Diro v Green Communication Ltd [2009] PGNC 221; N4053 (26 June 2009)

N4053

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

MP 564 OF 2008

IN THE MATTER OF AN APPLICATION MADE PURSUANT TO SECTION 296 COMPANIES ACT

BETWEEN:

EDWARD RAMU DIRO
Plaintiff/Applicant

AND:

GREEN COMMUNICATION LIMITED
Defendant/Respondent

Waigani: Hartshorn J.
2009: June 23rd, 26th

COMPANIES ACT - Application by Interim Liquidator for Directions – s. 332(1)(a) Companies Act – whether claim should be admitted

Facts:

The interim liquidator for the Defendant/Respondent applies for directions from the Court as to whether he should accept a claim of an unsecured creditor in the liquidation.

Held:

Mr. Smith as the interim liquidator is directed to accept the claim by Dawamiba (BVI) Ltd as an unsecured creditor as contained in the Form 43 that he received on 5th June 2009.

Counsel:

Mr. W.J. Frizzell, for the Interim Liquidator
Mr. G. Poole, for the Plaintiff/Applicant
Mr. A. Mana, for Fine Move International Ltd

26th June, 2009

1. HARTSHORN J: Mr. Christopher M. Smith was appointed the Interim Liquidator of Green Communication Ltd (Greencom) on 19th December 2008. In that capacity Mr. Smith applies for directions from the court pursuant to s. 332(1)(a) Companies Act. As "liquidator" includes an interim liquidator pursuant to s. 290(1) Companies Act, Mr. Smith does not require leave to make application under s. 332(1)(a).

2. The first direction sought by Mr. Smith concerns the rejection or acceptance by him of a claim by Dawamiba (BVI) Ltd (DBVI) as an unsecured creditor. Counsel for Mr. Smith submitted that he should be directed that the claim of DBVI be rejected as amongst others, no documentation has been provided to substantiate DBVI’s claim in this and related proceeding OS 185 of 2009.

3. The claim of DBVI is detailed in a Form 43 received by Mr. Smith on 5th June 2009. It is for a payment made to the Independent Consumer and Competition Commission (ICCC) on behalf of Greencom for the first lump sum of the mobile licence fee and for a payment made to the Papua New Guinea Radiocommunications and Telecommunications Technical Authority (Pangtel) on behalf of Greencom for Spectrum Licence Fees. Both payments include 2 further payments made for shortfalls in the US Dollar/Kina exchange rate. The total amount of the claim is US $ 3,340,029.02.

4. On 11th May 2009, another purported creditor, Fine Move International Ltd (FMI) had submitted a claim to Mr. Smith for the same payment to the ICCC in respect of which DBVI has now subsequently claimed.

5. That claim was rejected by Mr. Smith. The reason given was that, "there is insufficient documentation or evidence of agreement of advance to Green Communication Ltd by Fine Move International Ltd. The supporting documentation includes a copy of a facility agreement concerning a loan to Dawamiba (BVI) Ltd.".

6. This rejection by Mr. Smith is being challenged by FMI in proceeding OS 185 of 2009.

7. For a claim to be admitted in a liquidation, pursuant to s. 351(1) Companies Act, it has to be:

".... a debt or liability, present or future, certain or contingent, whether it is an ascertained debt or liability or a liability for damages..."

8. From the evidence in this proceeding and in OS 185 of 2009 to which I was referred, it is clear that:

a) the sum of US$ 3,064,148.70 was sent by telegraphic transfer on 17th October 2007 by Deacons Solicitor's, Hong Kong, to ICCC in payment of invoice no. Greencom 111007 pro rata licence fee and first lump sum.

b) that sum and a further sum of US$ 5831.70 were receipted by ICCC as being received from Greencom and Greencom wrote to ICCC confirming that the sums were paid on behalf of Greencom.

c) the sum of US$ 257,974.22 was sent by telegraphic transfer on 17th October 2007 by Deacons to Pangtel in payment of invoice 040-07 to Greencom for first year operation Spectrum charges and a further sum of US$ 12,074.40 was sent on 14th November 2007.

d) both sums were receipted by Pangtel as being received from Greencom.

9. The evidence from a partner of Deacons is that Deacons made the payments to ICCC and Pangtel on behalf of FMI.

10. As to why FMI made the payments and on what basis, the evidence is that:

a) FMI entered into a facility agreement with DBVI to lend DBVI up to US$ 25 million. These funds were to be used by DBVI to fund Greencom's operations.

b) the security given to FMI for this facility were mortgages over all of the shares in DBVI, its wholly owned subsidiary and Greencom.

c) out of this facility, DBVI was to pay ICCC and Pangtel on behalf of Greencom but was not able to do so to meet relevant time limits.

d) consequently, FMI paid ICCC and Pangtel directly through Deacons on behalf of DBVI on behalf of Greencom.

11. Further, Mr. Ngai Kwok Fung, a former director of Greencom, DBVI and Rapid Motion International Ltd (Rapid Motion), (a 55% shareholder of DBVI), deposes that amongst others:

"...up to US $4,200,000 would be paid to Greencom "(via DBVI) to enable licence fees payable by Greencom... to be paid....".. that Greencom would "direct Fine Move and DBVI to make payment of licence fees direct to the regulatory authorities in PNG in its name and on his behalf."...The payments made by Fine Move to the ICCC (and Pangtel) were agreed to be an advance to DBVI under the Finance Facility, secured by the Share Mortgage, and on lent by DBVI to Greencom as an inter-company loan."

12. There is no dispute that payments were made by Deacons to ICCC and Pangtel on behalf of Greencom. Those payments are debts that can be admitted in the liquidation. The evidence given by Mr. Keith Cole, a partner at Deacons and Mr. Allan Mana, a partner at Allens Arthur Robinson, Port Moresby has been given on the authority of FMI and the evidence of Mr. Ngai Kwok Fung on the authority of FMI, DBVI and Rapid Motion. Their evidence is not contradicted.

13. Notwithstanding that there is no actual proof of payments being made by FMI as deposed to by Mr. Smith, I am satisfied that there is sufficient evidence now filed before the court for the court and Mr. Smith to be satisfied that the payments made by Deacons were made on behalf of FMI on behalf of DBVI on behalf of Greencom to ICCC and Pangtel.

14. Consequently, this court directs Mr. Smith, the interim liquidator, to accept the claim by Dawamiba (BVI) Ltd as an unsecured creditor as contained in the Form 43 that he received on 5th June 2009.

15. The other direction sought in Mr. Smith's notice of motion in paragraph 1(b) is adjourned to the Registry. The costs of the application are to be in the liquidation.

Warner Shand Lawyers: Lawyers for the Interim Liquidator
O’ Briens Lawyers: Lawyers for the Plaintiff/Applicant
Allens Athur Robinson: Lawyers for Fine Move International Ltd