In re Makare Holdings Ltd [2012] FJHC 1149; HBE99.2010 (5 June 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
COMPANIES JURISDICTION

HBE 99 of 2010

IN THE MATTER OF MAKARE HOLDING LIMITED (formerly known as ULUMATUA INVESTMENTS LIMITED formerly known as EBONY COMPANY LIMITED)

AND

IN THE MATTER OF THE COMPANIES ACT

BEFORE : Master Deepthi Amaratunga
COUNSEL : Mr. Sione Fa for the Substituted Petitioner
Mr. Nilesh Lajendra N. for the Company

Date of Hearing : 17th May, 2012
Date of Ruling : 5th June, 2012

DECISION

1. INTRODUCTION
   

1. The substituted Petitioner has filed the amended petition seeking winding up of the Company in pursuant to winding up rules 32. The affidavit verifying petition is filed, but failed to satisfy the requirements in the winding up rules. The counsel for the Company filed an affidavit in opposition and raises two objections to the wining up and they are that the debt alleged to have occurred in pursuant to an 'investment' in the Company and the second objection is that the Petitioners being foreigners are precluded from 'investing' into a business venture in Fiji without obtaining Foreign Investment Registration Certificate. The money was given to the Company in pursuant to a 'loan and acknowledgment of debt agreement'. The substituted petitioner has failed to fulfill the requirements in pursuant to the winding up rules by advertising the winding up notice in news paper as well as in the gazette and has also failed to comply with the winding up rule 30 and the amended petition of the substituted petitioner is dismissed for failure to comply with the winding up rules.
   

2. ANALYSIS
   

2. The Petitioner in this action has withdrawn its petition seeking winding up on 22nd August, 2011 and upon an application Bernard Robert Evants and Vera Heritage Evans (A.K.A. Vila Heirtage Evans) was substituted on the same day and both of them have filed their intention to support the petition on 8th July, 2011.
   
3. Companies Winding up rules 32 deals with the substitution of parties to a winding up action.
   

Rule 32 reads as follows

'Substitution of creditor of contributory for withdrawing petitioner

32(1) when a petitioner for an order that a company be wound up by the court or subject to the supervision of the court is not entitled or not, where he either-

(a) Fails to advertise his petition within the time prescribed by these Rules or such extended time as the registrar may allow; or

(b) Consents to withdraw his petition or to allow it to be dismissed or the petition when it is called in court on the day originally fixed for the hearing thereof or on any day to which the hearing has been adjourned; or

(c) If appearing, does not apply for an order in the terms of the prayer of his petition,

The court may upon such terms as it may think fit, substitute as petitioner any creditor or contributory who appears to the court to have a right to present a petition, and who is desirous of so doing.

(2) An order to substitute a petitioner may, where a petitioner fails to advertise his petition within the time prescribed by these Rules, or consents to withdraw his petition, be made in chamber at any time.'

4. The substituted petitioner filed an amended petition and the affidavit verifying the said amended petition and the service to the Company was effected and an affidavit of service of the same was filed, but no step was taken to advertise either in gazette and or in local news papers.
   
5. The rules regarding the advertisement of petition is contained in rule 23 of the companies winding up rules and state as follows
   

'23. Every petition shall be advertised for at least 7 days before the hearing as follows-

(a) Once in the Gazette, and once at least in 1 newspaper published in Fiji and circulating in the district where the registered office, or principal or last known principal place of business, as the case may be of the company is or was situate; and

(b) Such advertisement shall state the date on which the petition was presented and the name and address of the petitioner had of his barrister and solicitor, and shall contain a note at the foot thereof stating that any person who intends to support it, must send notice of his intention to the petitioner, or to his barrister and solicitor, within the time and manner prescribed by rule 29, and an advertisement of that petition for the winding up of a company by the court which does not contain such a note shall be deemed to be invalid...' (emphasis is added)

6. The said rule 23 of the Companies Winding Up rules contemplate that every petition shall be advertised at least 7 days before the hearing of the winding up. In this instance the substituted petitioners have filed an amended petition and this needs to be advertised in the gazette as well as in newspaper published in Fiji, at least 7 days prior to the hearing. The substituted petitioner has failed to comply with the said mandatory provision in law and hearing concluded without adequate notice. It is pertinent to know that the said advertisement should contained the requirements stated in the Companies Winding Up Rules 23(b) and that includes the date on which the petition was presented and the name and address of the petitioner and of his barrister and solicitor, and shall contain a note at the foot thereof stating that any person who intends to support it, must send notice of his intention to the petitioner, or to his barrister and solicitor, within the time and manner prescribed by rule 29. The substituted petitioner has failed to do so.
   
7. The substituted petitioners could not rely on the advertisement and the gazette notice published by the original petitioner, which again rejected by the court for non compliance. The substituted petitioner was required to advertise their amended petition stating the relevant particulars as required by rule 23(b) of the companies winding up rules. The substituted petition should rejected and struck off for non compliance of the said mandatory requirements, prior to hearing of this action.
   
8. Apart form that the substituted petitioner has not complied with the requirements contained in the Rule 30 of the companies winding up rules as well.
   
9. The substituted petitioner has completely ignored the mandatory requirements contained in the winding up rules. This amended petition of the substituted petitioner needs to be struck off, for non compliance of preliminary requirements prior to hearing.
   
10. The counsel for the Company only raised issues regarding the nature of the alleged money transaction and stated that it was an 'investment' in the Company and for that he relied on the letter of the solicitor of the substituted petitioner who has referred to the debt as 'investment', this is again an error on the part of the solicitor where the contract entered between the parties when the money was transacted has not mention it as an 'investment'. The Company cannot solely rely on that letter of solicitor which was written in 2008 to support their contention. The money was handed over in pursuant to a contract that described it as 'Loan and Acknowledgment of Debt Agreement' and it was entered in 2007, and the perusal of the said contract does not indicate any 'investment' in equity of the Company. Clauses 2 and 3 of the said contract are ample testimony that the said agreement was not an investment in equity of the company, but a loan as described in the said agreement at the heading.
    
11. The said clauses clearly indicate that the debt shall be paid by the Company on demand. The monthly installment was AUSD 5,000 and the interest rate was also fixed at 9% on reducing balance basis.
    
12. I need not decide on the issue of the objection whether the substituted Petitioners needed a Foreign Investment Registration Certificate in order to enter into the said agreement to provide a loan for the Company, as I have already decided to dismiss the action for non compliance of the winding up rules by the substituted petitioner. I will order a cost of $750 as cost for the Company assessed summarily.
    

100. FINAL ORDERS
     

1. The amended petition of the substituted petitioner is struck off.
2. Cost is assessed summarily at $750 to be paid by the substituted petitioner to the Company.
   

Dated at Suva this 5th day of June, 2012.

Master Deepthi Amaratunga
High Court, Suva