In re Ocean Trader Ltd [2012] FJHC 1433; HBE17.2003 (7 November 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
COMPANIES JURISDICTION

Winding Up Action No. HBE 17 of 2003

IN THE MATTER
of OCEAN TRADER LIMITED

AND:

IN THE MATTER
of Companies Act 1983.

BEFORE : Master Deepthi Amaratunga
COUNSEL : Mr. Nilesh Prasad for the Plaintiff

Date of Hearing : 6th November, 2012

Date of Ruling : 7th November, 2012

RULING

1. The direction of the court was sought regarding the release of money deposited in the trust account to the solicitor for the Plaintiff. An Order to wind up the Ocean Traders was made on 20th of October, 2004 upon a petition filed on 9th August, 2004 in HBE 85 of 2004.
   
2. The money was paid to the trust account of the solicitor in on 16th February, 2004, in this action.
   
3. Section 313 of the Companies Act states as follows:
   

313.-(1) Any transfer, conveyance, mortgage, charge, delivery of goods, payment, execution or other act relating to property made or done by or against a company within 6 months before the commencement of its winding-up which, had it been made or done by or against an individual within 6 months before the presentation of a bankruptcy petition on which he is adjudged bankrupt, would be deemed in his bankruptcy a fraudulent preference shall, in the event of the company being wound up, be deemed a fraudulent preference of its creditors and be void accordingly.

(2) Any transfer, conveyance or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void to all intents. (emphasis is mine)

4. The material time is 6 months before the commencement of this winding-up and the counsel Mr. Nilesh Prasad referred to Australian Company Law and referred to an interpretation given to phrase 'the relation back day'. I am not inclined to adopt the said interpretation which is a statutory interpretation in Australia.
   
5. The Companies Act in Fiji is exhaustive and I need not refer to foreign legislation as Section 227 defines the commencement of winding up as follows.
   

Commencement of winding up by the Court

'227.-(1) Where, before the presentation of a petition for the winding-up of a company by the court, a resolution has been passed by the company for voluntary winding-up, the winding-up of the company shall be deemed to have commenced at the time of the passing of the resolution and, unless the court, on proof of fraud or mistake, thinks fit otherwise to direct, all proceedings taken in the voluntary winding-up shall be deemed to have been validly taken.

(2) In any other case, the winding-up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding-up.' (emphasis added).

6. The material time is the presentation of the petition and in this instance 9th August, 2004 and any payment made after 9th February, 2004 (i.e. 6 months prior to that) will be considered as material time period in terms of the Section 313 of the Companies Act read with Section 227(2). Since the money was deposited after 9th February, 2004 it should belong to the official receiver if the winding up has not concluded. The solicitor is directed to transfer the funds to the official receiver, forthwith. I do not think that retaining the money belonging to a company (where court has ordered winding up) in a trust account for a long time is justified in the light of clear provision contained in companies Act and referring to Australian Company law is a misdirection of law, by the counsel for the Petitioner.
   

1. FINAL ORDER
   

1. The money deposited to the trust account by the company (in liquidation) be transferred forthwith to the official receiver, without any deduction of the same.
   

Dated at Suva this 7th day of November, 2012.

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