OF DUE COMPLIANCE wherein they confirmed that the petition was duly advertised in the Fiji Sun newspaper on Thursday the 15th day of August 2013 and in the Government of Fiji Gazette on Friday the 16th day of August 2013.

FACTUAL BACKGROUND

[5] The Company is a limited liability company having its registered office situated at 9 Kings Street, Yalalevu, Ba (Fiji) and was incorporated on the 3rd day of April, 1997 under the Act as a private company limited by shares. The share capital of the company is $100,000.00 divided into 100,000 shares of $1.00 each.

[6] The objects for which the company was established are to carry on the wholesale and retail businesses of pharmaceutical chemists, to carry on the business of makers and dealers in surgical instruments, appliances and artificial organs and to grant policies or other instruments of assurance against or assuring compensation or payment in case of death or injury to health or limb by accident or other similar misfortunes.

[7] The Petitioner has presented the petition to have the Company wound up on the ground that the Company is indebted to the Petitioner in the sum of $146,573.52 being the total outstanding in respect of provision of hardware supplies on credit purchase as agreed to be paid by the company and that it is unable to pay its debt or on the just and equitable ground.

ISSUES

[8] The issue to be determined by the Court is that whether the company is unable to pay its debts.

THE LAW

[9] Section 213 of the Act provides as follows:

213.-(1) The winding-up of a company may be either-

(a) by the court; or

(b) voluntary; or

(c) subject to the supervision of the court.

(2) The provisions of this Act with respect to winding-up apply, unless the contrary appears, to the winding-up of a company in any of those modes

219. The Supreme Court (now the High Court) shall have jurisdiction to wind up any company registered in Fiji.

220. A Company may be wound up by the court, if-

(a) ...;

(b) ...;

(c) ...;

(d) ...;

(e) the company is unable to pay its debts;

(f) the court is of opinion that it is just and equitable that the company should be wound up;

(g)... (Emphasis added).

235. For the purpose of conducting the proceedings in winding up a company and performing such duties in reference thereto as the court may impose, the court may appoint a liquidator or liquidators (Emphasis added).

221. A company shall be deemed to be unable to pay its debts-

(a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding $100 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 3 weeks thereafter; neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor (My emphasis); or

(b) if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company is returned unsatisfied in whole or in part; or

(c) if it is proved to the satisfaction of the court that the company is unable to pay its debts, and, in determining whether a company is unable to pay its debts, the court shall take into account the contingent and prospective liabilities of the company.

DETERMINATION

[10] The Petitioner has preferred this petition seeking to wind up the Company on the ground that the Company is unable to pay its debts or that it is just and equitable that the company should be wound up.

[11] The Company is a registered company in Fiji under the Act. The Court therefore has jurisdiction to wind up the Company (s.219 of the Act) on the ground stipulated under section 220 of the Act. A company may be wound up by the Court on the ground that it is unable to pay its debts or on the ground that it is just and equitable that the company should be wound up (s.220 (e) (f) of the Act).

[12] The Petitioner says that the Company is indebted to it in the sum of $146,573.52 on account of purchase of hardware items on credit and that the Company is unable to pay the debt owing to it albeit section 221 notice issued. The Petitioner further says that it made demand in writing for the payment of the debt but the Company has neglected to pay or satisfy the sum or any part thereof or to make any offer to it to secure or compound for the same to the satisfaction of the creditor, the Petitioner. In term of section 221 (a) a company (in this case petitioner) is deemed to be unable to pay its debt if after being served with demand notice on it neglected to pay the sum demanded or to secure or compound for it to the reasonable satisfaction of the creditor (in this case Petitioner) within 3 weeks the company will be deemed that it is unable to pay its debts. Section 221 demand notice has been duly served on the company, but it failed to settle the amount demanded as debts due ($146,573.52) or part of it within the stipulated period of 3 weeks. Therefore the company may be deemed, pursuant to section 221 (a) of the Act, to be unable to pay its debts, a ground for winding-up.

[13] Moreover, the winding-up petition and affidavit verifying the contents of the petition were also served upon the company. An affidavit of Romulo Delai has been filed in proof of such service.

[14] The company did not file any objection or affidavit in opposition, opposing the petition. In the result, the debts as alleged in the petition remain unchallenged. I therefore answer affirmatively to the issue whether the company is unable to pay its debts.

[15] In the premises, the Petitioner has a right to have the Company wound up by the Court. I therefore make order that the Company be wound up on the ground that it is unable to pay its debts. I also make order pursuant to section 235 of the Act that Official Receiver be appointed Liquidator of the Company. The costs of the Petitioner of this petition be taxed and paid out of assets of the Company.

FINAL ORDERS

1. The Company (ANGCO MEDICAL CLINIC LIMITED) be wound up.
2. The Official Receiver be appointed Liquidator of the Company; and
3. The Petitioner is entitled to taxed costs to be paid out of the assets of the Company.
   

Mohamed Ajmeer
Acting Master

At Lautoka