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In the Matter of Coco Assurance Services Ltd (1-118035) [2025] PGNC 125; N11255 (24 April 2025)

N11255

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MP (COMM) 10 OF 2024 (IECMS)

IN THE MATTER OF THE COMPANIES ACT 1997

AND:
IN THE MATTER OF COCO ASSURANCE SERVICES LIMITED (1-118035)

WAIGANI: CAREY J
17, 24 APRIL 2025

COMPANIES ACT 1997 — Petition for liquidation – Procedure for winding up under the Companies Act.

Dentons Canada LLP instituted liquidation proceedings against Coco Assurance Services Limited for a debt that was owed. Coco Assurance Services made no submissions in the proceedings and Pacific Re Limited who was a Creditor also supported Petition for the appointment of a liquidator as filed by Dentons Canada LLP.

Held:

1. Coco Assurance Services Limited be wound up by the Court under provisions of the Companies Act 1997.
2. Coco Assurance Services Limited pays the costs of this Petition.
3. Andrew Pini be appointed as Liquidator in accordance with Section 291(2)(c) and 291(3)(a) and (d) of the Companies Act 1997 with respect to the winding up of Coco Assurance Services Limited pursuant to this Petition.
4. The Bank in which the Liquidator is to open a trust account is at a Kina Bank Limited Branch.
5. Leave be granted to abridge time for entry of the winding up order to the time of settlement by the Registrar which shall take place forthwith.
   

Cases cited
In The Matter of the Companies Act and in the matter of International Construction PNG Limited (2007) N3337
In the Matter of The Companies Act 1997 between PNG Harbours Board and Chris Textiles Limited (2005) N2855

Counsel
S Supro for the Petitioner and Second Respondent
M Kispe for Creditor and Interested Party

JUDGMENT

1. CAREY J: This the decision in relation to a Petition filed on 18 May 2024 (the Petition) by Dentons Canada LLP (the Petitioner) seeking to wind up Coco Assurance Services Limited (the Company).
   
2. Further, Pacific Re Limited (the Creditor) supported the petition for the appointment of a Liquidator as filed by the Petitioner in this matter.
   

BACKGROUND

3. The Petition filed by the Petitioner seeks the liquidation of the Company due to an outstanding debt of K26,968.14 for legal services provided by the Petitioner.
   
4. On or around April 2022 the Petitioner and the Company entered into an agreement in relation to legal services to be provided to the Company by the Petitioner.
   
5. The Petitioner has been following up on the payment for K26,968.14 with no success.
   
6. On 18 March 2024 the Petitioner caused a Creditor’s Statutory Demand (the Statutory Demand) pursuant to Section 337(2)(b) of the Companies Act 1997 signed by the Petitioner.
   
7. The Creditor and the Company have a reinsurer-insurer relationship.
   
8. The Company is indebted to the Creditor in the sum of K333,049.27 being for unpaid premiums of reinsurance contracts provided to the Company (the Debt) between June 2020 and December 2023.
   
9. The Creditor served as Creditor’s Statutory Demand (the Form 42) dated 13 September 2024 on the Company on 29 October 2024.
   
10. On 6 November 2024 a notice of intention to appear at the hearing of the Petition and support the Petition as submitted by the Petitioner was filed.
    
11. The full Debt of K333,049.27 remains due and owing by the Company to the Creditor.
12. Despite multiple attempts to collect the debt from the Company, the Petitioner has been unsuccessful, having followed the legal procedures.
    
13. With the Petition to liquidate the Company filed by the Petitioner on 25 June 2024 and 3 July 2024 the Petitioner served the Petition via email and hand delivery at the Company’s registered office, respectively.
    
14. The Certificate under Section 45 of the Companies Act 1997 was sealed on 13 November 2024.
    

ISSUES

15. (a) Whether the petitioner’s statutory demand was properly served on the company.

(b) Whether the petition was filed within one month as required under section 336(1) of the Companies Act 1997.

(c) Whether the company is able to pay its debts as and when they are due in the ordinary court of business; and

(d) Whether the Court should exercise its powers and appoint a liquidator to liquidate the Company.

DETERMINATION

16. The Petitioner’s Statutory Demand was served on the Company.
    
17. The Petition was filed within the required period per Section 336 (1) of the Companies Act 1997.
    

Section 336 (1) of the Companies Act 1997 states:

“(1) On an application to the Court for an order that a company be put into liquidation evidence of failure to comply with a statutory demand is not admissible as evidence that a company is unable to pay its debts as they become due in the ordinary course of business unless the application is made within one month after the last date for compliance with the demand.”

18. The Company’s inability to pay debts is evidence by the Affidavit of Debt of Jeanale Niggs filed on 15 November 2024 and Affidavit of Debt of Beatrice Fitina filed on 16 April 2025.
    
19. It is accepted by this Court that the Company is unable to pay its debts as and when they are due.
    
20. Section 291of the Companies Act 1997 states:
    

“(1) A company may be put into liquidation by the appointment as liquidator of a named person.

(3) The Court may appoint a liquidator where it is satisfied that –

(a) the Company is unable to pay its debts as they become due in the ordinary course of business; or

(4) The liquidation of a company commences on the date on which the liquidator is appointed.”

21. The Petitioner avers that Mr. Andrew Pini, an account and registered liquidator, has consented to be appointed the liquidator in this matter with supporting document in the form of the Consent of Official Liquidator filed on 18 May 2024.
    
22. It is accepted that circumstances are such that the appointment of Mr. Andrew Pini as liquidator to liquidate the Company pursuant to Section 291(3)(a) of the Companies Act 1997 are appropriate.
    
23. In the Matter of The Companies Act 1997 between PNG Harbours Board and Chris Textiles Limited (2005) N2855 it was held that:
    

“It is not just and equitable to order the winding of the applicant because the applicant has not come to Court with clear hands.”

24. In this proceeding the Petitioner has come to Court with clear hands.
    
25. In The Matter of the Companies Act and in the matter of International Construction PNG Limited (2007) N3337 it states:
    

“32. This is not a situation where a company simply does not pay a debt because it does not want to, or a mere debt collecting exercise. There is evidence of continued inability to pay its debts. There is no evidence from the company concerning its financial standing or solvency,......”

26. In this particular matter, the evidence demonstrates that the Company is unable to meets its obligations in the form of debts as they become due.
    
27. I am satisfied that the Company should be put into liquidation.
    

ORDERS

28. The Court Orders that:
    
    1. Coco Assurance Services Limited be wound up by the Court under provisions of the Companies Act 1997.
    2. Coco Assurance Services Limited pays the costs of this Petition.
    3. Andrew Pini be appointed as Liquidator in accordance with Section 291(2)(c) and 291(3)(a) and (d) of the Companies Act 1997 with respect to the winding up of Coco Assurance Services Limited pursuant to this Petition.
    4. The Bank in which the Liquidator is to open a trust account is at a Kina Bank Limited Branch.
    5. Leave be granted to abridge time for entry of the winding up order to the time of settlement by the Registrar which shall take place forthwith.
       

Ordered accordingly.

Lawyers for the Petitioner and Second Respondent: Dentons PNG
Lawyers for Creditor and Interested Party: Leahy Lewin Lowing Sullivan Lawyers