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Molea v Didao Development Corporation [2023] SBHC 88; HCSI-CC 48 of 2018 (14 September 2023)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 48 of 2018

BETWEEN

SELSON MOLEA AND LESLIE MOLEA
First Claimant

AND:

DIDAO DEVELOPMENT CORPORATION
First Defendant

AND:

TOATA MOLEA
Second Defendant

AND:

HELEN MOLEA
Third Defendant

Date of Hearing: 7 August 2023
Date of Judgment: 14 September 2023

Olofia E for the Claimant/ Judgment Creditors
Taupongi J for the 1^st, 2nd and 3^rd Defendants/Judgment Debtors

JUDGMENT

KOUHOTA PJ:

On 25^th January 2021 the Court gave Judgment for the Applicants/Judgment Creditors and order that the First, Second and Third Defendants pay the Shares of the Applicant.

Further on 9^th August 2022 following an application of the Claimant, the Court make the following orders;

1. The First and Second Defendants to purchase the Shares within 30 days’ period is justifiable. The Defendant are not entitled to purchase the Shares on their own terms.
2. In the event where the Defendants do not or unable to purchase the Claimants’ shares within 30 days’ period, the Claimants can sell their shares to the Public.

It is obvious that the Claimant had not comply with the Orders of 9^th August 2022 and this resulted in this application. This application is made by the Claimant as Judgment creditors pursuant to rule 21.109 of the Court Civil Procedure Rules 2007 seeking the following orders;

1. An order that Sammy C Diau an accountant of SD Financial and Business Consultancy Services, be appointed as a receiver over all Assets, Business and Properties of the Judgment Debtors/Enforcement Debtors with immediate effect.
2. An order that all Assets, Properties and Bank accounts of the Judgment Debtors be freeze for preservation until such time the Receivers approval and consent is granted for the order to be discharged.
3. The Receiver shall file a report within 60 days of this order his findings including such amount he recovered in the course of his duties.
4. An order restraining the Enforcement Debtors, any persons in their authority, including servants, agents, or otherwise from hindering, threatening prohibiting and inhibiting the Receiver from carrying out his duties.
5. Any other orders deem fit and proper to made by this Honourable Court.
6. Costs to be paid by the Enforcement Debtors.

Counsel for the Enforcement Creditors submit that the Claimant seeks to appoint a receiver to administer the First Judgment debtor inclusive who will manage the company and decide on what is a best approach to deal with the company and its shareholders. The Receiver he submit will have the powers;

(a) To investigate all business and properties legally and beneficially owned by the Judgment Debtor;
(b) Take possession of these properties;
(c) To assume control of the shares held by the First and the Second Judgment Debtor as interim director in their place;
(d) To administer these assets, including the powers to sell;
(e) Investigate all other properties of the Second Judgment Debtor and his wife and to demand compliance from those in custody of such properties, assets or interests;
(f) Investigate the Ownership and collect evidence of purchase of the following vehicles
(g) To consolidate all properties and assets, value them and sell them if required
(h) All such things necessary and required to fulfil his powers and duties.

To enable the Receiver to operate and administer the Affairs of the First Judgment Debtor properly and without fear or favour, the Second and Third Judgment Debtors be restrain from entering the premises of the First Judgment Debtor and threaten him from carrying out his duties.

Counsel for the Judgment Debtors in opposing the Application submit that he opposed the Application on 5 ground outline in paragraph 2 to 6 of his submission. Ground 2 mainly contained the facts relating to the progress of this matter. In ground 3 Counsel submit that the Application was brought under a wrong law. He submit that receivership is govern by part 3 of the companies (Insolvency and Receivership) Act 2009 and the power to appoint receiver is given by section 62 of the Act. Counsel refer to section 61(1) which states” A receiver may be appointed in respect of the property of a person by, or in the exercise of a power conferred by, a document to which a person is a party.”

He submit that section 62(1) and 62 (2) a receiver is normally appointed in respect of property under a document or instrument such as a loan agreement with a commercial bank. He however concede that section 62(3) recognizes the powers of the Court to appoint a receiver in respect of a property under the Rules are set out in the Court Civil Procedure Rules 2007.

Counsel also submit that the Application is contrary to Liquation proceeding which is usually commenced by issue a statutory demand. He also submit that BSP have a charge over the assets of the Judgment debtors. Counsel also submit that the Claimants are seeking a wrong solution saying that the Claimants wants someone else to come in and manage Didao and its assets.

I had consider that the submission of the Counsel for the Judgment debtors and was of the view that section 62 of the Act does not prohibit appointment of a receiver as the Judgment creditor is seeking to. The Appointment of a receiver as the Judgment credit wishes to do is provided for in section 61(3) of the Act. Section 62(3) states “The power confer by section is in addition to the powers conferred on the court to appoint a receiver”

Thus this what the Judgment creditor wants to do in this case, they are seeking the Court to exercise the powers confer on it by rule 21.109 to appoint a receiver. In regard to the submission of the Counsel on the issues of Liquidation I am of the view that is a choice of the Judgment creditor whether he go for liquidation or appointment of a receiver. The Act does not require that a Judgment creditor must apply for liquidation first before applying for appointment of a receiver. On the issue of BSP having a charge on the Judgment debtor’s assets and the various companies the Judgment debtor owed money to, that is the matter between the companies and the Judgment debtor and is not a concern for the Judgment creditor.

I also consider submission of the Counsel for the Defendant in paragraph 2 of his submission on the facts relating to actions of the Judgment creditor and their behaviour is irrelevant to the Applications. Having considered the Application and the submissions of the Counsels, I am satisfied that the Judgment creditor’s application is in order. The Application to appoint a receiver is an avenue open to Judgment creditor to enforce the Judgment given in their favour. The Application is granted to together with the Orders sought. I so order, the Counsel to draft the Orders for Courts perfection. Cost against the Judgment debtors to be taxed if not agreed.

THE COURT
Hon. Justice Emmanuel. Kouhota
Puisne Judge.