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Yagudi Ltd (in liquidation) v Po'o [2019] PGNC 482; N8713 (11 June 2019)

N8713

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

MP 27 OF 2014

IN THE MATTER OF THE INSOLVENCY
ACT CH. No. 253

AND:
YAGUDI LIMITED
(in liquidation)
Petitioner

AND:
TAU PO’O
Respondent

Waigani: Hartshorn J.
2019: 11^th June

COMPANY LAW - Liquidation - Application for leave to reverse a decision of a liquidator of a company – s. 332 (1) (b) Companies Act

Cases Cited:
Papua New Guinea Cases

SCR No 2 of 1981 [1981] PNGLR 150 at 150
Ume More v. UPNG [1985] 401
Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1156
In the matter of Waghi Klos Ltd (2011) N4283

Behrouz Boochani v. The State (2017) SC1566

Overseas Cases
Walker v. Gibbston Water Services Ltd (2014) NZHC 494

Counsel:

Mr. D. Wapu, for Mr. T. Wang, Creditor

11^th June, 2019

1. HARTSHORN J. This is a decision after the hearing of a notice of motion of Mr. Toni Wang. Mr. Wang purports to be a creditor of the insolvent Tau Po’o and of Yagudi Limited (in liquidation). In his notice of motion, Mr. Wang applies for leave to reverse the decision of the liquidator of Yagudi (in liquidation), Mr. David Guinn, to reject Mr. Wang’s proof of debt. Mr. Guinn is also the trustee of the insolvent estate of Tau Po’o. If leave is granted an application is made to reverse the liquidator’s decision. In addition other consequential relief is sought.

2. I allowed the hearing of the notice of motion to proceed in the absence of the liquidator of Yagudi Limited (in liquidation) as I was satisfied that he had been served with the said notice of motion and had been made aware of the hearing date and time.

Preliminary

3. This proceeding was commenced pursuant to the Insolvency Act seeking the substantive relief that Tau Po’o be adjudged insolvent, and such order was made on 11^th May 2015. The relief that Mr. Wang seeks in his notice of motion is pursuant to s. 332(1)(b) Companies Act. Secondly, he seeks that relief against the liquidator of Yagudi Limited (in liquidation). The liquidation of Yagudi Limited and the administration of such liquidation, which would be under the provisions of the Companies Act, are not issues in this proceeding. Further, the relief sought is not in regard to matters that are necessary for the determination of the substantive relief sought in this proceeding, which, as mentioned, has been determined by being granted.

4. In addition, Mr. Wang is not a party to this proceeding and has not applied for or been granted leave to be a party to this proceeding. Consequently, for the above reasons, I am satisfied that Mr. Wang’s notice of motion should be dismissed as an abuse of process.

5. If however, Mr. Wang’s notice of motion is not so dismissed, the test to apply successfully for leave under s. 332(1)(b) Companies Act requires consideration. The test that is applicable was not addressed by counsel for Mr. Wang.

6. Section 332(1)(b) Companies Act is identical to s. 284(1)(b) Companies Act 1993 of New Zealand. I refer to my decision in In the matter of Waghi Klos Ltd (2011) N4283 in this regard.

7. In Walker v. Gibbston Water Services Ltd (2014) NZHC 494 at [30], the Court stated in respect of s. 284 that:

“The grant of leave must be based on whether the applicant has an arguable case with a credible factual basis and a reasonable likelihood of success.”

8. I am satisfied that this test is applicable when considering whether leave should be granted under s. 332 (1) Companies Act.

9. As the orders sought in the notice of motion are bound to fail as, amongst others, they are sought in this proceeding, an incorrect proceeding as previously referred to, and so are bound to fail in this proceeding, Mr. Wang does not have an arguable case which has a reasonable likelihood of success. Consequently the relief that is sought should be refused.

10. As to leave being sought pursuant to s. 155(4) Constitution, this section has been considered on numerous occasions by the Supreme Court. It has been interpreted as conferring jurisdiction on the court to issue facilitative orders, such as prerogative writs or an injunction, in aid of the enforcement of a primary right conferred by a law: SCR No 2 of 1981 [1981] PNGLR 150 at 150 and Ume More v. UPNG [1985] 401 at 402.

11. In Medaing v. Ramu Nico Management (MCC) Ltd (2011) SC1156 at [11], reproduced by Salika DCJ (as he then was) and Hartshorn J in Behrouz Boochani v. The State (2017) SC1566 at [39], it was stated:

“6. Section 155 (4) is not however the source of any substantive rights, as stated by Kidu CJ in SCR No 2 of 1981 (supra):

“The provision under reference.... does not.... vest in the National Court or the Supreme Court the power to make orders which confer rights or interests on people. Such rights or interests are determined by other constitutional laws, statutes and the underlying law. Section 155 (4) exists to ensure that these rights or interests are enforced or protected if existing laws are deficient to render protection or enforcement.”

7. We also make reference to Powi v. Southern Highlands Provincial Government (2006) SC844 in which the Court, after giving detailed consideration to s. 155 (4) said that in its view, there are about five important features or attributes of that section. They are:

“1. The provision vests the Supreme and National Court with two kinds of jurisdictional powers, namely orders in the nature of prerogative writs and the power to make “such other orders as are necessary to do justice in the particular circumstances of each case” before the Court;

2. Although the power is inherent, it is not a grant of jurisdiction to cover all and every other situation and for the creation and grant of new rights. Instead it is a general grant of power to the Court to develop and grant such remedies as are appropriate for the protection of rights already existing and granted by other law, including the Constitution;

3. Where remedies are already provided for under other law, the provision does not apply;

4. The provision does not grant the Supreme Court power to set aside or review the decision of another Supreme Court regardless of number (sic) it is constituted, except as may be provided for by any law; and

5. A person seeking to benefit from that provision has an obligation to demonstrate a case of his rights or interest being affected or that he stands to suffer much damage or prejudice and he has no remedy available under any other law.”

8. We respectfully agree with the views expressed in Powi (supra).”

12. In this instance s. 332 (1)(b) Companies Act provides the right or remedy which Mr. Wang seeks to exercise. Consequently s. 155(4) Constitution may not be relied upon.

13. Given the above it is not necessary to consider the other submissions of counsel.

Orders

14. It is ordered that:

a) The notice of motion of Toni Wang filed 2^nd December 2016 is dismissed;

b) No order as to costs;

c) Time is abridged.
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