Mobil Oil Australia Ltd v Fera [2001] SBHC 35; HC-CC 177 of 2001 (13 June 2001)

Civil Case No. 177 of 2000

MOBIL OIL AUSTRALIA LIMITED>

v

REX FERA

(TRADING UNDER THE FIRM NAME OR STYLE

OF TAAS MARKETING LIMITED)

High Court of Solomon Isl/span>

Before: Frank Kabui, J;

Civil Case No. 177 of 2000

Hearing: 1>th June 2001

Judgment: 13^th June 2001

J. Sullivan for the Plain

Debtor in person

JUDGMENT

(Kabui, J): In a Summons dated ated 25^th May 2001, the Special Managers seek the following orders;

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1. The Judgment Debtor, Rex Fera (alson as Rex Buka Fera, era, Rex Fera Buka, Rex Buka and Rex Faita) be adjudged bankrupt pursuant to Section 23(1) of the Bankruptcy Act (Cap. 3);

2. Wayne Morris and Benjamin St. Giles Prince (“ce (“the Trustees”) be jointly and severally appointed Trustees of the property of the Judgment Debtor pursuant to Section 24(1) of the Bankruptcy Act (Cap. 3);

3. The Trustees shall not be required to give security;

4. The Trusteesl have in relation toon to the property of the Judgment debtor, all the powers, rights, and obligations of the Official Receiver and same may be performed or done by one of them;

class="Mss="MsoNormal" style="text-indent: .55pt; margin-left: 35.45pt; margin-top: 1; margin-bottom: 1"> 5 Trustees shall take immediate possession and controlntrol of all the property of the Judgment Debtor;

6. The Special Managers be discharged;

7. The costs of incidental to this application be the Trustees’ cost inst in the administration;

8. Such further directions or orders as to the Honourable Court may seem meet.

A similar Summons filed on 18^th May 2001 in the same terms had been cancelled. This Summons of 25^th May 2001 was heard on 30^th May 2001. Mr. Fera, the Debtor appeared in Court at the hearing without legal counsel. For that reason, he requested that the hearing be adjourned to allow him to retain a lawyer. I adjourned the hearing to 9:30 am on 12^th June 2001. However, I said that there must be notice of change of Solicitor, if any, and such with any affidavits must be filed by 4:00 pm on 7^th June 2001. At the hearing of this Summons at 9:30 am on 12^th June 2001, Mr. Fera again requested a further adjournment in order to retain a lawyer. He said that he had contacted the Office of the Public Solicitor but without success. He then contacted the Registrar who suggested A & A Legal Services. He said Sol - Law objected to A & A Legal Services as there might be conflict of interest as A & A Legal Services had acted previously for Mr. Tori and others who are the relatives of Mr. Fera and for the Companies controlled by Mr. Fera. However, Mr. Fera did not press this point. What he wanted was that he be given time to retain a lawyer.

Counsel for the Special Managers, Mr. Sullivan, opposed Mr. Feapplication for adjournmentnment in very strong terms. He said there was nothing to be gained by an adjournment because Mr. Fera had admitted that he was indebted to creditors for over $8,000,000.00 million which he had not been able to pay to his creditors. He said, Mr. Fera had sufficient time to retain a lawyer since the 30^th May 2001 and would have no excuse to request a further adjournment . The matter, he said, should proceed and be concluded as further costs were likely to be incurred if the matter were to drag on.

I have considered Mr. Fera’s application carefully.s his right to be represented by legal Counsel at any any hearing of the matter. It is for this reason that I adjourned the hearing on 30^th May 2001. He was to find a lawyer without fail. He had 14 days to find a lawyer in Honiara. In his oral representation from the Bar table, he said he had spoken to someone in the Public Solicitor’s Office lawyer but did not say who the lawyer was in the Public Solicitor. He did not also state the date he went to see the Public Solicitor. He appeared to be rather casual about the matter in Court. If he could not find a lawyer in Honiara within a period of 14 days, how else would he succeed if he were given a second chance? Honiara is a small city and the number of law firms in Honiara could be counted on one’s fingers. He did not say which law firm he was going to retain was free to act for him. Crystal lawyers who he said were his Solicitors from the start withdrew at the hearing yesterday. A & A Legal Services did not challenge Sol - Law’s objection as regards the matter of conflict of interest. This was a chance, though disputed, not taken up by Mr. Fera if A & A Legal Services were minded to take instructions from him. I think what was in the mind of Mr. Fera at the time was that the Minister had signed an instrument on 7^th June 2001 appointing James Apaniai as the official Receiver of his estate. He had foreshadowed this approach on 30^th May 2001 by producing in Court a letter written to himself by Moses K. Mose the Permanent Secretary in the Department of Commerce, Employment and Tourism. I think he felt that there was some hope in this approach and he would like to see a lawyer about it. If I am correct in thinking this, then Mr. Fera must think again. As pointed out by Mr. Sullivan, the appointment instrument dated 7^th June 2001 signed by Minister David Holosivi was wrong because the appointment of a receiver of an estate is a judicial act and not a ministerial act under section 75 of the Bankruptcy Act. In any case, Mr. Fera has already waived his right of review etc in this respect under section 99 of the Bankruptcy Act. However, these matters are not the issues in the Summons filed by the Special Managers. I reject Mr. Fera’s application for a second adjournment. I do not think Mr. Fera’s right is prejudiced under section 23(1) of the Bankruptcy Act. This section states-

“23. - (1) Where a receiving order is made against a debthen if the creditors at thet the first meeting or any adjournment thereof by ordinary resolution resolve that the debtor be adjudged bankrupt, or pass no resolution, or if the creditors do not meet, or if a composition or scheme is not approve in pursuance of this Act within fourteen days after the conclusion of the examination or the debtor or such further time as the court may allow, the court shall adjudge the debtor bankrupt; and thereupon the property of the bankrupt shall become divisible among his creditors and shall vest in a trustee.

class="MsoNoMsoNormal" style="text-align: justify; margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> (2)………..”

I now turn to the summons filed the Special Managers. It was resolved at the full meeting ting of the creditors held at 9:00 am in the Coastwatchers Room, Mendana Hotel, on 19^th April 2001, that the Special Managers apply to the High Court for an order that the Debtor be adjudged bankrupt. A proposal by the Debtor for an arrangement with the creditors was also rejected. According to the Second Special Managers Report dated 19^th April 2000, his total indebtedness on 22^nd January 2001 stood at SBD 8.684 million. This sum comprises the following creditors-

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Mob">Mobil Oiil Oil Australia Limited p;&nbbsp;&bsp; &bsp;  p; &nnsp;&&nsp; &nbp; &nbbp;&nnbp;& &nbbsp; &nbp; &nbp; &nbssp; &&nsp;;&nsp; p;&nbbsp;&bsp;&  sp;& p; &nbsp &nbbsp; ;&nspp;&nsp; &nbsp&nbsp &nbs;&nbbp; SBD1.SBD1.55D1.557 mil7 mil7 million

Shell Company (Pacific Islandslands) s) L Limited ;&nspp;&nssp;  p; &nbp; &nbp; ;&nbpp; &nnsp;&&nsp; &nbp; &nn&sp;;p;bssbsp;;&nbssp;&nsp;&nBD0.668 million

0pt">GoodmGoodman Fian Fielder International (SI) Ltd &nnsp;&&nsp;;&nspp;&nssp;&nsp;  p;&nssp;  p; &nbp; &nbp; ;&nbpp; &nnsp;&;;bsp;;&nbssp;&nnbspnnbsp;343 mn

1"> Development Bank of Solomon Islands & &bsp; &nbssp; &nbssp; &nbp; &nbs; &nbbp;&nnbp;& &nbbsp; &nbp; &nbp; &nbssp; &&nsp;;SBsp;SB9 mil/span an

Ta’as Marketing Limited (ind (in liq liquidatuidation)&ion) &nnsp;&&nsp;;&nspp;&nssp;&nsp;  p;&nssp;  p; &nbp;&nbbsp;&&sp;& p;&nbbsp;& p;SBD millspan> ap class="Mss="MsoNorsoNormal" mal" stylestyle="mar="margin-lgin-left: eft: 36.0p36.0pt; mat; margin-top: 1; margin-bottom: 1">

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lass="ass="MsoNormal" style="margin-top: 1; margin-bottom: 1"> These are proven debts though they are approximate in terms of exactness. Mr Fera’s assets are not sufficient to meet his debt of SBD8.684 million. Other possible creditors have also been identified pending proof of debts. The indebtedness of the Debtor to his creditors and his inability to pay them out of his assets and income following the receiving order made on 13^th December 2000 was the reason for the resolution by his creditors to reject his arrangement with them and then decided to authorize the Special Managers to apply to the High Court for him to be adjudged bankrupt. Mr. Fera however, argued that he was personally indebted to Mobil Oil Australia Limited only and the other debts were not his personally. In my view, that argument does not really assist him because he is also unable to discharge that debt of SBD 1.557 million he owes to Mobil Oil Australia Limited. In any case, his argument is contrary to his previous admission of the total debt of SBD8.684 million which had been proven without any challenge from him during previous proceedings. With that scenario in place, it is difficult for me to resist the application by Summons filed by the Special Managers. I am satisfied on the evidence before me that I should grant the application sought by the Special Managers. I grant the Orders sought therein accordingly.

F.O. Kabui

Judge