Credit Corporation (Fiji) Ltd v Sheik's Rent A Car Ltd [2006] FJHC 104; HBF 0024.1995L (27 February 2006)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBF 0024 OF 1995L

NO. 27/2006

BETWEEN

CREDIT CORPORATION (FIJI) LIMITED
Petitioner

AND

SHEIK'S RENT-A-CAR LIMITED
Respondent

Mr. G.P. Shankar for the petitioner
Mr. A. Patel for the respondent

Date of Hearing: 27 February 2006
Date of Ruling: 27 February 2006

EXTEMPORE RULING

[1] Before the Court is a Summons filed on behalf of the respondent and/or its contributory and member, Mohammed Sheik Khan. That Summons seeks that a winding up order previously made against the respondent be permanently stayed.

[2] In support of the Summons, the applicant/ respondent relies upon an affidavit of Mohamed Sheik Khan sworn on the 11^th July 2005.

[3] The application is opposed.

[4] This matter has a very lengthy history it having been commenced by the filing of winding up petition dated the 17^th October 1995.

[5] On the 11^th August 2000, His Lordship Mr. Justice Madraiwiwi delivered a ruling with respect to a Summons filed on the 29^th January 1999 seeking to vacate the winding up order dated the 8^th December 1995. The Summons also sought to discharge the petition presented on the 17^th October 1995.

[6] It would appear from the ruling that the basis of the application was as it is in the present proceedings, that is that the real borrower was Mohammed Sheik Khan and not the company, Sheik's Rent-A-Car Limited. His Lordship ruled and I quote from page 2 of his ruling:

"The hire purchase agreement does refer to Mohammed Sheik Khan trading as Sheik's Rent-A-Car as the lessee in the opening lines. But the determining factor is that it was signed by the respondent with its seal and the signatures of its secretary and one of its directors duly affixed. That in the court's respectful opinions is conclusive of the matter and the respondent's attempts to evade its financial obligations on a technicality does it little credit."

His Lordship went on to dismiss the application.

[7] It is submitted to the Court on the current Summons that the Court has the capacity pursuant to section 252 of the Companies Act to make the orders sought. Section 252 of the Companies Act enables a winding up order to be stayed in certain circumstances and upon the application of either the liquidator or the official receiver or any creditor or contributory of the company.

[8] It is submitted on behalf of the applicant/ respondent that the applicant Mohammed Sheik Khan is a contributory. Section 215 of the Companies Act defines contributory as meaning "every person liable to contribute to the assets of a company in the event of it being wound up and for the purposes of all proceedings for determining and all proceedings prior to the final determination of the persons who are to be deemed contributories includes any person alleged to be a contributory".

[9] There is nothing before the Court detailing the shareholding of the respondent company and there is nothing other than the mere assertion of Mohammed Sheik Khan that he is in fact-a director and shareholder of the company. The nature of that shareholding is not known to the Court.

[10] His Lordship in the ruling earlier referred to, referred to the manner in which the lease agreement was executed, that is by the affixing of the company's seal and the signature of a director and secretary.

[11] Counsel for the Petitioner draws the Court's attention to the fact that the lease agreement, copy of which is annexed to the affidavit of Mohammed Sheik Khan, sworn on the 24^th January 1999, also contains a guarantee and indemnity which appears to have been executed by the director and secretary.

[12] It is submitted that it is not possible for an individual to guarantee his own debt and is of course normal for directors to guarantee the debt of a company.

[13] It would in my opinion be improper and in any event I see no basis for the Court to review or go behind the decision of the Court of the 31^st July 2000. That being so, the only basis upon which the applicant's Summons can succeed is upon a finding that the applicant, Mohammed Sheik Khan is in fact a contributory.

[14] There is nothing before the Court to facilitate the Court being satisfied that he is in fact a contributory and is in fact a person entitled to make the application as now before the Court. Even if it were that there was material before the Court to satisfy that requirement then I am of the opinion, that the material that is before the Court would still not enable the Court to make the orders sought, particularly, in the light of the earlier ruling of the Court, the date of that ruling and the allegations that are now placed before the Court, as to the timing of the payment allegedly made in satisfaction of the debt.

[15] The applicant/respondent's Summons is dismissed.

[16] I order the respondent to pay the petitioner's costs which I assess in the sum of Two Hundred and Fifty Dollars ($250.00).

JOHN CONNORS
JUDGE

At Lautoka
27^th February 2006