FPSA Investment Co-operative Association Ltd v Parmanandum [2012] FJHC 1369; HBC1124.1986 (12 October 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 1124 of 1986

BETWEEN:

F.P.S.A INVESTMENT CO-OPERATIVE ASSOCIATION LIMITED,
a Co-operative Society duly registered under the Co-operative Societies Act, having its registered office at 298 Waimanu Road, Suva
PLAINTIFF

AND:

VIJAYA PARMANANDAM
of Suva and Savusavu, Barrister and Landlord
DEFENDANT

BEFORE : Master Deepthi Amaratunga
COUNSEL : Ms. Rakai M. L. for the Plaintiff

Date of Hearing : 3rd September, 2012
Date of Ruling : 12th October, 2012

RULING

1. INTRODUCTION
   

1. The Plaintiff in this action is a legal entity incorporated in pursuance with the Co-operative Act 1996 (successor to the Co-operative Societies Act). The plaintiff was dissolved in terms of Section 108 (1) of the Co-operative Act 1996 by publishing a gazette notification on 9th March, 2007. The registration of the said Co-operative (the Plaintiff) was cancelled. This action was pending before the court and no step was taken during the liquidation and the entity is now fully liquidated. Now an ex-parte summons filed by Fiji Public Service Association for substitution, on the basis that they had taken over the assets of the Plaintiff. After the full dissolution of the entity there cannot be any substitution. The closest analogy is the fully wound up company and in Re Cornish [1967] 2 All E.R 875 it was held that if a company is "fully wound up" that is the end of the entity. There cannot be substitution of another party as there is no inheritance of a company similar to natural person the only person who could have made application in a pending action in the process of liquidation of a company is the liquidator during the time of liquidation.
   

2. ANALYSIS
   

2. There is no action taken in this case for a considerable time. Plaintiff is a fully wound up company. The present ex-parte motion was filed by the intended plaintiff who seeks to substitute on the basis that it had taken over the assets of the Plaintiff.
   
3. The issue before me is
   

Whether there can be a substitution of a Plaintiff, who had been fully liquidate (fully Wound up)?

4. The Plaintiff was an entity incorporated in terms of the provisions contained in Co-operative Act 1996 and it was fully liquidated and gazette accordingly.
   
5. Section 108 of the Co-operative Act of 1996 states as follows
   

"108 (1) If the Registrar, after an audit has been held in terms of Section 81 of this Act or after an inquiry has been held in terms Section 86 of this Act or after an examination has been held in terms of Section 87 of this Act or on receipt of the written consent of two – thirds of the members of co-operative, is of the opinion that a co-operative ought to be wound up, he or she may issue an order directing it to be wound up.

(1) The Registrar may, on his or her own motion, make a winding-up order in respect of a co-operative which has ceased working continuously over a period of six month's or the membership of which is reduced to less than the minimum membership prescribed in Section 7 of this Act.

(2) No co-operative shall be wound up save by an order of the Registrar.

(3) A member of a co-operative may, within one month from the date of a winding – up order under subsection (1) or (2) of this Section, appeal in writing against the order to the Co-operative Tribunal which shall make a decision within two months.

(4) When making a winding – up order under subsection (1) or (2), of this Section the Registrar may appoint a liquidator for this purpose and fix his or her remuneration.

(5) A liquidator shall not wind up a co-inoperative until a decision has been taken upon the appeal instituted under the provisions of subsection (4) of this Section."

6. The Plaintiff was voluntarily wound up and the annexed 'A' to the affidavit in support states
   

'As per the Memo dated 20th March, 2006 from the Co-Operative Officer and the letter & Minus of 15th November, 2005 of FPSA-ICA as per attached, I would like to inform you that Liquidation of FPSA-ICA has been completed by our Accountants ....'

7. Section 109- 114 of the Co-Operative Act, 1996
   

109(1) Subject to the provisions of any order made by the Registrar under Section 110 of this Section a liquidator appointed by the Registrar shall have power to –

(a) take immediate possession of all assets belonging to the co-operative and of all books, records and other documents pertaining to its business;

(b) carry on the business of the co-operative so far as may be necessary for winding –up except that he or she shall not for this purpose be entitled to issue any long;

(c) fix by notice published in the Gazette a date before which creditors shall state their claims for admission or be excluded from any distribution made before they have proved them;

(d) refer a dispute to arbitration and institute and defend suits and other legal proceedings on behalf of the co-operative by his or her name or office;

(e) give such directions in regard to the collection and realization of assets as may ne necessary in the course of winding-up the co-operative;

(f) investigate all claims against the co-operative and,subject to the provisions of this Act, decide by order questions of priority arising between claimants;

(g) Pay claims against the cooperative including interest payable up to the date of the winding-up order according to the respective priorities, if any, in full or to such extent as the assets of such co-operative permit;

(h) Compromise any claim by or against the co-operative, provided that the approval of the Registrar has first been obtained;

(i) Call such meetings of members as may be necessary for the proper conduct of the liquidation, giving not less that fifteen clear days notice of every such meetings;

(j) Decide by order subject to any-law limiting the liability of members. The contributions to be made by members, past members or by the estates of deceased members of the co-operative to its assets;

(k) Arrange for the distribution of the assets of the co-operative in a convenient manner when a scheme of distribution has been approved by the Registrar, and

(l) Order by what persons and in what proportions the costs of the liquidation are to be borne.

• (1) Any person aggrieved by any order of the liquidator made under the provisions of paragraph (f), (j) or (l) of subsection (1) of this Section may appeal in writing to the Registrar within thirty days of the date of the order provided that the appeal involves a dispute as defined in Section 115 of this Act.
  
• (2) A person aggrieved by a decision of the Registrar under the provisions of subsection (2) of this Section may appeal in writing to the Co-operative Tribunal within thirty days of the making of the decision and the Co-operative Tribunal shall make a decision.
  
• (3) A liquidator shall deposit the funds and other assets of a dissolved co-operative which are collected by him or her which come into his or her possession as liquidator in such manner and in such place as may from time to time be determined by the Registrar.
  
• (4) A liquidator shall, once in every three months, submit to the Registrar a report stating the progress made in winding-up the affairs of the co-operative, and shall, on completion of the liquidation proceedings, submit a final report and hand over to the Registrar all books, registers and accounts relating to such proceedings kept by him or her.
  
• (5) A liquidator appointed under this Act shall, in so far as the powers are necessary for carrying out the purposes of this Section, have power to summon and enforce the attendance of parties and witnesses and to compel the production of documents by the means and, so far as may be, in the same manner as is provided in the case of a Court.
  

Section 110. A liquidator shall exercise his or her powers subject to the control and supervisions of the Registrar, who may –

(a) Rescind or vary an order made by a liquidator and make whatever new order is required;

(b) Remove a liquidator from office;

(c) Call for all books, documents and assets of the co-operative;

(d) By order in writing limit the powers of a liquidator under Section 109 of this Section;

(e) Require accounts to be rendered to him or her by the liquidator;

(f) Cause the liquidator's accounts to be audited and authorize the distribution of the assets of the co-operative;

(g) Make an order for the remuneration of the liquidator, which remuneration shall be included in the costs of liquidation and shall be payable out of the assets in priority to all other claims.

Section 111. An order made by a liquidator or by the Registrar or by the Co-operative Tribunal under Section 109 or 110 shall be enforced by any Court in like manner as an order of that Court.

Section 112. Save in so far as expressly provided in this Act no court shall have any jurisdiction in respect of a matter concerned with the dissolution of a co-operative in this Act, and no appeal shall lie to a court from an order of the liquidator, the Registrar or the Co-operative Tribunal.

Section 113. Upon winding-up of a co-operative, the assets, including the reserve fund, shall be applied first to the cost of liquidation, then to the discharges of all deposit liabilities to its depositors, then to the discharge of all other liabilities of the co-operative, then to the payment of share capital held by the members then, provided that by-laws of the co-operative permit, to the payment of a dividend or bonus at a rate not exceeding that laid down in the by-laws of the c-operative for any period during which no dividend or bonus was in fact paid.

Section 114.

(1) When the affairs of a co-operative, in respect of which a liquidator has been appointed, have been wound-up and, where no liquidator has been appointed, after two months from the making of a winding-up order under Section 108 of this Act by the Registrar, the Registrar shall make an order cancelling the registration of such co-operative and the co-operative shall be dissolved and shall cease to exist as a body corporate from the date of such order: Provided that the cancellation order shall be published in the Gazette.

(2) The claim of a creditor or a member of the co-operative who has but received what is due to him or her under the approved scheme of distribution shall be processed within two years from the date of cancellation of registration.

(3) Any moneys remaining after the application of the funds to the purposes specified in Section 113 of this Act and any sums unclaimed after two years under subsection (2) of this Section shall be paid by the Registrar to the National Co-operative Federation for the furtherance of any objectives related to co-operative development." (emphasis is mine)

8. The letter of the Director & Registrar of Co-operatives annexed as 'D" to the supplementary affidavit of the Rajneshwar Singh state as follows
   

'This is to confirm that FPSA Investment Co-operative Association Limited was liquidated as per gazette notice dated 9th March, 2007.'

9. This letter has to be read with annexed 'A' to the affidavit in support which I have quoted earlier in this ruling and the said gazette notice is annexed to the affidavit in support and the legal status of the entity is clear in the said gazette. When the registration of the entity is cancelled there is no entity to be substituted and once the liquidation process is concluded.
   
10. This indicate that the Plaintiff is no more and their cause of action has not survived since the Plaintiff is a legal person as opposed to a natural person. Once it is liquidated there cannot be any asset or liability, since at the process of liquidation the assets and liabilities are considered finally. This action was not considered in the said process and with the fully liquidation of the entity the action comes to an end and cannot be reviewed after the company was fully wound up. Section 114 of the Co-operative Act 1996 is conclusive and state 'shall cease to exist as a body corporate from the date of such order: Provided that the cancellation order shall be published in the Gazette.'
    
11. The written submission filed by the intended plaintiff has completely missed the pertinent issue and of little assistance to this ruling. The submission even failed to address any provision of the Co-operative Act 1996, which is the crux of the matter. Neither it address the issue of fully wound up entity's legal status. The closest analogy I could think is fully wound up company and in Re Cornish [1967] 2 All E.R 875 is a case where it held even tax liability of a liquidated company was extinguished once a company is "fully wound up". I could not find any cases on this issue relating to Co-operative Act 1996. I have not been referred to any provision in Co-operative Act 1996, where I could grant this summons for substitution after "fully wound up" and the entity is dissolved.
    

100. FINAL ORDER
     

The ex-parte summons for substitution for the Plaintiff (now fully dissolved) is struck off.

Dated at Suva this 12th day of October, 2012.

.................................................
Master Deepthi Amaratunga
High Court, Suva