Duff v Samisoni Enterprises Pte Ltd [2024] FJHC 555; HBE8.2024 (18 September 2024)

IN THE HIGH COURT OF FIJI
AT SUVA
COMPANIES JURISDICTION

HBE 8 OF 2024

IN THE MATTER OF SAMISONI ENTERPRISES PTE LIMITED a limited liability company having its registered office at Lot 1 Wailada Subdivision, Lami.

AND

IN THE MATTER OF THE COMPANIES ACT, an Application under Section 177 of the Companies Act 2015, Rule 6 (a) of the Companies Winding Up Rules 2015, Rule 17 of the Companies Winding Up Rules 2015 and under the inherent jurisdiction of the Court.

BETWEEN: SELINA HELEN DUFF aka SELINA HELEN SAMISONI
of Lot 5, Naranji Street, Tamavua, Suva, Shareholder/Director.
APPLICANT/SHAREHOLDER
(Respondent in the summons)

AND: SAMISONI ENTERPRISES PTE LIMITED
a limited liability company having its registered office at Lot 1 Wailada Subdivision, Lami.
RESPONDENT
(Applicant in the summons)

Representation:
Applicant in this Summons: Mr S. Leweniqila (Toganivalu Legal).
Respondent in this Summons: Mr P. Niubalavu (Oceanica IP).

Date of Hearing: 29^th August 2024.

RULING

1. Introduction and Background
   

[1] The Respondent’s lawyers (Toganivau Legal) filed summons to strike out pursuant to Order 18 Rule 18 (1) (a) (b) (c) (d) of the High Court Rules 1988 seeking the following orders:

“An order that the Applicant’s/Shareholders and the action against the Respondent be struck out on the following grounds: -

(a) It discloses no reasonable cause of action or defence;
(b) It is scandalous, frivolous or vexatious;
(c) It may prejudice, embarrass or delay the fair trial of the action; or
(d) It is otherwise an abuse of the process of the court.

The summons is with an affidavit of Vanessa Charters. An affidavit in reply of Vrinda Nandan was filed on behalf of the Applicant (Respondent in summons).

[2] The Applicant on 26^th February 2024 had filed an application for relief from oppression. It was filed with an affidavit of the Applicant (Selina Helen Duff aka Selina Helen Samisoni). An affidavit in reply of Ms Charters was filed on 2^nd May 2024.

2. The Submissions
   

For the Respondent (Being the Applicant in Summons to strike out)

[3] Mr Leweniqila submitted that the affidavit on behalf of the Applicant (Selina Helen Duff) was sworn by a Solicitor of the firm of Oceanic IP Lawyers. No authority of the client is included. The Respondents rely on the affidavit of Ms Charters in support of the application to strike out. According to them most matters raised dealt with and was settled following mediation. Therefore, it is an abuse of process. According to Ms Charters the applicant (Selina) is engaging in shareholder “overreach” and having a second bite at the cherry as the claim has been previously resolved.

For the Applicant (Being the Respondent in Summons to strike out)

[4] Mr Niubalavu stated that winding up was initiated through oppression pursuant to section 176 to 179 of the Companies Act. It is guided by the Companies Winding Up Rules. The Applicant is a shareholder, has all the rights and is a member of the company. She can invoke Section 177. She can seek the orders as sought in the substantive application before the Court. Points to oppressive conduct of company.

[5] This interlocutory application which is summons to strike out under Order 18 rule 18 of the High Court Rules is not relevant to winding up, it is to do with striking out of pleadings. The application has to come out of Companies Act. The definition in the High Court Rules does not include Companies Act. The mode of submitting the application is wrong. The reason for the solicitor swearing an affidavit is on the content of the affidavit. It is to do with the striking out application. The Court will have to go through the statutory affidavit of their client to find the grounds.

100. Analysis

[6] Companies matters are governed by the Companies Act 2015. The High Court proceedings relating to companies are governed by the Companies (High Court) Rules 2015. The substantive proceeding before me is one of oppression pursuant to Section 177 (1) (a) of the Companies Act 2015. The rules for which are contained in the Companies (Winding Up) Rules 2015. An application for relief from oppression is a special application: Rule 8 (2) of the Companies (Winding Up) Rules 2015. The procedure on special application is set out in Rule 17. The party’s attention are drawn to Rules 17 (2) and (3).

[7] The Companies (High Court) Rules 2015 in Rule 3 provides that –

“Any proceeding initiated under these Rules is deemed to be a proceeding within the meaning of the High Court Rules 1988 and the general practice of the Court, including the course of procedure and practice in chambers, applies so far as may be practicable, except if and so far as the Act or these Rules otherwise provide”

I am of the view that Rule 3 of the Companies (High Court) Rules 2015 allows the Applicant in this summons to apply to strike out under Order 18 Rule 18 of the High Court Rules 1988. The oppression proceedings that is before me is a proceeding within the meaning of the High Court Rules 1988. Order 18 Rule 18 (1) provides that “the Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement...” (My emphasis)

[8] The Applicant’s basis for the strike out application against the oppression application by Selina Helen Duff aka Selina Helen Samisoni is an apparent abuse of the court process (Order 18 Rule 1 (d) HCR). They have relied upon Radrodro v Church of Jesus Christ of Latter Day Saints [2005] FJHC 694; HBC0204.2005L (11 November 2005) where Justice Connors stated “...(d) The purpose of the Courts jurisdiction to strike out pleading is two fold. Firstly is to protect its own processes and scarce resources from being abused by hopeless cases. Second and equally importantly, it is to ensure that it is a matter of justice, defendants are permitted to defend the claim fairly and not subjected to the expense inconvenience in defending an unclear or hopeless case.”.

[9] The Applicant (Respondent in the substantive matter) submits that “the applicant under paragraph 18 of their ‘Statutory Affidavit in support of Winding Up’ claims that the subject company had ceased all her ‘Shareholder Privileges and Corporate Accommodation Shareholder including access to corporate vehicle, fuel card, monthly access to $5000 (Five Thousand Dollars) in Credit Card for personal use to a total of approximately $66,000 (Sixty Six Thousand Dollars) per annum.”. They further submit that the claim by Selina Helen Duff aka Selina Helen Samisoni was settled out of court after proceedings were brought against the company. Selina Helen Duff aka Selina Helen Samisoni under a mediation settlement dated 7^th February 2019 was paid approximately $700,000.00.

[10] It is not in dispute that Selina Helen Duff aka Selina Helen Samisoni is a shareholder in the company (Samisoni Enterprises PTE Limited). She is seeking relief from oppression and the orders she is seeking are that she and John Leslie Samisoni be appointed as incoming Directors of the company and that she be paid dividends for the past years and that the company restore and compensate her shareholder privileges, which are fuel supply and access to corporate vehicle maintained at company expense equivalent back-dated value cash value of $66,000 per annum to September 2017, credit card access worth of $5000 per month, health and life insurance, corporate accommodation, shareholder privilege and all other entitlements or benefits that have been enjoyed by the other shareholders. In the alternative she sought that the company be wound up and the Official Receiver be appointed as a Receiver.

[11] The grounds for winding up of the company according to Selina Helen Duff aka Selina Helen Samisoni are:

(a) refusing to declare and failing to pay dividends for the period 2017 to 2022.

(b) company’s refusal to call for an urgent/special general meeting.

(c) company’s delaying tactic and refusal to provide information.

Vanessa Charters, a Director and a shareholder of the company in her affidavit in reply to the affidavit of Selina Helen Duff aka Selina Helen Samisoni, in response to the grounds of winding up provided the company’s response.

[12] Oppressive conduct of affairs (Division 1) is contained under Part 16 (Members rights and remedies) of the Companies Act 2015. It is by sections 176 to 179 of the Act. Section 176 of the Companies Act provides that if the conduct of a company’s affairs has been oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member of the company, then a Court has the power to make any orders necessary to remedy that conduct. To determine whether conduct has been in beach of section 176, the key question is whether there has been commercial unfairness towards a shareholder. That is, has there been a departure from the standards of fair dealing, or has a decision been made to impose a disadvantage, disability or burden on a member that, according to ordinary standards of reasonableness and fair dealing, is unfair?: Hylepin Pty Ltd v Doshay Pty Ltd [2020] FCA 1370 at [24].The alleged conduct is to be objectively assessed having regard to the particular context in which the conduct occurred, and it is the effect of the conduct that is material in determining whether the conduct was in breach of the oppression provision: Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55 at [9].

[13] Both sides have filed their affidavits. It would be premature to assess and rule on the affidavits alone. I also remind myself of the numerous case laws which have warned on the need strike out matters sparingly under Order 18 Rule 18. This is a matter which I feel should proceed to full hearing. Striking out the matter will be unjust. I am of the view once the issues between the parties are ventilated, the parties would hear and understand each other’s point of view and appreciate each other’s position. Striking out this matter is not the answer to the dispute between the parties. It is for the Applicant (Selina Helen Duff aka Selina Helen Samisoni) to prove the conduct of the company’s affairs has been oppressive to, unfairly prejudicial to, or unfairly discriminatory against her, a member of the company. If oppression is proved then the Court has the power to make any orders necessary to remedy that conduct.

[14] Court Orders

(a) Summons to strike out is dismissed.

(b) Costs reserved until completion of matter.

Chaitanya S.C.A Lakshman
Puisne Judge
18^th September 2024