Mobil Oil Australia Ltd v Fera [2000] SBHC 49; HC-CC 177 of 2000 (28 November 2000)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 177 of 2000

MOBIL OIL AUSTRALIA LIMITED

V

REX FERA

High Court of Solomon Islands
(F. O. KABUI), J)

Hearing: 24th November 2000
Judgment: 28th November 2000

J. Sullivan for the Applicant
Respondent not present

JUDGEMENT

(Kabui, J): The Judgment Creditor filed a Notice of Motion on Friday 24^th November, 2000 against the Judgment Debtor. I heard this Motion on that same day at 2 pm. The Motion appeared to be quite urgent because one of the Orders sought in that Notice of Motion was for me to abridge time so that it could be heard ex parte if the Judgment Creditor was unable to serve the Judgment Debtor and other parties before 2 pm of that Friday. The Notice of Motion was copied to the Judgment Debtor, Mr. Rex Fera, Crystal Lawyers, Ta’as Marketing Limited, Remex Investments Limited, Bremex Limited, Richstone Real Estate Limited and to the Official Receiver. I was told by Mr. Sullivan, Counsel for the Judgment Creditor, that he had not served the Official Receiver. Crystal Lawyers, he said, had declined to accept service on behalf of the Judgment Debtor but further attempts to serve them with the Notice of Motion had not also been successful. The other entities were all controlled by the Judgment Debtor so that non-service upon him personally, would also mean the same for the other entities controlled by him. I decided to hear the Motion ex parte after being informed of the reasons for non-service by Mr. Sullivan, Counsel for the Judgment Creditor. The decision to do this as I did is allowable under Order 55, rule 3 of the High Court (Civil Procedure) Rules 1964 (the High Court Rules). That is to say, a motion can be heard ex parte if the Court is satisfied that delay in effecting service would cause irreparable or serious mischief. It is for the other side to set the order aside if it is already made, if it so wishes.

The Notice of Motion were in the following terms –

1. Time for the hearing of this motion be abridged and the motion be heard ex parte if all respondents have not been served.
   
2. The Official Receiver be appointed pursuant to section 13 of the Bankruptcy Act (cap. 3) as interim receiver of the property of the Judgment Debtor.
   
3. The Official Receiver in her capacity as interim receiver be directed to take immediate possession and control of all of the property of the Judgment Debtor.
   
4. A consequential order directed to each of the trading banks in Solomon Islands restraining the Debtor, his servants or agents until the determination of the Petition or further order from selling, leasing, charging or otherwise dealing with or making any disposition of any of their property including without limitation and real property, shares, motor vehicles and bank accounts.
   
5. Each of the Respondents, Ta’as Marketing Limited, Remex Limited, Bremex Limited and Richstone Real Estate Limited, their directors, servants or agents be restrained until the determination of the Petition or further order from selling, leasing, charging or otherwise dealing with or making any disposition of any of their property including without limitation and real property, shares, motor vehicles and bank accounts.
   
6. Notice of the above orders be forthwith served on each of the trading banks carrying on business in Solomon Islands.
   
7. The costs of and incidental to this application be the Petitioning Creditor’s costs of the Petition.
   
8. Such further or other relief as to this Honourable Court may seem meet.
   

Having heard the Judgment Creditor’s Motion ex parte, I granted the orders sought in the Notice of Motion at the rising of the Court but said I would give my written ruling today. I do so now.

Mr. Rex Fera is the Defendant trading under the firm TA’AS MARKETING. The Plaintiff is MOBIL OIL AUSTRALIA LIMITED. By a specially indorsed Writ of Summons filed on 7^th June 2000, the Plaintiff is claiming the sum of $1,518.680.61 against the Defendant plus interest at 5% from 19^th May 2000. It is very big money. The Writ of Summons was served upon the Defendant at his warehouse at the Honiara main wharf at 12.50 pm on 15^th June 2000. Service was effected by Mr. Dofe. The Defendant, through Crystal Lawyers, filed a Memorandum of Appearance on 27^th June 2000 but failed to file a defence thereafter. The Plaintiff, in exercising its right, applied to the Court and obtained a judgment in default of defence on 27^th July 2000. A fixed cost of $180 was also awarded to the Plaintiff. The Defendant has failed to pay $1,518,680.61. The Plaintiff who is now the Judgment Creditor then filed on 9^th October 2000 a Bankruptcy Notice against the Defendant who is also now the Judgment Debtor. The Bankruptcy Notice was addressed to Rex Fera C/- P.O. Box 41, Auki, Malaita Province. The Bankruptcy Notice was served upon the Judgement Debtor at 2.55 pm on 13^th November 2000. Service was effected by Mr. Bodkin the Manager of the Judgment Creditor. The Judgment Creditor took another step and filed on 24^th November 2000, the Creditor’s Petition against the Judgment Debtor.

The Notice of Motion filed by the Judgment Creditor referred to above is based upon section 13 of the Bankruptcy Act (Cap. 3) which states

“The court may, if it is shown to be necessary for the protection of the estate, at any time after the presentation of a bankruptcy petition and before a receiving order is made, appoint the Official Receiver to be interim receiver of the property of the debtor or of any part thereof, and direct him to take immediate possession thereof or of any part thereof.”

This section speaks for itself. First of all, the appointment of an interim receiver is a matter for the discretion of the Court. Secondly, such appointment can only be made after the presentation of the bankruptcy petition and prior to the making of the receiving order. Thirdly, the Court can only act if it is shown to the Court that it is necessary to protect the estate. Lastly, the Court in making the appointment of an interim receiver can direct the receiver to take possession of the property concerned. In this case, I was satisfied that the requirements of section 13 above had been satisfied. The affidavit to support the Notice of Motion was filed on 24^th November 2000. The content of this affidavit is revealing indeed. The Judgment Debtor controls Ta’as Marketing Limited, Remex Investments Limited, Bremex Limited and Richstone Real Estate Limited through majority shareholding. Solomon Rice Company Limited has a judgment against Ta’as Marketing Limited for $3,700,000. As a result of this debt, the Solomon Rice Company Limited has filed a petition to wind up Ta’as Marketing Limited. Sullivan (SI) Limited also has a judgment against Ta’as Marketing Limited for the sum of $60,000. Solomon Breweries Limited has a judgment against the Judgment Debtor for $1,600,000. Either the Judgment Debtor or Ta’as Marketing Limited is also indebted to Solomon Taiyo Limited for $300,000. The Judgment Debtor further owes Fielders (SI) Limited $700,000. The total indebtedness is $6,360,000. At Honiara the Debtor owns 7 parcels of registered land being the following –

191-014-147

191-014-169

191-014-155

191-014-15

191-014-266

191-014-154

191-014-271.

At Auki, the Judgment Debtor owns the following properties -

171-001-320

171-001-394

171-001-274

171-001-260

171-001-275.

At Noro, the Judgment Debtor owns the following properties -

098-011-19

098-012-71

Creditors were demanding payment from the Judgment Debtor and Ta’as Marketing Limited as back as before May, 2000. On 22^nd May 2000, the Judgment Debtor failed to turn up in Court to be publicly examined in respect of the affairs of Ta’as Marketing Limited giving the excuse that he had to go to Auki due to family illness. That same day, he was in Honiara because he transferred parcel numbers 191-014-147 and 191-014-155 to Bremex Limited on that same day 22^nd May 2000. It also appears that on 31^st May 2000, the Judgment Debtor lodged for registration, transfers to Bremex Limited of the following properties in Honiara –

191-014-169

191-029-15

191-014-266,

and at Auki, the following properties –

171-001-320

171-001-394

The consideration for each of these transfers was $10,000 alleged to represent under valuation of each property. It is also possible that there may be other properties belonging to the Judgment Debtor which have not come to the knowledge of the creditors. Whilst parcel number 171-001-57 at Auki appears to be owned by Richstone Real Estate Limited, it is not known when and from whom that property was acquired. Richstone Real Estate Limited also owns a Nissan Motor vehicle registration No. 8335. The Judgment Debtor had been seen at the Registrar-General’s Office in Honiara at least on two occasions apparently for the purpose of registering dealings.

It is however, understood that one of the transactions being pursued by the Judgment Debtor concerns the name Ta’as Marketing Limited but the nature of the other dealings are not known. Due to the renovation work being carried out to the Registrar-General’s Office, the breakdown of the photocopier therein and shortage of staff in that office, full search has not been completed to obtain documents. It is therefore not known though feared whether the Judgment Debtor has also transferred other parcels or assets out of his name to Companies controlled by him. It is also known that the Judgment Debtor or Ta’as Marketing Limited has been trading with Shell on a basis that is secured by a bank guarantee from the National Bank of Solomon Islands. It is further known that the Judgment Debtor or one of his Companies had bank accounts with the ANZ Bank in Honiara. The Judgment Creditor therefore is fearful on the basis of the foregoing information that the Judgment Debtor has taken or will continue to take steps to place his property out of the reach of his creditors. By affidavit produced in Court at the hearing of the Notice of Motion, Mr. Golding learned from Mr. Glass, the Manager of the National Bank of Solomon Islands that the Judgment Debtor had tried to secure the release of a Bank security from the National Bank of Solomon Islands in order to deal with certain property. Based upon the foregoing information, the Judgment Creditor asked the Court to appoint an interim receiver in order to preserve the property of the Judgment Debtor and prevent any attempt to defeat his creditors and also to restrain those companies controlled by the Judgment Debtor from dealing with their assets in any manner prejudicial to the interest of the creditors. It is clear from the affidavit evidence before me that there is a real risk that the Judgment Debtor’s behaviour may well result in the Judgment Debtor’s Creditors being defeated of their credits against the Judgment Debtor. The unfolding information so far must be sending chills through the spines of the Judgment Creditor and other Creditors as well. By granting the Orders sought in the Notice of Motion, I have at least stalled that pattern of behaviour by the Judgment Debtor and reassured the Judgment Creditor and other Creditors that the assets of the Judgment Debtor are preserved for the benefit of the Judgment Debtor’s Creditors. This is the best that can be done for the Creditors at this stage of the process to obtain a Receiving order against the Judgment Debtor.

F.O. Kabui
Judge