Guinn v Tau Po'o [2009] PGSC 36; SC1047 (21 May 2009)

SC1047

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 45 OF 2009

BETWEEN:

DAVID GUINN
Appellant

AND:

TAU PO’O
Respondent

Waigani: Injia, CJ
2009: 21st May

SUPREME COURT – practice and procedure – application for stay of interim National Court injunctive orders – principles of refusal or grant of stay discussed - grant or refusal of stay is discretionary and is exercised on proper principles and grounds – appellant does not have an arguable case – argument that he lacked capacity to bring proceedings not an arguable point - overall interest of justice favors continuation of interim orders the subject of this application pending determination of appeal – application dismissed with costs to respondent

Cases Cited:

Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279

Counsel:

A Mana, for the Appellant/Applicant
J Sirigoi, for the Respondent

21st May, 2009

1. INJIA, CJ: The appellant applies for an order staying the interim injunctive orders of the National Court made on 12th May 2009. The order is sought pending the hearing and determination of the appeal filed against the decision. The application is contested by the respondent.

2. I have considered the material in the form of affidavits relied on by the parties and submissions made by both counsel.

3. The principles on grant of stay are set out in Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279 (McHardy case). The grant or refusal of stay is discretionary and it is exercised on proper principles and on proper grounds. The Court must start from the basic premise that the judgment creditor is entitled to enjoy the benefit of the judgment. There are ten (10) other considerations which are enumerated in that case which may be considered. The circumstances of a particular case may warrant greater or less or even no weight to a particular relevant factor(s) and then again, that is a matter of discretion. The onus is on the applicant to persuade the Court to exercise its discretion in his favor.

4. I apply the considerations set out in McHardy which are relevant to the circumstances of this case in the following manner.

5. I consider the main consideration to be whether the appellant has an arguable case on appeal to warrant a grant of stay. The crux of the issue to be determined in the National Court at the trial is whether the appellant had legal capacity to call a shareholders’ of Yagidu Ltd (the company), constitute the meeting himself and pass a special resolution appointing himself as liquidator thereby putting the company into voluntary liquidation under s 291 (1)(a) of the Companies Act. There was no dispute that the National Court in previous separate Court proceedings appointed the appellant as the liquidator of Workers Mutual Insurance (PNG) Ltd (WMI) and Eda Mutual (PNG) Ltd (EM), that they were placed under liquidation by order of the Court in 2006 and 2007 respectively and that the applicant was appointed liquidator for both companies. These two companies each held 50% shares in Yagidu Ltd. The appellant purported to exercise powers that he assumed to have been given to him by law to represent the shareholders of the MMI and EM and to call and conduct the meeting. It is noted from the minutes of the resolution in evidence that the minutes do not record the basis or grounds for putting the company into liquidation.

6. The appellant’s legal capacity to call and conduct this meeting and pass the said resolution was raised and argued at the hearing of the respondent’s application for interim injunctions. The trial judge raised serious questions concerning the legal capacity and propriety of the appellant and his actions, that demonstrated that the respondent had serious issues to be tried. For my part, Mr Mana for the appellant did not refer me to any provision of the Companies Act or the Companies Regulations which empowers a liquidator of another company or companies which hold shares in an operating company to conduct the latter company’s business in the manner done in this case. Mr Mana relies on some general principle of company law that confers on a liquidator the kinds of powers exercised in this case but even then, a case on point has not been cited to me. In the circumstances I am not persuaded that the appellant has an arguable case on this point.

7. The appellant also questions the respondent’s capacity to bring the proceedings. On the evidence as presented to the Court below, the company records showed that the respondent was a director of Yagidu Ltd as at the time of company search – 22nd December 2008. A director of a company in liquidation is entitled to bring proceedings to terminate the purported liquidation: s 300 (1) & (2) of the Companies Act. Therefore, in my view, the argument that he lacked capacity to bring the proceedings to challenge the liquidation is not an arguable point.

8. In these circumstances, the overall interest of justice favors the continuation of the interim orders the subject of this application, pending determination of the appeal.

9. For these reasons, I dismiss the application with costs to the respondent.

_________________________________
Allens Arthur Robinson Lawyers: Lawyer for the Appellant
Sirigoi Lawyers: Lawyer for the Respondent